Mobile Home Park Investors With Jefferson Lilly & Brad Johnson

Welcome to episode 20 of the Park Street Partners’ Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson. Today we have a very special podcast, because not only we have the first interview on the show but also because it’s with industry legend Jim Clayton. The interview was recorded live at the Annual Manufactured Housing Institute Show in Las Vegas last week. Stay tuned to hear what Jim had to say about the future of mobile home park investing, estate planning, ESOP, the competitive advantage offered by Clayton Bank and Trust,  the future of manufactured housing, and even Jim's thoughts on Donald Trump vs. Hillary Clinton!     Key Takeaways: [1:06] Jim started Clayton Homes which became America’s largest mobile home park manufacturer. He took that company public & ended up selling it to Berkshire Hathaway through Warren Buffett, for about 1.7 billion dollars. [1:57] The Park Street Partners have borrowed money from Jim’s bank & have been very happy with their relationship wit

Welcome to episode 19 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with Park Street Partners. Today, Jefferson and Brad discuss a case study on a mobile home park that’s near and dear to their hearts. It’s called the Cherrywoods Mobile Home Park and it’s the first deal they bought in their partnership.   Key Takeaways: [1:48] The Mobile Home Park Investors podcast has over 3000 downloads per month! [2:40] Check out Cherrywoods.net to see how the Park Street Partners set up their websites. [2:57] Jefferson and Brad talk about how they found the Cherrywoods Mobile Home Park and all the things they love about this property. [5:34] The Cherrywoods Park was developed in 1996, which is a rare find. [6:56] The seller was open to seller financing, which is something the Park Street Partners love. [11:59] Current rents on properties in the same town, according to rentometer.com. [14:21] The type of property manager to look for and that you want to have for your park. [17:29] J

Welcome to episode 18 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad follow up on episode 17, which was all about taxes and only briefly touched on depreciation. Today’s episode will focus exclusively on depreciation and will get into details on why mobile home parks are such a great tax strategy to legally shelter income through accelerated depreciation.   Key Takeaways: [1:35] It doesn’t really matter how much you make, it matters how much you keep. [2:41] “Mobile home parks are just land.” “There are no assets to depreciate.” “Land is not depreciable; therefore mobile home parks have no depreciation.” - WRONG! [3:42] Jefferson gives a rundown of what this asset class actually is. [4:09] On average, you can probably depreciate about 75-80% of the mobile home park’s purchase price. [4:31] Not only do parks kick off a lot of cash flow relative to other asset classes in real estate, but the vast majority of that in

Welcome to episode 17 of the Mobile Home Park Investors podcast hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad discuss taxes and share helpful tips to help you save on your mobile home park property taxes. Listen in for advice on tax depreciation, how not to pay double taxes on your ‘wheel estate property,’ preparing your CPA for the April 15th deadline, miscellaneous business expenses, and more.   Key Takeaways: [1:39] Today’s episode will cover depreciation briefly. Check out episode 18 for a more in depth discussion on tax depreciation. [2:18] You can save on your taxes by segmenting out the component costs of any mobile homes that come with your park. [4:36] Jefferson shares another tax saving idea.  [8:45] Brad shares tips, especially for 1st time mobile home park owners, on getting your CPA prepared for the April 15th deadline. [10:36] Jefferson and Brad always advise purchasing your property in some sort of an entity such as a LLC.  [13:29] What is

Welcome to episode 16 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad talk about how to market a mobile home park. This is obviously an important thing to do and they have specific advice and resources to share on today’s episode.         Key Takeaways: [1:39] Why is it important to market your mobile home park? [3:18] “The 800-pound gorilla for advertising in our space is Craigslist.” Brad outlines the pros & cons of advertising on Craigslist. [6:24] Where do the Park Street Partners get their leads from? [6:53] What Jefferson used to do but doesn’t anymore! [8:11] How can you use Facebook & your creativity to advertise properties? [13:42] What are the advantages of having a website & using Squarespace to create, manage and host your website? [15:30] How does having a website enables you to use other online services to help you promote your property? [17:02] What other resources can you use to have a d

Welcome to episode 15 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad discuss some of their deals that have fallen out of bed for various reasons. These include deals they passed on after having done varying levels of diligence, all the way to the point of having them under a contract. Listen in to learn how not to let your emotions lead you to closing a bad deal.   Key Takeaways: [1:12] What not to do when closing a deal? Don’t let your emotions guide you no matter what. [2:44] Tale from the road to closing the Blue Grass State deal. [5:21] As Warren Buffet advises…invest in a business that any idiot can run because sooner or later, one will! [6:07] What are some red flags to look out for when you’re in the process of closing a deal? [9:37] Tale from the road to closing the Texas deal. [13:19] Why was the Park Street Partners’ 1st deal (a single-wide Michigan) a bummer and why did they call 113 banks? [18:06] Anot

Welcome to episode 14 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad will discuss details on how you can partner with them or 'bird dog' for them. Over the last year, many people have reached out to PSP and shown interest in jointly investing and partnering with them. They will talk about some of the partnerships they have done in the past and guide you on what they look for in parks. Their goal is to help you be more efficient in your search, also to be more efficient for them when they get deal flow that is really focused on what they consider to be the best kind of parks to acquire.   Key Takeaways: [1:53] What kind of deals add value for the Park Street Partners? [4:41] Brad details some of their acquisition criteria. [8:03] Jefferson lets us in on a little secret! [9:56] Brad talks about some red flags on a property. [11:34] Details on specific situations that they have partnered with folks, in the past. [12:

Welcome to episode 13 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad will discuss Capital Expenditures (CAPEX), which are generally larger ticket items that you will be paying for with your mobile home park property, at some point or another. Of course, if you do your due diligence up front, you might not need some of these, at least not in the near-term. So today, Jefferson and Brad will talk about some of the large ticket items they have had to spend relatively larger dollars for, such as roads and utility lines.   Key Takeaways: [1:26] These large ticket CAPEX items may sound scary, but here is the bright side! [3:19] Capital expenditures for repair & maintenance on buildings vs. land. [4:57] The biggest large ticket/one-time, non-recurring expenses for mobile home parks are water & sewer pipes. [8:47] New technologies can reduce repair & maintenance costs and help keep your capital expenses lower.

Welcome to episode 12 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. This is part 3 of a 3 part series where Jefferson and Brad discuss what you should do over the first 30 days that you own your park. On this last episode of the 3 part series, Jefferson and Brad will discuss managing the books, the new rules and regulations, why Pitbulls are a ‘vicious’ breed, and more!   Key Takeaways: [1:20] After covering PNLs on episode 11, the discussion moves onto the books. [2:40] Jefferson managed his books for his park for about the 1st 4 months. [3:31] You can use software to make the process simple! [4:50] Distributing the new rules & regulations to your tenants.   [5:20] The No Vicious Breed Dogs Policy in the rules & regulations is very important. [7:37] Why Pitbulls are now a high risk breed? See article by Malcom Gladwell! [8:26] What if a tenant rejects the rules & regulations? Or what if they don’t sign the rules & regulat

Welcome to episode 11 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with Park Street Partners. This is part 2 of 3 episodes where Jefferson and Brad discuss what you should do over the first 30 days that you own your park. Following up on last week’s cliff hanger, today’s episode will cover advice on setting up your park’s website, marketing and advertising, and installing or managing your park’s water meters.     Key Takeaways: [1:28] You can easily set up your property’s website using Square Space or Wix. [3:44] Square Space has some cool analytics that show traffic volume. [4:20] What are the key things to put up on your website?  [6:58] You can advertise across various sources such as Zillow, Craigslist, and Trulia. [8:48] Include your URL in the medium you advertise in. [11:32] Make sure to get new signage for your park. [13:56] Jefferson discusses details and importance of installing a water meter in your park.  [19:13] Don’t try to make a profit on the water. [2

Welcome to episode 10 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. This is part 1 of 3 episodes where Jefferson and Brad will discuss what you should do over the first 30 days that you own your park. That is a very key transition period, which will set the tone for your management style with the manger as well as with the tenants. Hence, it’s a highly critical 30 days to get right. If you invest the time, effort, and a little bit of money in getting your first 30 days done correct, then you should have fairly smooth sailing going forward. Today’s episode will cover advice on the park manager, collecting rent, and the telephone!   Key Takeaways: [1:39] One of the critical issues to address is, what to do with the park manager. [4:00] Advice on finding a new manager for your mobile home park – Putting up flyers. [5:55] What to do if you love the manager but they’re not tech-savvy! [7:48] What if you’re remote & can’t put up flyers on t

Welcome to episode 9 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad are going to talk about closing a deal on a mobile home park. They will detail what sorts of documents and procedure are required in order to have your money go to the seller and have title come from the seller to you. At a high level, that’s what closing is all about, money goes one way and title goes the other.     Key Takeaways: [2:14] The 1st step to take once you have an agreement to purchase property. [3:21] If you don’t get title, what are you really buying? [4:46] The next step to take after signing paper work. [6:29] How can you establish yourself as a legitimate buyer? [6:47] More importantly, you don’t wanna give the seller an excuse to cancel the deal. [8:06] Part of opening escrow involves the title company opening their preliminary title process. [8:30] What are you actually buying with title insurance? [11:23] Jefferson discusses th

Welcome to episode 8 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad will discuss seller carry, also known as seller financing. This is when a seller of a mobile home park carries back the mortgage, which allows the owner of the mobile home park to not have to deal with a bank to get a mortgage and to close a deal more quickly. If you like this podcast, please subscribe to it on iTunes or Stitcher and rate us highly.   Key Takeaways: [1:29] It’s best to negotiate directly with the seller, even if buying property through a broker. [2:30] What are the benefits for a seller to carry back the mortgage? [7:53] Brad explains the depreciation recapture component of seller financing. [10:07] The downside for a seller to carry back the mortgage is de minimis. [12:37] The best part about seller financing. [13:19] A key benefit for a seller who offers seller carry. [13:42] What to do once you agree to seller financing. [16:1

Welcome to episode 7 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad will discuss third party reports. If you have a mobile home park under contract and are looking for any type of debt, this is the time for getting down to brass tacks. Even if you’re paying all cash for a park, 2 of the 3 third party reports are very important no matter what, and the 3rd one is important specifically to a bank.     Key Takeaways: [1:23] 1st third party report: the Phase 1. [3:02] How you could be liable for ‘LUST’? – Leaking. Underground. Storage. Tanks. [4:50] If there is LUST, you’ll need to do a Phase 2 report. [5:47] More on phase 1 – costs and desktop reviews. [7:05] 2nd third party report: the Survey. [8:29] Boundary survey vs. full ALTA survey. [9:49] Key things to look for on the survey. [12:00] 3rd third party report: the Appraisal. [15:26] Problems with appraisers who are not specialized in park appraisals.   Mentions: w

Welcome to episode 6 of the Mobile Home Park Investors podcast, hosted by Jefferson Lilly and Brad Johnson, with the Park Street Partners. Today, Jefferson and Brad will share their insights on finding a loan in order to invest in a mobile home park. You actually need to pay for your mobile home park in order to buy it!   Key Takeaways: [1:12] Debt eligibility varies with the size of the park. [5:03] Information required by banks & how to show you are a credit-worthy borrower. [7:21] What can you expect on your first loan? [8:50] Dealing with state-wide banks. [11:08] The first question to ask a lender. [13:54] Jefferson shares an amusing story on his experience with lenders! [18:13] Lesson learned: persistence pays! [18:38] What are banks looking for?   Mentions: www.parkstreetpartners.com Join the LinkedIn Group: Mobile Home Park Investors Yellow Pages Google Maps Please rate the podcast on iTunes or Stitcher Please subscribe to the podcast on iTunes  

This is part 2 of the discussion on initial off-site diligence you can do prior to buying a mobile home park. Jefferson Lilly and Brad Johnson, with the Park Street Partners, continue their discussion from episode 4 (part 1), which covered due diligence you can do via desktop research and things to look for in financials. On this episode, they will advise on what to look for in the infrastructure of a park and how to handle a first call with the seller.   Key Takeaways: [1:35] What is the most important aspect of a park's infrastructure? [2:15] Determining if a park is on the public utilities system: city water & city sewer. [4:46] A park that is on the septic system presents a high-risk investment. [7:40] Park infrastructure: Master-metered gas and electric lines. [9:36] What options do you have if you get a gas leak and have to shut down service? [12:00] You can have someone check out the electric load of a park on-site. [12:35] Understanding what is going on with the water infrastructure. [13:40] Fixin

On part 1 of this two episode podcast, Jefferson Lilly and his partner Brad Johnson, with the Park Street Partners, will provide resources and advice on doing off-site diligence before deciding to buy a mobile home park. This is the part when you first get a deal and are beginning to decide if you want to pursue it, which can be a scary moment. Jefferson and Brad will outline how you can do a fair amount of diligence by doing desktop research and making phone calls. Part 2 (episode #5) will cover on-site diligence, which is done after you’ve got your property under contract.     Key Takeaways: [02:13] Due diligence on a mobile home park in 30 seconds or less – The first 15 seconds [04:37] The next 15 seconds of your diligence [06:27] The 30 seconds of diligence – Summarized [07:15] Researching if demographics support a successful park investment [08:09] Demographics data – What to look for? [09:48] Refer to multiple websites and verify the accuracy of the data [11:08] Markets that meet demand for mobile home

On this podcast, Jefferson Lilly and his partner Brad Johnson will focus on answering the question, why someone would want to own a mobile home park now? In particular, they are going to talk about the demographics of their tenant base, the need for affordable housing they are trying to fill and helping others to do the same – who might be listening to this podcast and thinking about getting into the mobile home park business!   Key Takeaways: [1:27] Baby boomers are coming into retirement and they need affordable housing! [3:43] Our average price point per month matches many retirees’ budget for housing. [4:26] The mobile home park industry can help folks in need, specially seniors, get into a house they're actually going to own. [4:41] There is an affordable housing crisis in America. [5:34] An affordable, safe community for those that don't have capacity in their budget to pay more for housing. [5:53] Path to home ownership for lower income individuals, seniors, and younger people in their 20’s getting mar

This is the second podcast, hosted by Jefferson Lilly, joined by his partner Brad Johnson. Last week, Jefferson and Brad talked about why mobile home parks are such a good business to be in. But unless you are really looking, you're not likely to just come across one of these properties. On this episode, Jefferson and Brad talk a bit on how you can find a mobile home park to purchase. They will also share their experiences of how they have looked in some unique and unusual places. Key Takeaways: [1:25] Jefferson found his first mobile home park property on eBay. [4:17] You can find mobile home parks that are listed on eBay. [6:07] Finding a mobile home park property online. [06:32] How does Brad typically find many of the Park Street Partners’ deals? [07:23] How do you get access to off-market or pocket listing deals? [10:28] Brokers often have pocket listing deals that are not posted online. [12:16] Reasons why a seller might not want to list a property publicly. [12:49] Reach out to brokers for some interes

Welcome to the first official podcast, hosted by Jefferson Lilly, joined by his partner Brad Johnson. Today they will talk about why it is such a compelling business to be in the mobile home park industry – as they call it, the 'macro'. In subsequent podcasts, they will talk about how they actually operate parks by providing specific 'micro' examples. The purpose of this podcast is to cover why someone should consider investing in something as crazy as mobile home parks?   Key Takeaways: [01:33] Investing in real estate – mobile home parks [02:29] A key factor that makes mobile home parks better than investing in other types of real estate or asset classes [03:14] The competitive advantage of investing in mobile home parks [05:01] Supply is fixed and in fact shrinking ~ 1% a year [06:18] Why shrinking supply is not indicative of a dead or dying business [06:58] Tenants are typically sticky to their properties [07:55] The tenants are not mobile – under 1% leave every year [09:32] Lower tenant turnover + lower