How Mobile Home Park Investing Can Create a Freedom Lifestyle

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, thelandgeek.com and on this week's Art of Passive Income podcast. I'm really excited for a guest. Scott Todd is out on vacation, but our guest today is Bryce Robertson. Now if you're not familiar with Bryce, he is your real estate mate. I'm not even going to try an Aussie accent. He is an Aussie born real estate investing entrepreneur, number one international bestselling author, world traveler and adventurer. Bryce began his investing career with a negative net worth, unseasoned credit and a mere $2,000 in the bank. Having raised millions of dollars and a culmination of success in mobile home park investing, Bryce lives the freedom trinity of financial time and location freedom. Bryce is host to the YouTube channel and video podcast Freedom Hack Radio, co author of 10,000 Miles to the American Dream. He writes weekly articles for Bigger Pockets and has number one top selling mobile home park investing and capital raising home study courses. Bryce Robertson, welcome.

G', day Mark. Thanks for having me here, brother.

I'm, I'm so glad to see you. And you know I'm a big fan of the Aussie accent. I lived in Coogee beach for three months and then traveled Australia up to Cairns for three months. So I'm just going to try to get you talking as much as I can.

Let's do that.

So let's just rewind the tape. And how did you get started in real estate?

Yeah, so I was born, raised in Australia, got to the end of high school and near the end of high school realized there's not a chance I'm going to university. So at the time I had no idea of any influence in business or entrepreneurship, knew nothing about it. So I went out there and I got what I thought was the highest blame paying blue collar job because I thought that was the best thing I could do. So I got an apprenticeship as a steel fabricator welder, did a five year apprenticeship in three years and then in my very early 20s, I moved out to Western Australia and worked in the underground gold mines where I was working 12 to 14 hours a day, seven days a week, eight weeks on, one week off. And I did that for round about two years through Western Australia and Northern Territory and that enabled me to save up a little chunk of cash because I had a dream of traveling the world for six years. Now I didn't have enough money to travel for the entire time. I had enough to just get started. So here's what I did. I went over to London, England and I set up my first base camp. That's when I would work. And I would work eight to 10 hours a day, five to seven days a week for a couple of months at a time, save up a little chunk of cash, go traveling through Europe until my money ran out. And then I would come back and work again and then go to Africa. And then I did that whole UK Europe, Africa cycle for three years. Then after that I wanted to change. The scenery went from 12 million people in London to 5,000 people in a small ski village called Fernie in British Columbia, Canada. And I actually just went there for one snowboarding season. And then when I got there, I found out that they had coal mines down the road. So I set up my own little gig down the coal mines. And then I ended up staying out there for two years. And when I wasn't working at the coal mines, I was either firefighting, downhill, mountain biking, snowboarding, or at the local gym. And so all of the things that I did were just like these mountainous activities. So I didn't really travel anywhere through that time. And that enabled me to save up an even bigger chunk of cash this time so I could take an 18 month surfing and scuba diving trip down in Central and South America. And in the last six months of that tour, I met my wife in the Caribbean, who is a native from California. So naturally we ended back here in the states about 13 years ago. When we got here in the States, we made an agreement with each other. We wanted to recreate this type of freedom lifestyle. Step number one, we wanted to do it without our money running out. Number two, wanted to wanted that money to actually grow while we're traveling and having fun. So we looked at the three main ways we could make big bucks and that's owning a business, real estate and stock market. I think crypto category, cryptocurrency fits in that last category. It really wasn't a thing back then. So in the beginning I was trying a bunch of different things, about seven different side hustles. And then I realized, wait up a minute here, I'm spread too thin, I'm spinning plates, I need to choose one thing and laser focus on it. Now at the time I knew it was going to be real estate because I had a 20 out of 20 year background in construction, construction management. But what was it going to be? So I looked at all the different ways to make money in real estate. Mobile home parks, self storage, multifamily apartments, single family homes, fix and flips notes, wholesaling, the whole kit and caboodle over and over and over again. Mobile home parks kept popping off the page. Massive supply and demand in favor of mobile home park owners. Awesome tax benefits, getting to solve what I believe is America's number one real estate problem. The need for affordable housing, high cash flows, awesome equity, not much competition. I was all in. So three months later when I made that decision, I got my first mobile home park on the contract. But at the time, I had a negative net worth $2,000 in the bank and unseasoned credit because I hadn't been in the states long enough. So I had to go out there and lean on family and friends to bring in the capital to fund that deal. I also had to figure out how to get a private loan, which I got through someone's retirement account as well. So we lined up the loan raised, I think it was $170,000 or 102, $70,000 for about a $600,000 deal. And then three months later got the deal closed. And when that happened, two things happened. One, I realized I can do way bigger and better things with the power of a team. And the second thing I realized is there was a massive need for investors to come and join me in an idea where I'm doing most of the work. So I rinsed and repeated this syndication model, and then two and A became financially free, and then everything just expanded from there.

Wow. So that is quite a story. And Scott, I love the mobile home park model. And the reason we love it is that it's very similar to the land investing model, but you get depreciation, which we don't get. And it's just a little bit more of brain damage in the due diligence phase. But once you own it, it's a lot less brain damage, I think, than every other multifamily model because it's just they tend to have a way higher cap rate and less competition. And it's just a phenomenal thing. But as far as, like, your first deal, what would you say was the most challenging aspect of it? Was it finding deal. Analyzing the deal. Raising the capital?

Yeah, I was raising the capital because, you know, finding a deal that was pretty easy, got on a contract within like three months or something. But yeah, raising capital was definitely the hardest part. The interesting thing is at the time I had put on credit cards, $36,000 of mentoring, training that was going to put me in the position to make those kinds of transactions much easier. And I was, I knew, I saw this deal online. I wanted to put it under contract, but I didn't have a contract yet. So I called up my mentor who had paid $36,000 for no answer. So no answer again, no answer. So I ended up calling the firm that coordinated him and I said, I can't get hold of my mentor. Finally got my mentor. And I told him, hey, I got this deal, it's 12 cap, Southern California. Gave him all the stats on the park. And then I told him, yeah, and by the way, I've got a negative net worth $2,000 in the bank and unseasoned credit, so makes it a little bit more challenging. And he said, wait up, run that last bit by me again. I said, you know, negative net worth $2,000 in bank, unseasoned credit. He said, you're dreaming, kiddo. You're never going to get it done. You're never going to do the deal. It's not going to happen. Just go back down to the club and just do a little single family. You're way out of your field here. So I just like, I hung up on him and I never called him again. And I actually called somebody else in the mobile home park space who was successful at mobile home park investing. And he said, what, you got a 12 cap in Southern California? Have you got it under contract? No, I don't have a contract. I'm going to send you one right now so you can put this thing under contract. And so I got it under contract. So a little bit of a challenge up front there, but that really, really motivated me to get the deal done because my mentor told me I couldn't do it.

Wow, that's, that's. There's a lot of lessons in there as far as, you know, mentorship and, you know, finding the person that is walking the walk and not just talking the talk. So why did you write the best selling book, 10,000 miles to the American Dream?

Yeah, it actually happened by accident. Reed Gooseens is the, is the man who actually brought our group together. He's another Australian real estate investor, very successful in multifamily apartments here in the US and we had met through networking in the Southern California scene. And then he had been starting just banding together. Other Aussies who have gone from Australia, living in America, have become financially free from investing in U.S. real estate. And there was a group of about eight to 10 of us. And then we're hanging out, we're doing deals, we're helping each other solve problems. And then we all met up in San Diego. And when we met up, we realized, yeah, there's potential for us to do deals and grow together. But we all had this common. We came financially free in America. We did it coming from Australia. We've lived in other countries. It was nowhere near as easy to do business or invest in other countries. We became really, really compelled to share with people. Hey, Americans, guess what? Your backyard is just an absolute land of opportunity. We know because we've been all over the world and we've seen different barriers of entry in different countries. It's really easy achieve financial freedom here compared to other places. And here's how we did it in real estate eight different ways. Mobile home parks, apartments, real estate technology, single family homes, and a whole bunch of other different ways.

Yeah, that's awesome. I think I was on Reed's podcast and he was on mine as well. He's, he's a great guy. And then why did you create the video podcast Freedom Hack Radio?

Yeah, that's to put out there, you know, to teach people about the freedom trinity of financial time and location freedom. You know, one of the things that happened when I became financially free is number one, I no longer had to, you know, make decisions based off need or anything like that. It was all just like, hey, what's in alignment with my heart and my soul? And that's how I can make decisions. And I think when we get to live like that, it's a pretty cool freaking way to live and we start making better decisions in our life. The second thing I did is I looked at, hey, I've got, you know, it was 20 years at the time of construction and construction management. Didn't really enjoy being in that industry. Didn't really have much to show for at the end of it. Two and a half years in real estate, investing, love, my life became financially free. I became really, really compelled to share that with other people. So I think that everybody out there in America can truly live financially free. There's a lot of different ways you can do that. And if you're actually committed, I think it's very reason reasonable to do it within 10 years. I think it's, it's reasonable for someone who's going to take a bit more action to do it in five years. And if you really want to take massive action, you can do it in three years or less. And I just want to share with people how they can actually achieve this. So we have people at the top of their game all over America coming in on Freedom Hack Radio and sharing a lot of freedom Nuggets.

That's awesome. When you're teaching mobile home park investing in capital raising, are you seeing a pattern as far as a successful student versus a non successful student?

Yeah, I think that like a patent is in characteristics or.

Yeah. Character traits. Characteristics.

Yeah. I think enthusiasm is it participation, enthusiasm. And if people follow up with me after the course like immediately and they're like, I already started doing this stuff. It's action taking, you know, is really where it's at. You know, the. We'll have an abundant amount of people in our classes and information is cool. Yeah. Some people say knowledge is power. I don't actually think knowledge is power at all because who's taken a course or read a book and taken in that knowledge and then never done anything about it? Everybody. I've done that too. So knowledge is not power. Applied knowledge is power. So it's people who are actually enthusiastic and action takers. People who are ready to like throw themselves out there and just do that first step. You're gonna have to figure out what the who whole process is. Just get the first step. Like when I did my deal, my first deal, I just got it on a contract, then I had to do due diligence, then I had to start raising capital and getting a loan and I just did it step by step. I didn't try and overwhelm myself with how am I going to do all of these steps from start to finish? Because if I looked at that at the beginning, I never would have even got that first deal done.

Yeah, I think there's so much wisdom in there. And the last five years, I think the best best selling book as far as like self improvement or self development has been Atomic Habits by James Clear. And that's all it is, is just breaking it down into the smallest actionable step. And then by doing that, it just keeps compounding. And in real estate investing, that's exactly what it is. You don't need to start visualizing how am I going to close this, this huge, you know, multimillion dollar mobile home park. It's number one, what's a good market? And just break that down and then just keep breaking down all the steps of it. Next thing you know, you're at the fun part which might be closing and then, you know, collecting that, those, that, those monthly checks. What do you see or hear or experience from other mobile home park investors that you think that's just the worst advice I've ever heard.

I think the worst advice that's happening with mobile home park investors right now is the way that they're evaluating the mobile home park. Most investors are getting the net operating income and they're capping it and then they're applying a cap rate to it. And that is how you calculate commercial real estate value. But they're also including the home rent when they're doing that calculation. In the end noi, we separate the home rent and the lot rent into two different things. We include the lot rent in our noi. We don't include any of the home rent in our noi. We actually keep that aside. Then we come over. So then we do that same calculation. Lot rents times, times occupied lots times 12. And then we take out our expenses, which is probably around about like 40% on average. 40% expenses. So 60% will be left over. And then I'm pretty sure I said we annualize that. So we annualize that number and then that's our net operating income. And then we divide that by 12. That would be the value for our land. Then we would take all of our homes, which we would call our park owned home inventory, and we take a look at what the market value is, each of those homes, and then add up the total market value, take about 20% off that, that, and then add that onto the land value. Now we have the home and land value. And the last thing we'll do is if there's any immediate repairs to the infrastructure like the roads or the water and sewer lines or the septic systems that needs to be done in the first 12 months, we will deduct that off the, the other number that we came up with. And then you have the true purchasing price for mobile home park. And most other operators are not doing that. They're actually just going in there and they're just, just get, taking that NOI of lot and home rent and they're paying about double for mobile home parks than what they should.

No kidding. Wow. So with the current economy changing very quickly, what are you excited about and what are your fears?

Yeah, so let's start with the fears first and then we'll get to the happy part. I'm fearful that what could go wrong will go wrong. And so when we're doing our due diligence, we're doing our underwriting, we're taking a lot of things into consideration. I would say we are the most conservative mobile home park investing group out there. And I would challenge you to find me someone who has as conservative assumptions as this. Because if we're purchasing right now and we can get a 6% interest rate and we're going to be refinancing somewhere between in the next 12 to 36 months. Then we'll add on 200 basis points to our interest rate in our projections for that refinance. We'll do the same thing for a cap rate. We'll add on 200 basis points or 200% to our cap rate. If we're refinancing in one year to three years, and for our exit cap in five years, that'll be 300 basis points. So that's 3% on top of what cap rates are right now. Those two measures are to mitigate against interest rates increasing and cap rates increasing. Do I think they're going to increase that much? No, but if they did, we're still going to be cool. Other thing we do is we double our construction costs and we double our construction timelines because the costs we've got supply chain issues, materials are hard to get. They're a little bit more expensive than what they have been. And prices could go up between now and us executing on that business plan. And the reason for doubling the timelines is cities are taking a little bit longer than normal to approve permits and to approve certain milestones with the park. Also, contractors are understaffed on a nationwide level. So it's, you know, it's harder to get contractors scheduled and get those guys flowing as well. Well, but we actually have our own contracting companies that we use in house, so so we kind of mitigate that risk as well.

I mean, I think it's great you're under promising you're over delivering to your investors, but do you ever find that challenge where they're looking at two other operators and saying, well, this, this one's projecting, you know, a much higher, you know, yield than you?

We haven't had that problem because, for example, we just had a deal that had room for about $850,000 and it filled within less than 24 hours. And we had over 2 million of people who wanted to join that deal. So no, we're not actually seeing that. We're actually not actually seeing that people can actually exceed our returns even with these conservative assumptions, because a lot of the parks we're buying, we're buying them 50% occup. So we're only paying half for the park. And in the first one to three years, we're taking it to 100% occupied. And at which point that's when we're doing the refinance. And when we do the refinance, we're returning original Capital to investors. That's what we've been doing so far. And then they get to go reinvest that capital. However, they get to stay in the deal and claim on the cash flow and equity. So when you look at the compound effect of that, the IRR is very high. Wow.

That's phenomenal. Phenomenal. So what are you excited about in the economy?

Well, I mean, I'm excited for the economic crash to actually happen, but I think that's not going to happen on my timing. I want it to just happen and come to fruition. We're definitely excited about all the deals that we're bringing on. We're a recession resistant investment firm. We've got a handful of mobile home parks we're bringing to the table back to back. We've got another bitcoin mining fund we're bringing to the table. We've launched two of those so far. Been super successful. Got some car washes coming up. We've got cold storage coming up as well. So we've got a bunch of diversified recession resistant investments that we're really excited to be bringing to the table that we believe that can weather the storm of recession resistance.

I love it. So, all right, you got a lot going on. Which of all those projects are you personally most excited about and why?

I think the thing that excites us the most is these mobile home parks because we're not seeing anybody else out there that's doing structuring the deals where structuring and returning investor capital in the first one year to three years, then they stay in the deal and also buying parks at a 50% occupied and taking them to 100. So there's just because of our construction background, we can do that extremely quickly, way quicker than other operators, like years quicker than other operators because of the pace that we move at and we get the job done quickly. And it seems to be a unique investment model which we're hearing from investors. And when we're launching these deals, we're getting tons more people just saying, hey, we want to be involved in that type of structure. And so, yeah, we feel really honored that we've got these types of deals to bring to the table when a lot of other asset classes and a lot of other investments, they're looking more questionable or maybe even a little bit more risky than normal.

Yeah, absolutely. Absolutely. Well, Bryce, your, your mentorship has been invaluable, but we're at that point in the podcast now where I'm going to put you on the spot one more time and ask you for your tip of the week. A website, a resource, a book, something actionable for the Art of Passive Income listeners to go improve their business, improve their lives. But before you do that, I have to give a shout out to our sponsors, which is Flight School. Learn how the next 16 weeks can transform your life. Go up that mountain of land investing with Scott Todd as your Sherpa. He will take you up there quickly, safely and efficiently. Start building your passive income without any headaches, no renters, rehabs, renovations or rodents. And oh yeah, that flight school investment ain't going to cost you nothing. Guaranteed you're gonna make back that money in six months or less. Just show us your work. So learn more. Go to landgeek.com training thelandgeek.com training Bryce Robertson what is your tip of the week?

It would be to enhance your financial freedom. And you would do that by going to freedomtrinity.com where we're actually teaching people through a two day powerful course how to create financial freedom. And it's not just like hey, come to the class, listen to me speak. That's not it. It's a super interactive class. We actually just hosted one over this last weekend. We had people that had tons of breakthroughs. There's about 14 breakthrough exercises plus a bunch of other milestone exercises and interactions that happen over the two day event where each student literally creates their own personalized and customized financial freedom strategy plan based off whatever their circumstances are because everybody's goals, circumstances, projections are all different. So it's fully customized. And yeah, we had an amazing weekend. We had tons of breakthroughs and we've got a couple of courses coming up soon. So check out freedomtrinity.com for our live locations and also our virtual class coming up as well.

I love that. And you know, I know everyone listening to that. That's why you're listening to Art of Passive Income because passive income is going to to get you to that point where you're working when you want, where you want and with whom you want and live your best life. My tip of the week is learn more about Bryce and his mobile home goodness at Property Works and works and stuff with a Z. USA.com I will have a link to the site propertyworks USA.com Rice Robertson are we to going good?

We're good mate.

Awesome.

Thanks for having me here, brother.

Yeah, my pleasure. I want to thank the listeners and remind them the only way, the only way that we're going to get the quality of guests like a Bryce Robertson from PropertyWorksUSA.com is if you do us three little favors, it'll take you about two minutes. Follow Rate Review the podcast. Send us a screenshot of that review support@the landgate.com we're going to send you for free a signed copy of Dirt Rich, so please do it. It really helps. All right, well, Scott's not here. Bryce doesn't even know what I'm going to say. But 1, 2, 3. Let freedom ring. Thanks everybody. Bryce is like, that's how you end it.

Beautiful.

Thanks for listening to the Art of Passive Income podcast. Are you ready to learn how you can start building a passive income without renters, rehabs, renovations or rodents? Schedule a free consultation at thelandgeek.com forward/training let freedom ring.