Latest / REL Freedom Podcast / Matthias Gruenwald - Turning Mobile Home Parks Into Gold

Transcript

Matthias Gruenwald - Turning Mobile Home Parks Into Gold · REL Freedom Podcast

• 0:00
  SPEAKER_00: There's so many ways to make money in real estate.
• 0:02
  SPEAKER_00: It's really just it matters more that you decide than what you decide.
• 0:05
  SPEAKER_00: Um I think you can make in especially in commercial real estate, like in every asset class, you can make uh tons of money, obviously.
• 0:12
  SPEAKER_00: Uh some are more competitive than others, absolutely.
• 0:15
  SPEAKER_00: We love the mobile home park business just because it's uh filling and fulfilling a need for affordable housing.
• 0:22
  Mike Swenson: Welcome to the Real Freedom Show, where we inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate.
• 0:29
  Mike Swenson: I'm your host, Mike Swenson.
• 0:30
  Mike Swenson: Let's get some real freedom together.
• 0:43
  Mike Swenson: Hello, everybody, welcome to Real Freedom, Real Estate Leverage Freedom, where we talk about different ways to build time and financial freedom through opportunities in real estate.
• 0:53
  Mike Swenson: I'm your host, Mike Swenson.
• 0:54
  Mike Swenson: If you want to get started on your real estate investing journey, check out our website freedom throughrealestate.com.
• 1:01
  Mike Swenson: It's where we post all of our great content to help you decide where to get started, how to get started, and give you as as much great information as you can to enjoy this awesome entrepreneurial journey that is real estate.
• 1:13
  Mike Swenson: And so today we've got an awesome guest.
• 1:15
  Mike Swenson: We're going to talk a little bit more about probably mobile home parks.
• 1:18
  Mike Swenson: Got Matthias Grunwald here.
• 1:20
  Mike Swenson: He is the co-founder and managing partner of WCG Investments.
• 1:24
  Mike Swenson: For those of you that have followed the show in the past, we had his business partner, Tim Woodbridge, on.
• 1:28
  Mike Swenson: That is going back to episode, I believe it's 267.
• 1:32
  Mike Swenson: If you want to go check that out, you uh moved to the US from Germany.
• 1:35
  Mike Swenson: I'll let you share the story, but got into mobile home park investing, and that's really where you guys focus right now.
• 1:40
  Mike Swenson: And so excited to hear you share your journey and your story, Matthias.
• 1:44
  Mike Swenson: So thanks so much for coming on the show.
• 1:45
  SPEAKER_00: Thanks, Mike.
• 1:46
  SPEAKER_00: Thanks for having me.
• 1:47
  SPEAKER_00: Pleasure to be here.
• 1:48
  Mike Swenson: Take us back a little bit, you know, back to the beginning, how you got to the US, how that uh real estate investing of uh twinkling your eye got started, and and we'll go from there.
• 1:58
  SPEAKER_00: Sounds good.
• 1:58
  SPEAKER_00: Yeah, absolutely.
• 1:59
  SPEAKER_00: So back in uh 2012, I moved from Germany uh to the United States, and that was mainly for the job opportunity I had in the company I was working for.
• 2:08
  SPEAKER_00: Um they had uh they expanded to the United States, to Greenville, South Carolina, actually, uh, where there's the biggest BMW facility in the world, actually in Greenville, South Carolina.
• 2:17
  SPEAKER_00: Uh ironically, it's not Munich, it's not Germany, it's actually in South Carolina.
• 2:21
  SPEAKER_00: And we were a major supplier for BMW, and we still were at that time, uh, and still to this day.
• 2:27
  SPEAKER_00: Um, I don't work there anymore because I'm doing full-time real estate right now.
• 2:30
  SPEAKER_00: But back then I moved over here to be the plant manager uh for that facility.
• 2:34
  SPEAKER_00: And from there, we have really explosive growth.
• 2:37
  SPEAKER_00: And uh I moved from the plant manager position to chief operating officer uh over the years, and then was also responsible for the Monterey, Mexico, and Detroit, Michigan uh facility as well.
• 2:48
  SPEAKER_00: So I learned a lot of skills about operations, uh streamlining processes and efficiencies, um, finding efficiencies and you know, hiring and firing people, recruiting, HR, corporate politics, learning a little bit of everything at that time.
• 3:02
  SPEAKER_00: Um, and then really uh fast forward to like 2020 when COVID hit.
• 3:06
  SPEAKER_00: Um I was already in my executive position for a couple of years, and then I realized, look, I'm kind of in a dead end right now, and I'm I'm doing well, but I feel like I feel the golden handcuffs in a sense.
• 3:16
  SPEAKER_00: Well, what is next in life?
• 3:17
  SPEAKER_00: You know, I was pretty young.
• 3:18
  SPEAKER_00: Um, I was always having my uh have my career on like uh fast forward basically.
• 3:23
  SPEAKER_00: I was always the youngest in that position in that in that corporation.
• 3:26
  SPEAKER_00: It was a larger corporation, um a subsidiary of like uh at that time, Itachi Chemical, so a big company.
• 3:32
  SPEAKER_00: Um so at that was like in my early 30s, I'm like, hey, what's next?
• 3:35
  SPEAKER_00: I'm on an executive there, do I jump to another corporation?
• 3:38
  SPEAKER_00: What do I do next?
• 3:39
  SPEAKER_00: I'm like, okay, let's I just Google it.
• 3:41
  SPEAKER_00: That's how it was.
• 3:42
  SPEAKER_00: Like, what do the rich do?
• 3:43
  SPEAKER_00: How do the rich get rich?
• 3:44
  SPEAKER_00: How do the wealthy get wealthy?
• 3:45
  SPEAKER_00: And I always came back to real estate.
• 3:47
  SPEAKER_00: And then I started reading real estate books because in you know 2020 with the COVID-19 pandemic, um, everybody had a little more time on their hands because everything slowed down, the world slowed down.
• 3:58
  SPEAKER_00: Read a bunch of books.
• 3:59
  SPEAKER_00: I think I read like 70-something books that year.
• 4:02
  SPEAKER_00: Um, still to my record to this day.
• 4:03
  SPEAKER_00: A bunch of books I read, and most of them were like real estate and like personal development.
• 4:07
  SPEAKER_00: And then I like the first book I read, I still remember, I read about like the tax benefits and everything.
• 4:12
  SPEAKER_00: I'm like, man, this can't be legal, you know.
• 4:14
  SPEAKER_00: So I couldn't believe it.
• 4:15
  SPEAKER_00: Did more research on it.
• 4:16
  SPEAKER_00: I was like, man, uh it's it's kind of crazy how um, you know, the the IRS is really supporting the fact of you know entrepreneurship in in real estate because you create housing and what tax benefits you can get.
• 4:27
  SPEAKER_00: So in my my mind, I was like, okay, if I do X amount of money now, but have to pay a lot of tax on it, if I'm gonna become like a real estate professional, I actually have to don't have to make as make as much money to keep the same amount because I pay less taxes or almost completely eliminate my tax burden.
• 4:43
  SPEAKER_00: So I kind of ran my numbers, and I'm always, you know, Stephen Carvey in his book, like uh The Seven Habits of Highly Affected People, he always talks about act with the end in mind.
• 4:51
  SPEAKER_00: And my end was that I want to get out of this corporate job and replace that income.
• 4:54
  SPEAKER_00: So, how do I get started?
• 4:56
  SPEAKER_00: I always wanted to get into like multi-family or commercial assets uh um since we started real estate, but I I didn't have the track record, I didn't have the accolades, so we started small.
• 5:06
  SPEAKER_00: So I tried we tried to go into like um short-term rentals, but I was like around 2021 where everybody wanted to buy short-term rentals.
• 5:13
  SPEAKER_00: So we get out bid left and right, and my mind was always like, I'm not gonna overpay just because other people are greedy.
• 5:18
  SPEAKER_00: Um, so I looked at, okay, let's do small multi-family at least.
• 5:22
  SPEAKER_00: You know, starting small, I want to go into apartments.
• 5:24
  SPEAKER_00: And then late 2021, we got on a contract on a really good deal on the duplex.
• 5:28
  SPEAKER_00: That was our very first real estate deal.
• 5:30
  SPEAKER_00: Got that one done, and still to know to this day, I was terrified uh closing that thing.
• 5:34
  SPEAKER_00: It was my first real estate transaction, no idea.
• 5:37
  SPEAKER_00: I was afraid people are just gonna walk off the next day and they're gonna be stuck with a new mortgage and terrified.
• 5:42
  SPEAKER_00: Um, so I had this one for two years in 2023, then bought a fourplex because I want to do like a stacking method, like two units, then four, and I want to go to commercial to eight plus.
• 5:53
  SPEAKER_00: Um so did the fourplex, that one was a home run deal, just refined this year that deal all the money out.
• 6:00
  SPEAKER_00: Um basically have like infinite infinite returns right now on that deal, so which still like for my personal portfolio, outside syndicates I'm doing right now, the best deal I've ever made.
• 6:09
  SPEAKER_00: Um also like late 23, um joined the masterminds and met a lot of people, including my now partner Tim, Tim Woodbridge, um, and then started a um joint venture on a small Asia partner complex, 26 unit in Favel, Arkansas.
• 6:24
  SPEAKER_00: Uh, and then shortly after, like a month later, we closed on another joint venture, which was an RV park in Mississippi, which Tim was on the deal as an asset manager, and that's how we started working together.
• 6:36
  SPEAKER_00: Um, and in that in that deal, we kind of knew we got to know each other really well of our core values and how we run business and where we want to head in the future.
• 6:45
  SPEAKER_00: And I had a missing piece of like, okay, how do I get deals in commercial real estate?
• 6:49
  SPEAKER_00: And he is the acquisitions master, and he was perhaps liking um, he always says he doesn't like underwriting, can't do it, but he's pretty good at it.
• 6:57
  SPEAKER_00: I just don't think he doesn't like to do it.
• 6:58
  SPEAKER_00: And I like to do underwriting, I like to be the analysis guy.
• 7:01
  SPEAKER_00: You know, I like to build the operations.
• 7:03
  SPEAKER_00: And us two coming together uh in late 2023, we started our first syndication in 2024.
• 7:10
  SPEAKER_00: Um, and from that point on to fast forward today, at the time of recording, November 2025, uh, we added over 600 units, uh, did several syndications.
• 7:19
  SPEAKER_00: Uh the first one we did was a hundred unit mobile home park.
• 7:22
  SPEAKER_00: Um, and now we are managing over a thousand units and have 45 million uh assets under management right now.
• 7:28
  SPEAKER_00: So rapid growth, considering I just started with a duplex four years ago and now at over a thousand units within a couple of years.
• 7:34
  SPEAKER_00: And I couldn't have done without Tim, my partner, you know, and we're always joking like with us one plus one equals three, because once we've walked together, some magic happens.
• 7:43
  SPEAKER_00: So uh really proud of what we achieved so far.
• 7:45
  SPEAKER_00: And we're still hungry.
• 7:46
  SPEAKER_00: We have big goals.
• 7:47
  Mike Swenson: That's awesome to hear.
• 7:48
  Mike Swenson: And it's fun to see the growth, like, you know, you haven't been in it for very long, and at the same time, you've gained a lot of experience through doing repetitive things over and over and over.
• 7:58
  Mike Swenson: And yeah, it's fun to see kind of that hockey stick growth as it goes.
• 8:02
  Mike Swenson: So talk a little bit, you know, because you've done some of the other asset classes, you've looked at the other asset classes, you've kind of gotten your your area of specialty now.
• 8:11
  Mike Swenson: But talk through, you know, why mobile home parks, what you like about it, and then curious to hear kind of, you know, are are you thinking this is our lane right now, or are you open to other stuff in the future?
• 8:20
  Mike Swenson: But yeah, kind of talk through for people that might be sitting back saying, I don't know which, you know, I don't know which asset class to choose.
• 8:26
  Mike Swenson: Um, how do I decide?
• 8:27
  Mike Swenson: Kind of talk talk me through that decision for you.
• 8:30
  SPEAKER_00: Certainly.
• 8:30
  SPEAKER_00: There's so many ways to make money in real estate.
• 8:32
  SPEAKER_00: It's really just it's matters more that you decide than what you decide.
• 8:36
  SPEAKER_00: Um, I think you can make in especially commercial real estate, like in every asset class, you can make uh tons of money, obviously.
• 8:43
  SPEAKER_00: Uh, some are more competitive than others, absolutely.
• 8:46
  SPEAKER_00: We love the mobile home park business just because it's uh filling and fulfilling a need for affordable housing.
• 8:51
  SPEAKER_00: Affordability is an issue in the country right now.
• 8:54
  SPEAKER_00: Um, so we're filling in that niche.
• 8:56
  SPEAKER_00: Um and it makes it very recession resistant because people, if things get tight, people downgrade.
• 9:02
  SPEAKER_00: And always someone will downgrade into a mobile home park.
• 9:04
  SPEAKER_00: It's the cheapest way of living, really.
• 9:05
  SPEAKER_00: Um so we love the recession-resistant nature of mobile home parks.
• 9:10
  SPEAKER_00: Also, um the majority of the parks that we have have uh tenant-owned homes, which means we really just lease out the land.
• 9:17
  SPEAKER_00: So we're not responsible for any repair and maintenance on the homes itself.
• 9:20
  SPEAKER_00: Um, of course, we buy parks where we have park-on homes, but we convert them as fast as possible to rent our own contracts or selling them cash outright uh to people.
• 9:28
  SPEAKER_00: So we get them off our books, so to speak.
• 9:30
  SPEAKER_00: Um, that will help the expense ratios.
• 9:33
  SPEAKER_00: So um, if you have a lot all tenant-owned home um park, you can run in a 30% expense ratio range, 30 to 40%, depending on the utility setup.
• 9:41
  SPEAKER_00: If you have like private wells or if it's like city uh utilities or uh public utilities, depending on that.
• 9:47
  SPEAKER_00: But in general, the expense rates are pretty low, very predictable.
• 9:51
  SPEAKER_00: So we have a bunch of parks where we have tenant-owned homes only, and you can totally tell that's so easy to manage.
• 9:57
  SPEAKER_00: We jump on the call every two weeks, there's a few extra items, that's it.
• 10:01
  SPEAKER_00: On the park-on home side, it's like having regular rentals.
• 10:04
  SPEAKER_00: You have a lot of turnover, people are just renting.
• 10:06
  SPEAKER_00: So we stabilize them over time and sell them off over time.
• 10:10
  SPEAKER_00: Um, but you can definitely tell it's like more main uh maintenance and management intensive on that end.
• 10:14
  SPEAKER_00: But it shows like once you have it like stabilizing like a lot of um tenant-owned homes, um, how easy they are to manage.
• 10:22
  SPEAKER_00: You still have to do collections um and stay on top of people, and you have evictions here and there, but they're very, very rare if it's all tenant-on homes.
• 10:29
  SPEAKER_00: Because um, what makes the tenants so sticky is because moving a mobile home can be$15,000,$20,000 with you know, setting them up in a new park again, um, moving it, depending on where you move it, it gets even exponentially more expensive.
• 10:43
  SPEAKER_00: Um, so people rather pay like$50 more in lot rent if you do increase the lot land a lot rent on them uh instead of spending$20,000 and moving another park, which probably charges the same amount you about to charge, if that makes sense.
• 10:54
  SPEAKER_00: So we love to buy parks that are under market rents because people see like, hey, I'm paying$300 lot rent right now, but the park down the road is$475.
• 11:03
  SPEAKER_00: If we go in, take over, and increase rents by like$50,$75, uh, for example, we're still cheaper than the neighbor, and they're not gonna move their home out because they have to pay$20,000 and then still pay more rent, if that makes sense.
• 11:16
  SPEAKER_00: So they have very, very sticky tenants, and we love that because it puts so little stress on operations and having less turnover.
• 11:23
  SPEAKER_00: Um, and we also love to buy parks where you have empty pads and bringing new homes in and sell them either over long-term notes or we sell them cash.
• 11:30
  SPEAKER_00: So kind of basically increasing the value, raising the tight um through different channels, if that makes sense.
• 11:36
  SPEAKER_00: We're increasing rents, we're improving all the infrastructure, which compresses the uh camp rate as well uh on the asset because it makes it more attractive to a uh future buyer, uh, etc.
• 11:46
  SPEAKER_00: So that's that's why we love it.
• 11:48
  SPEAKER_00: Uh and the tax benefits are wild too, because they're all land improvements um with mobile home parks mostly.
• 11:54
  SPEAKER_00: So the the the year one depreciation is pretty high, especially now of the bonus depreciation being back at 100%.
• 12:00
  SPEAKER_00: The the write-offs are crazy uh on the on the mobile home park side.
• 12:04
  SPEAKER_00: Our investors love it.
• 12:05
  SPEAKER_00: So somebody comes in as like a real estate professional.
• 12:08
  SPEAKER_00: We had one deal when when they invest one dollar, they get two dollars of write-off in year one.
• 12:13
  SPEAKER_00: So if you put$100,000 in, you get$200,000 paper loss in year one.
• 12:17
  SPEAKER_00: So we have people just coming for the tax benefits sometimes in our syndications because that's so crazy.
• 12:22
  SPEAKER_00: Um, so yeah, that's that's one of the a few of the reasons why we love mobile home parks so much.
• 12:27
  SPEAKER_00: Uh, probably can speak about this for the rest of the day, but those are the main points why we love them.
• 12:33
  Mike Swenson: Yeah, and that's the thing that I learned too is the the further along we're in our business, the more you realize that, yeah, people really just, you know, they like the tax benefits.
• 12:41
  Mike Swenson: And so, you know, obviously the cash flow is fantastic, the future sales will be fantastic.
• 12:46
  Mike Swenson: Um, but really just having that tax write-off because yeah, if you're a high-income earner, it's tough to find that stuff anywhere outside of real estate.
• 12:54
  Mike Swenson: And so that's where I find myself talking more and more about the tax benefits than anything, because that's where they're gonna feel that benefit right away the next year they do their taxes.
• 13:04
  Mike Swenson: I had a client where he called up as CPA afterwards and said, I think you made a mistake and come to find out it wasn't a mistake.
• 13:10
  Mike Swenson: It was just no investing in real estate can be that helpful.
• 13:13
  SPEAKER_00: Exactly right.
• 13:14
  SPEAKER_00: The same happened to me because I resigned from my W 2 last year.
• 13:17
  SPEAKER_00: And so this year is my first full year.
• 13:19
  SPEAKER_00: But my wife was already helping in the business since 2021.
• 13:22
  SPEAKER_00: We did always manage in-house because we wanted to learn how to do property management.
• 13:26
  SPEAKER_00: And my partner Tim and I, we run a uh vertically integrated property management company that serves all the syndications, so it's all in-house management, so to speak.
• 13:34
  SPEAKER_00: Um, so we had the tax benefits already having a spouse as a real estate professional, obviously.
• 13:39
  SPEAKER_00: Uh, but we didn't have the major paper losses yet.
• 13:42
  SPEAKER_00: But last year I did.
• 13:43
  SPEAKER_00: So when I had my tax returns done uh this year for 2024, um, I had my CPM on the phone, he told me what my tax return is.
• 13:50
  SPEAKER_00: Like, excuse me?
• 13:51
  SPEAKER_00: And I couldn't believe it because I was so high.
• 13:53
  SPEAKER_00: But basically, all my taxes back I paid on my W-2 last year because I had the major paper losses from the first syndications we closed uh last year with all the cost segregation studies before we had even the 100% bonus beam back.
• 14:05
  SPEAKER_00: You know, that's actually not kicking into this year, 2025, in January.
• 14:09
  SPEAKER_00: So yeah, the tax benefits are crazy.
• 14:11
  SPEAKER_00: I think there's a lot of people that are overlooking this when they want to make the move full-time to real estate because the biggest expense you have in life is taxes.
• 14:18
  SPEAKER_00: If you can reduce that by a lot, you don't have to make as much money as in your W-2 because you can keep a lot more.
• 14:23
  SPEAKER_00: So you always have to keep that in front of you if you want to make that switch going full time to real estate.
• 14:28
  Mike Swenson: You know, you you met Tim, you guys have a great partnership.
• 14:30
  Mike Swenson: Phrase that I've used is if you want to go fast, go alone.
• 14:33
  Mike Swenson: If you want to go far, go together.
• 14:35
  Mike Swenson: And so there's a ton of people in the real estate space that are partnering up, you know, deciding like, hey, we can do things better.
• 14:43
  Mike Swenson: Uh, you see the books out there of like who, not how, um, just talking about the benefits of great relationships.
• 14:48
  Mike Swenson: So for you, talk a little bit about kind of how that relationship came together, how you guys decided, like, hey, instead of trying to do this by ourselves, how about we link up?
• 14:56
  Mike Swenson: And then obviously, you mentioned kind of the one plus one equals three theory of now, you've seen of how that can play out over time.
• 15:03
  Mike Swenson: Yes.
• 15:04
  SPEAKER_00: We're very grateful that we have each other as partners and also as friends.
• 15:07
  SPEAKER_00: And we are aware that it's very special what we have built so far.
• 15:11
  SPEAKER_00: I think it's really hard to find um a partnership that ends up also in a very deep friendship, and sometimes it's like friends first and then partners, but with us, what's different.
• 15:21
  SPEAKER_00: Like we start as partners and then became really close friends because then we realized as we work together, like our core values align so much also on a family basis and what's really important to us.
• 15:30
  SPEAKER_00: And then because that helps a lot building the business, the empire that we're building right now, we keep the core values in mind.
• 15:36
  SPEAKER_00: You know, that once the core values align, the the big decisions that we have to make, we almost always on the same page because we look through it through the same lens.
• 15:46
  SPEAKER_00: Um, and it's certainly true if you you can be the best, most efficient worker out there or entrepreneur, but you get always beat by a strong team because you can only do so much as a one-person, uh, one-man army.
• 15:57
  SPEAKER_00: You won't get very far.
• 15:58
  SPEAKER_00: Um, once you build that team, and then you build with a partner like a strong team together.
• 16:03
  SPEAKER_00: Um, and you also can you can also lean on somebody if you know you're going on a vacation or you go on the trip with your family, you know, your partner jumps in and we do it, you know, vice versa.
• 16:11
  SPEAKER_00: I leave and Tim does a little bit of my stuff, and vice versa.
• 16:13
  SPEAKER_00: It helps a lot.
• 16:14
  SPEAKER_00: If you're like a solopreneur, you don't really have the luxury.
• 16:16
  SPEAKER_00: You're sitting on the beach with a laptop at that point.
• 16:19
  SPEAKER_00: So um you're always gonna be working.
• 16:22
  SPEAKER_00: Um, how to find that from for me was um I'm when I joined several masterminds, I always try to find like, okay, who's doing big moves and who do I initially feel like they are um a good person, and also how can I bring value to them?
• 16:36
  SPEAKER_00: And I saw Tim when he was in that mastermind I'm in that he was attempting big moves and he did big moves.
• 16:42
  SPEAKER_00: I saw him he did several acquisitions at a time before we started working together.
• 16:46
  SPEAKER_00: And then I brought a deal to him, which was our first indication because I lived in that market.
• 16:51
  SPEAKER_00: Um, and I brought it to him.
• 16:52
  SPEAKER_00: He's like, Oh yeah, I looked at that one, but I underwrote it this way, and I showed my underwriting, and I did it um very comprehensive because I'm very detailed.
• 16:59
  SPEAKER_00: And Tim was like, Yeah, you're doing a good job on this underwriting thing.
• 17:01
  SPEAKER_00: Uh and then I showed him why the deal works, and he was like, Oh yeah, I see it works now.
• 17:05
  SPEAKER_00: And it's all still to this day one of the best deals we we did, you know.
• 17:09
  SPEAKER_00: Um, so it's cash from very heavy.
• 17:12
  SPEAKER_00: Um, preferred returns been paid, you know, since month three in full.
• 17:15
  SPEAKER_00: Um, we've been almost in year two right now.
• 17:17
  SPEAKER_00: You're gonna refund next year and get everybody's money back.
• 17:19
  SPEAKER_00: It's gonna be a home run deal.
• 17:21
  SPEAKER_00: Um, but we realized in that in that sense, like, okay, I didn't know the acquisitions part as well.
• 17:26
  SPEAKER_00: He did.
• 17:26
  SPEAKER_00: He knew the broker of that deal.
• 17:28
  SPEAKER_00: He already did uh, I think one or two deals with that broker at the time.
• 17:31
  SPEAKER_00: And actually, somebody offered more than we did on this on this deal, but we got it because Tim had the relationship already with that broker because he knew Tim is gonna close.
• 17:41
  SPEAKER_00: The guy didn't know me though.
• 17:42
  SPEAKER_00: Uh, but I knew that market, I knew the operations and how to build your operations because I did it as a chief operating officer.
• 17:48
  SPEAKER_00: Yes, I was manufacturing, but the principles are similar how to hire people, how to place people in the right seats and stuff.
• 17:54
  SPEAKER_00: So we actually the addition one to one equals three with us style right there, where we realized, okay, I'm missing that.
• 18:01
  SPEAKER_00: Tim got it.
• 18:02
  SPEAKER_00: Tim missed this, misses that, I got that.
• 18:05
  SPEAKER_00: And then from there it was just rocket fuel.
• 18:07
  SPEAKER_00: We just did another syndication in August last year, then another one in November, and we kept going.
• 18:11
  SPEAKER_00: We had like three or four more this year.
• 18:13
  SPEAKER_00: I actually lost track of how many we did so far.
• 18:14
  SPEAKER_00: We did we closing, closing, closing.
• 18:16
  SPEAKER_00: We actually have a closing coming up the next seven days.
• 18:18
  SPEAKER_00: Uh, it's gonna be the last one for 2025.
• 18:20
  SPEAKER_00: But we had severals, several this year.
• 18:22
  SPEAKER_00: I mean, actually, about to go on the contract, now the biggest deal ever, with almost 300 lots.
• 18:27
  SPEAKER_00: Um, hopefully, uh in December, we're gonna go on the contract after you rewalked the properties.
• 18:31
  SPEAKER_00: Uh, so you have a really good dynamic, like how we systematized everything, uh, how we build the team and how we build the property management company at the same time.
• 18:40
  SPEAKER_00: Um, which also, Tim, opened my eyes how to vertically integrate the property management um into the business, into the empire as well.
• 18:49
  SPEAKER_00: Um, which helped me a lot also that I'm gonna write the deals better and be more efficient, and it's cheaper than going with a third party.
• 18:55
  SPEAKER_00: And you care more than any third party ever will to manage the assets.
• 18:59
  SPEAKER_00: So it's not only cheaper and increase the returns to the investors, but also um, you know, we make money on top of it too, because we run the property management company.
• 19:08
  SPEAKER_00: So if there's profits left, we split them 50-50.
• 19:10
  SPEAKER_00: So there's a lot of things we'll learn from each other, and it's rare to find.
• 19:13
  SPEAKER_00: I mean, it's it's not as simple as like going on social media and just saying, hey, I want to partner up.
• 19:17
  SPEAKER_00: That works maybe, uh, but you have to date a lot of people.
• 19:20
  SPEAKER_00: And I've been through other people I partnered with with JVs and it didn't quite work out, not really leaving on bad terms.
• 19:26
  SPEAKER_00: I just realized I don't like their work style.
• 19:28
  SPEAKER_00: You know, I don't like when things get tough and it's down to height, and I have to step up uh and fix the problem.
• 19:33
  SPEAKER_00: Whereas when we have trouble now, WCG, everybody steps up.
• 19:37
  SPEAKER_00: Like Tim, I, and our other partner, Vinnie, you know, we're all stepping up and you're there for each other.
• 19:42
  SPEAKER_00: And I think that makes a difference between like successful businesses and uh businesses they're not gonna make it very far because um we are there for each other.
• 19:50
  SPEAKER_00: You know, if someone's struggling, uh, we all chip in, you know, all hands on deck, uh, which I think our investors are real realizing that too, because they're more investing into the operator than the deal.
• 20:01
  SPEAKER_00: Of course, the deal is important, but they want to trust the operator, want to identify with the operator.
• 20:05
  SPEAKER_00: You know, we just we're regular people, we know what we're doing, but we're not perfect either.
• 20:10
  SPEAKER_00: And we're honest about it.
• 20:11
  SPEAKER_00: We're transparent about it, we're not perfect, but hey, if things get ugly, we tell you about it.
• 20:15
  SPEAKER_00: We we do webinars and send it to our investor base and say, hey, this went south on this deal last three months.
• 20:20
  SPEAKER_00: And here's why.
• 20:21
  SPEAKER_00: Well, here's what we're gonna do to make it better.
• 20:23
  SPEAKER_00: We're like super transparent, and we love that.
• 20:26
  SPEAKER_00: Um that this kind of our motto as well.
• 20:28
  SPEAKER_00: We tell our investors like we run as like a Fortune 500 company, but we have small team transparency, like you can always look under the hoods, um, which you know makes it very easy, easier to raise capital because people love that transparency.
• 20:41
  Mike Swenson: I call this, you know, kind of resume building in terms of growing your portfolio because, yeah, your relationships with brokers matter and they want to see that you can perform.
• 20:50
  Mike Swenson: And you had mentioned, you know, a deal where you didn't have the hot necessarily the highest price, but they knew you could close.
• 20:55
  Mike Swenson: And I think for people outside of commercial real estate, like that's kind of a tough thing to grasp because you're used to single family, you know, like, hey, I got to have the the highest price to be able to win.
• 21:05
  Mike Swenson: And it's like, no, the seller wants to make sure that when if I'm gonna take all this time to go through this process, I want to make sure this thing sells.
• 21:12
  Mike Swenson: And yeah, if I, you know, if it's a hundred thousand or you know, whatever it might be different, okay, fine, but we want to go with people that we know.
• 21:19
  Mike Swenson: So the resume is really important here, and that's where you guys are building up a great reputation of yeah, the ability to close, the ability to follow through on what you say you're gonna do, and that stuff does really matter in the commercial real estate space.
• 21:31
  SPEAKER_00: It totally does, it totally does.
• 21:33
  SPEAKER_00: In that case, they offered$200,000 more, but that group was unknown to the broker, and that broker is from like Marcus and Miller chat.
• 21:40
  SPEAKER_00: I mean they're a big brokerage, they're very well known, obviously.
• 21:42
  SPEAKER_00: It wasn't a small brokerage, and they really put a lot of trust into Tim because he already closed several deals with them, and that made all the difference.
• 21:48
  SPEAKER_00: Although they offered 4 million, we offered 3.85.
• 21:51
  SPEAKER_00: So I guess it's a hundred and fifty thousand dollar difference.
• 21:54
  SPEAKER_00: But they said we don't want to go through the process of 90 plus days, and then at the 11th hour they're gonna pull out for some reason, or right before DD ends, due diligence ends, they're gonna pull out.
• 22:04
  SPEAKER_00: Um, so they put the really the trust in our hands, and we closed.
• 22:07
  SPEAKER_00: We closed on time, everything went went well uh during the closing, and the seller was very cooperative.
• 22:13
  SPEAKER_00: Same with the brokers, and you know, we we try to make the transaction also pleasant to the seller in a sense.
• 22:19
  SPEAKER_00: Of course, we have our standards, but be very clear what we want.
• 22:22
  SPEAKER_00: We we tell them at the beginning: DD doesn't start until we have all the documents from you.
• 22:28
  SPEAKER_00: We don't want to have you know, like 60 days, whatever, 30 days, um, whatever we define for that deal, depending how big the deal is.
• 22:35
  SPEAKER_00: Um, and then you trickle in documents, you know, over time, and we're losing time to review stuff.
• 22:40
  SPEAKER_00: Um, the clock starts once you give us the documents.
• 22:42
  SPEAKER_00: We make it very clear, and then most of them, like 99% of the time, they're fine with it.
• 22:46
  SPEAKER_00: Um, we hardly have any people in if we ever fight this.
• 22:49
  SPEAKER_00: Um, but and then there's the list we provide before we even sign a PSA, like, hey, this is a DD list, that's what we need from you guys.
• 22:55
  SPEAKER_00: If there's anything that already stands out that could be a deal breaker, let us know.
• 22:58
  SPEAKER_00: You know, like then we get the transaction before we even get the transaction started from a legal basis.
• 23:03
  SPEAKER_00: We already make very clear what our expectations are, and that goes a long way.
• 23:06
  SPEAKER_00: And we just try to be super transparent to investors, you know, to the sellers, to the brokers, etc.
• 23:11
  SPEAKER_00: And even if it doesn't work out, it doesn't work out.
• 23:13
  SPEAKER_00: It's business.
• 23:14
  SPEAKER_00: And we make that also very clear, and all parties usually understand.
• 23:17
  SPEAKER_00: So um, I think just being that transparent makes a big, big difference, and not only in real estate business, but also but also in this business.
• 23:24
  SPEAKER_00: Since these transactions take a lot longer than just buying a single family home, you know, you can get this done in 30 days or less.
• 23:30
  SPEAKER_00: This takes some of the deals taking over 100 days because the banks take forever sometimes, you know, uh, on those deals, you know.
• 23:36
  SPEAKER_00: Um, 90 days, kind of the average, but I've seen deals that take like 110 days to close because the bank took forever.
• 23:42
  SPEAKER_00: So uh this one it is, you know, and then the seller doesn't want to invest a lot of time and then you have to do it again because time is money.
• 23:49
  Mike Swenson: Are you looking to get started or scale in real estate investing but don't know your next step?
• 23:53
  Mike Swenson: Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it?
• 24:00
  Mike Swenson: Go ahead and push the easy button and invest with us.
• 24:03
  Mike Swenson: Real estate investing is what we do full time.
• 24:05
  Mike Swenson: We've done dozens of deals with hundreds of doors.
• 24:08
  Mike Swenson: We have the knowledge and experience to handpick the best deals that most investors can't find for.
• 24:13
  Mike Swenson: We've at large off-market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own.
• 24:19
  Mike Swenson: The best thing is it's 100% passive to you or for less capital than you put down trying to acquire a property on your own.
• 24:26
  Mike Swenson: Don't let this year go by before you don't make the leap or add to your portfolio, or you just did an analysis by paralysis.
• 24:33
  Mike Swenson: To find out more, visit freedom throughrealestate.com and click on invest.
• 24:38
  Mike Swenson: You can book a call and learn more there.
• 24:40
  Mike Swenson: So get to scaling your portfolio now with us by your side.
• 24:43
  Mike Swenson: Obviously, to be able to grow fast, you have to find great deals, right?
• 24:48
  Mike Swenson: And uh and raise capital.
• 24:49
  Mike Swenson: And so, you know, you guys aren't gonna skimp on, hey, we're now gonna accept poor quality deals because we know we want to grow really fast.
• 24:56
  Mike Swenson: You're still gonna have that bar of what makes a deal worthwhile to move forward.
• 25:01
  Mike Swenson: So, talk about maybe some of the the growing pains there of we got to continue to to to bring this uh manufacturing machine of deal flow.
• 25:09
  Mike Swenson: Um, we've got to crank that thing up so that we can continue to find great deals and continue to find those investor dollars as we're as we're growing at a rapid pace.
• 25:17
  SPEAKER_00: Yes, exactly.
• 25:18
  SPEAKER_00: So, speed is everything in that business.
• 25:20
  SPEAKER_00: Sometimes when you get like a pocket listing from a broker and not many people have seen it so far, it's really important that you're quick on this.
• 25:27
  SPEAKER_00: So we have an underwriter on the team.
• 25:30
  SPEAKER_00: Um, in the beginning, like a year or so ago, a year and a half, I did all the underwriting.
• 25:34
  SPEAKER_00: Right now, I do just like the last 10%.
• 25:36
  SPEAKER_00: So we have an underwriter on the team.
• 25:37
  SPEAKER_00: She knows exactly how to underwrite.
• 25:39
  SPEAKER_00: You know, I taught her how to do everything.
• 25:41
  SPEAKER_00: Uh, she's also a partner on our syndication as well.
• 25:43
  SPEAKER_00: She does all the underwriting, highlights anything that looks strange or where we can make improvements.
• 25:48
  SPEAKER_00: I do the last 10%, get the LOI.
• 25:51
  SPEAKER_00: Basically, template is already out there.
• 25:53
  SPEAKER_00: Our executive assistant is going to create the LOI.
• 25:55
  SPEAKER_00: And then Tim goes in, does the last 10% of the LOI, make sure everything checks out with the underwriting, get the offer out.
• 26:00
  SPEAKER_00: So we can go from like getting a deal on our desk to like an LOI create it within like a day or two, um, or faster sometimes.
• 26:08
  SPEAKER_00: If we know, okay, we need to be really fast and get it done like within a day or 24 hours.
• 26:12
  SPEAKER_00: Well, others will like probably look at this like for a couple of days, a week, whatever, and we can make an offer really quick.
• 26:17
  SPEAKER_00: Um, that makes a big difference.
• 26:19
  SPEAKER_00: And then we can also do a lot of volume.
• 26:21
  SPEAKER_00: So I'm not sure how many offers we did in the last 12 months, but we have a spreadsheet we call acquisitions pipeline, and that's probably like 200 something plus deals in there.
• 26:29
  SPEAKER_00: We did offers on.
• 26:30
  SPEAKER_00: And usually we do like three offers per deal, so you can actually say it's like 600 offers because we do a cash offer, a seller carry offer, and a seller finance offer, basically.
• 26:39
  SPEAKER_00: We can pay more if you if you hold the note at like a 5% or whatever it is, or interest only, and something very creative.
• 26:46
  SPEAKER_00: Um, but yeah, with those with those um you know growing pains, we still put on a sniper rifle, if that makes sense, um, instead of just go shotgun, meaning we actually narrow down very, very narrowly where we're gonna buy.
• 27:00
  SPEAKER_00: So we love the southeast.
• 27:02
  SPEAKER_00: Uh, where many states are landlord friendly, so our majority of our portfolio is in you know, South Carolina, North Carolina, Georgia.
• 27:08
  SPEAKER_00: Uh, we have some in Virginia.
• 27:10
  SPEAKER_00: We had one outlier park in Oklahoma we bought, and this is still one of our best deals, uh, all tenant-owned homes, because one of our partners brought it to us and it was off market, and it's been owned by the same guy for like 30 plus years, and he just wanted to get retired.
• 27:22
  SPEAKER_00: He was like 80-something years old.
• 27:24
  SPEAKER_00: So it was one of those deals where you couldn't pass on, and we're glad we didn't because it's such a good deal.
• 27:28
  SPEAKER_00: Uh, we actually pay a 10 pref on that thing, it's how good a deal is.
• 27:31
  SPEAKER_00: Uh, so it's a really good deal.
• 27:33
  SPEAKER_00: Um, but we as as we went through that process, we were matured a lot too to understand like we cannot just like shop everywhere, we have to shop where we are strong.
• 27:42
  SPEAKER_00: Um, and we know the southeast market really well.
• 27:46
  SPEAKER_00: Um, and then building the system and the process is really important too, that you can be fast of making the offers and having the right conversations, and you're blending out all the noise very quickly and efficiently.
• 27:57
  SPEAKER_00: Like, we say no more than we say yes to what comes across the desk.
• 28:00
  SPEAKER_00: In the beginning, it was like, oh, this is cool, this is a pocket listing off market, whatever.
• 28:04
  SPEAKER_00: Let's try to make it work.
• 28:05
  SPEAKER_00: And then we realize, okay, it's it's a town in West Virginia with a thousand people.
• 28:08
  SPEAKER_00: You know, we probably can operate it, but it's gonna take a lot of bandwidth to operate that, dipping into a new market, which is tiny.
• 28:15
  SPEAKER_00: You know, we have nothing even close to that area.
• 28:18
  SPEAKER_00: You have to find new community managers, you know, new plumbers, new electricians, whatever, um, and stuff like that.
• 28:23
  SPEAKER_00: So we got more, we we try to build clusters now.
• 28:26
  SPEAKER_00: Like we have certain areas where we have a lot of uh parks right now, and we focus on these clusters to make, we can spread out from there, um, so to speak.
• 28:34
  SPEAKER_00: So, some in the upstate of South Carolina in the Greenwich Baumbourg market, great market.
• 28:38
  SPEAKER_00: Um, we we haven't clusters there and we're adding all more smaller parks, which also enables you to buy smaller parks again because you can tag it onto the existing 200 units.
• 28:48
  SPEAKER_00: You can then just say, Okay, I normally just buy like 100-150 plus units, but here's a 50 unit, I can plug it into the other 150 I already have because the economy of skills there actually makes everything else perform better and just plug it in.
• 29:00
  SPEAKER_00: So as you grow, that's you you're constantly improving and changing.
• 29:05
  SPEAKER_00: I think um people probably misconception, like you have like one system and then you just like have the four-hour work week and let it go, you know.
• 29:12
  SPEAKER_00: Like if everything comes to me, you know, money magically appears and stuff like that.
• 29:16
  SPEAKER_00: It's unfortunately it's not that way.
• 29:17
  SPEAKER_00: And I've I say unfortunately, but I've also fortunately it's not that way because I will get bored really fast.
• 29:23
  SPEAKER_00: Uh, so you constantly have to adjust your processes, your systems, um, and see what the inefficiencies are.
• 29:31
  SPEAKER_00: And especially if you grow, you see the inefficiencies are happening.
• 29:34
  SPEAKER_00: What was efficient last year might be inefficient today because you have so much more scale.
• 29:38
  SPEAKER_00: So you constantly have to improve.
• 29:40
  SPEAKER_00: And that's why I was you know um involved in my W2 most of the time.
• 29:44
  SPEAKER_00: We were growing rapidly too in the manufacturing business.
• 29:47
  SPEAKER_00: Same thing.
• 29:48
  SPEAKER_00: What worked last year doesn't work today anymore.
• 29:50
  SPEAKER_00: So I use the same skill set I built in that W2, like an USA in real estate right now, uh, which helped you know helps tremendously.
• 29:57
  SPEAKER_00: Um with the capital raising side, and the game.
• 30:00
  SPEAKER_00: We had no idea how to raise capital in the beginning.
• 30:02
  SPEAKER_00: So we partnered with somebody that taught us while we were G co-GPing with him how to capital raise, do live webinars, you know, do like Facebook ads and stuff like that.
• 30:11
  SPEAKER_00: Um, and we're using those tools right now, and you know, we are constantly involving it, and we just uh the deal we close on next week.
• 30:18
  SPEAKER_00: We've been oversubscribed after seven days.
• 30:20
  SPEAKER_00: We went, you know, uh opened the deal up to our investor base.
• 30:22
  SPEAKER_00: You know, it was uh$1.5 million.
• 30:24
  SPEAKER_00: We actually have to push people away and say, sorry, um, there's no space anymore, which is great.
• 30:29
  SPEAKER_00: In the beginning I had no idea how to do this, and now we can raise in a million and a half within seven days, which is mind-blowing if I think back two years ago, you know, or even three years ago, and we just really just got started in real estate.
• 30:40
  SPEAKER_00: Um, it's kind of wild to see like how you're evolving, and then you look back and you realize, oh man, I climbed that mountain.
• 30:47
  SPEAKER_00: This is amazing, you know, and you just keep keep going.
• 30:49
  SPEAKER_00: And then you look forward to what the future will hold for you.
• 30:52
  SPEAKER_00: Um, you just you know keep improving one percent better every day.
• 30:56
  SPEAKER_00: Man, the mountain gets bigger and bigger.
• 30:58
  Mike Swenson: It's awesome to see, yeah, how that momentum has built for you, and how you know, pairing up and partnering up and and finding the great asset class, like yeah, you guys have have a great thing going, and and uh sounds like you guys are on fire.
• 31:09
  Mike Swenson: So for for people that want to reach out to you, learn more about what you're doing, how can they do that?
• 31:14
  SPEAKER_00: Yeah, they can go on uh wccginvestments.com.
• 31:17
  SPEAKER_00: That's our website.
• 31:18
  SPEAKER_00: There's a contact form there.
• 31:19
  SPEAKER_00: Uh, you can book a call with us if you'd like to learn more.
• 31:22
  SPEAKER_00: I'm also very active on uh most of the social media platforms, uh Facebook, LinkedIn, Instagram as well.
• 31:28
  SPEAKER_00: Um, so um, yeah, you can reach out personally there uh on those social media platforms if you have any questions.
• 31:34
  SPEAKER_00: Uh, happy to help also get people started in real estate, of course.
• 31:38
  SPEAKER_00: Um, if you're interested in investing, definitely check out WCGinvestments.com.
• 31:42
  SPEAKER_00: You can sign up there.
• 31:43
  SPEAKER_00: Uh, we also have like a free e-book, why we love mobile home parks.
• 31:47
  SPEAKER_00: Um, you just have to put in your information and you get it sent to you guys for free.
• 31:50
  SPEAKER_00: Uh, no strings attached, and then you can check it out why we love it so much.
• 31:54
  SPEAKER_00: And uh yeah, it was a it was a pleasure to be here today, Mike.
• 31:56
  SPEAKER_00: Thanks for having me and uh had a great time.
• 31:59
  Mike Swenson: Well, thank you so much for coming on.
• 32:00
  Mike Swenson: Exciting to see your growth, and uh best of luck if you guys continue to grow and improve in the future.