BRYCE ROBERTSON INTERVIEW – Investing In Mobile Home Parks and Creating Financial Freedom

Welcome to the Next Level Income show, where our goal is to take your income, your investments and your life to the next level. I'm Chris Larson.

And I'm Caleb Welborn. Today our guest is Bryce Robertson, a real estate investing entrepreneur, educator and author. Originally from Australia, he has traveled over 50 countries over six continents in search of greater wisdom and prosperity and has owned businesses in five countries over three continents. Bryce is the founder and principal of Property Works, which specializes in mobile home park investments in the United States. From due diligence to assignments, syndication and property management, they have mobile home parks covered. He just released a new book in May, 10,000 miles to the American Dream, about a group of Australian investors who are drawn to the United States by the real estate market. He has several home study courses to help people learn how to invest in mobile home parks, and he hosts workshops to help people get started in this space. Bryce is usually traveling for pleasure thanks to the freedom lifestyle he has created through real Estate Vests Investing. Bryce, thank you for joining us today on the show.

G', day, guys. Thanks for having me.

Yeah, absolutely. Bryce, you have a really interesting story. We were talking a little bit before the show. Do you mind kind of giving us a little maybe sneak preview into your book and telling us in a nutshell, how did you get from Australia to the United States and end up as a real estate investor here?

Sure, yeah. Great question. So, you know, grew up in Australia, traveled around to different countries, you know, wanted to explore the world and see what was. I was always told the world is my oyster, so I can do whatever I want to do. And traveled around and went to different countries and traveled to about 50 different countries, different continents, had different businesses in different countries and different continents. And so have a grasp of what it's like to get an entry level into different businesses in different countries. And then I met my wife from traveling, which drew me. She's from California, and that drew me to America. Now I've been living in America for 10 years, and as soon as I got here, I just realized straight away that it really? Seriously, Absolutely. Is the land of opportunities uncomparable to other countries. Some basic things like in real estate, when we go to buy a property in Australia, you have to put 20% down. That's like the lowest down you can put to get a property in Australia. Here in America, seller financing, 3% down, 3.5% down, 5% down. All these different options, that's just one thing. We cover a lot of that in our book. And it's just it really is the land of opportunities. And so it's a group of eight of us who have all independently had our own experiences growing up in Australia, traveling the world to come and find this amazing opportunity in US Real estate. And we share our stories. We've become financially free from US Real estate, and we're kind of shaking up some Americans saying, hey, you guys, really seriously got to grasp the fact that this is the land of opportunities, and wake up, because it's just right under your feet and hoping to inspire people to take more action to create a freedom lifestyle for themselves.

I love it, and I'm so glad that you say that. It's so wonderful to hear somebody that's come from another country that sees the opportunity, and especially during this time of, you know, opposition politics, where people are pitting Americans against one another, it's just. It's wonderful to have a very optimistic view on things. And that's one of our things here on the show that we like to talk about.

Absolutely. That's great to hear. So you said it was eight of you independently, you know, traveling the world and coming here. How did you all connect once you were in the United States and doing it here?

Through our mate, Reed Dusens. He interviewed us all on his podcast, and he has a podcast on investing in the US and we were all show. And then he's just like, hey, wait up, guys. You guys need to meet each other. Let's just introduce each other and say g' day and see what happens. And then, you know, we met up in San Diego, then we met up in San Antonio, and we really connected, had a great time, had a good laugh, as Aussies do. And we all just found a common thread that we were just absolutely obsessed with. US real estate and just the success that we can have here and the lifestyle that we can live because of it. And we just thought that it would absolutely just be our duty to share that with other people and let people know.

Awesome. So, Bryce, it doesn't look like you're in the United States right now. If I'm looking behind you, where are you today?

I'm currently in Florianopolis, Brazil. Beautiful little island in the south of Brazil. And my apologies, there's a little bit of construction noise in the background, but, yeah, awesome.

Yeah, I'm just looking at the background right now. I'm not even looking at you, with all due respect.

Yeah, I think it's awesome how much you're able to travel with the lifestyle you've created. So you specialize in mobile Home park investing, which I think is a fascinating space for our audience. Could you give an idea of what mobile home park investing is like in a nutshell, and then give us an idea of what your unique approach is to it and what your secret sauce is in that space.

Okay, let me try and do this quickly. It's a big topic to cover, but mobile home parks, essentially, mobile home is a home that can be transported on a flatbed truck and placed on the ground. Then you tie it down and put skirting around it. Even though they're mobile homes, essentially once they get placed in space in place, they're pretty much going to stay there because it costs about $5,000 to $10,000 to move or transport and set a mobile home up. And most people that live in mobile home parks or mobile homes, because it's affordable housing, don't have that extra money in the bank. So usually when a home sits there, it stays there. A mobile home park is two or more mobile homes on the same owned piece of land and that's called a mobile home park or mobile home community. Essentially. In mobile home parks, there's two different types of home ownership. There is when the tenants own the home and they're a homeowner and there's when the park owns the home. And that's called a park owned home. Whoever owns the home is responsible for the repairs to the home. So in the mobile home park investing space, as a mobile home park owner, we, we love to have parks that are all 100% tenant owned. Doesn't always work out like that, but we always work towards getting that over a few years because when the tenants own the homes, they have a higher pride of ownership in the home. They take care of it better. And also we're just a glorified parking lot at that point. All the park owner has to do is be responsible for supplying water and sewer lines to the mobile home and just making sure common grounds are clean, collecting rents. It's basically like being a parking lot. When you own the park owned homes as well, you become more responsible for the management and the maintenance and the turnover and it is profitable and there is a lot of opportunity that exists in that. But there's also something that you have to weigh up because you're going to spend more time in management and more hassles and more turnaround and things like that as well. And when someone doesn't own the home, then they have a less pride of ownership. But in a nutshell, that's basically mobile home parks. You can also have different types of ownership of the utility systems as a mobile home park owner. And you need to definitely evaluate those risks when you're purchasing a mobile home park and be able to go, okay, I own this utility system. What happens if it fails? Can I recoup my costs or cover that something that I cover in my home study course. But the basic business model, the secret sauce that I have for mobile home parks is I like to buy mobile home park that I can double the value of that mobile home park. So I like to essentially buy it at a, for essentially a 9 cap in this current market and then based off the purchase price in three to five years, I'd like to be able to refinance that or sell that based off the purchase price. At a 18. Yeah, at an 18 cap. So basically doubling the money and I syndicate deals and I bring investors involved with in my deals and that means that for the investor previously I've been able to double investors capital in three to five years and that's the basic business model. And for me that means purchasing mobile home parks at 9 caps and above.

Awesome. So you said double investors money. So talk about one thing I've heard you talk about. I think it was on Reid show, forced depreciation, which we love. I talk about it in my book. We talk about it in our multifamily webinar. What proportion is cash on cash? Because I hear mobile home parks are cash cows and I've heard you say it before. What part of that is cash? What part of it is appreciation? How do you blend that together? Bryce, does it depend on the park or what's your target and what have you seen in the past on those?

It does depend on the park. But also I like to buy value add parks for being we are the owners of the asset and we control a product appreciating the property. We do that by raising rents, by filling vacant lots, by billing back utilities to tenants. All these ways that we increase the net operating income through our management and through our efforts and through our improvements, which then when the cap rate gets applied to that dramatically increases the value of property. What was the specific question again? Sorry.

Oh, I was just wondering historically what have you seen like the blend of cash on cash versus that forced appreciation?

So historically, typically investors will start off somewhere around the 8% mark preferred return and then from there as the improvements get made and the rents get raised, that'll increase up to somewhere around about 15, maybe even 19% mark of annual return on cash flow and then the remainder gets paid out at a refinance or sale of the property at somewhere between three to five years, where they get to fully recoup their costs and double their money. And there's also an added benefit with mobile home parks of accelerated depreciation because of improvements that happen in a mobile home park. You might just think, well, it's land, you can't really appreciate that much on land, but there's a lot of improvements like, like utility lines, utility meters, homes, roads, even letterboxes and things like that that can get depreciated. And when you individually segregate all of those things and then blend them together, there's around about a 15% to 17.5%, sorry, 15 year to 17 year depreciation schedule on that, which all the investors get to get on their K1s, which they pass through to their personal tax returns, which essentially means money that you don't pay at tax time.

We love that too. And for any listeners that are on, we had John Heyer on last month, tax professional. And you guys can go back and listen to that episode. And John talks a lot about the cost segregation. So you dove pretty deep there, Bryce, into kind of some of the strategies that you do for forced depreciation. When you're looking at markets, how do you evaluate demographics, different MSAs, different markets that you're going to purchase in, and how does that play into your model?

Yeah, so there's a few different ways you can go about it. And I think, I don't know what the statistics are for multifamily, but there's a lot of multifamily apartments. There's only about 45 to 50,000 mobile home parks in the U.S. so I kind of reversed the way that I would do it. And that is instead of looking for a market that I want to invest in, although I do do that, usually when a park comes to my table that I'm going to evaluate, I will then look at what market it's in and assess that market and see if it's going to be viable. What we're looking for in the mobile home park space is an affordable housing market. So we want there to be a big gap between the cost of living in a mobile home and the cost of your alternative styles of accommodation, which the step up from mobile home would be either living in an apartment or owning your own home. So we want to see in the market, we want to see at least 25 to 30,000 people in the actual city. We want to see at least 100,000 people in the metropolitan area. We want to have low unemployment rate. We want to see that the cost of living in a mobile home is the cost of living in an apartment is at least one and a half, if not two times the cost of living in a mobile home. And we also want to see that median house pricing is over $100,000. If you're in one of those kinds of markets, you put out a test ad and then you get a bunch of calls in for people wanting to stay in a mobile home, then you know that you're in an affordable housing market. And that's really what we're looking for. We're looking for affordable housing because I think the statistics state in America, there's about a third of Americans that in the need of affordable housing. Now, sure, that might be a bit thwarted because there's elderly and children mixed in there, but nonetheless, there's around about a third of the statistical people in the US that need affordable housing, and there's only 45,000 mobile home parks. So if you've chosen the right market, your phone should be ringing off the hook. And that's really an amazing advantage that we have in the mobile home park space.

No, there's a huge crisis here in Asheville with affordable housing, which I know you're familiar with the Asheville market to a degree. Bryce. I was in Colorado visiting my uncle here about two months ago now. I guess it was actually no few more than that four months ago, around the turn of the year. And I saw some really cool mobile home parks. And I was mentioning to my uncle, we were talking about affordable housing and how do you solve that? And I said, this seems like a great area out here because there's a lot of land, there's a huge gap in terms of affordability, and where do people go? There's a lot of immigrants that have moved there for the job market to Colorado over the past couple decades. And it's really neat. Some of the innovations that we've seen in mobile homes and manufactured housing over the past few years. So it seems like it could be a great fit in a lot of different markets.

Yeah, absolutely. Absolutely.

So one of the reasons we wanted to feature you on the show is your philosophy around money and freedom and how it's not really about the money, it's about the options it gives you and the lifestyle you can live. I know you love traveling, and as I get older, I want to be able to travel more and more as well. So could you go a little bit more in depth on that philosophy that you have.

I mean, the interesting thing is, each year I always set goals and always set goals in the different areas of my life. You know, wealth generation, relationships, spirituality, having fun and traveling, and all the different areas of my life. And the interesting thing is, in the. It was all about wealth generation. But then once I created financial freedom, once the burden of worrying or thinking of being concerned about money goes away, your life changes. Things definitely change. You start to think about things differently and start to reframe what's more important. Once that's taken care of and that grows and that takes off, then you can focus on the things that are more important. And everybody has their own thing that is their reason why or the things that they want to do when they become financially free. And I think that's something that people should think about more in the beginning and start doing more from the beginning. Because for me, it's spending time in relationships, dedicating more time to my wife, traveling, more hanging out with friends, being in nature, being in the wilderness, and things like this. And interestingly, those things cost no money. But when I found myself not being concerned or having the burden of worrying about money, they're the things that are really important, and they're the things that I have a lust for in life. And I also have a very strong passion for real estate, and that's been a very good catalyst to live the life that I want to live. But I'm all about teaching people how to think about what it is that you really enjoy. Because you get the money, what do you want? Do you want the suit and the Mercedes and the Ferrari? Most of the time, people don't find satisfaction in that, or they will find temporary satisfaction. But what will really get people going is being able to buy a car for their mother, or being able to buy a house for their children or put their children through education or something like that. And these are the more important things that I think most investors aren't really talking about, not really thinking about in the beginning. And you can easily find yourself working in the real estate game and creating wealth, and the next thing you know, you're working 12 hours a day, seven days a week, and you essentially have a job. Again, for me, that doesn't work for some people. They love doing that kind of thing. But you got to think about what it is that you really love and start creating now, because that's what this is all about. It's about living a freedom lifestyle. And I truly believe that in America, each of us has the opportunity to live a True freedom lifestyle that we want to. And it's like, it's just there, we're all three feet away from it. And I really want people to really get that.

Awesome. Yeah. We love to ask our investors, why, why are we talking about this? What do you want to get from whether it's financial freedom, what do you want more of in your life? And I truly believe that when we have that freedom like you're talking about Bryce, we can focus on what we're passionate about. For some people, like for me, it's my young boys. For other people, it's volunteering, it's spending time traveling and having experiences and it obviously changes through life. It's wonderful to hear you say that. You know, it's one of the reasons we're in Asheville. We talked a little bit about that before the show. You know, just, you know, people that are conscious about the choices they make and do that. And I think, you know, if you can help more people achieve financial freedom, they can do more good in this world and you know, hopefully not just be happier personally, but, you know, have the whole world be happy. So how. So kind of a two part question. How long did it take you from when you did decided on real estate and your path to financial freedom till you got there?

So it took, it would have taken about three and a half years from the first decision in real estate to become financially free. And it was two and a half years from the time that I started in mobile home park investing.

That's awesome. That's a fast track.

Yeah. Mobile home parks really just accelerated. I mean, seriously, if you buy the right size mobile home park, you really only need to have a handful of mobile home parks to dramatically change your life. And if you have five or more mobile home parks, then it's just, it's like just absolutely amazing you can start helping so many other people.

What would you give, what advice would you give your 25 year old self if you go back in time?

You know, like the Chinese proverb goes, when's the best time to start investing? 20 years ago. And when's the second best time? Now I would have started investing much earlier and, and really you guys are creating an amazing platform here for people to learn education. There's so many ways learn to invest in real estate and just get a little bit of education, team up with somebody who has experience and who has a proven track record and then go out there and get deals even I would have considered myself to have a little bit of analysis paralysis in the beginning and I wish I had gone out there and just put in offers straight away, and I believe I would have become financially free even quicker. But, yeah, just go out there and get started. Don't wait another day. Don't think about it. Don't think. Oh, that sounds cool, but I can't do it. Literally anybody can do it. When I first started in real estate, I met this old couple who looked like, you know, they looked like they just jumped straight off a cruise ship. And I remember sitting there talking to them about the tens of properties that they owned, and I'm like, what, you guys? Like, you guys can do this? I can do this.

Yeah.

We live in the States. We live in America. It's a land of opportunities. Go out there and do it. And I wish I had started earlier.

That's great advice. So for anyone who's listening, who's getting all fired up about this right now, what's one simple, actionable thing they can do as soon as they turn off the podcast or stop watching on YouTube to go do, to take that first step to get everything moving?

Get educated. Get educated on the type of real estate that you want to get involved in. Get that education and. And you're going to take it from there. So, yeah, get educated. Get a mentor. Go out there and go for it. You know, none of this means anything unless you're out there putting in offers, you know, but before you put in office, you need to get educated. So I'd say get educated.

So if people want to get educated on this space. Bryce, your new book just launched. You have some upcoming courses. Do you mind sharing with our audience the best way to get in touch with you to see those resources that you have to offer?

Yeah, I mean, I teach mobile home park investing. I teach syndication, and then there's my book as well. If you guys want to get in touch with me, the best way to reach me is by email. That's BrycealeStateTemates.com.

Awesome. Well, we will make sure we have links to all that in the show notes, and if anybody wants to check that out, we'll also have your website on there as well.

Beautiful. Excellent. Sounds great.

Bryce, thanks so much for joining us on the show today.

Absolutely. Thanks a lot. Thanks for the questions.

Enjoy Brazil.

I will. Thanks, guys. I'm gonna go surfing now.

Awesome. I'm jealous.