Jason Sirotin:
I’m doing great. And even if I was feeling shitty, do you think I’d say it here?
Glenn Esterson:
I probably would.
Jason Sirotin:
It did make me … When we were getting ready for the podcast today, I was running from another meeting and it was like … I started to think, “Man, how would I even manage anything else in my life right now?” And I was like, “And I’m about to go do a podcast about my desire to do something else.” And I’m like, “I’m an insane person.”
Glenn Esterson:
Well, you and me have kind of a similar take on life. It’s like, we work like our life depends on it. And we just know how to keep going. After decades of doing this exact stuff, this is what we continue to keep doing, just keep moving forward and somehow make all the hours of the day count and do these insane things of going back and forth and all around and still manage to pull it off once in a while.
Jason Sirotin:
Yeah, that’s what’s weird-
Glenn Esterson:
[crosstalk 00:01:17] credit where credit is due, man.
Jason Sirotin:
Yeah. Let’s pat ourselves on the back. Man, we’re awesome. Well, I want to thank everybody for joining us today. It’s been a day. So, all right. We’re going to be talking about Glenn’s book, The Mobile Home Park Manifesto. And before we get into that, Glenn, you did just go through a little bit of a renaming. So, what is the final title of the book? And I know it’s long.
Glenn Esterson:
Oh boy.
Jason Sirotin:
If you could still remember it.
Glenn Esterson:
Yeah. It’s a mouthful now. Based on the guidance of some really great guys in this industry, George Allen specifically, was one of the, for lack of a better term and I hate to use the term, gurus. But if anybody fits that definition, it’s him. And he was nice enough to review my book and had some comments that he made that I thought were very relevant. So, we took them for what they are and said, “You know what? It makes sense.” And we decided to adjust the title just ever so slightly. But the title is now a much longer mouthful. If you give me a second, I’ll probably be able to remember it.
Jason Sirotin:
It’s a soliloquy by Shakespeare.
Glenn Esterson:
Exactly.
Jason Sirotin:
Thou shalt own a mobile home park and maketh a lot of money.
Glenn Esterson:
Yeah. So, the new term is going to be … or the title of the book is still The mobile Home Park Manifesto. But we added a subtitle to it and that subtitle is, “A guide to ethical and profitable investing in non-institutional grade land lease communities.” Like I said-
Jason Sirotin:
It has a real ring to it.
Glenn Esterson:
But we definitely didn’t want … we didn’t want to give any misunderstandings about who this book is intended for. It’s not for the institutional guys. It’s not for these monster deals that sometimes I’m involved with, but have very little relevance to the guys that I’m trying to help out, the guys that are coming into this industry, and the mom and pops that are already in the industry and struggling and not understand why they’re not having the kind of successes that they should be having. And if you buy a 300 unit park and it’s all grade A, even if it’s all parked owned homes, you’re probably going to be just fine. But if you have a 40 unit park in a tertiary market, with aged homes that are from the ’70s, maybe this book would be better for you than it would be for the guy buying that larger deal. And that’s really what I’m trying to emphasize. And I think the subtitle made a lot of sense, because George Allen went into it assuming it was for guys like him who buy these monster, beautiful parks and are a different animal altogether than the kind of stuff that I generally sell and the stuff that my buyers typically buy.
Jason Sirotin:
That’ll be the next book.
Glenn Esterson:
Yeah, that could be the next book. Exactly. There’s about five other books now that need to be written somehow.
Jason Sirotin:
Work creates more work, that is for sure.
Glenn Esterson:
Oh yes.
Jason Sirotin:
All right. So, today Glenn, we’re going to be looking at chapter six of the book. And for those who have joined us midstream and don’t know what we do, I’m learning how to possibly buy into a park and learning everything. And we’re using Glenn’s book as kind of the guide to the first batch of podcasts that we do. And today we’re going to be covering chapter six, which Glenn titled Goals and long-term Focus. So Glenn, when you wrote that chapter, what were your thoughts? Where’s your head at? What’s the goal of this chapter for the reader?
Glenn Esterson:
Well, it’s really to help set people’s expectations with this business of investing in what is one of the harder investments to manage. We all probably have some lofty goals out there. A lot of us want to make a lot of money and have a beautiful family and be happy and healthy and all that kind of stuff. Great. We all have those same kinds of things. But what about like, how do you actually get it into place and what type of mentality do you have to have to be able to make that happen? Because it’s not … we’re not all born and bred the same way, and we’re not all cut from the same fabric. And so, you have to have some real truth talk with yourself because otherwise you might be finding yourself just, “Wow, this is hard. Wow I’m not good at this. Wow, that was all my money and now I’m going to have a real hard time in life.” And you don’t want to find yourself in that kind of thing.
Glenn Esterson:
So, upfront, I touch just a little bit about goals and how to set those goals and why it’s important to set those goals. You have to really kind of start with what is your real long-term focus with investing?
Jason Sirotin:
Can we try it? Can you just ask me a couple of the questions that come up in your list?
Glenn Esterson:
Sure, sure. So, it starts with the one I just asked, what is your real long-term focus? And if it’s just some kind of thing in your head, well, I want to be rich and happy one day. Great. It’s a dream, it’s not a goal. It’s a dream. And you have to put that dream on paper to turn it into a goal. And then you have to write up the steps, what that means to you. And that’s so far up the chain, you’re going to have [inaudible 00:06:50] write steps the rest of your life. But now once you’ve kind of narrowed it down into, “Well, hey, look, I’ve decided I’m going to invest in real estate. Now I have to decide what kind of real estate I want to invest in,” somehow you end up in this category of mobile home parks. And you’re saying, “This is what I want to spend my time and money investing into because everybody says I can get more money out of this. And work is work and I’ll just work like I’ve worked and I’ll invest in here to get a higher yield.”
Glenn Esterson:
So, you have to kind of at least have some basis where you start because like most things in life, if you don’t know what you want and you’re just kind of out there just scrambling around, you’re not really going to get to where you’re trying to go on time, if at all. So, you got to visualize what that end goal is. And how you’re going to get there is the steps that you’re going to work on. And so, I tend to break my goals up into different platforms or buckets or whatever you want to kind of call it. I got my family, I got my personal self, I got my social life, which is probably the smallest aspect of my life … of my buckets right now, and then my professional life. And in each year, as most people do, we think about, “Well, how can I make this thing better or that thing better?” And we come up with plans for it. So, we’re narrowing this down now to our professional life. We’ve narrowed it down to what investment vertical we’re trying to do some real estate investing in. And we’re saying, it’s these mobile homes.
Glenn Esterson:
So, at this point something you have to kind of say, “Well, what kind of mobile homes am I trying to invest in? Where am I trying to invest? How much money am I trying to invest? What can I afford to invest without jeopardizing my other buckets? What can I realistically do when I’m saying I want to invest in real estate?” Some people might say, “Hey, I got $200,000. This is the first time I’ve ever had $200,000. I want to go and put it into a million dollar park and do the business that way.” I tend to remind people that that’s a terrible idea. We all know how hard it is to earn that first chunk of change and how quickly it goes. And if you hadn’t already set your life up to be able to continue on with not having that money, you’re not in a position. If you don’t have a year’s worth of savings and you don’t have your job stuff figured out because you’re just like, “Oh, it’ll be a passive investment,” you’re going to come get hammered by life.
Glenn Esterson:
This business is not very passive, especially for the kind of stuff that we’re selling and the kind of stuff that I’m pretty sure most of my buyers are going to buy on the first time. It’s not passive. And you have to be realistic and you have to understand there’s real travel constraints. There’s real money constraints. There’s a lots of headaches. And by having some goals lined out for yourself and seeing that, “Hey, I do want to do this, but I don’t want to be on a plane and then have to drive two, three more hours out to wherever to get there and have to do that once a week” … Because first of all, you’ll probably go broke because the park’s not making enough money for you to afford that kind of travel. And it’s not going to be a good time.
Glenn Esterson:
So, you have to really kind of visualize the where, the what, the how, and the why about this deal and then start coming up with the practical planning. Like who’s going to be your manager? Who’s going to finance this deal? Who’s going to be your insurer? Who’s the banker that you’re going to be working with? Who’s your advisory team? Who’s your maintenance team? Who’s going to answer the call at 2:00 o’clock in the morning when you have a park owned home spitting water all over the place? Who’s going to be that kind of …
Glenn Esterson:
So, before you’re investing and buying, you have to have this plan figured out because otherwise, how are you going to know where to look? You’re going to look over in Wyoming if you live in Florida for a deal? I mean, maybe, but that might not be the easiest thing for you to deal with on your first park. And so, these are the steps and goals that I talked about through the book, about what’s necessary to kind of figure out for yourself. And I can’t tell you [inaudible 00:10:59] for yourself. I can just put the ideas in you. Well, what would you do in this situation? What would you do in that situation? Expect these types of things to happen. And you have to be very honest with yourself and come to terms with what you can and what you can’t do. Because the last thing you want to do is get into this business and make your life harder than it is with no positive outcome. Because getting into this business is going to make your life harder in the beginning. But if you do it right, it should be a positive outcome for you after a couple of years. So, [crosstalk 00:11:30] there’s a lot to talk about there. But that’s kind of the premise of the chapter.
Jason Sirotin:
I’m glad you don’t know anything about this subject. You had nothing to say. So, what I was thinking is, man, you’re saying all the things … and it made me … the things that make me not want to do it … like every time I talk to you, I’m like, “Man, I don’t know if this is right for me,” because it’s so much work. But I think that there’s a special person, right? There’s that person out there who’s looking for something to do and grow. And I feel like this is a great business for those people that want something that they can really see it take shape. And it’s not just about … for me, it’s passive income. But even though I know it’s not passive. But it’s like wealth and long-term cash flow. I think about it like that.
Glenn Esterson:
And there’s lots of … what works for you doesn’t work for somebody else and vice versa. And I always knew growing up, it was told a hundred times by my dad, there’s a thousand ways to skin a cat. You just have to first figure out-
Jason Sirotin:
Which is gross.
Glenn Esterson:
… what you’re doing. Yeah, I know, but that’s … in the South that’s what we say. And with this business, you want passes and you’re willing to pay for passes. And you live in an area where there’s not a lot of activity eat unless you … in New Hampshire anyways. So, you would have to most likely travel around to go find something. Whereas the guy in Florida might have many options there and might not need to go anywhere, except that his yield might be a little small.
Glenn Esterson:
So, the first thing you’re going to come up to, is like, “Well, geez, do I want to buy a stable, passive type of park? Or do I want to buy a park I got to fix and create more value? And then do I want to just slip out of this park after three, five, seven years or am I a long-term holder?” And you have to decide what are you? What really? You can change your mind anytime, but you have to have a plan to start now because it’s just important to know where you’re trying to get to.
Glenn Esterson:
And you have to really calculate your downside. What if all hell breaks loose and you lose everything? What does that look like for you? And can you tolerate that? Because this business, as I’ve said many times, has a lot of risk. And there’s a lot of risk exposure on every deal you buy, even the cleanest, prettiest little parks that you’d be like, “I’d let grandma live there.” There’s still risk exposure on all of these things. So, you have to really kind of figure it out. It’s not like buying a house in this business or buying a package of houses where you can just buy them for 50 grand, fix them for 20 grand, sell them for 100 grand and make your spread, and do that in 60 or 90 days or 180 days. That doesn’t happen in this business. You have to have much longer hold times, typical. At least a full year, usually two or three or four years before that property is going to be ready to be marketed again and you get paid properly.
Jason Sirotin:
It’s a game. It’s a long game and you got to play it.
Glenn Esterson:
It’s a long game.
Jason Sirotin:
And there are people who are into that and people who make a lot of money at it. The podcast from yesterday, episode 12, we talked about those deals and going through those deals and those large ones that … it’s a heavy lift because it’s so big and the cost is so high, but the cash flow on that is just crazy. I mean, that’s-
Glenn Esterson:
It’s monstrous.
Jason Sirotin:
And that’s where it gets really interesting. And I just don’t … I think there’s a certain deal that is going to come along that’s going to be the one for me, that’s like that but smaller, or something that pops up right close to me where I can cut my teeth on it and see if I like it. And if not, a property manager and just toss cash at it until I can figure out a way to sell it. Something where I’m not going to feel too stuck, like maybe 20 to 40 yacht lots or something like that, which there’s a few of those right around me. There’s one literally right down the street.
Glenn Esterson:
Yeah. And there’s … if you’re open to seeing what those options look like and being willing to meet the market demands of your local area and not try to be so bold on ego, like, “Oh, I can just go out to Alaska and buy a park and I’ll make it work from Atlanta, Georgia.” It’s a lot easier. I would much rather see you buy your first 20 unit deal in Barrington and say, “Hey, I had success with this 20 unit deal. Maybe I’ll go buy a 40 unit deal towards Boston somewhere.” And get a little further from home and get another stabilized property and see that. Because I think that’s a better growth pattern for you, particularly. Not necessarily for everybody, but for you.
Jason Sirotin:
That makes more sense to me. So, when those come up, we’ll have to talk about those. Glenn, this was super informative. Again, this is chapter six from the book The Mobile Home Park Manifesto, and then a really long catchy tagline. If you want to learn more about Glenn and look at listings and just be part of the experience, go to themhpexpert.com. If you want to reach Glenn via email … it looks like somebody is emailing Glenn right now it’s [email protected]. And you can call Glenn directly on his mobile phone, send him weird pics, do tons of crazy things to annoy Glenn at 423-483-0492. For The Mobile Home Park Expert Podcast, I’m Jason Sirotin for Glenn Esterson. Thank you for listening and have a great day.
