Although Paul Larson got his start in multifamily, he happened to stumble upon a mobile home park in 2019 and fell in love with the asset class. He and his partner purchased a small RV park the following year and soon pivoted, accumulating 600 units and making RV parks the star of their portfolio. In this episode, Paul walks us through the challenges that come with maintaining an RV park, how he adds value to his properties, and how he finds value-add mom-and-pop deals.
The Challenges of Maintaining an RV Park
Paul says the number-one challenge is having good management in place — it can make or break a deal. His team has developed a process that works well for them, however, by recruiting management from within the park. “They understand these parks and how they work,” he says. “And they take pride of ownership. They treat it like it’s theirs.”As for physical maintenance, Paul zeroes in on utilities during the due diligence process by examining plumbing, electrical, and roads. If a park uses septic tanks, for example, he and his team underwrite the deal as if they will have to replace every one of them.
Adding Value
There are several simple ways to add value to an RV park, Paul says. The best things you can do are provide laundry facilities, internet service, and storage for boats and trailers. For example, by offering cable and internet to 80 tenants for $50 a month, you can easily make an extra $3,000 per month — that’s $36,000 a year with virtually zero effort needed.
Other value-add ideas include incorporating ponds, kayak and boat launches, bathhouses, swimming pools, and on-site dining. One property Paul and his team recently acquired came with a restaurant on site. By renting the building out to a local restauranteur via a triple net lease, they are making an additional $6,500 per month.
Finding the Best Deals
Paul seeks out value-add mom-and-pop deals wherever he can. When he had more time, he would drive around, find out who owned the parks, and figure out how to get in contact. Today, however, he relies more on advertising. Through Facebook, he’s received great responses locally.
“We’re like the RV guys,” Paul says. “And people think of us. So we mention every time we do a post, ‘Hey guys, if you know of an RV park or anybody looking to sell or any type of idea of where one could be, let us know, we’ll pay you a commission or we’ll kick you some equity.’ We’ve had a huge response.”
Additionally, his wife works with brokers to find off-market deals. Mom-and-pop owners often don’t advertise that they are selling due to fear that their tenants will find out, so they prefer to conduct their business off-market — which Paul is happy to do.
“We buy these parks, we can close, and when you start building that track record, it really helps,” he says. “But I think word of mouth has been our biggest return on investment when it comes to finding parks.”
Paul Larson | Real Estate Background
- Owner of Larson Real Estate & Investments LLC, a real estate investment company that focuses on buying value-add cash flowing multifamily assets 75 units and up.
- Portfolio: GP of $35M multifamily that totals over 600 units with almost all being RV parks now.
- Based in: Fort, AL
- Say hi to him at:
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TRANSCRIPT
Ash Patel: Hello, Best Ever listeners. Welcome to The Best Real Estate Investing Advice Ever Show. I'm Ash Patel and I'm with today's guest, Paul Larson. Paul is joining us from Spanish Fort, Alabama. He is the owner of Larson Real Estate & Investments and focuses on multifamily and RV parks. Paul is currently a GP on $35 million worth of multifamily and RV parks. Paul, thank you for joining us and how are you today?
Paul Larson: Doing very well, Ash. Thanks for having me, man.
Ash Patel: It's our pleasure. Paul, before we get started, can you give the Best Ever listeners a little bit more about your background and what you're focused on now?
Paul Larson: Sure, absolutely. Paul Larson here, out of Spanish Fort, Alabama. My company focuses on multifamily. We started buying small stuff, duplexes, quadplexes, 10 units at a time, built that up and stumbled upon a mobile home park. That's when we fell in love with that asset class. We picked up a mobile home park in 2019, small for what we're buying now, which was a 44-pad park. What was so intriguing was - man, we've owned duplexes, quadplexes and we're rehabbing these properties, and turning tenants... These people actually owned the mobile homes. It was a big change for me, from owning property to owning land.
So I started sitting down and doing the math and looking at the maintenance and looking at different headaches that involve certain real estate, and I go, "Wow, this is great. We just have to cut the grass and maintain the common area and the tenants take care of their floors, their toilets, their roofs, their sheetrock... There are no repairs." I said, "Okay, this is pretty cool." So I dove in and just started going after these parks. Bought that park and bought a small RV park the following year, and I just said, "You know what? COVID's here." That's the time that we purchased the RV park; people were in lockdown, they couldn't move about like they wanted to, and RV park assets started getting pretty hot. People could travel in their RVs, they could set up.
The supply chain was a little bit tough on mobile homes, as we bought our mobile home parks to fill. We bought them 60%-70% occupied, so we'd have to build in homes, and it became a little bit challenging to fill the park with mobile homes. So we're like, "Well, people own their RVs, they have wheels; we can fill the park faster that way." So we pivoted.
And just last year, my partner and I, Jeff, purchased a little bit over 400 units, which got us up a little bit over 600 units as of today. A large majority of that portfolio is RV parks.
Ash Patel: Alright, hold on... You said you stumbled across mobile home parks. How did you stumble across that park in 2019?
Paul Larson: So I heard a little bit of chatter about mobile home parks. I started putting the word out to a couple of people, and as I was meeting up with a broker she had mentioned, she said, "Hey, I actually have a mobile home park that you may be interested in. I'm not sure if you're looking for that." I said, "You know what? As a matter of fact, I am." So I stumbled upon it by meeting with the broker, and decided to have coffee. She took me to the park, drove me around, and I was like, "Wow." It was an off-market deal... Everything started adding up.
It was a mom-and-pop owner, the guy had it for 25 years, and hasn't really done much to it, hasn't made really any improvements, and hasn't raised rents for the most part. So it had all the qualities that I needed for a value-add project. And I didn't really know anything about it. Just took a shot in the dark. My wife said, "Hey, let's do it." We actually worked out creative finance, we got seller-financed projects, we rolled our sleeves up, we learned about the tenants, how to fill the park, and how to manage the part... Once we figured out that process, we said "Hey, let's dive in." That's how it all started.
Ash Patel: Paul, how big did your multifamily portfolio get?
Paul Larson: Before I bought the first mobile home park, we had about 150 doors, and that consisted of a lot of quadplexes and duplexes. As I said, we bought a couple of 10-units at a time, and we focused on Mobile, Alabama at that point.
Ash Patel: So you are on your way to scaling that to an incredible level, and then you pivoted into mobile home parks, and then you stumbled upon RV parks again. Now are you all in on RV parks? Are you selling off your other assets?
Paul Larson: Yeah, I've actually sold quite a bit of the smaller multifamily. Obviously, we all know the markets have been hot. We're getting some ridiculous cap rates, so we're able to get very healthy returns and we've been going all-in on RV parks. We bought about six RV parks last year. And I'll tell you the reason why we've gotten so heavy on that. The maintenance is much less, we're able to buy these parks at a great price, the cap rates are phenomenal, we're able to cut out a lot of the headaches with many maintenance men that we need. If we have a, say, 50-unit apartment, we need a couple of maintenance men, we need managers, we need property management, we have to turn tenants, we have to make sure that we're replacing floors, and painting inside, and we're constantly working on the property. It's a great asset class. But if you can remove all of that by just owning the land and getting a great return on that piece of property, when that tenant leaves you just have somebody pull right in to replace them. So the cash flow is strong. We like to buy here on the Gulf Coast because there's no real seasonality. It stays warm pretty much year-round, so we're able to keep our parks full pretty much every single month of the year.
Ash Patel: Are you still looking to acquire additional mobile home parks?
Paul Larson: Absolutely.
Ash Patel: Okay, so you're all in on both MHPs and RV parks?
Paul Larson: Right.
Ash Patel: What are the challenges with maintaining an RV park?
Paul Larson: I think that it's about being in the right market. If you're in the right market, you can keep your park full. And you've got to look at it in two different ways. Are you going to be a long-term park? Are you going to be a short-term, a lot of transit? We prefer to be more of a long-term park, because we were mobile home park owners at first, and that transitioned into RV parks. So we treat them more like a mobile home park. We have great residents, we make sure that we check the RVs, we want 10 years or newer, we want to make sure the vehicles are nice, and we still have great rules and regulations for our guests to make the park look nice.
These aren't cheap. They can spend a half-million dollars on the RV real quick. So we're able to bring them in. We'd like to have maybe 60%-70% of long-term; that keeps the cash flow strong. Then the icing on the cake is the transit, people that are coming for vacationing. So you want to make sure your project is close to, say, a boat launch, or has a boat launch, maybe a kayak launch, close to Walmart's, Dollar General's, close to things that are outdoors activity. Because RV-ers like the outdoor lifestyle, so you want to look for a couple of those amenities.
I'd say the challenge would be management. You really want to focus on good management; that can make and break your deal. We've come up with a really cool process to put good management in place by recruiting people within the park. People that have been living in parks for 15-20 years; a lot of times, they need to be retired. These people already have a certain level of income coming in, they really enjoy the lifestyle, they understand these parks and how they work, and they take pride of ownership. They treat it like it's theirs, keep a clean park, bring good tenants in, and make sure that it stays full. So I would say probably the number one challenge would be having good management in place.
Ash Patel: What about the physical maintenance of the park? Maintaining the electric, the plug-ins, the sewer - what's the challenge with that? Or is it just set it and forget it?
Paul Larson: Absolutely. That's the good thing. I'll touch on a couple of points. Just like you named, what about the sewer? So it's all about the utilities. You have roads - some are paved, and some are aggregate, depending on the market. Some of the pads are concrete pads that RV-ers will park on, some parks don't have them. They're not 100% necessary, but it depends on the park and the market. You have sewer hookups and you have electrical panels. The cool thing is, is that's it. You don't have roofs, you don't have windows, and toilets, you don't have sheetrock floors, and you're not concerned about any of that maintenance. These people own their RVs, so they maintain those.
What we like to do is focus on the utilities during the due diligence. What does the plumbing look like? Does it have septic? Does it have city sewer? Does it have city water? Does it have wells? You can work with either/or, but you need to understand what you're getting yourself into. Because if it has a bunch of septic tanks, we like to underwrite it as if we have to replace every one of them.
Worst-case scenario, if we have come in here and replace every one of them, the numbers still work. But the cool thing is you only have a few of those items that you have to pay attention to. So check your plumbing, check your electrical, check your roads, and you just focus on that. Then you can bring your electrician in, bring your plumber in. You really limit what you really have to focus on when you're underwriting or analyzing these deals.
Ash Patel: Do you have to have amenities? You drive by the interstates and you see the giant pond, and RVs all around there. Do you have to have some niche?
Paul Larson: Yeah. Our last two purchases - one's in Florida. So we're in Florida, Mississippi, and Alabama right now. We purchased right outside of St. Augustine, Florida, which is a great market, year-round residency there. We have ponds there; we also have ponds at a park that we purchased in Alabama, which is Beaumont, Alabama. We just put piers at the ponds and we filled the ponds with fish. The RV guys and girls - they love to fish, they love to kayak. We had some kayak launches at one of our parks. So these are a couple of amenities that are great.
Another one you want to focus on is a bathhouse. People a lot of times won't use them, but it is a great amenity to have. Because you can bring people in that do not actually have the bathhouses, come in and install those, and you draw a bigger crowd. A pond where they can fish - you draw a bigger crowd. Pools are nice, too. We have pools at some of our parks. The pool is not absolutely necessary. Internet is a big deal. People like to have their internet available when they pull in. Those are a couple of amenities that are important. I'd say pool, internet, ponds, a place to launch your boat, a place to launch a kayak. If it's not at your property, it at least needs to be close to it.
Ash Patel: Got it. Paul, can we dive into the numbers on your last deal?
Paul Larson: Absolutely.
Ash Patel: And this was 400 units?
Paul Larson: No. My last deal that I purchased - we bought 75 units and up, that's what we're looking for. Last year, we purchased a little bit over 400 units, or 400 pads, if you will. That was a combined three parks that we bought. The last deal we bought was right outside of St. Augustine, Florida. This park actually has 86 pads, it has storage in the rear, so a boat and RV storage in the rear, and then it has a restaurant on-site. We do not operate the restaurant, but we do have a triple net lease on the restaurant. We have a great restauranteer in there paying a triple net lease.
Also, we have three acres that we purchased with the property, and we already have a conceptual drawing, and we are going to put boat and RV storage. Because in that market, after doing all the research, we've found that there's not enough boat and RV storage. Everybody practically is 100% occupied, so that indicates, "Hey guys, we need to jump in and go ahead and do this." It crosses over very well with our park. If people are going to leave to go back up north, they can actually park the RVs with us, and then we can turn around and rent that spot if they're gone for that certain amount of time.
This particular deal we purchased for $3.2 million, and we actually did a proforma on this deal. We thought we would bring in rents to about $750 a month. The current rent was averaging about $500, so we said $250 a month and the delta is a good rent bump. And we can do that immediately. Well, we negotiated this deal for about six, seven months. We started negotiating on it roughly mid-summer last year, and closed on it at the very end of last year.
By the time we closed on that deal, we were able to get the rents to $1,100 a month, because of rent inflation. It made us look like absolute geniuses. But I'll tell you, I have to give a lot of credit to the property manager that we brought in, because she really knew the area. She understood, "Hey, listen, this is what we can really do." So the good news is that we completely knocked that one out of the park. It doesn't always happen like that, but it did on this park. So now, this park is bringing in a tremendous amount of rent, way above what we anticipated.
Ash Patel: Alright. That is insane, $500 to $1,100 a month.
Paul Larson: Yes.
Ash Patel: How do you raise somebody's rent that much without them wanting to kill you?
Paul Larson: Exactly. This park was not fully occupied. As I said, we focus on mom-and-pop owners. They've owned the parks for 20 years, they don't really have much of a website, they're not really marketing; they haven't done a lot. The number one focus we did was we're not going to bump everybody that's there right off the bat. We're going to say, everybody that's coming in new, we're going to charge them the new rent. So we did that. The following 20 people that came in, we charged that number, and nobody [unintelligible 00:16:50.18] at that number. At that point, when we bought the park, we do what's called a town hall meeting and we bring everybody into the park and say, "Hey, we're the new owners. This is what we're doing. We're looking forward to breathing in some new life and energy into the park. What would you guys like to see done?"
Ash Patel: "Are you going to raise our rent?", says the old guy in the back.
Paul Larson: Exactly, and we tell them just like this, "Hey, listen, at the end of the day, we want to make sure that we give you guys a great community to live in. We're going to make sure we clean everything up, and yes, there will be a rent increase." We don't balk at it, we don't make a big deal about it, we just tell him it will be, and you'll be notified. But before we go and do all of that, Ash, we want to show these guys who we are and that we truly care about them. That it's not just about money.
We go in, we clean the bathhouses up, we put in certain amenities, we cut the trees back, we plant beautiful landscaping all over, anything that's old we remove it. We just go in and breathe life into the project, and show these guys that "Hey, we're not just coming in to bump your rent; we're giving you an amazing place to live, that you can be proud of." And at that point, what's fair is fair. What is the market going to be? That's what we have to get to. But we don't want to be slumlords and just bump the rent.
Ash Patel: Yeah, I love that. I think it's so important. Anytime you purchase any asset that people use, you have to go in there, because they're going to be very uneasy. Whether you're purchasing a multifamily, apparently an RV park, or a commercial building, everybody's uneasy. They don't know what the new owner is going to do. Even people that have 10-year leases are like, "Oh my god, am I going a get kicked out? Are they going to raise my rent?" Even though contractually, the new owners can't, there's still that feeling of uneasiness. So I love that you guys do that and just show people that you’re going to make a lot of positive impact... So thanks for sharing that.
$3.2 million purchase, more than double the rents... What was the restaurant bringing in before, or was that owner-operated before?
Paul Larson: The cool thing that worked out was working with the seller. That's what my background is, I was director of sales of a real estate investment firm before I started my company. We did a lot of wholesaling and flipping, and those guys were phenomenal entrepreneurs. I learned a ton, but I got a lot of one-on-one with sellers. I've learned that it's all about a win-win situation. How can we both win? How can you walk away and I walk away where we both win? That's when you start working as a team to see a deal getting done. So while we were talking to the previous owner, I said, "Hey, what are you doing with the restaurant? What's going on? What can we anticipate?" Because I've been in the restaurant industry for 10 years.
My wife, Von, is from Laos, and we were in the restaurant industry for 10 years. We recently sold everything. That was her, she ran everything, she had her amazing customers, and it was a beautiful thing for a decade. But I knew the business, I understood what went on behind closed doors, and how to be profitable. So I wanted to really understand what he had been doing. And he and I actually worked together. He said, "I'm talking with this broker, it's a restaurant broker, and this is the game plan." I said, "Man, that's a great plan. How about we do this, this, and this?" we changed a few things, and then the deal got brokered and we brought a tenant in. It was unoccupied whenever we started negotiating. We brought this tenant in, and they own several local restaurants, their food is amazing. We said, "Okay, we'll do this, this, and this to the property, but we want a triple net lease, and this is what we'll be responsible for and this is what you'll be responsible for." So now it's bringing in $6,500 a month.
Break: [00:20:26] - [00:22:11]
Ash Patel: Did a part of either you or your wife want to run that restaurant?
Paul Larson: Absolutely not.
Ash Patel: Alright, so once you severed ties with the restaurant business, you were done.
Paul Larson: Yeah. She absolutely loved her customers, we've become best friends and family. Because we had open kitchens, so my wife would be an open kitchen and cooking. We had a bar area where you can sit down and she did a lot of Pho, Thai food, and Laos food. If you ask her what kind of food she cooks, she'll tell you, "I cook what I like to eat." She loved the vibrant feel, but at the end of the day, we did it for 10 years, it was amazing, and we went out on top. She helps out big time with the company now.
Ash Patel: Very cool. So $6,500 a month in rent; what are you responsible for?
Paul Larson: We are responsible for the roof and any water intrusion, due to any of the outside work. Also, we work with the roof, we make sure the roof is good, any water intrusion due to the roof, and any real something like a beam or any structural beams, we're responsible for. They take care of taxes, they take care of insurance, they take care of all maintenance that becomes an issue whatsoever other than the roof and the structure.
Ash Patel: 86 pads - I'm assuming a lot of the local people come to the restaurant as well.
Paul Larson: Yes, absolutely.
Ash Patel: Because 86 pads is not enough to sustain that restaurant, right?
Paul Larson: That's right. That's exactly right. It's pretty cool; it's gotten a lot more popular as the Tomahawks, where you [unintelligible 00:23:39] the tomahawks. So they have a section in the back that they padded out and closed off to where people can do that as well. It's been a big hit.
Ash Patel: Very cool. How does somebody get into the RV park business? What are you seeing with cap rates compressing?
Paul Larson: I think that we're early in the RV park space, to be honest with you. It's early for the banks, too. We've just recently started getting financed by banks, because we've been able to have a proven track record over the past couple of years. We got really good at creative financing, but now lenders are waking up to it. They're saying "Wow, this is a real asset class now." You'll see institutional guys that are buying these RV parks. The cap rates are compressing more in other asset classes, they're not compressing as much on the RV parks.
Now, the turnkey stuff will. We don't buy turnkey properties, we make them turnkey. So we're able to take advantage of the compressing cap rates. We find off-market deals. Now, I will say this - we do work with brokers that have deals that the seller won't take in that market and we tell them "Hey, we'll pay both sides your commissions if the deal works. Bring that thing to us. We'll sign anything you want us to and let us work with the seller direct. We'll do all that and we'll still pay your full commission as long as the numbers work."
Ash Patel: I love that. Earlier, Paul, you mentioned some value-add, adding RV and boat storage. You said you did a study on that. Was that an informal study, or was it a formal feasibility study?
Paul Larson: I always tell people that you are the best feasibility study. If you're going to listen to what another person can put together for you, then you're leaning on them a little bit too much. I get getting a feasibility study, but I think you should know that market or have someone that knows that market very well. We do things as far as driving the market, we make phone calls to the parks, we learn what the actual occupancy is by talking to the managers, and we do deep-dives on finding out what's really going on. We do a lot of JV; we JV with guys, smart people, people that can wear the hat that makes sense. Find somebody in the market that you can do the deal with, that knows that market like you know your market. That's what we've been successful at.
Ash Patel: Paul, besides the restaurant and storage, what other ways are there to add the value-add approach to RV parks?
Paul Larson: So there's a few things; one is laundry, washing machine dryers, you can make money there. Another thing that we are very successful at is arbitraging internet and cable. We'll get for as 86 pads, if you allow somebody to put internet in there, they're going to spend about $70. But we can say, "Hey, we'll offer it to you at $50. You'll get cable and internet." For a park like that, we'll spend roughly maybe $1,000, fiber optics monthly, really fast, high-speed internet. And then we'll go in there and charge them $50 a piece; it's optional. Let's say 80 people take it, that's $4,000. That's a way to make $3,000; that's another $36,000 a year just on the internet.
That takes no extra work out of our part for anybody whatsoever. So that's a cool way to make money. You have your laundry, which is a good way to make money. Storage is big; people need to realize that boats, trailers - don't let people just park anything. Keep your park clean, and attract the right people. And if they have things, they will be willing to pay for the parking.
Depending on your zoning and where your market is, there are other ways to do that. Let me think, what are some other ways...? You can keep going; you can pick people's trash up for them, and you can do all types of things where you charge. But I would say those would be the top three - it would be laundry, it would be internet, and cable... Those will be the top two, for sure.
Ash Patel: I love that. I never would have thought of that. Normally, you think you just rent out a cement pad and collect your rent. But I love all the value-add approaches. You mentioned $30,000 a year in internet profit. When you divide that by 0.07, that's over half a million dollars in value that you've created. That's incredible. On that one property that you purchased for $3.2 million, what is it worth today?
Paul Larson: Now, I will tell you this - that's been our best deal by far. I really hate to share those numbers, because it gets out of hand. But honestly, if you do the numbers and you look at what it's bringing in now... Because when we first started talking with the guy, it was bringing about $30,000. When we closed it, it was bringing in $42,000. January, it brought in over $70,000, and then it's constantly going up. So now it's bringing in $70,000-$80,000 a month. You take 35% expense and you do about a seven cap; do the numbers on that.
Ash Patel: Yeah. Paul, do you remotely manage these or are they all within driving distance?
Paul Larson: The ones here in Alabama - I have property management on each park. I have somebody that lives in the park. We have a great process for training. We also do weekly Zoom calls, so I don't have to go to the park. I do go to the parks, and I oversee project management, but I like to train my team to do things that sometimes they can do better than I can, so that I can look for the next deal and make sure that we keep our pipeline full.
But each park has its own property manager. The park in St. Augustine, that's eight hours away from me and it's been the most profitable park that we've had. Again, we bought it for $3.2 million. It could be worth well into $12 million-$13 million.
Ash Patel: It sounds like you just have to get out of your own way.
Paul Larson: That's right, exactly. You have to get out on your own way. We actually have a JV partner on that deal. My partner Jeff, that I own a lot of these units with - he had done a deal with a guy named George and they own about 80 doors together. He said, "Paul, I want to offer George as a property manager; bring him in as a GP, because he owns over 800 units total. He and I own about 80-90 doors, if I'm correct on that." He said, "I want you to talk to him and see if this would be a good fit." I loved him, I fell in love with the guy. He didn't know anything about RVs, nothing; he buys apartment complexes. So it's very simple, we taught him, we showed him, and he just fell in love with it.
It was like a breath of fresh air, something new for his company. He's been phenomenal. So we gave him a piece of the GP, and also, we pay his company a fee, which we worked out at a good price. We build teams to take these deals down with people that have an abundant mindset, people that are fun, people that we can hop on a plane and go to Costa Rica with and spend a week. Those are the people we like to work with. But we get down to business, we negotiate, get the deals right, we make the cash flow work, and we pay our quarterly distributions to our investors, because that's number one, return of capital. But while doing this, we want to have fun to want too, we want to enjoy ourselves. It's all about the team for us.
Ash Patel: Paul, with your investors, is it a typical GP-LP split?
Paul Larson: It is.
Ash Patel: Is there a pref?
Paul Larson: We've done pref, but what we've been doing is giving a little bit more equity away, because we're getting responses from everyone. They're like, "Man, I want more equity." Because we buy these properties, and honestly at 50%, 40% ARVs, well below market. When you look at a pref and you look at being able to get some equity because of what we're going to do to these deals - we're going to double them if not triple them in value - they win tremendously. We want our investors to feel like they're partners, and getting the most out of each deal, so we can do the next one and the next one together, if they prefer to.
Ash Patel: Have you had any exits yet on RV parks?
Paul Larson: We're having two right now.
Ash Patel: Is there a typical hold period?
Paul Larson: Well, I'll put it to you like this... The one we're selling in Mississippi - December was a year, so we've had it for about a year and four months. The one Dog River and Mobile, it'll be two years this March. Actually, it was two years in March, so we had that property. So one we've held it for 1.4 years, and the other we held for two years.
Ash Patel: I'm going to guess your investors are doubling their money.
Paul Larson: Oh, yeah, absolutely.
Ash Patel: Incredible. How do you find these deals? The value-add mom-and-pop deals.
Paul Larson: At first, I used to drive parks and really spend time going by and driving them. Trying to find out who owns these parks, who's the management, how can I get in contact... And I just couldn't handle that on a daily basis anymore. As we started buying these parks, the projects became more hands-on. I did a lot of project management at first, so I got very tied up with that part of the business. But we've done a really good job of advertising what we do. I'm not super-big on social media compared to some people that are really, really good at it. But Facebook - I've gotten really good responses locally with my hometown, my area. Not a lot of people around RV parks, so my partner and I, we're like the RV guys, and people think of us.
We mention every time we do a post, "Hey guys, if you know of an RV park or anybody looking to sell, or any type of idea where you want to be, let us know. We'll pay you a commission or we'll kick you some equity." We've had a huge response. My wife actually has been phenomenal working with brokers. They find off-market deals that aren't listed, because the mom-and-pops are nervous about, "Dude, I don't want my tenants to find out about me selling. I don't want the town to know. What if this happened, that happened?" So we're able to put them at ease and say, "Hey, listen, don't worry about that. We’ll work with you off-market." We're able to get a really good deal that way. We buy these parks, we can close, and when you start building that track record, it really helps. But I think word of mouth has been our biggest return on investment when it comes to finding parks.
Ash Patel: And Paul, the million-dollar question, do you own an RV?
Paul Larson: [laughs] I don't own an RV. I don't. But I'll tell you this - I absolutely love the RV parks that we have. We joke all the time, like "Man, we would stay in these and have a great time." But right now, I'm in one of my condos in Gulf Shores. We have short-term rentals that we go and stay in, and then we run out as well. We bounce around a couple of properties that we have, and that's where we spend our downtime.
Ash Patel: Paul, what's the hardest lesson you've learned in this industry?
Paul Larson: The hardest lesson to learn in this industry.
Ash Patel: A tough one, one that kicked you in the teeth.
Paul Larson: I would say wanting a deal too badly; wanting it so bad that you overlook a couple of things. I've talked to investors, especially new investors and you can see they're salivating for their first deal. That could be a wholesaler trying to get into flipping, or it could be a flipper trying to get into multifamily, or it could be multifamily trying to get into development. Wanting that deal so badly can get you in trouble. It happened to me a couple of times. I would say, be patient, know your numbers, have your boxes to check off, and know that you are not going to buy this deal unless these boxes check off. That way you can do a 30,000-foot view and you can say, "Nah, on to the next." Or, this one checks the box. I'm going to make an offer on it. And then whatever happens, happens.
Ash Patel: I love that. Paul, are you ready for the Best Ever lightning round?
Paul Larson: Let's do it.
Ash Patel: Alright. Paul, what's the Best Ever book you've recently read?
Paul Larson: I love to read. I'm going to say recently, Who Not How, by Dan Sullivan. Have you read that one?
Ash Patel: Oh, yeah. It's a life-changing book for people like us that are just --at least me-- high-strung, wanting to do it all...
Paul Larson: You're preaching to the choir man. It was an incredible book. Who Not How, Dan Sullivan.
Ash Patel: Have you read Rocket Fuel?
Paul Larson: Oh, yeah. Absolutely.
Ash Patel: Okay, good. Paul, what's the Best Ever way you like to give back?
Paul Larson: We give back at church, we love church. We're big with St. Jude, we like to give back. I play a lot of golf, so any tournament I can put together and be a part of for any cancer-related, especially children. St. Jude has a special place in the heart. We donate to several different places, time and money. Really, the time feels much better than the money.
Also, I donate a lot of time to other fellow investors that have questions that want to get into the business or get to the next level. I've been helped by so many amazing people that I just feel any chance I have to give back to somebody else to maybe help out here or there, I jump on it.
Ash Patel: Yeah, incredible. Paul, how can the Best Ever listeners reach out to you?
Paul Larson: I would say Facebook is one that I'm active on. That'd be Paul Larson. Look for the Paul Larson of Spanish Fort, Alabama. I do have an Instagram. It is @_paul_larson. I have a LinkedIn, Paul Larson, and larsonrei.net is my website.
Ash Patel: Awesome. Paul, thank you so much for taking time out of your day today sharing this incredible journey from multifamily, and mobile home parks, giving us all the ins and outs of the RV industry. We can't thank you enough for all of your advice today.
Paul Larson: Thank you so much for having me, Ash.
Ash Patel: Best Ever listeners, thank you for joining us as well. If you enjoyed this episode, please leave us a five-star review, share this with everyone you think can benefit from it. Also, follow, subscribe and have a Best Ever day.
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