Podcast Episode #3: Mobile Homes, RVs, Campgrounds and Tiny House Communities
Looking at the variations of the mobile home park model, you end up with at least four distinct types of communities — mobile home parks, RV parks, camping grounds and tiny home communities. Some parks end up with a combination of these in a single space, but each type has different nuances.
Mobile home parks
Mobile home parks (MHPs) are now typically known as manufactured home communities. They offer a resilient investment since at most parks the tenants own the home, but you own the land, which they lease. This keeps maintenance costs very low, which is a strong draw for investors.
RV parks have regained popularity with the uptick in motorhome purchases. With this increase, many mobile home parks are converting a portion of their space to accommodate RVs. This can be a smart business choice since most MHP lots that connect to septic are prepped for three-bedroom homes. RVs count as a one-bedroom, so, in theory, you can put three RVs onto one MHP lot and create additional income.
Campgrounds are places for investors who really want a hands-on experience. They’re for people who enjoy camping more than running a straightforward business because yields can get complicated. Not only do you bring in income for tent site rentals, cabin rentals and RV parking, but you’ll most likely have a general store on site as well as activity fees and equipment rentals. There is a lot more upkeep based on the amenities of your location as well.
Connecting tiny homes with MHPs is a model that hasn’t been completely figured out yet. The movement is still new enough that best practices have yet to be established when it comes to incorporating them into an existing park or even creating a separate community. Once a few effective strategies are out there, prepare to see more tiny homes mixed into MHP communities.
Play it safe as a first-time investor
With so many options, as a first-time MHP investor, it can feel overwhelming, so it’s best to play it safe and straightforward with your first MHP purchase. The value-adds many parks come with can be tempting, but prove harder to manage, so tread lightly. Learn more about the best beginning investment options in MHPs with Glenn Esterson and Jason Sirotin. Check out the MHP Expert Podcast.
Jason Sirotin: Hey, everybody. Welcome to the Mobile Home Expert podcast. I’m Jason Sirotin here with mobile home park expert, Glenn Esterson. Glenn, how are you doing?
Glenn Esterson: I’m doing excellent, thank you.
Jason Sirotin: What we’ve been talking about the last two episodes has been kind of the basis of your book, the Mobile Home Park Manifesto, and today, we’re going to dive into what is chapter seven of the book, and we’re going to touch on some top-level things. We’re not going to go all the way in to what the book does, but we’re going to touch on the top things.
We’re going to talk about the variations of the mobile home park model. We’re going to talk about RV parks, tiny home communities, is it a fad or an actual shift, and campgrounds, so like annual leaseholds and daily guests. What my goal is for everybody who’s just tuning into this podcast is I am an investor. I am interested in the mobile home park space. Glenn happens to be a friend of mine, and I’m trying to learn everything I can. Hopefully, through me and all of my dumb questions, you’ll be able to get the answers you need to have a successful mobile home park.
Glenn, let’s jump into it. Let’s talk about just at the base. It says, what is MHP? When somebody says MHP, what are they saying?
Glenn Esterson: Well, MHP stands for mobile home parks, and we now call them manufactured home communities. They used to be called trailer parks, so somewhere in that description should give you a pretty good idea of what MHP is. The basis, as we’ve discussed before, behind mobile home parks and why they seem to be such a resilient investment is because the tenant owns their own mobile home, and they put it on a lot in your park that they lease for a period of time.
So, there’s virtually no maintenance costs when you don’t own the home, and you have a park of 10 to 100 or 500 inside of there. It’s basically somebody leasing a 100 foot by 50 foot space or something like that on dirt with infrastructure. It makes it a pretty strong draw for investors lately because it’s a very sticky tenant who stays there quite for a good period of time, often the rest of their lives. So, that’s the basic of what they are, and they’ve really become more than they ever have been.
They started off way back in the mid-1900s or so really as kind of campgrounds and RV parks and trailer coach parks and things like that. Over time, they became a reasonable way to live for people that didn’t quite have as much money, and they’ve evolved into these large communities. For a while, maybe a little longer, maybe up until kind of recently, they’ve been fairly neglected and ignored for a good while. A lot of them became what was known as a trailer park with a bad visual appeal to it.
Nowadays, they’re becoming just beautiful parks with beautiful homes on there on large lots and nice landscaping and well-maintained roads and clubhouses. They are an absolute way of life in many locations, especially in the Sunbelt and the Northeast is a tremendous amount of high-quality mobile home parks, manufactured homes communities nowadays. They-
Jason Sirotin: What do you think-
Glenn Esterson: They actually have … Go ahead.
Jason Sirotin: What do you think has caused that shift?
Glenn Esterson: I think around the 70s, the late 60s, people kind of started rebelling against the system a bit more, and parks became kind of a way to have the ability to move around the country and be a bit more nomadic now that the transportation infrastructure was more in place. Essentially, people settled somewhere, and they were nice for a while. Then during the 80s, it started going downhill. I can’t remember the impetus for it, but it seemed as if around the 80s it was almost all lot rent communities, and by the mid-90s or so something shifted, and people started allocating homes on there for rent on their vacant lots. Years later, it became almost impossible to sell those homes anymore, and people were getting stuck with a lot of inventory on their lots and no way to sell it.
Jason Sirotin: Because they depreciate, right?
Glenn Esterson: Yeah. They get older over time, and they definitely show their age quicker than a house will. If you don’t invest in these homes on a regular basis to keep them looking nice, they lose their appeal pretty quick. When you start as an owner owning a lot of these homes, sometimes it’s difficult to manage the amount of maintenance, and they start to kind of fall down and trying to sell a home that’s in shambles is a slippery slope. That means you’re probably going to get a tenant who doesn’t mind living in shambles. Before you know it, you have kind of a degraded park.
But some regulations came out in the 2000s, and then some stronger regulations came out after the recession, and it made it virtually impossible for a park owner to be able to sell a home on a lease purchase option, which is how they are traditionally done. Most of the guys living in a mobile home park aren’t going to have 10, 15, $20,000 in cash to buy the home, so it has to be financed.
They created some rules that made it very difficult to do that for a long time. They’re starting to get reversed now, and people are taking more chances now than they used to with doing it, so we’re seeing, again, a new kind of pattern starting of reverting back to land lease communities as being the ultimate goal, and reducing the inventory to where it’s all tenant-owned, and therefore reducing the expenses. It makes it for a very viable investment option at that point.
So, we’ve kind of come full circle on where they started to where they are now, but the appeal now is that they’re still one of the highest performing investments in the real estate market, especially if you’re a longterm cashflow type of guy. If you’re a flip and fix, fix and flip type of guy, a lot of that’s being done too, but the real money’s in the longterm [inaudible 00:07:12] use as these parks have quite the cash flow that grows every year and very low operating expenses. [crosstalk 00:07:22].
Jason Sirotin: You would agree that this is almost recession-resistant, right? In terms of investments goes-
Glenn Esterson: Yeah. Yeah, absolutely. I wouldn’t ever call it recession-proof because I definitely had some struggles during the past recession with the park that I owned, but given a mild recession, these definitely handle better. Even mine that I owned in a deep recession in the tertiary market with some major complications with the city and the county, I still managed to stay pretty full, and my income was there and fairly stable. But I wasn’t able to really grow my rents and things like that during the downtime, and I lost some people that moved from the tertiary market into a secondary market for work. I filled them up pretty quickly, but of course, I had to throw a couple thousand dollars into each of them to turn them around again.
Jason Sirotin: Yeah, gotcha.
Glenn Esterson: So, I wouldn’t call it recession-proof, and boy, if we get another humdinger of a recession, who knows? It’s all up for grabs. These are-
Jason Sirotin: Right. There’s nothing solid ever. There’s always risk involved.
Glenn Esterson: Right, they are more resilient than most, and if it wasn’t for the lack of financing in this industry, it would be, I think, a considerably stronger asset class for investors as well.
Jason Sirotin: Can you explain that a little bit? Are you saying that banks aren’t as willing to give out money or loan money to MHP parks?
Glenn Esterson: Yeah, that’s the basics of it. We talk about it again in a later chapter, but banks barely want to loan on these mobile home parks, and they just started again in the last two years. There’s always been a few banks that always would and things like that, but they put them under much more scrutiny. If you own the homes in the park, it’s even that much harder to get financed.
Your typical mom and pop that has owned it for 40 or 50 years probably doesn’t have the world’s greatest books and records, so they have a very hard time being able to evaluate a park and then get comfortable that the loan they’re going to provide on it is going to be able to get repaid back in full and on time. Even though everybody knows these things make money, the books and records typically will show that it doesn’t make … A lot of owners put all of their expenses in there, and it makes it look like there’s not much money in it. If it’s a cash deal, a lot of owners used to put money, cash money in one pocket and money orders and checks into the bank so the income would look low.
Going from a mom and pop business to a sophisticated business makes it real hard for a bank to want to get involved if all the I’s aren’t dotted and T’s aren’t crossed. We’re seeing more banks get involved now than before, but still, so many hoops to jump through. Of all the deals I sold in the last few years, I would say less than 30, 35%, somewhere in that number, were financed by a bank. It’s often easier to refi after you’ve had it a couple of years and built good books and records. But as an initial acquisition, two-thirds of the time they’re done in cash.
Jason Sirotin: Since the last recession, I mean every business, even if you’re doing five, $10 million a year, getting a line of credit is still incredibly difficult, and you have to personally guarantee it. So, it’s way easier to go to private equity sometimes.
I think this is a good transition. Can we talk a little bit about the variations in the MHP model, and are there tons of them? Is it really complicated, or is it simple in terms of understanding?
Glenn Esterson: Pretty simple. Pretty straightforward. The basic concept is land lease. That’s the basic concept, right? Whether it’s for a day, week, month, or year, it’s a land lease, and that’s the model behind mobile home parks. Actually, they come, as I started to say to you, they kind of came from travel trailer courts, good old-fashioned RV parks in the 1920s and 30s when they kind of got a kickstart. That was really the model that developed into a mobile home model.
Now, we’re seeing an explosion of RV parks again, and the sales behind motorhomes right now are just through the roof. It’s very impressive, growing at a much faster rate than mobile home parks are understandably because they don’t give the zoning out too freely with mobile home parks.
RV parks are a huge segment of the business. Some are nice and easy to operate. Some are a straight-up business that you have to operate daily. The kind that I personally have been a big fan of is a mobile home park that gives maybe 20% of its park as an RV if it lends itself in location and whatnot. I think that’s a great extra spread on your income, especially with mobile home parks on septic. You can often, not always, but often if you have a three-bedroom septic on your mobile home lot, you can often divide that lot up into two or three lots and use that same septic because the RV’s considered one bedroom. So, you triple your rents there.
If you’re in an area where there’s a lot of contractors working that’s staying for three, six, nine months, it tends to be a great thing. The guys that are doing the daily, weekly stuff like where it’s all over the Southwest and the coastlines, and all the fancy, nice, beautiful places to go travel, that’s a business. There’s a lot more to it, but the premise is the same. They’re leasing out the dirt, and they’re getting a fee for the dirt.
Often they’re selling goods as well at a store and getting things for the campers that are staying there, but they tend to be a very high-quality asset that seems to be, for the last few years anyways, the rent rolls and the P&Ls that we’ve been tracking have all been growing. People even still go camping during a recession. That was another kind of thing that happened during the last recession. Camping really kicked up, and I think that’s kind of what the new inspiration has been with the explosion in this last decade.
Jason Sirotin: Yeah. You-
Glenn Esterson: There’s some great high-quality parks that you can rent the space for the entire year, and you pay a flat fee, and you use it when you use it. There’s some that have permanent homes that are on some of these RV parks, and that’s a very interesting model. I’m a big fan, and I think as things continue, we’ll probably see a lot more people entering that market as well. Although it is a much smaller segment than the mobile homes segment is if you can understand that.
Jason Sirotin: Yeah. You’ve mentioned RV parks a lot, and, on a side note, the idea of driving in a large, giant vehicle down the highway with my whole family makes me physically ill, but I understand that there are a lot of people who like to do it. Do you think that RV parks are a better investment now than mobile home parks, or should it be something that’s tied together?
Glenn Esterson: Well, I don’t know that one’s better than the other. I think a better operator that is more efficient in an RV park versus a strong operator in an MHC park would probably argue that theirs is better. I would say from a yield standpoint, location-dependent, the yields do seem to be similar with both asset classes. If you’re a guy that can handle the daily operation of an RV park, it might be a great fit for you. If you’re a guy that just wants coupon money in the mail, MHP would probably be a smarter option for you.
Jason Sirotin: What makes the RV park harder? In that sense-
Glenn Esterson: It’s the business side.
Jason Sirotin: … it sounds a little …
Glenn Esterson: It’s the business side of the thing, and you have to staff it. You have to [Crosstalk 00:15:48].
Jason Sirotin: It’s more marketing, right?
Glenn Esterson: Yeah, and you’ve got to get people to your spot, and all that kind of stuff. And you have to offer usually more amenities than a mobile home park has to offer as well to get people to stay at your spot. You have more employees, and you have to deal with people staying for the weekend and others staying for a week, and some staying for just … I’ve rented for a month, but be in and out of the place. So, there’s just more moving parts to it.
I don’t know that it’s necessarily something that isn’t solvable pretty easily with the right management team, but it is a different aspect in a mobile home park where you only need, for a small park, really a couple guys, a guy or two to help with the maintenance, a person to help with the management of the tenants, and the owner of the park. It’s really pretty low-key and easy, and it’s all money in between the first and the 10th of the month usually. It’s probably easier accounting on some level as well.
Jason Sirotin: On a slight backtrack, Glenn, when we’re talking about the variations, I imagine an RV park has to have … You want it to be really well-maintained because you’re driving people there because of the physical beauty in a lot of cases would be my assumption.
Glenn Esterson: Exactly.
Jason Sirotin: But in a mobile home park, are typically the tenants in charge of taking care of their own yards, or is that something handled by the mobile home park owner?
Glenn Esterson: It’s both. There’s kind of three options really available. You make your tenants mow everything, and they’re responsible for their pad and maintaining it, but good luck trying to organize them to do it on the same day of the week. The other option is that the owner does it all and just builds it into his rents, and he takes care of it with a third-party company or himself. Then there’s, I guess, other kind of variances of the option, not really a third option, but often it’s tenants do their houses, and the landlord does all the vacant houses and the vacant areas and the common areas and things like that.
Jason Sirotin: Sounds like it’d be easier just to put that in the rent.
Glenn Esterson: I would think so. I used to try and mow my park, and it wasn’t huge, but it was a few acres, six acres or something like that, and a lot of green space in there. Man, the grass grows fast in Tennessee, and I was out there at least once a week. I was mowing the grass once every other week, and by the time I’d get back to it, it was six inches high, and it was a real pain.
Jason Sirotin: And who wants that? You’ve got bigger things to focus on, right?
Glenn Esterson: And, who wants to do that?
Jason Sirotin: Yeah. That’s not where I would-
Glenn Esterson: It would take the whole day, take the whole day with the weed whacking. I was like, “Oh, well, I’ll have Johnny in number two or whoever, mow the lots, and work it off of his rent. That was fine, but it was always very sporadic.
Jason Sirotin: I hate trade deals. I never have good luck with trade deals. If we want to trade, let’s trade cash because cash gets people to do shit. I think that that’s the way to go.
Now, so we talked about some of the variations, but there’s been a thing for, I would say, the last three or four years. In fact, I’ve had a couple of my employees take part in the tiny house movement, and now there’s these tiny house communities and like-
Glenn Esterson: They’re popping up everywhere.
Jason Sirotin: … a family of four living in 420 square feet. That’s almost as bad as an RV trip, in my opinion. But there is a big conservation model, and in America now, it’s hard to support a family on just one income, so the tiny houses have a big appeal. Can you talk about how the tiny home communities and tiny houses in general, what you think is happening currently, and what you think the future holds for them?
Glenn Esterson: Sure, sure. Years ago, long before people were calling them tiny homes, we used to build little tiny houses all over Appalachia. We would go and scrap wood from a barn, and we’d go slap up a cabin. For 1,000, $2,000 we would have a nice little 400 square foot cabin built. They’d be cute and quaint, but you wouldn’t want to spend too long there.
I actually lived in one for almost a year, one that we built. It was interesting. I had my kids with me part-time at the time, and they seemed to enjoy it, but there was definitely no frills. There was no TV. No frills, but it was mountain camping, and it was enjoyable.
Now, people have a hard time affording a good spot, and it’s understandable that this would eventually come to surface as these tiny home communities come up. The problem … And by problem, I don’t mean problem, but my concern, and a lot of people’s concern, is these homes aren’t built with any regulations. They’re just like what I did. You just slap them together.
The cost of them seems to be a little excessive for some of the ones that I’ve seen. Although I’m sure there’s plenty of affordable, reasonable models out there, but to own a home that you’re going to spend 20, 30, 40 even a 100 grand I’ve seen tiny homes selling for, that isn’t built to any kind of codes, it means it’s going to be much harder for you to insure it. You don’t own the land under it, but how are you ever gonna move it?
To me, that seems like the model still hasn’t been totally figured out because as you pointed out, and as I experienced living in one of those things with a family, and kids, and all that stuff, it can get a little cramped. If you’re a single person or maybe a couple, it might be a nice short-term place to live in or settle in if that’s all you need, but I have a feeling somebody’s going to figure out how to make the models successful, and people are going to replicate it. But I think there’s going to be a lot of people trying this out and losing from an investment standpoint at first.
Jason Sirotin: Well, let me pitch you an idea that I had, and you tell me if it’s shitty or not. I was thinking about it with a developer friend of mine, building an in-town community like in Atlanta that had community bathrooms and a really nice maintained garden area and all of that, but it was meant for more of the New Age hippie. Is that market sustainable, or is that part of the fad that you’re concerned about?
Glenn Esterson: That’s kind of the fad because you know once you stay in a place for a year … If you’re living in a house for one year that’s 400 square feet, if you aren’t already motivated to have a slightly larger space and that’s a perfectly content thing for you, fine. But I think after living in a small space for a year, I wasn’t so content with it anymore. I needed something bigger than that, not because of excess, but because it just wasn’t practical. We were on top of each other for too long in what I was living in.
So, I think you’d be able to help short-term people find a place to settle, and then they’re on their way out as soon as they can be on their way out is kind of what I think. Most tenants thinking that it’s going to be fun and sexy are gonna be a little disappointed after a bit of time. Although, in heavily dense places where land’s just so expensive, it might be a perfectly reasonable option. I guess it’s going to have to be metro-dependent because to buy a tiny home for $50,000, geez, that’s a nice down payment. Even if you have only $5,000 to put down on that thing and they finance it for, you can put that down on a mobile home, have a lot more space, and have essentially the same experience for about the same cost.
Jason Sirotin: Yes. If I gut-checked you, and I said dig it, meaning keep it, or dump it as an investment, do you think that people should be investing in this, or is this something that people should be watching and then making really educated decisions about? So, dig it or dump it?
Glenn Esterson: Yeah, I would say if you’re new to the business, definitely not look at that as the low-hanging fruit right out of the gate. That’s something I think you build your risk tolerance up to and you build your experience up too. I’m pretty confident there’s going to be a lot of winners in this business, but probably a lot more losers in the beginning. I wouldn’t invest in it at this point in time in 99% of the deals that I’ve seen out there that are tiny homes.
But there are a few of them. There’s one right outside of Atlanta that’s real nice. I forget the name of it. I think it’s in Macon that they’re putting one in, and you know, hey, the demographic might be right there. But at the same time, I just sold a park in Macon that you could have bought a home in that mobile home park for a couple thousand dollars and paid $200 a month, $250 a month in lot rent, and that’s with the new owner going in and making the park look livable again.
Jason Sirotin: Wow, that’s crazy. That is a good deal. That’s way better than a tiny house. But a lot of people do have that stigma, tiny house versus trailer in their opinion, and I think that’s the job of the community at large to change that perception. It’s not something that’s going to happen very quickly.
Let’s move on from the tiny homes, and let’s talk about something that I think is really cool and you’ve mentioned numerous times, which are campgrounds. Annual leaseholds and daily guests, can you talk a little bit about that?
Glenn Esterson: I like campgrounds, yeah. I’m a big fan of campgrounds. Now, I don’t sell too many campgrounds. I don’t think I’ve sold any in the last forever, but I’ve evaluated a bunch, and I’ve been to a whole bunch of them right now over the last X amount of years anyways. I really like that model, but it is a better investment, I think, for a guy who wants to be at that campground a lot, and not really as a business.
Although, the business model seems pretty good, but the yields are definitely harder to understand, and it’s so many moving parts with campgrounds because you got tent sites, you got cabins, you got RVs, you got a store, you have rentals for adventure on a Lake, you got boat rentals, you’ve got activity fees, and things like that.
Jason Sirotin: Kayaks and paddle boats-
Glenn Esterson: I didn’t-
Jason Sirotin: … stand-up paddleboards, all that stuff.
Glenn Esterson: Yeah, but I’ve been to some excellent campgrounds in the Northeast that really made for such a fantastic time at a low cost that I really enjoyed them.
I was talking to the owner there. What they did was they had sectioned off about half maybe a little less than a half of their area for permanent mobile home, RV tenants who pay, I think it was like $10,000 a year, all at once in January to reserve that spot. They leave their house there, and it’s like a blue-collar vacation spot.
They had giant pools and water slides and all this fun stuff for the kids to do. Those guys get to come in and out as they please. We spent the weekend there with our camper, and man, my kids loved it. I loved it. I think those types of models are great. With camping, it’s really come back alive again over this last 10, 20 years. People are doing it every day, and it’s-
Jason Sirotin: It’s because everybody’s …
Glenn Esterson: [crosstalk 00:28:03] RV sales through the roof.
Jason Sirotin: People want to take their kids out because they don’t want them on tech. That’s a great way to remove yourself from the tech.
Glenn Esterson: Yup. It’s like-
Jason Sirotin: What are the yields like on the campgrounds? Are they comparable to the RV parks or the …
Glenn Esterson: Yeah, they’re comparable. Your day-one yields are going to be sub 10%, but by your year two or three yields, you’re probably looking at somewhere in that mid-teens, upper-teens kind of area.
Jason Sirotin: What causes that shift in yields? Is it just getting the properties up to par?
Glenn Esterson: Yeah, it’s really, a lot of them have been aged. I was recently trying to sell one in Tennessee. It was in the western side of Tennessee, and it was a beautiful park. It was a really beautiful park in a really sleepy kind of area, but it had a destinational-type of lake there that people came to. Then there was another one in North Carolina that was very similar, really surreal, just pretty everything, but aged. You could tell that the new guy coming in is going to have to redo the streets and clean up the docks and things like that. Put in some updated pedestals for the RV spaces, and general upgrading things that just get left by the wayside when you go into a park too long and you don’t operate it maybe as aggressively as you used to.
When you start increasing that, and you start adding value to the park, you’re going to go start charging a little bit more in your rents, maybe you run some more aggressive advertising, and you pick up the pace over there a little bit, you start seeing that rent growth. The challenge with a lot of these older parks, buying them, is it’s you’re taking a leap of faith with a lot of these mom and pops because the books and records, man. I looked at one park. It had a 2,000-page, handwritten ledger going back to day one, but not a bit of anything on a computer thing. So, trying to evaluate the deal is a significant commitment of time to see if it even makes sense.
You have to trust that the handwritten material isn’t a lie. You know what I mean? It becomes a challenge, but I think it’s a great model to invest in. Not for the novice, but I can see me one day owning a campground as like a retirement thing because it looks like such a good model. When done well, we’ve seen returns north of 20% with owners pretty consistently. That’s lovely. It’s nice to have.
Jason Sirotin: To wrap up today, Glenn, if you could say what is the best model for a first-time investor in this space to follow, what would you say just right off the bat?
Glenn Esterson: That’s a great question, and I like that question. I would hands down say man, follow the book on the first deal. Don’t try to get rich. If it was me, I would be looking at a secondary, or maybe primary but probably secondary market, with strong MSA and strong demographic growth. I would be-
Jason Sirotin: What’s an MSA?
Glenn Esterson: An MSA, a metro statistical area. When somebody says I wanted to go to Atlanta, they might be referring to downtown, but the MSA would be the however many, 15 counties, that are included in the Atlanta area.
Jason Sirotin: Gotcha, gotcha.
Glenn Esterson: The whole country’s made up of these MSAs.
I would say a strong secondary market and not a value-add type deal, something that’s pretty stabilized that doesn’t have a lot of deferred maintenance. I would be willing to pay an extra bit for the park if it had good books and records and everything was clean and orderly, and I could trust what I’m buying and know that I’m going to get a smaller return for this park on my first deal as I learn the ropes.
Do the easy stuff first like learning how to fill an occupied lot if they have a couple vacant lots, and learning how to navigate a rent increase without offending your tenants, the simple little things. If you’re bad at it, at least you know you have a good park that you’ll be able to get out of for hopefully, more than you paid for it, but if worst case, for at least what you paid for it because it’s a solid deal.
Whereas some of these really heavy, value-add deals that we sell, I would not recommend them for a first-time guy because it’s too heavy of a lift. That’s how they [crosstalk 00:33:03].
Jason Sirotin: You don’t want to cut your teeth on that.
Glenn Esterson: Yeah. I don’t think so.
Jason Sirotin: I wouldn’t.
Glenn Esterson: You can cut your teeth on something small and easy, just like going to college before you go to graduate school or before you go to doctorate school and you work your way up the ladder becoming better at understanding the business.
Jason Sirotin: A lot of people don’t understand that in business in general that it’s not about … Business is a marathon. It is not a sprint, and when you sprint, a lot of times you make huge mistakes and don’t think things through, and you lose.
Glenn Esterson: Yeah.
Jason Sirotin: Glenn, thank you.
Glenn Esterson: The heavy, value-add, you require a lot of capital, and if you don’t budget correctly and it’s your first deal, and you won’t budget correctly most likely on a heavy, value-add, you’re quickly going to be on that slippery slope going, “Uh-oh, how do I get out of this thing?” That definitely [crosstalk 00:33:53].
Jason Sirotin: Which is the worst place you want to be. You don’t want to be there.
Glenn, thank you so much. Today was super helpful. If people want to get a hold of you, they can go to your website, which is themhpexpert.com. Then you can contact Glenn directly, and it’s gesterson, that’s [email protected] You can call Glenn. He’s great to talk to on the phone. He’ll give you his time. His number is (423) 483-0492.
I’m Jason Sirotin for Glenn Esterson. Thank you for joining the podcast. Glenn, thank you so much for your time.
Glenn Esterson: As always, Jason, it’s been a pleasure. Thank you.