Mobile Home Park Millionaire Explains Creative Finance w/ Jan Wanot

If you've done a bank loan, it's just brain damage. Like, they ask you for so much stuff, and I hated getting bank debt. If you have some discomfort and pain in your life, do not just sit with it and power through it every time. Think about that pain and let that pain be a guidepost in your life to say, is there a better way to do this?

Hello and welcome to another episode of Multifamily Strategy. I am your host, Christian Osgood. Today, joined with one of my really good friends, Jan Wanat. Yawn runs Wari. He owns a ton of mobile homes. This guy is great at creative finance. I'm super excited for this episode. So Yawn, welcome to the channel, man.

Thank you so much, Christian. I made it to the big leagues. Mom, here I am.

Oh, I have spoke at several of Yawn's events. Yawn is the big leagues. This guy can host events and community like no other, which is something I really want to dive into in this podcast. Yon, where did— let's start with where you got started. I want to dive into how you built the community that you built, because what you've done in Washington State is absolutely unparalleled. You are the premium brand for community in, like, investor community Washington State. WARI is it. For those out of state, like, that is where everyone goes. Biggest Facebook page, most consistent events, your attendance is fantastic. I'm really excited to talk about how you got there. How did you actually start? Before you had all the real estate, what did life look like Sure.

Well, Polish immigrant came to this country with nothing. You know, people say, hey, I started from zero and now look at what I have. And I wish I started from zero. I started from negative. So, you know, when I was 18, I tried to get a credit card and they were like, sir, you can't get credit. You have a $48,000 judgment against your name. And I was like, what do you mean? I'm 18. I've never had credit. Turns out, well, my dad has the same first and last name and they wrongfully put one of his judgments on my name. And so, it took me 6 months to get to zero. And then, I started building something. So, I wish I started from nothing. I started from less than nothing. And I went to school. I grew up very poor on Section 8 and food stamps. Slept in a living room and was homeless for a bit and all of that. And so once I became a teenager, I was like, I don't want this anymore. I want something better. And so I was always kind of focused on understanding financial literacy, understanding what it was going to take to get me out of this, what it was, and not only just get me from surviving not get me just out of what I was into surviving, but into thriving. So, what were the money and investment habits of the wealthy? What do rich people do that I don't do? I became obsessed with that. I became very interested in studying that. And so, that's what I did. And I went to college and I got a marketing degree and a computer science degree. And then, I got a job and it became very, very clear very, very quickly that I could not build wealth just having a job. Even a high-paying job was not going to be enough. And so, during my free time on nights and weekends, I did my 9 to 5 at Boeing and then I did my 5 to 9 working on myself, working on a side hustle. And so, I tried various businesses and I failed at various businesses. And then I thought to myself, "Hey, I've read books on investing. I've looked at BiggerPockets. I read Rich Dad Poor Dad." And now I'm like, "Okay, I'm going to try my hand at real estate investment." So that's what I did.

How much were you making at that W-2, out of curiosity? What is good money at that time for you?

Oh yeah, good money. I mean, I was making $63,000. My first job outta college and I was shocked. That was amazing for me.

You know, more than I made outta college.

Yeah. Yeah. So it was good. I was like, this is cool. This is the American dream until the, until kind of the magic wears off. It's like getting a new car. You're like enthralled for 3 months and then you're like, oh, it's just a car. Right. And so, It's like getting a new pair of shoes and you're like, "Oh, I have to keep them perfect and clean." And then, after 2 weeks, you're like, "Ah, screw these shoes. I don't care. They're just shoes." And so, once the magic wore off of, "Oh, I got a job out of college," I was like, "Oh, I'm making $60,000 a year. I'm saving $20,000 a year because I moved back in with my mom. How many years until I have $1 million at this savings rate?" Well, $1 million divided by $20,000 is 50 years. I was like, "This isn't going to work for me." And so, that's when everything changed and I had to— realize I have to stop trading my time directly for money and I have to start having money make me money.

And $1 million in 50 years is not going to go nearly as far, not even kind of as far. So, yeah, there needs to be a better plan. How much money do you think someone would need to make in a W-2 to not need to have a side hustle? I'm curious what that number is. I got to almost $200,000 at the end of my sales career. And it only got me 2 duplexes. So, I assume it's more than that. But where do you think you need to be to do that, like Dave Ramsey's just save your way to wealth and do it in a reasonable time? How much do you think you need to make a year?

I think if you're basically guaranteed $500K a year, you can live your life and be okay with not doing anything else. And maybe you like your— I mean, I have friends that make $500K. I've made $500K in a year and I was like, Okay, great. I could— like, if I could sustain this level of income in perpetuity, I could live a really comfortable life and have enough for investing and saving and everything. And so, I think $500K will get you a great lifestyle and a retirement and investments, and you won't have to have side hustles. If you're under $500K, you better start working that 5 to 9. Because the 9 to 5 is going to get you mediocrity at best. And if you're okay with just having an average life, then stop listening now. Yeah.

Unfortunately, you only get one life. So, I feel like average is pretty boring. I agree with that. I think the benchmark is somewhere around 5. If you're most people and you're making less than $500K, even combined income like husband and wife, If you guys are making $500K, I think you have the option to— if you just wanted Dave Ramsey's Go Debt Free, you probably earn enough where you can do something beyond what is common. Other than that, you better figure something out because we're going to keep printing money, unfortunately, and your dollars will be worth less and less. Your income is not going to go up to match that. You're going to have to either use leverage or you'll do the Mark Cuban thing and have a tech company that goes off to billions of dollars. Those are pretty much your options. You want— what was the first investment for you? So you tried some side hustles. Some of them didn't work. When you actually landed on investing, what did that first deal look like?

First, I made a commitment to what I was doing. And I made a commitment to the previous businesses I tried too. I think you have to commit to one thing and execute on that. You can't be spread so thin that you're trying to make crypto work, and a landscaping business and do real estate investing. It's just like, no, you're going to be average or worse at 3 different things. So, I committed to things for at least a year. I would give all of my effort into one thing for a year. And I think that was my first step is I committed to finding a real estate investment in a year. And my first investment was a single-family home, which I recommend You start with 2. I think it's the very risk— you can mitigate risk very easily with single family because you have so many outs, right? If you buy a mobile home park, that's not a great deal. There's not many buyers for that. If you buy a single family home that wasn't a great deal, there's still going to be buyers for it because people like houses and like you might lose $50K, but it's pretty simple to understand valuation of a single family home. And so I started with a single-family home and it was a house hack. And the way I found it is by defining my criteria, which was single or small multifamily in Central Tacoma, under $500,000, under $50K rehab, that would cash flow $500 a month. And that was my criteria. And so that equation for you, for you, if you haven't defined your criteria, you need to. 'Cause otherwise, you don't know what you're looking for. You have to have crystal clear criteria. So, the equation that I use is, what's the asset type? For me, it was single small multifamily. What's the location? Central Tacoma. What's your price range? Up to $500K. What's your value add? Mine was up to $50K rehab. And what's your profit metric target? And mine was $500 a month in cash flow. Okay? And that's all I looked at.

How far into that first year did it actually take for you to find the deal?

It took me about 4 or 5 months, I would say. And it took me 4 or 5 months of doing the exact same thing every day, which was looking at properties that fit my criteria. So first, you have to know what you're looking for, and then you have to look for it every day. If that sounds boring, it gets a little boring. It gets a little monotonous. But guess what? I looked at single and small multifamily homes under $500K that needed a light rehab and would produce $500 of cash flow every single day. And I started noticing trends in my Central Tacoma market, which were, huh, this single-family home's $200K, this one's $170K, here's one for $220K. Here's one for $195,000. Here's one for $210,000. Here's one for $225,000. And then one popped up on Craigslist for $140,000. And it was just like all the other ones I just described, 4-bed, 2-bath. And guess what I did? Because I knew my criteria, number one, and I knew now my market, number two, I could act faster than other people because I knew exactly what was a deal and what wasn't. So that same day I saw that listing on Craigslist, I was at that seller's house in her living room negotiating the deal, and I got the contract the same day.

And that's what tends to happen when you focus up for a year on something, right? All of a sudden, it's like, okay, I'm looking, I'm looking, and I've made a commitment, and then, oh, you find that one thing. Once you closed that first deal, did everything go more or less as expected? Was that just a grand slam deal, or were there any unexpected you learned along the way?

Nothing went well at all. Nothing. Went well. I've never done a renovation of any sort. I was 26 when I bought my first house. I was working at Boeing. I was good at Excel. And that's it. That was my skill. I was good at contracts and I was good at Excel. And so, I've never done a renovation. We hired a general contractor. I've never gotten a loan for anything. So, I got a renovation loan from a bank. I put together a scope and budget. It was, it's laughable how bad my scope was. I can't believe the bank gave me money. My brother found a contractor. That contractor ended up using like a Home Depot bucket as a permanent part of a like sump pump system in my basement. And I'm like, dude, I don't know enough about this to say if it's wrong or not, but it doesn't look right. You know, he, he was, he was on the roof fixing the roof. Hitting on my 17-year-old female neighbor. And I'm like, Phil, shut up, please stop doing that now. You're gonna get us all arrested here. It was just an absolute mess. Like, I was stressed every day. I didn't, you know, I could tell the work wasn't good, but I didn't know enough to really like criticize it because it was my first ever project. So super stressful, but At the end, got it fixed up, got it rented. My rent is $1,650. My mortgage is $1,150. And I'm like, "Ah!" The gates of heaven open up. And I'm like, "I'm officially an investor. I'm cash flowing." I thought I was making $500 a month. Of course, I didn't think about CapEx, maintenance, reserves, and vacancy, the 3 silent killers of deals. I was just like, "Rent minus mortgage. I'm rich. Okay. $500 a month." So, that was my first deal. I still own it and I still love it. That was the deal that kicked off my investing journey. I bought 10 very similar rental units that all met my criteria: Central Tacoma, under $500K, single and small multifamily with light value-add that would cash flow $500 a month. Okay? I knew what I wanted. In 12 months, 10 units, single family, fourplex, triplex, duplex that met that criteria. Because guess what? It is all I looked at every day. I just underwrote the same boring thing. And that is how you gain success in something. You do the boring shit over and over until you can do it better than anyone else. And so that's what I figured out how to do.. And that's what I've done. Now I focus on mobile home parks and seller financing mobile home parks. And I do the same boring thing every day. And guess what? It works out. And we own a number of cash-flowing communities that are excellent. And I'm glad I've transitioned to commercial real estate. But it all started with a very simple plan, a very simple criteria set, and then just doing the boring activities. Of underwriting, deal searching, and making offers and doing inspections until I got what I wanted.

So it took you a few months to get that first deal. But after that first deal, you said within a year you had picked up 10 deals like that. So you hit a pace not that far after that first deal where you were buying, what, 1 or 2 houses a month?

Yeah, well, I bought— my next deal was a fourplex that met those criteria. Then the next one was a duplex. And then the next one was a triplex. And they all met my criteria. So yeah, I started just buying small multifamily because I figured, why not get 4 instead of 1, right?

Mm-hmm. At what point did you switch into mobile home parks? Commercial real estate— I agree with you 100%. Commercial real estate is where I like to live. Instead of 4 units, why not do 50, right?

Yeah.

It's a lot easier to scale. You settled on mobile home parks where I did. I have a mobile home park, but I do more in the multifamily space. Same general concept. Why mobile home parks?

Sure. Yeah. You know, typically in America, we have a recession roughly every 10 years historically, right? '90s, 2000s, 2008. I guess you could call something— there's probably a recession somewhere around 2020, but kind of a short-lived one. For the most part, I don't think, I don't think we really had another real recession since 2008. And so since 2008, we've been on this absolutely obscene bull run. And I was, for lack of a better term, scared that a recession was going to hit. And all of my single and small multifamily homes which the values of depend partially on consumer sentiment, would get smacked and I would not be doing so hot as I thought I was. And so I thought, how can I get out of property and owning assets that are tied to people's feelings? How can I stop owning something that has that level of risk built in, which is, again, consumer sentiment, people's feelings about the market, the future, about their spending power, etc. And so that was one of the reasons. And mobile home parks, RV parks, and self-storage are what they call uncorrelated assets. And they're called that because their values are uncorrelated to the values of single-family homes. So generally they don't move together. Single-family homes move, the value of it moves together with a lot of other variables in the market, but these uncorrelated assets supposedly do not. And so, it's a good hedge against owning too much single and small multifamily residential property. Another thing is— I love that. I had 3 washing machines break in 1 month. I was managing all my rental units. I was tired of owning so much stuff. And so, I thought, "How can I own less and cash flow more?" And mobile home parks were an answer to that because in my mobile home parks, we just own land and utilities. And we provide a community for people to live their life. But I don't own toilets. Even though I have a couple hundred rental units, I don't own toilets. I don't own flooring. I don't own— walls and paint and electrical systems. I just own utilities and land. And so, we cash flow more, but we own less stuff that we have to maintain and fix all the time. So, it's operationally easier than owning the property too, the building itself. I just like owning the land.

Do you find there's an effect on— because they're not as market correlated, do they appreciate more or less than standard multifamily buildings?

It's hard to say, Christian, because first of all, I haven't been through a full market cycle as a full-time real estate investor. So like, you know, I need to humble myself and say I don't know for sure. But I will say this. Theoretically, if there is a recession or when there is a recession next, because there will be a recession someday, there are people— the first thing people do in a recession is they cut expenses. And what is What's every single American's largest single-line-item expense? Housing. Whether it's your mortgage or it's rent, there's not a recurring monthly expense that's as expensive as your house. And so, if you live in a $4,000 apartment, you can just downgrade to a $2,000 apartment because it's not a problem for you. If you live in a $2,000 apartment, you can go to $1,000. If you live in a $1,000 apartment with your family that's a 3-bed, 2-bath, What are you going to do? Okay, some of you are going to move. Some of you will move back to live with family. That's fine. But some folks in that situation, they're the next step down on the totem pole is homelessness. If you don't consider mobile home and RV parks, okay, because there I have a double wide in one of my parks that costs $410 a month. That's 3 beds, 2 baths, 1,400 square feet. Okay, $410. Okay, that is the backbone of American affordable housing. Mobile home and RV parks are the backbone of that product sector. We absolutely need them because in a recession, if people need to downgrade their expenses and downgrade their housing, We are a catch-all. We are catching folks and providing them clean, safe, and affordable communities to live in for half the price of the typical apartment of the same size.

Well, and that's, that's the thing that I love about— because I'm in entry-level housing and it was the same logic. I do a lot of stuff where I fix up beat-up properties. I make a less expensive place than my competitors. There's really nowhere for them to go except for mobile home parks or homelessness. And there are some fantastic, like truly fantastic parks. It can be a really great way for someone to actually live in a larger space for less, and you're able to have some efficiencies because as a landlord, your expenses look a lot different than they do when you have to maintain a building. How long ago was it that you bought your first park, and how many parks you have? I know you have a couple hundred units. How many purchases is a couple hundred units for you on?

Yeah. So our first park was in 2020. You know, after I made that decision, it took about 4 months to get our first deal done. Kind of like, you know, when I committed to single family, I was like, I'm going to find my first single family deal. It took me about 4 months to find that first house on Craigslist. And same thing with mobile home parks. You know, if you really commit to something, you define your criteria, you're going to find that first deal. The first deal actually wholesale to a friend of mine. I wish I didn't. Of course, as most good wholesales, years later you look back and you're like, I made— hold on, let me do that. I made $30,000 and now they have like half a million in equity for doing nothing. Cool. Okay. No, no, no. Yeah. Why did I wholesale that? Great. So that's how that goes. If it's a— if you're getting paid a really big wholesale fee, it's because the next guy is going to make a ton of money on it. Okay. So consider trying to keep some of those wholesales that you think are killer. Any which way, 2020, we bought our first park. First one was a wholesale. Second one we found by just cold calling. And making a connection. And someone offloaded their headache to us, and we were happy to buy it. They were really fighting us hard on the price. They wanted $450,000, and we're like, God, why do these guys want $450,000 for a 20-unit? And then we show up, and it's actually like a 30-unit, and they just weren't aware of it because they paid so little attention to it. So now we're like, oh, $450,000 is actually a great price for, for the 30-unit. And that was our first park. And the second one was a 43-unit, same thing, off-market cold call, seller finance, just like the first one. The third one was 51 units, off-market cold call, seller finance. Are you noticing a pattern here?

Yeah, I am.

The next one was a 42-unit, off-market cold call, seller financed. And yeah, so we own 7 communities closing on the 8th this month. They're smaller communities, okay? These are not institutional quality assets, okay? These are 30 to 50-unit sites that we're getting at steep discounts direct from owners. We're cleaning them up. We're putting in professional management. We have 5 full-time employees that are professional managers that live near the communities and make them great. And that's kind of where we've been operating. And the next step is getting into a little bit bigger assets, right? So we're hoping to break into our first 100 units soon. But for now, we are having a great time buying cash-flowing assets in that 30- to 60-unit range.

Why seller financing on all these? Is there a reason that you did that over bank financing? Down payment, interest rates? What is it about seller financing that made you go the creative finance route?

I don't like banks. I can't imagine why. If you've done a bank loan— It's just, it's just brain damage. Like, they ask you for so much stuff. And that— if you have some discomfort and pain in your life, do not just sit with it and power through it every time. Think about that pain and let that pain be a guidepost in your life to say, is there a better way to do this? Because pain is a great guidepost. But if you just push through it and just get through it every time without rethinking it, then you're going to just keep encountering the same pain. And I hated getting bank debt. It's just a fricking nightmare every time. And they can pull the rug at the 11th hour. And I hated not having control and not knowing what their magical underwriting committee with their oracle and their fricking cauldron in the middle was thinking or doing and why they would change their mind at the last second. And so, I thought, let's take control of this process and let's work with individuals, not institutions. Let's pay interest to people that I think deserve it more than the big banks. I want people to continue earning cash flow from an asset that they worked hard to acquire and build up. Why not continue earning cash flow and let a new professional operator make sure they continue to get that cash flow and be a good steward of their community. Like, every time, 100% of the time we've bought something, we've made it better. I can guarantee you that. And 100% of the time, the seller has gotten paid on time every single month. I haven't missed a payment in my life. And we're going to continue to do that. So, why not? There's only benefits to everyone involved. And we absolutely love to work with individuals as opposed to institutions.

I absolutely agree with that. One of the best things about seller financing is you've already negotiated and got approved for your terms when you sign. So there's no question mark of, is the bank going to do this? I've had a bank loan where they actually scheduled the day of signing and then they didn't sign and they didn't— they stopped communicating with us for 2 days. And we came back and they're like, oh no, you passed underwriting, we would love to lend to you. The VP just didn't like the fact that you have 8 seller finance notes. We're just We don't know what that means for us. I'm like, it means nothing for you. It's unrelated to this property. That was their actual reason. Their VP looked at our books. They're like, seller financing. There's a lot of seller financing here. I don't want to be the first bank to lend to them. It's like, who cares? We passed under it. Yeah. They literally ghosted us on our signing date. They just didn't show up. Yeah. Very weird. So, I don't like that because that's obviously significantly after earnest money went hard. On a deal. They're like, uh, yeah. Now, fortunately, I was able to work with the seller on it. We did eventually find new financing. We got, we got the deal closed. Um, but it took— I could have just lost all the earnest money. There's nothing that— that was way out of my control, right? I can't control a bank. You have so much control over it. And naming your terms, there's some deals that it's like, if you went on terms, you can get crazy cash flow And you can just do deals that other people can't do. Have you had any deals that worked specifically because of the seller finance terms where they would not have worked with a bank?

I think all of them. I think all of them. Yeah. Yeah. I'm trying to think of the exception to that rule. Gosh, for sure right now, we're struggling really hard to make cash-out deals work. You know, we've tied up a couple this year and they fell apart as soon as the bank looked at it, you know. And so, because the seller was just stuck on cash, they want cash out, and we're like, we'll do our best. Okay, we'll do our best. But you're— as soon as we sign it up with cash, with a cash out for you, we lose most of the control in the financing piece of this deal. And if we have seller financing, we retain control of the process. And we perform every time. I've not— yeah, I just haven't had seller finance deals fall apart. Yep.

So it's hard for them to fall apart. You really have to screw something up because everything's already agreed on. They've signed for it.

Correct. There has to be something crazy happen in inspection. Right. But if it's— it's never due to debt terms that— no, that the seller finance deals fall apart.

Never. I've had handshake deals where we get to signing and people retrade things, but I've never had it materially affect the deal where we've always been able to put together something that made sense. Yeah. Seller financing is a fantastic way to close a deal. Totally. Through your journey, what is the thing that you think you are the best at and how has that grown your business?

Great question. I would say one of my gifts is fostering community and managing community. And so, that's kind of what I've done. As soon as I got started with real estate investment, I would go to all the meetups, which is about one per week, and I would ask everyone questions and just be curious and try to be value-add.. And then I was like, "Dang, I still have more questions though. I still want to connect with these investors because I don't know what I'm doing and they do. And I really want to figure out how to add value to their lives." And so, what I did was I added 5 or 10 of the people that I met on Facebook into a Facebook group called Washington Real Estate Investing or WA Real Estate Investing, WARI. And they were like, "What is this?" And I was like, "Well, I just thought we could continue the discussion in here." And they're like, I guess it's kind of weird. I was like, oh, they're not going to like this until I set the tone, until I create value for them first, and then maybe they'll reciprocate, maybe. And so, I realized, oh, I need to start sharing my journey, things I'm learning, create content for other people to enjoy and learn from, and then maybe I'll get blessed with some of that in return. And that's what I started doing is just creating content, sharing what I'm learning, sharing my journey, asking questions. And then people started to get the hint, oh, okay. Yeah, this is a good place for us to do this too. And the group has grown organically from 5 or 10 people that I manually added to now 20,000 people. And we have a great place for you to meet your next partner, contractor, architect, engineer, for you to find your next deal. We have had thousands of off-market deals come through the page, some good, some not so good, just like any other marketplace. But guess what? I've personally made lifelong friends through the group. I've personally gotten insane deals from the group. And we host events that a lot of people derive value from. I host a masterclass on how to get started with real estate investing for those that want a little bit more structured approach and some guidance. And so, yeah, the group has grown into its own living, breathing thing. And it's a great community that I hope to just continue to create value for. That's my main mission. And I think that's why the community thrives is because that is my main mission is to create value for others.

That was one of the first things that I was told to do when I bought— right after I bought my first duplex. This was in 2020. I bought my first duplex. I was like, okay, I was like, where do I find more? They're like, okay, well, you need to get connected with a couple brokers and you need to be in the Wally Group. I was like, what's that? And then I go, well, they just have to accept you. They accept a lot of people. Just, uh, just reach out and then you get plugged in. I was like, I've met so many investors through WARRI. Some of them have actually even funded some of my deals. Like, they're people who I've partnered with at some point, and it's like, I'm not even that good at using Facebook or, uh, or, or doing the, the online networking thing. I market a lot, but I'm not like on social media. Sure. WARRI is amazing, and it is— in just being in the industry In Washington State, it's kind of just the commonly accepted, like, oh, you're an investor, you're part of this group. It's industry standard. How you did that on Facebook is insane to me. But it is, it's just a fantastic community. People are on it posting all the time, every day. And it's not just deals. Sometimes, people just put funny— this is really funny shit on there. And then, you have the actual community where there's personality and there's laughing and It's like if Jesse Lee posts anything, it's always going to be hilarious. But you just created this amazing community.

Yeah. It's fun and it's value-add. And like, what more could you hope for? You know, people say, go and find your passion and go find something that doesn't feel like work. And this is it for me. It's like fostering the community. It's teaching others. It's creating valuable content for others. Doing work with people in the community. That is what I would do if money was no object. That's what I will continue to do once money is no object to me, which is the plan. It's not like I'm going to just stop and go sit on a beach. No, I'm going to keep doing the stuff that brings me joy. And it's just great to have found part of my work. Don't get me wrong, some of my work is an absolute grind and I'm just getting through it.. But some of my work is purely joy and passion-filled, and it's what I would do if money was no object. I would do it because it's fun and I love it and it brings me presence and joy.

That's how I feel about multifamily strategy. It is the thing where it's like, "Wow!" Watching other people win and just even having a group where I'm like, I go through hard stuff or I'll have an expensive thing happen and I'm like, "A bunch of people can learn not to spend $4.5 million on a resort that you don't want to own." That's a valuable lesson. If I could save anyone $4.5 million, hopefully, it's worth the cost of admission. But those pieces I have felt are very life-giving. I love that you've built that in the community and your passion for it is very obvious. That makes sense now that you started the show. Yeah, I studied marketing. I'm like, "Oh, that aligns," because it's a very well-structured, very well-branded, very well-marketed group. The events cannot be It really can't be overstated. They're fantastic. I've seen you just absolutely pack out rooms with investors. Really fun, the community you've built there. Thank you. Highest stupid tax. That is the thing that we do. We don't know what we don't know when we get started. I know you learned a lot on your house. Is that your highest stupid tax? What was the most expensive lesson? It could be monetary or it could just be emotional.

Sure.

Sometimes you have something where I'm like, "This destroyed my universe." Totally. But what was it for you? What lesson can people learn to maybe avoid or not have that same pain?

God, too many to count, man. I haven't lost a lot of money. The only money I've actually lost on deals is earnest money on very speculative deals. This isn't a stupid tax because I knew it was very risky, but the payout was also going to be very big. But what we did, me and my partners, We bought 6, we got 6 properties that were zoned single family, but the city of Seattle said would be rezoned to multifamily through mandatory housing affordability, a citywide rezoning. And we thought we're frickin smart, we're smarter than the average Joe, we're gonna get these before other people get to them. And before the city rezones them. So we got 6 of these projects, some of them We bought some of them. We just tied up with really long closings, like 12-month closing, 18-month closing, builder terms. And we were either going to sign them or buy them and then build multifamily that we got for a single-family price. Smart, right? Well, we thought we were going to make on average $200K per deal. And what happened is that the city at the last second changed its plan and only rezoned half of what we owned. From single to multifamily. So, we kind of slightly overpaid for 3 single-family homes. And then, 3 of them, we did make money on. Anyways, we thought we were going to make $1.2 million that year. And we made $60,000. Womp, womp, womp. Because half of it got just tanked, just nerfed.

I've had deals like that where it was a structure thing where it's like, we made money. We actually made a lot of money on the deal. But we overpaid our investors by like— they all put in $300,000. We doubled their money in 11 months because we were like, "We'll double your money in 5 years." And then, we needed to buy them out to refinance 11 months in, and there was no clause for like, "If we buy you out ridiculously early, I just have an option to purchase for double what they bought in." I was like, "Well, congratulations, everyone. You have an over—" In 11 months, since your returns are calculated annually, I'm like, "We borrowed at over 100% interest is what we did." Crazy. Stupid. We made money, but I will tell you, you may have hit this in your investing career when you were starting. There are many times when I was starting where $300,000 would have made a huge difference in what I could do. Sure.

Sure.

We made money, but I've also run out of money and needed $300,000 quite urgently.

Sounds like maybe more like money was made.

And mostly by the investors. Yes. And a little bit of help. That was right at the end of the bull market. So, there's also a little bit of like, you know, how much of that was— Yeah. We bought at the end of the perfect timing. Sure. We refinanced into debt that is much cheaper than what we have today on a fairly large commercial asset.

And look, don't sell yourself short on that though, Christian, because guess what? To get the benefit of those crazy timings in markets, you have to be a player in the market. And you have to consistently be a player in the market because we continue to be players in the market in 2023. But we made dogshit. We didn't make much money. Yeah, we still got a few deals done. But we just kept the lights on. Like we weren't thriving last year because there was just a slowdown in the market. People wanted 2022 pricing with, you know, these new crazy high rates. And so it was just difficult to get deals done. But we continue to be players in the market. And because of that, now guess what? This month I'm closing on two amazing projects. And it's not because like I got lucky. It's because I've been a player in the market the whole time. And so you, through the good and the bad, you have to continue being a player and not get wiped out. That's rule number one of investing is don't lose money and stay in the game. That's the rule is don't lose money and stay in the game. And if you stay in the game long enough, yeah, you're going to get some of those crazy appreciation times.

That are just awesome. So perfect. And I know you have a, you have a mastermind. What does the mastermind look like through, through Wari? If someone wants to, is that an event? Is that a, like, is that a gated thing where it's like, hey, X amount of times per year you join? What does it look like if someone wants to learn more structured from you?

Sure. Yeah. So I have the Wari Masterclass, uh, which is a 6-week class where we spend a full weekend together. I teach you A to Z. How do you, First of all, how do you define what you're looking for? How do you then get that? How do you start getting deal flow coming in, whether it's on market, off market? How do you analyze all those deals, create offers in various ways? How do you, how do you close a property in 10 different ways with 10 different types of structures, right? Whether it's an novation, subject to, seller finance, cash, lease option, you got to know the tools of the trade. So we teach you A to Z, how do you find, acquire, close on, and add value to your assets, your first few assets. And that's over a full weekend. Then we do 4 Zooms, we do 2 project walkthroughs, and you get 3 one-on-ones with me. Right now it's $4,000 and we have had hundreds of people come through it and all have been quite satisfied. I only got 1 refund request. From someone that took the class. He was like 4 weeks in and I was like, dude, what do you mean? You're doing great. Give it, look, give it 4 more weeks. If you still feel like this isn't for you, I'll give you a refund. 2 weeks later, he finds his first flip. 3 months later, he sells that flip and makes $90 grand on his first ever flip. And I'm like, you are the only one that's asked for a refund. And look at you now. And it changed his life, right? And so, yeah, love to do the class. Wari Masterclass. You can learn more about it on Wari if you're interested. And then this year is our first year doing a mastermind just for higher-level investors. And so, we're going to limit that to 25. It's called the Wari Summer Camp Mastermind in August. We got an absolutely epic luxury lodge, 20,000-square-foot lodge on top of a mountain overlooking the San Juans. And that's for 25 higher-level investors that are looking to network, with their peers to mastermind, to get answers to their specific problems, and just to level up with other similar people while having a fun camping-like experience, a luxury camping-like experience in an epic location.

So excited for that one as well. Oh, that is exciting. If you're taking guest speakers for that, I know one. Nice. And then Because this guy loves community, I've heard a rumor that there is also a course that has recently dropped for creative finance and mobile home parks. Someone wants to just copy the strategy. Maybe they can't make it out for a mastermind. Maybe they're national. Maybe this is somebody who lives in Florida who's not going to drive 15,000 miles over to Washington. Tell us just a little bit about that project.

Yeah, so that is one I'm most excited about because that's where I spend most of my days now is on seller-financed mobile home parks. And so we've got an amazing offering for you. It's myself, Christian, and Cody, 3 guys you know and hopefully love. And even if you hate us, we'll, we'll still have you as a student because we are confident that you're going to learn something from us. And it is called MH Park Academy, Mobile Home Park Academy, mhparkacademy.com. We have a crazy deal right now because our first calls are starting next week. So we, for the introductory inaugural class of Mobile Home Park Academy, we are doing a discounted rate at $1,500. You're gonna learn from me, Cody, and Christian through detailed video course modules. On how do you start looking for mobile home parks? How do you talk to sellers off market in a structured way? Guys, there is a system and a process for even a simple discussion with an owner to present yourself as a likely candidate for being a purchaser of their asset and for getting seller financing. Okay, you can't just wing this stuff. You can, but you're going to fail 50, 100 times before you figure it out. So why not save yourself that time? Learn directly from us. We're going to do a weekly call with all of you. We're going to answer your questions. I have provided you analysis templates, detailed investment overview package that you can actually create a full investment with. And we have provided you all of the foundational information you need to find analyze, underwrite, close on, and add value to a seller-financed mobile home park. And guess what? These investing principles we teach, they apply to multifamily, single-family. You can use these strategies with other assets, but we're going to tell you a lot about mobile home parks, which is just the hottest thing since sliced bread.

So I will say this, I have done a significant amount of deals. I, I I haven't counted. I've probably done 20+ real estate transactions to build a couple-hundred-unit portfolio. The best deal I have ever done dollar per dollar is the one mobile home park that I recently purchased. Private money. Didn't even need seller financing because we bought 25 units for $300,000 on the water. We bought it with 13.5% debt. Fortunately, there was a cap rate of 19%, so it cash flows very well. That is a deal that anyone could have bought. Was on the market, and we were able to put it together because we have a basic understanding of different, different ways to close the deal and different creative financing. No banks were involved. We got it done. It needed a little bit of cleanup, and it needed a new septic system for $70,000. It's gonna be worth like a million bucks. Yeah, these are things that— it's just super fun to be on these projects. I've found that mobile home parks have some unique plays to them. Yeah, I've— my opinion, I mean, correct me if I'm wrong, I think you can get more creative with mobile home parks than you can multifamily. There's just more options. 100% have individual units. I have a friend who's seller financed a lot of the units back to the tenants because they didn't want to own them.

Oh yeah, I mean, you can get ludicrously creative. Oh, I love— absolutely love chattel debt or lending on these, this, uh, personal property, these mobile homes, selling these to folks. Not only do I like to get seller financing, I like to We provide seller financing too. And I love helping people become homeowners. Like, guess what? You're not going to have to deal with me coming and fixing the unit if you own it. And here's a path that you can own it where I'm actually going to save you money over what you're currently paying. And then at the end of this 3 or 5-year term, you're going to own the home and then you can just sell it to someone else or do whatever you want. And so, you know, we, we love to get seller financing, but we also love to give it to people. And, um, heck, and you know, it's where else am I gonna earn 12% on, um, on $20 grand? I mean, it's just like an easy savings account for me, you know?

So yeah, we hope to see you there. I don't do a lot of projects with a lot of different people. This was an interesting one. Uh, the way that Yon runs things is incredible. So it was a really fun collaboration. If you guys wanna check that out, mxparksacademy.com, link will be in the show notes here, wherever you watch this podcast. Be that YouTube, Spotify, Apple, you name it, it shows up everywhere. If you enjoyed this, give us a follow wherever you listen. We will see you all on the next episode. Thanks so much, John.