Why Athletes Make Great Business People with Brian Spear

Recession resistant asset class. The demand for the product is insatiable. It's massive and continues to increase every single year.

Right.

Our product that we provide them, our office, is affordable housing and there is a massive, massive, massive demand for affordable housing.

Right.

We're in an affordable housing crisis. You can't make more of it. I can go on and on, but suffice it to say, there's massive demand there and there's no new supply. Coming online.

Welcome to the Next Level Income show where it's our goal to take your income, your investments and your life to the next level. I'm your host, Chris Larson. If you haven't yet, get a copy of our book for free at our website, Next Level Income.com. that's www.nextlevelincome.com. just click on the book link and I'll even send you a copy if you put your address in. On today's podcast, we have Brian Spear as the driving force between Sunrise Capital investors. Brian is known for his effective and pragmatic approach to legacy wealth creation through investing in commercial real estate assets. Putting his own spin on the strategies of real estate giants like Buffett, Sam Zell and others, Brian integrates macroeconomic trends with specialized market knowledge to deliver Superior's legacy wealth creation for Sunrise Capital investors. As a principal at Sunrise Capital, Brian uses leadership abilities honed at the University of Kentucky varsity baseball team as captain to guide individual investors toward their goals of financial and time freedom. He's also the voice of real freedom through passive investing podcast where he continues to help high net worth investors better understand the world of alternative investing and how it can help them generate, create and preserve legacy wealth. Brian, welcome to the show.

Hey, Chris, how you doing, bud? Life is good. Life is good.

Yes. Yes. Yeah, we, we were talking, yeah. Before we got started here and you know, you, you have little ones and it was my son's first day of school and you know, you say life is good. There's, there's two ways to look at things, right? We can, and it can be the way your perspective really changes things. And I wanted to share this with the audience. My son, he, he comes, he mopes, he kind of mopes into the kitchen this morning and one of the highlights, I like to make my boys breakfast in the morning before they go to school. You know, spend, spend 15, 30 minutes with him. I said, what's, what's wrong? What's wrong, Miles? And he goes, I don't like school, dad. And he's a great student. He's got a Lot of friends. And I'm like, why? He's like, did you like school? And I was like, I like school, but not every day. And I said, you know, it's okay not to like things some days. I said, like, why are you upset? He goes, well, I'm not going to have my friends in my class. I said, yeah, that's, that's sad, but you'll still get to see him. I said, well, let's name three things that you're excited about on the first day of school. So we got, we started changing, you know, doing the Tony Robbins thing, right. Change your mind, change your physical state. You know, you can stand up and, and do that. And you know, it's. It. To me, it's amazing how you can, you can change the way the world appears to you just by changing what's in your mind. And that's one of the things that has always impressed me with you, Brian. You always have a smile, you're always professional. You just always have a very positive energy about you. And I'd love for you to share a little bit about your background and kind of get to get inside your head and figure out how, how do you maintain that energy?

Well, great stuff and kudos. Love that, by the way. Love, Miles. We'll dig into it, but I got to dig in. I got to double click into this because you and I, we spent some time in Nashville.

Yeah.

Speaking at an event maybe a month, month and a half ago.

Yeah.

And I got to spend a little bit of time with Miles. I didn't even know it at the time, but for everybody's benefit here, it's one of my most fulfilled speaking engagements that I've done Right. You know, thus far we've done hundreds of millions of dollars of real estate owned assets in 18 different states, a bunch of cool stuff and a lot of different speaking things. But this was a really, really fulfilling one because there were a lot of kids there. It was kind of inspiring the next generation, etc, and trying to instill some of these pearls of wisdom that you're dropping here for the next generation, trying to help them along the way. And there was a group of maybe eight different investors sitting at a table. I think there were seven or eight seats at each little inside of this, this conference room where there were I think maybe 10 different circular tables. We had seven different entrepreneurs at our table, which was kind of like the main, main. And then all the kids came in afterwards, probably 70 kids that come in. And before all the kids came in and we were Going to just try to. Try to share some insights with them about, you know, starting businesses, generate cash flow, passively investing all these various things to try to help you live the life that you want with you and your family. And all the entrepreneurs were like, hey, there's one seat that's open here that a kid can. I wonder who's going to be the brave soul that ultimately sits with the rest of the entrepreneurs here, right? So, Miles, you would be proud, my friend, that ultimately, lo and behold, unbeknownst to me, Miles walks in and Chris's boy sits at our table Amongst all the 70 different folks that are there. And that was so cool to me, buddy. We. I didn't even know. You didn't even know. We were just talking about it after the fact and realized that that, that happened. That was.

Yeah, you're like, wait, that's your son? Yeah, well, thank you for that. And yeah, I mean, I. Again, I think the same thing that you said, Brian, that was. That was the most fulfilling speaking engagement. I. I got to participate in here and maybe all memory because, yeah, it was this group of teenagers. And look, for anybody that's interested, you can reach out and let me know. It's called the passive income Mastermind. But what's really neat is there's. There's so many parents in that. You know, like, your girls are probably just a hair. A hair young for it, but, you know, a lot of teenagers that were in the group, and it was really fun because we got to interact with them and talk about what they learned and the challenges that they were facing. And, you know, the same reason why we do this podcast, to inspire you, the listener of what's possible and having these teenagers around. You had teenagers that were driving that are running TURO businesses, that are running land businesses. And, you know, you have kids that are as young as my son Miles, that's 12, that's like, oh, I could actually start, like, a vending machine business. And, you know, he's. They're talking about things like roi, whereas most kids will look at. They're like, Roy is. That is how you pronounce pronouns that Roy. You know, it's like, you know, these kids are learning the language of finance. They're learning of what. What's possible out there, and they're learning that, hey, you. You do not have to go work for somebody. You can actually create something yourself, and you can create a life that really is of your own design.

I agree. And it comes back to mindset lifestyle design. So much more. Why do we do what we do so that we could live the life that we want with our families? Right. In real estate because we want to generate a gigantic net worth or because we want to rent, earn so much income on an annual basis. Right. You don't buy a quarter inch drill, you buy a quarter inch hole.

Love that.

And we, we, the only reason we want the cash flow is to be able to live the life that we want with our family and have free time, real, real time. Like to, to be able to spend precious time with your family. Right. That priceless one on one time that we also cherish. It's what we often feel like we're missing out on. If you're at a W2 job where maybe even you do earn really healthy living, but you feel like you've got the old golden handcuffs. Right. It's why we want to generate more passive income so we could spend more time doing the things that we love with the people that we, we. To your point about changing your mindset, tweaking your brain to be able to create your own future. One of my little favorite quotes here is that weak men believe in luck, but strong men believe in cause and effect. Right? I don't believe in luck per se. It's like the guy that works 10, 20, 30 years, 70, 80 hours a week, dirt under his fingernails, grinding every single day for 30 years, and then at the end of three decades, he finally strikes it rich. And some people come to, oh man, wow, you just got so lucky. The guy's been working for 30 years to ultimately make that happen. Right. It's the concept of prepartunity.

So prepartunity. Let's underline that pre opportunity. That's, that's a Brian Speerism right there, I think.

Yeah. And I'll, and this, we'll zoom back because I'll give a little bit of background. It'll, it'll, it'll, yeah. Provide some context here. So pre opportunity comes from a old college baseball coach. He's in the hall of fame. His name is Ron Polk. So for those that don't know me, obviously guys, um, I, I, I, you know, we've owned mobile home parks all over the country now. A bunch of different really neat stuff. My very first experience with mobile home parks was when I lived in one when I was years old. My parents got divorced. My dad moved to Gary, Indiana in the 1990s and my mom moved to a mobile home park in the south side of Chicago. So we were just kind of a, you know, a down in financial circumstances. And that's kind of the. Where I started from it was middle white class suburbia. Then my parents went in financial distress and that's what was my first entry, mobile home park sector. And then from that point forward I just dedicated my life to trying to ensure that I was going to be in a better financial position. When I was that age, having children, wanting to be able to do what I wanted with my family and just was willing to do whatever it took to make that happen. So just worked super hard academically and athletically. Academically graduated top of my class, graduated fifth. Everybody else above me went to like Ivy League schools, really neat places and in for the athletic side of it I was, I also wanted to choose a sport where I could get scholarship. Well, I wasn't tall enough to play basketball, wasn't strong enough to play football, but you can be any size and shape and play and, and play baseball, right. And be pretty successful. So I taught myself how to hit both right handed and left handed and ended up getting scholarship offers all over the country. And when I was getting this right getting recruited, I happened to be in an auditorium at a where Ron Polk happened to be speaking and he, and he taught me that term pre opportunity. He's going out there and explaining to everybody that not everybody's going to start right when you're on your, you know, right now everybody's a superhero all star, right? Your AJT or whatever. The minute you go to D1 ball, like not everybody's going to start, right. You were the superhero on your team. And the higher go on the pinnacle, the more difficult it gets, right?

Yeah, absolutely.

And he's like, you need to prepare in advance for the opportunity. As I've likely heard the phrase, if you stay ready, you never have to get ready. Right. So that's the idea and the concept. You prepare over and over and over and over for your one opportunity and opportunity comes, you have to take advantage of it because it's, you might not always have a litany of these that pop up. You just have to be always ready for that one opportunity. And so for, for that I've always had a sense of urgency. You just got to work hard consistently and then when those opportunities arise, right. The beautiful thing about it is you will definitely put your best foot forward and you will more often than not succeed. But even if you don't, but even if you don't, you still are going to be able to lay down at night with your head restful pillow, sleeping like a baby because there's literally nothing that I could have possibly done more than what I've done along the way. Right? So that's what allows you to keep a steady mindset as you progress, right? If I'm everything that I possibly can to be as successful as I can, what, there's literally nothing else that I can do. The rest, you just let the chips fall where they may.

I love that. And that's, you know, kind of going back to what we talked about. One of our rules with our boys. We have four. Four rules in our. In our family. One of them is do your best. And they're lacrosse players. And to your point, it's like, you know, if. If one of my older son got pulled off the. Off the field one time by his. By his coach, and he was upset. He's like, I didn't do anything wrong, coach. He was really upset. He does not like to get pulled off the field. And he's. He said. I said to him after the game, I said, why do you think the coach pulled you off the field? He goes, I don't know. I didn't do anything wrong. And I said, were you sprinting as hard as you could? Now, they were beating this team, right? So they're beating this team pretty handily. And he was just kind of sandbagging it a little bit. And I said, it's because the coach knows how fast you can move, and he knew you weren't giving it your all. And I said, listen, even though you scored a lot of goals and you guys won that game, I said, you shouldn't feel good because you didn't give it your all. I said, I don't care if you win or lose, son. I said, I just want to make sure you gave it your all. And I think what you said is the same. I think we all know that, you know, those of us that are gone out there and you know, when. When you empty the tank, right, and you say, I couldn't have given it anymore, you. You can be. You can be proud, but when you don't, you know, you always look back and say, ah, I could have. You know, those are where regrets come from, right? Oh, I know I had. Had more potential there, but, you know, I just. I just talked about a sporting analogy. And you mentioned that as well, Brian. You know, we were. We were talking in just a little, you know, coffee conversation here last time I saw you, and you're just listening to you and hearing your philosophy and seeing kind of the way you operate. It reminded me of when I was working in the medical device space. I'd hire reps, and these reps would have to go into surgery with neurosurgeons, orthopedic, spine surgeons. Very high stress, high consequence environment. And what I found was there were two types of individuals that seemed to really, really succeed disproportionately. And one of them tended to be high operating military, retired military. You know, I was fortunate enough to work with some special operations individuals. And you know, one of my favorite guys that worked for me, he said one time you had had just a really rough day. And he goes, you know, Chris, at least I can get shot at today. I was like, yeah, you know what? That's a, that's, that's a pretty good perspective. You know, as bad as it gets, at least. Or, you know, we used to say, hey, at least I, I wasn't the one on the table in the operating room. Right? That's, that was always kind of the thing. But then the other group were elite athletes, Brian. Elite athletes. And, you know, I tried to figure out, okay, I can't hire all elite athletes and all special forces guys, so what are the components that really make these individuals successful? And I look at you, and I look at your, your athletic and baseball career, and one of the things that athletes have in common is that they have to have delayed gratification. Because like you said, that pre. Opportunity means you have to prepare for a long period of time in advance for that opportunity in case the ball gets hit you, in case, you know, you're in the bike race and the brake goes at the right time. So not only do you have to have the fitness, you have to have the mental, you know, clarity. And then the, the kahuna, shall we say, to make, yeah, the gusto. To make, make that play at that right time, you know, so one, one is that preparation. The second one is also the fact that you fail so much when you're, when you're an athlete or a performer, you know, you make mistakes. You know, you, you like in a, in bike racing, you know, if you, if you win 10 of the time, you're a superstar, a megastar, you know, base. But baseball, you know, you're still losing about 50% of the games, even if you're doing really, really well. Right?

So I'll piggyback this. I couldn't agree more. So, Chris, the way that I view it is baseball as a hitter, right? I was a hitter. That's even better. Now, seven out of ten times you go to the hall of Fame in baseball, you're hitting.300 as a career, you're going to the hall of Fame and you fail 70% of the time. Think about how brutal it is. You fail 70 of the time. And when you walk back up to the plate, you have to convince yourself the best person on the planet and you're going to dominate this pitcher. When you know statistically that it's very likely that you are going to fail. But you have to convince yourself, right? And that mental fortitude to continue pushing forward. And it's why, you know, again, a lot of different versions of sports and athletics will, will help you hone this, this character trait. But the way that I love to phrase it today, and it's what I share with my nephew, he's a wrestler. And in wrestling it's one on one, baby.

Okay.

You're either going to win or you're going to lose. And it's ownership Jocko Wilnick, there's nobody else there. In team sports, it's a little bit different. But when you're wrestling one on one, it's man to mano, we mano. And if you lose, that's why there's a lot of tears. And dads don't realize it, but when your kids go and they sign up for wrestling, when you're wrestling 6, 8, 7, 8, 9, 10 years old, there's a lot of tears on the mat for that exact reason. Because the other person beach. But my, my nephew Alex, he got involved and was, he's, he's very, very good. Extremely well just driven through and through. I see a lot of my in him and I was trying to share with him how to respond when things don't go your way.

Yeah.

And phrase that I like to try to share is win or learn. Right. Win or learn, we never lose. You only lose when you quit. Win or learn, we never lose. If you can pick something up and learn from it and continue to move forward and you fail forward, then you will become better and better and better. And that skill snowballs over a long time to allow you to continue to excel in whatever trait you're, you're going, whatever, whatever, whatever endeavor that you're going to have for the rest of your life. And it's why the things that we do in athletics growing up, you had the same myself. And then you take it to the business world. All of these things that we learned over decades, it, it infiltrates into what you do and how you lead your team. We don't have employees. We have in our organization. Right. It's a totally different sort of perspective. And we try to drive a culture that, that perpetuates that, that, that, that same endeavor.

Right.

We've got a lot of different athletes that are on our team for that reason and so much more. Right. It's just very, very interesting stuff, Chris. So love that.

Love that. No, I, again, that's, I love how you said that, too, because I've always said, oh, fail forward, feel forward. I'm going to start using win or learn. I really like that. You know, you kind of the win or lose, you'd replace that and it's like fail forward. Like when that sounds, that sounds cute. But. No, but win or learn, that's a great, that's a great lesson, you know, for children and to do that. And, you know, the, the other thing, you know, talking about, you know, you know, you're talking about teammates and know, what else do you learn as an athlete? And you know, one of the, one of the big things, in addition to having to prepare, the delayed gratification, the fact that you have to, you know, push through, you know, even if something, you know, doesn't go your way, you also have to, like you said, you have to learn to rely on other people, you know, be coachable and do that. So let's talk about, you know, from a coachable perspective and building teammates. Talk about your story as you join Sunrise Capital Partners with Kevin. And Kevin's been on the podcast, so if you, if you haven't, go back and listen to his couple episodes that he's been on. He. He also tells the story from his side about when Brian came into the organization. I'd love to hear your story as well, Brian, before we jump into what you guys are, are working on right now at Sunrise.

Yeah. So Kevin is a, a phenomenal human being. I love his character. Right. First and foremost, whenever you're going to go into business with anybody, you want to go into somebody into business with somebody who's got exceptional character because it's a business marriage. So I, I was very fortunate to get a lot of academic and athletic scholarships all over the country. Landed at the University of Kentucky, played baseball in the sec. Captain of the team there. Not because I was the most talented guy. There were six different big leaguers on the team. Just worked super hard after school. I ended up taking a job that was going to earn me the most. Not because I was the greediest guy in the world, but ultimately I just wanted to try to ensure that I could change the family tree.

Right.

And it was A much better decision than going and playing free agent ball in the minor leagues where you're making 50, 20,000 bucks a year. And. And so I took a job throughout my twenties. Yo.

Real quick. I think, I don't know if everybody understands that because this is very common in most sports. You know, Mark Teixeira went to my high school. What was his contract, like 300 million or something?

It was something crazy, I'm sure.

Exactly.

Yeah, but the headline numbers that everybody sees on sports.

Yeah, yeah, but most, yeah, like cyclists I think, you know, we'd get, we get super lucky if we got a 3000amonth stipend. So as you were saying, as somebody that's a free agent trying to come in, you were looking at 15 to 20 grand a year to play baseball. Are you a high income business owner or professional earning 2, 300,000 or even more a year but still feel like you're living paycheck to paycheck? Are you comfortable working until you're 65 or 70 to retire or do you want to achieve financial independence and live life on your own terms? Firms you could join myself and Matt4 and learn how we both became financially independent in our early 30s. We'll teach you how to make, keep and grow your money. Teaching you strategies to maximize your earnings, keep your income that you've earned through tax strategy and legal structures and ultimately teach you how to grow it by determining your personal investing strategy as well as teach you how to analyze investments so you can grow your passive income to the point to live life on your own terms. Our coaching clients reliably do this in seven years or less. To learn more, check out our coaching program at nextlevelincome.com forward/coaching. That's nextlevelincome.com forward slash coaching.

Yeah. So in the big league, make a lot of money. Yeah. Let's run it down, let's run it down. So from on the scale. So if you're in the big leagues, you're making real money. So the 40 man roster, I think the minimum is like 600 grand a year right now. So kudos there. And it just goes up from there. Life is good. However, in AAA, the minute that you are not on the 40 man roster in the big leagues, it's a very modest salary. I think that AAA is probably 40, 45, maybe $50,000. Now. I'm not exactly sure.

I'm a little bit colored baseball at that point.

Correct.

Yeah.

But then it goes down from there. So it goes double A, then high A, then Low A, then a short season, then rookie ball. And you can imagine all those tiers, it gets lower and lower and lower. Right. So if you're coming out of the gate and you're going to get drafted, you, you typically have to have a little bit of money behind you. Right. They call it a bonus, baby. Or you get a little signing bonus and a little money to live off of. Ultimately, you don't have enough money to actually sustain yourself and try to become a professional athlete and make it to the big leagues. For the individuals that are just going to get drafted and we sign 10, 20, $30,000 bonuses, that's not going to last a long period of time because in the lowest levels of amateur or professional baseball, you're making fifteen hundred dollars a month or whatever. And you're literally making, you're only getting paid during the season. So you're only getting paid six, seven months out of the year and you're only going to make 15 grand a year. And you've got to try to become a professional athlete. And you know, think about what LeBron puts in his body every year. A million dollars just to try to make him a better athlete. So it'd be very difficult.

Eat a little more than I do, I would think at 300 probably.

Right. 68280 or whatever the guy give it to.

Shot. Yeah, if you're going to. Yeah, you need, yeah, you got to. You have a six, seven figure diet if you're up at that level. Plus your supplementation, you know, your, Your care, your saunas, your, your cryotherapy, probably all that crazy stuff.

Yeah, yeah. So, you know, I was fortunate to be before the nil, but we were playing in the University of Kentucky. So we're sponsored by Nike, we're sponsored by Gator. Treat you like a thoroughbred race course. So we're accustomed to all of these respective things. And then the moment you go into professional baseball, you're basically living off of your own earnings and whatever else you can bring to this. And again, I was a kid that didn't come for much and had a negative net worth. Right. So it was very difficult and just chose the path that was ultimately A better A to B for success financially for my family, we progress. So that was the decision that, that, that I took and, and basically built a pile of cash during my twenties, all the while knowing that I was going to get involved in. So in college I was in an accounting course. I ended up getting a business degree. And I learned the power of compound interest when I was in school. I'll never forget it. I was in an auditorium in memo hall at Kentucky, and the professor explains to me the power of compound interest. Just, you know, it's a story of a penny doubled every single day, right? And then walking through the fact that over long periods of time, like with just putting a little bit of money away every single day, every single month, every single year, like, I can see the writing on the wall. I walked out of that auditorium and there's 100 kids in there, and most of them weren't ready to receive the message.

Really.

Right. In my humble opinion, I'm looking around going, guys, are you hearing this? I know that without fail, I'm definitely going millionaire. This is insane. He's telling me.

I'll never forget that moment when I learned about compound interest, too.

Exactly.

I remember exactly where I was. I remember the article I was reading and I was like, holy cow, I agree.

And. And from that point forward, it was like, this is what I'm going to do for the rest of my life. I thought it was going to be an investment banking originally and then realized after doing an exorbitant of reading that real estate was an easier way to do it. Wanted to find the best niche and chose mobile home parks. I had a good background there and knew that that was going to be the best case. And met Kevin largely through the podcast medium in the same way that we're talking here today. I heard him on the podcast. I was like, oh, my gosh, this guy, he's got an exceptional business model. He's obviously a man of phenomenal character. He's about seven years my senior. I was like, if I can do be in a similar position to what he is right now, seven years from now, I'd feel good about myself. So I called him up. Hey, buddy, I got an offer you can't refuse. I was like, I'm going to come down to Florida, work 60, 70, 80 hours a week. I'm going to invest hundreds of thousands of dollars in your business, try to help you grow your business, and then I think we'll be able to do something pretty neat with it. I. I'd helped scale a small company from the six. I was the sixth employee. Scale it up to the employees that end up going full cycle for over 50 million bucks. So I'd helped scale a small company, knew what that was like. And he had such a great business model, but he was doing deals on personal capital with very small mobile home parks, and I knew that we could do so much more and you know, fast forward over the last decade, right. We, we started doing deals, personal capital, then friends and family, then some joint venture stocks. And then we move forward in a more formal fund structure starting in 2017. And it's just kind of continue to snowball from. So it's just been such a great run. It's just been, just been a wonderful, wonderful experience. And I can't say enough good things about Kevin. He's just a phenomenal human being in tandem with being a great business partner. He's just a great dad, a great husband, a great father. So much more, dude. He's just an amazing human being. So it's just been, it's been such a fun ride.

Yeah.

Far.

No, I love it. And yeah, I'm gonna get to see him here on, on the ride down there in November, spend a little, little time on the bike. And he told me I had to get ready for 85 degree weather. I'm like, dude, I can't wait for that, man. That's. I mean, I'm in, I'm in North Carolina, but it gets warm up here. But no, it's, no, it's been awesome because I've been following Kevin for about a decade now with his podcast and everything and just seeing the scale from afar and then seeing your integration and you know, Kevin, I talked a little bit about, you know, mobile home parks. But, you know, one of the things I wanted to share with the audience, Brian, is, you know, from a macroeconomic perspective, I think, you know, there's a lot of investors with concern right now, you know, this is going to be published about or come out, you know, about six weeks before the election, you know, and a lot of people right now are saying, like, what's going to happen with the economy? Mobile home parks, I know you spent time in them yourself. I spent time with our youth group growing up, you know, going to Appalachia. And a lot of, a lot of these individuals lived in mobile homes. And you know, you see the pride of ownership that people have in these. But there's also something, you know, that is really helpful that we need today is affordability. You know, but question that a lot of people have is what happens when there is a downturn in the economy? You know, how do mobile home parks perform?

Great question. And you know, there's a million reasons why we love the asset class, but you're hitting one of the main reasons why we like it so much. Right? It is a, it is an exceedingly recession resistant asset class. The demand for the product is insatiable. It's massive and continues to increase every single year.

Right.

Our product that we provide the market is affordable housing. And there is a massive, massive, massive demand for affordable housing. Right. We're in an affordable housing crisis. You can't make more of it. I, I can go on and on, but suffice it to say there's a demand there and there's no new supply coming online. And this.

Just explain that real quick. You, you know, there's no new supply of new mobile home parks like Net Net. And why, why is that?

Two reasons. One is the NIMBY syndrome and two is burdensome zoning regulations. So one is the NIMBY syndrome, basically an acronym for not in my backyard. Nobody really wants to live next to a quote unquote park. It's a stigma that's been around for decades and for this reason not a lot of folks want to get newly zoned mobile home parks immediately around their neighborhood. Like listening to this podcast, let's assume you're in a single family home and the. Let's say I, I moved into your neighborhood and I wanted to develop a mobile home park. Really right next to you. Literally right next to your home. Most folks would not want that to occur because a. They're worried about the old kind of crazy crime and unfortunate things that they heard occur inside of mobile home parks. Whether they be true or not. Right. Depending on the scale and the quality of the park. Secondarily though, they are worried about the value of their individual single family residents going down. The average price per square foot of homes sold in the vicinity would get lowered by the virtue of having the mobile homes there. Right. So they're worried about the, their, their overall of their home and price appreciation over the long term. So that's one piece of it, NIMBY syndrome, the second piece and the one that is often overlooked. But I think it's the most powerful by far. It's burden zoning regulations. If I were to go to a local municipality and say, hey guys, do you need more affordable housing? Without fail, everybody would say yes 100% of the time. Everybody would, yes.

I say great in those meetings here. Yep, yeah. Percent always.

I've got a deal for you. I got a deal for you. I'm going to go build you a mobile home park. I'll give you 100 a 4,000 units. They'll say no, I don't want that to happen.

Yeah.

And some of it's the NIMBY syndrome. But more importantly it's because the, the municipality actually Loses money when you newly zone a mobile home park. Why is that the case? Because mobile homes are actually their taxed as personal property as opposed to real property. So when you have a piece of commercial real estate, you have a residential property multifamily, it's real property, quote unquote, real property with higher amount of property tax that you can generate for the local municipality. But a mobile home is literally taxed as personal property because it's not a chassis, much like a truck or you know, semi truck or a car. Right. So there's not near as much property tax revenue generated. And on a parcel of land that as a mobile home park where there's a high density like hundreds of homes and largely a lot of children, hundreds of children on a relatively small parcel of land, you've got to pay, you know, public school tuition for 18 years and for the fire staff and the, the police and so much more public services for 18 years for all of these children and going through. And the property tax doesn't justify, they literally lose money. So it's not only the NIMBY syndrome, it's literally the city. It's a bad financial decision. So no new mobile really come online.

Yes, you have negative, negative social energy and you have negative financial incentives. So that's driving, yeah, the decrease. But yeah, we have this massive. And to me, so just from a, you know, econ, one on one, you have increasing demand, decreasing supply. You know, that is a, like you said, when you're like, hey, Kevin's got this great business model. What a great segment to go into and how. So how are you guys taking advantage of this today? I know you guys are on. Is it your fourth fund that you guys are working on right now, Brian?

Yep, fourth fund right now. Correct. You know, from our perspective, it's a great time to ultimately acquire assets. You know, in terms of being fashion resistant, the product typically does well regardless of the economy. I can provide you with data from Green street which conveys that basically the mobile home parks are not materially impacted by the nation's gdp, whether positive or negative. Meaning as you can imagine, right. Hotels by way of example, the inverse would be hotels and lodging. Right. So like if the economy goes into a recession, fewer people are going to be traveling around the country, staying in best westerns and Marriotts and things of this nature, taking vacations. But in the mobile home park sector, people need affordable housing regardless. So whether it's recession, depression, booming economy, bust economy, mobile home parks are steady trajectory upward every single quarter. And so again, they Typically the number one or number two, lowest default rate on an annual basis every single year. So it's, it's, it always does very well during periods of recession. And from perspective, for my money, right now is one of the best times to go acquire assets. Certainly the best time since the Great Recession of 2009. Right. The luxury now of looking back at what occurred during the Great Recession when everybody was real estate was the best thing since sliced bread running up 2005, 6, 7, Etc. Then unfortunately, the Great Recession occurs. Pricing came down 38%. Right. So the market crashed and it was a brutal situation at that time. That's really when there's blood in the streets and all of the headlines are, oh my gosh, real estate is the worst thing of all time, yada, yada, yada. The truth is you should have been selling two years prior. Right? That's right at the bottom of the market. When those headlines are kind of right at the forefront, that's really when you should be backing up the brain, buying all the assets. Right now we have hindsight in our favor and we could go back and say, okay, if I could have bought anything in 2009, anything in 2010, anything in 2011, we exceptionally well. It was difficult to get good debt. It was, it was not as easy to get equity. But anybody that made investments at that time did exceptionally well. And here we are today in this situation. In the fourth quarter last year, Green street called the bottom. Right. We paid tens of thousands of dollars for institutional data to try to help us skate where the puck is going. And Green street called the bottom in the fourth quarter last year. So we backed up the Brinks truck. We're looking to buy significant assets. We bought our first substantive institutional great asset in the fourth quarter of 2023. And we've continued to. When there's a vacuum in the marketplace, there's a lot of people pencils down as these headlines still are kind of out there. People are worried about the economy, people are worried about real estate, but the equity has already evaporated. Very much like the Great Recession where pricing came back 38%. In multifamily pricing's down 30, 35%. All different asset classes pricing is down 22%. Even mobile home parks have come off their peak pricing and has nothing to do with, with the macroeconomics. Right. It only has to do with the debt and terms in the fed funds rate.

Right? Yeah.

So from my perspective, it's like going, you know, if you're going to look perfectly objectively at Something and you're going to go to the grocery store to buy a can of beans and the can of beans dollar and you want to buy the can of beans because you know it's a good product. And then you come back the next week and the can of beans is 80 cents. Are you mad because the can of beans is 80 cents? You need it anyway. You got to put it. And I'd rather have it when it's 20% off. Right. So give me as much of that as you possibly can. And that's kind of our perspective right now. We have a long term horizon. As long as you can old assets, as long as you have the ability to have staying power in the marketplace, then this is a great time to buy. In my humble opinion. That's, that's, I keep going, Chris, but that's, that's our perspective at this juncture.

No, and you're echoing a lot of the things that Kevin said. And yeah, you guys had great discipline when the market was, was getting crazy. And to your point, you know, affordable housing is going to continue to be in demand because there are people that are forming households at record rates. They're trying to figure out, you know, how can I, how can I save money? But they can't afford the new luxury apartment that's coming on. And that's something you didn't say, but I know you were, you know, it's kind of wrapped up in that is like, hey, you build a new apartment, you need to get say $3,000 a month rent for it versus, you know, $500 or $600 a month for a mobile home lot. So, yeah, it's really interesting if you see all the factors that are out there. I've been following you guys for a long time. I love what you're doing. Brian, if the listeners want to get in touch and learn more about what you have going on at Sunrise or just get in touch with you to answer some questions that popped up. What's the best way to get a hold of you in Sunrise Capital?

Yeah, very much appreciate it, Chris. Easiest way is just go to investwithsunrise.com it'll take you where you need to go to learn more about who we are, what we're doing. Our current investment offering again, invest with sunrise.com.

Wonderful. And we'll have that in the show notes. Brian, it's been a blast having you on here. It's always good catching up with you. Love, like I said, love your smile, love your energy. And check out Sunrise Capital Investors if you have any questions, please like and subscribe to the podcast. Share this with your friends. We surely would appreciate it. Just like we appreciate you being on sharing your story today. Brian.

Yeah, no, my pleasure buddy. Can't wait to see you down here in Florida for 72 hours to key west, buddy. It's going to be a good.

Let's do it. I'm going to. I'm going to work on my tan. Hey Chris, here again. I hope you found this episode valuable. Now I have one more thing to gift you. We have a page for my coaching clients where you can get a free copy of my book as well as much more from previous guests on the show. Just check out nextlevelincome.com coaching to get a free copy of my book, audiobook and much more. I'll send you a copy of my book and cover all the shipping costs as a thank you for listening to the podcast. Also, please like share and take just 90 seconds to give us a rating on Apple Podcasts.