#169: Cash Flow Advantages of Mobile Home Parks

Welcome to The Accelerated Investor Podcast with Josh Cantwell, if you love entrepreneurship and investing in real estate then you are in the right place. Josh is the CEO of Freeland Ventures Real Estate Private Equity and has personally invested in well over 500 properties all across the country. He’s also made hundreds of private lender loans and owns over 1,000 units of apartments. Josh is an expert at raising private money for deals and he prides himself on never having had a boss in his entire adult life. Josh and his team also mentor investors and entrepreneurs from all over the world. He doesn’t dream about doing deals, he actually does them and so do his listeners and students. Now sit back, listen, learn, and accelerate your business, your life, and your investing with The Accelerated Investor Podcast.

Josh: So, hey, welcome back to Accelerated Investor. Hey, Josh here and super excited to have you with me again on this podcast, a love sharing this information with you. I’m very honored that you’re here sharing with me whether you’re again at the gym on our drive, wherever you’re at. Today’s guest is a friend of mine named Jefferson Lilly. Jefferson is a mobile home park investor. He’s been investing in mobile homes for over 13 years. And guys, check this out. He owns a portfolio of thirty-one mobile home parks. It’s over 6000 mobile home units, adds value and over seventy-one million dollars. He’s been featured on Bloomberg magazine, the New York Times and Real Money TV. He also has his own podcast. It’s over fifteen thousand downloads a month and also has one of the world’s largest mobile home park investing groups on LinkedIn with nearly 6000 members.

Josh: Today, we’re going to learn about Jefferson’s journey from his very first mobile home park in Slaughter Ville, Oklahoma, to him launching now his next fund that invests exclusively in mobile homes. So if you’re a cash flow investor looking to invest in highly cash flowing assets or you’re interested in buying and owning and operating mobile home parks, you’re going to love this interview with Jefferson Lilly.

Josh: So, hey, Jefferson, listen, we’re so excited to have you on Accelerated Investor, thanks for carving out a few minutes for us.

Jefferson: Great to be with you, Josh. Thanks for having me.

Josh: You bet. So mobile home parks, obviously with all this housing going crazy like lack of inventory. The thing that’s on my mind about mobile home parks and the mobile home park investments that we’ve looked at, full transparency. I haven’t bought one yet, but we’re underwriting a bunch of them. What I think about is affordable housing. Right, because housing is getting so expensive for so many people, I think about affordable housing. So when you think about Jefferson, your plans for next year, this year, 2021 starting a new year. What are some things that you’re really looking forward to? What are some things you see for mobile homes and for your own company? What are some of your big sort of goals and what do you think you’re projecting forward for this year in 2021.

Jefferson: Yeah, so our primary goal is to launch our next fund that will be roughly in the spring time, roughly Q2 of 2021. This will be now on my fourth fund. I got started almost seven years ago. Just doing some deal by deal is kind of raising three, five and six hundred here and there. And so the last one though was about fifteen point eight million. Nice. They’ve been getting larger. Doesn’t have to be a next larger fund, I would say. Probably would be. But anyway, that’s my primary goal, is to just finish out investing this last fund and then again launch the next fund roughly in the spring.

Josh: Got it. You guys already own thirty-one mobile home parks that you’ve bought, own operated or joint venture on. So what does this next fund going to look like? How is it maybe different than what you’ve already set up with your previous phones, your previous one-off deals that you’ve done?

Jefferson:So it’s certainly going to be far more similar than different. We’re still going to focus on mobile home parks. We will continue, as we’ve done with the last fund. The last one had a big switch in fees. I moved to a no fee, no salary, no fee model. It’s just pure alignment with our investors. We take no acquisition fee, no divestiture fee, no fee for arranging the debt, even though I personally guarantee it as needed. It’s just what I call pure alignment. So we made that change with our last fund, the third fund. And probably I think we’ll keep that that, as I call it, a pure investor alignment going forward with the next fund.

Josh: Got it. I like that. So you’re not taking any fees up front? I know lots of guys that sort of fee deals to death and then it leaves very little for limited partners. Even though limited partners feel like they have a lot of equity in a deal. The general partners are kind of scraping a lot of fees off the top. You’re going to this pure alignment model. I love that we do a lot of the same things. And so the question is, if you’re listening to this, you’re probably thinking, well, Jefferson, how are you making money and when do you make money? If you’re not taking any fees up front, maybe you’re waiting for a park to stabilize. How do you make money when you make money on a park?

Jefferson:So I split the fees with limited partners. That’s a 50 50 split. So but indeed, initially, as the first money comes in, like with our last fund, I made nothing just for having five and 10 million and sitting in the bank. I then went out roughly with the last fund. I made the first acquisitions about six months, five, six months into fund raising. So we typically have the funds open for a year. But even during fundraising, we’re beginning to make acquisitions. So then just as soon as those cash flow, which certainly most all of these mobile home park deals do, just as soon as they’re cash flowing, we’re splitting the check with investors. And then much farther down the road, our funds typically are 10 year life. We then sell the properties, presumably at a profit, and we split that. My investors do have preference to me add liquidity to get all their capital back first and again. Then we split 50 50. What remains. So that’s how I make money. I’ve been in this business for 13 years. I’ve got some parks on my own. I’ve got some other funds. You don’t have to feel too sorry for me. I’m already cash flowing. I don’t think the three percent acquisition fee up front, I’ll be fine.

Josh: I’m sure you will. Yeah. That’s great to hear. So, Jefferson, tell us a little bit about a recent park deal that you did tell us and so our audience can understand if they’ve never done a mobile home park deal. So I’m big with apartments on twenty seven hundred units of apartments, value add, be class and see class apartments that we can buy that have deferred maintenance, that have bad management, that have low rents that we can bring up. We can stabilize, refinance some or all of our investor equity out and then cash that thing long term. I would imagine you’re kind of doing the same, something similar. But describe for me a typical mobile home park deal that you like, something that stands out the year like we bought this deal made a lot of sense. And here’s why it made sense.

Jefferson: Yep. So just, gosh, it’s been probably seven or eight weeks ago now. We bought a deal called Coronado Village Mobile Home Park. It’s in Roswell, New Mexico. OK, well, yeah, that’s right. That’s our investment. That’s our investment secret right there. Just if you can  buy within 50 miles of wherever the aliens are here, secrets out. But so we like the deal because first off, we got into we made it around in eight cap. Maybe a little better. That seems to be reasonable pricing, certainly relative to where most apartment buildings are trading. Sure. Traditional multifamily. So right off the bat, we’re starting with, we think, a pretty good acquisition. And in fact, that property appraised for something like twenty or twenty two percent more than what we paid for it. So going in, going in. We think we bought it. Right. Soso Roswell is you know, it’s not Dallas or Denver or New York City. It’s obviously more of I don’t know, that’s a secondary market. It might be full on tertiary market.

Jefferson: There aren’t a lot of investors chasing deals in markets like Roswell, New Mexico, or Pocatello, Idaho, or Sioux City, Iowa. We bought in all of those places over the last year. So Roswell is, though, a healthy market. The average house price is over one hundred thousand dollars. That’s one of our investment criteria. The average household income is over forty thousand. That’s another one of our investment criteria. This property then has had at the time, I believe it was all a resident owned mobile home. This is a key a key point for us in something that your listeners would need to look at.

Josh: If they’re considering, please explain, because there’s the park owned,the seller finance model. There’s the they own the cans themselves and just pay the management fees. Explain that piece. For someone that might not know about mobile homes, what are the different parts there? Versus, again, an apartment building where you just own the building, you rent the units. Pretty simple.

Jefferson: Yeah. So we really believe this business is being more akin to the parking lot business than to apartments. Keep in mind, with apartments, you as the landlord owning all those proverbial leaky toilets and leaky roofs in our business, at least the way we run it, we again tend to buy parts where the residents own certainly the majority of the homes. That means those all of that maintenance on the proverbial leaky roofs and leaky toilets is on them, not on us as the landlord. Nice. So that reduces our repair and maintenance bill. I’ve never owned an apartment building. You have Josh, but you tell us it isn’t your repair and maintenance sort of 15 or 18 percent of your rents on average. Is that a fair bit? Is it is.

Josh: That’s pretty fair. We usually budget around it depending on the building, but A, B minus C plus A building is usually around seven hundred fifty dollars per year per unit is kind of a rule of thumb, if you will. And if you figure if you’re getting seven to eight hundred dollars a month in rent, it’s around 10 percent, 15 percent give or take. And then on a building that’s got more maintenance or that has more deferred means a little bit older style building or maybe 50 years old plus could be higher, could be a thousand dollars a year. And that falls in that 15, 18 percent range.

Jefferson: You there you go. So we typically have repair and maintenance budgets over the long run, obviously fluctuation year to year, but over the long run, we’re about five or six percent of rents for repair and maintenance because all we have to maintain is the land. Certainly we still have plumbing bills and some pothole repairs and some mowing. And for our parks up in the north, some snow shoveling. But you factor it all in certainly less than half of what would otherwise be the repair and maintenance budget goes into the land. Most of the repair and maintenance budget, as you know, goes into the actual improvements, that brick and mortar and we don’t have brick and mortar just got the land to maintain. That plays into the dynamic with our tenants. Our tenants might not live in houses as nice as you and I do, Josh, but this is their home. So they have graduated up out of apartments. They are homeowners, frankly, even if they were mediocre apartment renters. You give somebody a shot at becoming a homeowner. Lo and behold, they take better care of those proverbial toilets and leaky roofs.

Jefferson:So we have, we believe, a more responsible tenant base that does less damage than a traditional apartment renter. So that’s another reason we like this business, lower repair and maintenance and on the whole, a better tenant base. So there you go. We really want to and even then just go back to the Roswell deal we will be bringing in. It’ll take several years. We’ll be bringing in approximately 60 mobile homes because there aren’t vacant pads there, which is something we. Generally like to be able to do some infill, it’s almost like taking an apartment building and adding on another 60 some odd units, but we will only rent to own those or help folks get proper mortgages. We will not regularly rent those additional 60 homes like that. So we’re certainly, first and foremost a for profit partnership. But we do also have a social mission that’s to help expand the supply of affordable housing for folks that typically are making around thirty-five thousand a year household income. So we’ll be able to bring on, again, about sixty five affordable housing units and help. Sixty-five families in Roswell become homeowners. And we’ll certainly cash flow reasonably well out of those mobile additional mobile homes as well.

Josh: And my understanding is, is that Warren Buffett is a massive player in the mobile home industry. And there’s a lot of consolidation and professionalism happening in the mobile home space where, you know, 20 years ago, 30 years ago, there weren’t a lot of lenders in the space. It was more viewed as a very mom and pop ish industry that’s changing rapidly. I a lot of money coming out of Wall Street, people talking about affordable housing. They’re looking at simply a return on investment and the return on investments are through the roof. Talk about the transition of what you’ve experienced over the last 13 years and even before you got in the industry. That was probably one of the reasons it attracted you to the industry was some of the changes that were happening to evolution. So, again, for somebody who doesn’t know is an active or a passive investor and is looking at this niche potentially to do a passive investment with you or maybe an active investment for themselves, why is this becoming so much more of a competitive space and a much more professional space? Tell us a little bit about the evolution.

Jefferson: Yeah, so I think the dynamic is, is that this is still largely an overlooked niche now, niches by definition or small. So I don’t know the exact numbers, but I would guess basically for every mobile home park that’s out there, there are probably one hundred apartment buildings. So the large institutions that take fees and have to deploy billions and billions of dollars, it’s just much easier for them to keep bidding up prices on apartment buildings rather than really take the time and put in the effort to find mobile home parks. That’s sort of the one bad thing about this business. This niche is that it is relatively small, certainly much smaller than traditional multifamily or hotel or self-storage or any of the other kinds of real estate. There just aren’t very many mobile home parks, but they are getting discovered the way and the way Buffett got into it. And this has changed the business for the better. But he bought Clayton Homes from Jim Clayton. That was at the time, I believe, a publicly traded company. They were the largest manufacturer of mobile homes. They also owned, I believe, around 60 mobile home parks.

Jefferson: But the core value for that business was manufacturing the homes. So Buffett, because he doesn’t want headlines like billionaire, has to evict poor tenant. Buffett sold off the mobile home parks. It’s his business. He’s a far more talented investor than I am, but I probably would not have done that. But he sold off the mobile home parts more than a decade ago, kept the home manufacturing business, rode through them. The housing declined. Shipments of mobile homes dropped from something like four hundred thousand in the early 2000s to like forty thousand in nine or 10, just about a 90 percent reduction in manufacturing of mobile homes. But they have bounced back. Not fully. But that business has bounced back. Buffett is consolidated, and Buffett now offers financing on mobile homes, much the same way GMAC offers financing on General Motors cars. So now we can get financing on new homes.

Jefferson: When I got into this business in 2007, I was just taking money out of my own bank account, my own personal savings and just buying used mobile homes, rehabbing them. All of that was just quite a drain on cash. But those homes can now be financed. So we do that. We take advantage of the financing. They’ll bring in mobile homes. Depends exactly how you do it. But in general, the homes come in for free. Is the landlord have to personally guarantee the mortgages? But I. Brand new homes in my communities for free, my tenants then apply, get approved, I collect the lot rent on a home investment that would be forty-five to fifty five thousand that I haven’t had to come out of pocket for. At Buffet’s company, twenty first mortgage collects the home payments. So it’s really a win when they agree to not yank the home out of my community. If that person defaults, I agree to make up their missing mortgage payments for a couple of months until we get a new tenant in there.

Jefferson: So again, it’s all about alignment and this is very different than the way things were back in the late 90s. I wasn’t in the business at the time, but there was quite a war between landlords and the companies that then finance mobile homes as far as whether the finance company would yank out a home or again, whether a landlord would have to pay for the house. So the business is now more civilized and more aligned between us, the landlords and mostly Warren Buffett or a few other companies providing financing for mobile homes. So all that’s great for those of us, all of us, to help expand the supply of affordable housing.

Josh: Got it. So, Jefferson, couple of questions that are popping in my head. One is, what’s your favorite technique or strategy, your way to find your next park? Is it through a commercial broker or are these deals done off market? Help me understand and other people understand our listeners. If they wanted to go find a park, what is the minimum criteria? Is it one hundred cans on a park? Is it two hundred cans on a park? And how would they go about getting their first sort of offering memorandum, if you will, on a park? Where do they start?

Jefferson: Yeah, so there certainly are brokers and we bought some through brokers. We have shifted certainly with this fund so far to be one hundred percent sourcing deals off market. So we yeah, we’ve done that through our network, through folks that that work with us exclude some exclusively, some in partnership with some others. But basically we’re sourcing deals off market. I’m sure we will buy some additional deals from brokers. But as you might imagine, the pricing typically is higher through brokers and typically takes longer. We can go to a seller and say, hey, we’re a direct buyer. Obviously we’re not a broker. We’re not going to shop your pencil all over the market. We’re not going to upset your tenants when they hear that something’s for sale. We’ll just talk one on one. We’ll pay a fair price. We also can get closed sometimes in as little as 30 days, depending on how much data, good data that a seller has.

Jefferson: But we can close within a month for all cash if some other pieces fall in place. All that gives us, we think, can make it compelling to sell to us quick, close and privacy brokers typically, again, are not about privacy and we’ll stretch out a closing process for several months. So anyway, it’s just a matter of calling, basically even driving through parts, networking, finding out what parts might be for sale whenever you’re talking to an owner if they’re not selling, which they generally aren’t. But they might know other folks in that town that might be selling just we just work to build rapport with sellers and network and find deals generally off market. But it’s a lot of work. It’s a lot of follow up and systems and tracking leads and paying referral fees and salaries. And it’s quite a quite a six-figure investment for us every year to be finding deals off market.

Josh: But do you have a team that does that for sale? Do you have acquisitions manager or acquisitions team that just does nothing but that?

Jefferson:So we are scaling up, we’ve got several folks that we’ve worked with that have basically done that. Yes. And we will probably hire on an additional person or two in twenty twenty-one just to help scale that up.

Josh: Fantastic stuff. If somebody wanted to invest in a deal passively, what’s sort of the typical model? If you have a typical model, is it just a 50 50 split? Is it like you said, it’s in alignment? Do they get a preferred return and then equity? Tell me a little bit more about that for somebody who might be interested, because, again, mobile homes are real. I mean, they really Cash-Flow, the ones I’ve looked at, really cash flow, if you buy them the right way, probably cash flow more than any other asset. Class returns are higher. So people are like, oh, I don’t know if I want to own a mobile home park. Like, man, if you drove through some and you really knew what you were buying and investing in. Again, it’s not the mom-and-pop stuff from 30 years ago. Certainly some parks are. But, you know, the whole game is the whole industry is leveled up a lot. So what is a typical structure with a limited partnership look like?

Jefferson: Yeah, so we typically are now raising money in a fund to structure. Some folks do have to be accredited. Our funds are registered with the SEC. They’re classic 506 regD. Folks need to be accredited. They write us a check. We don’t work on a capital call basis, although folks can certainly write a subsequent check if they like what they see before our fund closes. They’re typically open for about one year. But yeah, we’re just in partnership with folks. There’s no preferred return for our investors. There’s no preferred return for me. Right? I don’t take salaries. I don’t take fees. I mean, again, personally guaranteeing the debt as needed anyway. So that’s the way we work is really just a fifty-fifty partnership when we sell. My investors do have preference to me to get their capital out first. I get it at the end of ten years when we sell, but we do it all the way along to the quarterly profits. We just we split those. We make quarterly distributions and keep building the parts for the long run. We’re not real fix and flip type. People won’t fix and hold and cash flow for a decade.

Josh: Same here with the apartments though. Yeah. I love it. I love it. So Jeffersonians, you think about all the things you’ve learned and you think back about what you would do differently or some advice that you would give to some of our members. I want to ask you about that in a minute. So think about that. Like, what would you give to your younger former self? What would you give kind of advice? Would you give back to some of our audience?

Josh: But before I go there, let’s talk about affordable housing for a minute. Right. Property values are just skyrocketing, especially with covid. Inventory is super low, even in Cleveland. I just read Forbes magazine came out this morning with an article that’s in Cleveland. Where I’m from is one of the top five markets on their watch list. Inventory is down 40 percent. Properties are selling in days to weeks. That never used to happen in Cleveland.

Jefferson:Sounds like San Francisco pricing out here where I live. Yeah, it’s not profitable in Cleveland or going in a couple of days. Yeah.

Josh: Yeah. The affordable housing is a real issue. So and even a friend of mine who owns the mobile home parks down in Florida and he builds and develops houses, he said Florida just I guess just recently, if it was last week or last month, removed some sort of moratorium that they had on building mobile home parks. So they’ve removed the moratorium to allow new mobile home parks to be built. I suspect that’s because they have an affordable housing problem. So talk to me in our audience about this affordable housing problem. How do you think mobile home parks fit in there? What do you see the future being to kind of solve that need with mobile home parks?

Jefferson: You know, so mobile home parks are the only naturally occurring affordable housing anywhere. Most other affordable housing is, are apartment buildings that government either owns or subsidizes. Right. So mobile home parks typically are certainly our properties, even if somebody buying a house from us all in their payment is still going to be probably one hundred bucks less, 10 percent less than what it would be in an apartment. And again, they’re on the path to owning an asset. Indeed, not as nice as the homes you and I are blessed to live in. But those folks will own an asset still worth something when they’re done paying it off. Could be as little as two years on some of our used homes. Some of the mortgages do go out to fifteen years on the nicest new homes, but none of these folks will be in debt for thirty years, the way many of us will be, that that site-built houses, they’re going to own the thing between two and 15 years, they’ll start off paying less than what they pay in a comparably sized apartment.

Jefferson: And again, once they’re done paying for the house, then they only have to pay that lot rent, which is probably more like a third, maybe even just a quarter of what a comparably sized apartment would rent for. And indeed, this is a compelling niche because so many local governments talk out of both sides of their mouth, frankly, politicians on both sides of the aisle talking to both sides of their mouth. I saw this, for instance, in the town where I got my start buying my first property and Slaughterville, Oklahoma, Oklahoma City, a little interesting place. Yes. Well, it’s a healthy little economy. It’s on the south side of Oklahoma City, out near Norman, where OU is. Oklahoma University. So we’re really sort of a suburb of a big, healthy college town.

Jefferson: But a couple of years after I bought that first mobile home park, wouldn’t, with the local town passed regulations to help us. And among other changes, they said no more housing development on anything less than two acres of land. Now, most mobile home parks would have 10 mobile homes per acre. So if you had a two acre mobile home park, it would have 20 affordable housing units on it by changing the law to require two acres of land around any kind of house, mobile or otherwise. They’ve really made it not economic to ever develop another mobile home park in Slaughterville. They certainly never say that they were discriminating against poor people or trying to stop affordable housing.

Jefferson: And it doesn’t say it’s illegal to build a mobile home park. They can say we’ve never made it illegal to build a mobile home park. But of course, the law has made it not economic to ever be able to develop a mobile home park. You have to buy two acres of land and you only get to put one house on it. You’re probably going to put in that market a quarter million-dollar house, three car garage for Oklahoma. That’s an above average house anyway. So we see that kind of thing nationwide where politicians are moving back the goalposts. Frankly, most folks that live in mobile home parks voted a far lower rate than most of the rest of us. Their voice is not heard in all those local city and county elections. Most of those I saw even one case in Florida. I’m trying remember the county where everybody was a realtor that ran the town and they again, completely outlawed, even on private property, any ability to bring in a mobile home.

Jefferson: The realtors that then run, that ran that Florida county said all houses have to be stick built, site built, very nice, large houses where they know where they’re getting their bread buttered. So unfortunately, we see that kind of thing nationwide where politicians are doing a grave disservice to folks making thirty-five thousand a year. And it’s really the politicians that we have to blame for the housing crisis, at least at that level of house price. So.

Josh: So hopefully there’s going to be places like I’ve looked at a lot of mobile home parks lately and again, haven’t offered on one yet, still learning more about the industry. So this interview is one reason why I have wanted to have you on the show. So thanks a lot for coming on, because I just feel like a park or multiple parks. In fact, one of the brokers I work with who sells a ton of apartments, forty thousand units of apartments he sold in his lifetime, says he will only actually personally invest in mobile home parks, even though he sells a lot of apartments, is a great dude. And so he’s like you. Look, you’ve got to start taking a look at this niche. So based on part of his advice, I’m starting to look at some parks to try to get my feet wet and figure out how that goes. So, Jefferson, last question. You’ve obviously got this amazing amount of experience. Thirty-one mobile home parks. Seventy-one million dollars of value. Launching your next fund. You probably learned a lot along the way. So talk to my audience and talk to your kind of a younger former self. What are some things you’ve learned along the way? Well, some advice that you would give to them and to your younger former self that can help us along our journey. 

Jefferson: Yeah. So I would say I’d sort of kick myself in the behind my younger self behind to get moving faster. I didn’t buy my first park until I was, I believe, thirty-nine. I probably could have done it financially somewhere around age 30 or so. I could have done it sooner. Faster. I feel I’ve been generally on the right path. I just should have gotten there faster. I will also say I would have told my earlier younger self to sidestep that first deal in Slaughterville not because of what the government subsequently did, but simply because that property. Josh, some properties just have too much potential, if you know what I mean.

Jefferson: So that that park needed a lot of work. Now its appraised for over three times what I paid for it thirteen years ago. But it’s just taken and certainly in the first several years it took so much time to be rehabbing homes. I was living in my mobile home park one out of every three weeks, being my own general contractor. I never had people that that do that this summer and the roofer and inspecting the new refrigerator that came into the lot, 17 and blah, blah, blah, that first property just had too much potential. And so if I had to do it all over again, I’d be in this business. I just would not have bought my first park. I would have bought something cleaner, a little nicer, more resident, more resident owned homes that kind of thing. But still, that deal is gone. Well, it just pulled an awful lot of time out of me in those early years.

Josh: I would probably argue that you learned a boatload about that, about the business from Slaughterville. Because of all the things you just described, Jefferson, I think about some of the apartments I’ve owned, some of the houses I flipped. And certainly like the ones where you’ve just gotten kicked in the rear over and over and over, and you’re like, God, this deal won’t go away. I’ve got to be on site all the time babysitting this thing. It’s so much work. But conversely. Wow, do you learn a lot when you’ve got to pick contractors and pick materials and site inspect things on a regular basis? So you might argue that that’s a big reason for your success. Looking back, though, you realize how much freakin work that was done.

Jefferson: I would have still learned, you know, but buying a park, I still would have done maybe, you know, one quarter of that amount of work. I still would have learned it if I had done maybe one quarter as much of home renovations and sleeping on site in a trailer, I would have learned.

Josh: Right. I’ll give you credit, man. That’s fantastic stuff. So listen, Jefferson as we round third head for home for our audience that wants to reach out to you. You have a massive LinkedIn group, almost six thousand members, the world’s largest mobile home investing LinkedIn group. Fifteen thousand downloads on your own podcast every month talking about mobile home parks. Of course, you’re opening up this new phone. People might want to invest. So if they want to learn more about these opportunities, where should they go?

Jefferson: Yeah, so the educational materials that we produced the podcast, that LinkedIn group, we also produced the industry’s own, but I believe the only calendar of events. So you can sync things like trade shows right in your calendar. That’s all available at MobileHomeParkInvestors.com. Got it. And then folks that are interested in learning more about our investments, they can hit up our website at Park Avenue Partners dot com right at the top. There’s a link to join our mailing list. Honestly, we email usually less than one once a month, just talking about our deals. And again, upcoming fund. There’s also an intake form at the bottom there. Park Avenue partners dotcom down at the bottom. Somebody can just. Type in their name, their contact information, a question, what have you that’ll come right to me. So MobileHomeParkInvestors.com and ParkAvenuePartners.com, fantastic stuff.

Josh: Jefferson, thanks so much for joining us today on Accelerated Investor

Josh: Well, there you go, guys. I hope you enjoyed that interview with Jefferson Lilly. What a great guy. What an amazing guy. I love his strategy talked about pure alignment, where he aligns with his investors. He owns 50 percent. They own 50 percent. He gets paid when they get paid. I think that’s a strategy that we can all take back into our investing, whether it’s flipping houses, whether it’s apartments, whether it’s mobile home parks. How can we better align with our investors to make sure that everybody’s in the same boat, rowing the same direction?

Josh: Everybody is getting paid at the same time instead of having a fee business, that fee, fee, fees our investors to death. I really love his talking points on pure alignment. If you enjoyed the podcast, leave us the rating. Leave us a review. If you need help with your investing business, raising more capital, learning how to find better deals, build your own portfolio, go apply for coaching. We’ll put the link in the show notes go apply for coaching. Let me know how I can help you build an amazing portfolio into next year and beyond. Let me know how I can help you achieve your financial goals with cash flowing real estate. Thanks so much for being here. We’ll talk to you next time. Take care.

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For over 13 years, Jefferson Lilly has been investing in mobile home parks across the country. After a recent purchase in Roswell, New Mexico, Jefferson’s company Park Avenue Partners owns over 6,000 mobile home units valued at over $71 million. On his LinkedIn group, he teaches over 6,000 investors how to buy cash flowing mobile home parks.

Resident-owned mobile home parks are more like owning a parking lot where a home just happens to be parked, says Jefferson. They have a more responsible tenant base who do less damage to the property. In fact, that’s why Jefferson likes mobile home parks: lower maintenance and repairs, and a better tenant base than apartments.

Jefferson likes to target markets where the average home price is over $100,000 and the average income is over $40,000 which is why he most frequently purchases parks in secondary and tertiary markets like Pocatello, Idaho or San Antonio, TX. Park Avenue Partners’ social mission is to expand the housing supply for people making $35,000 a year, so Jefferson feels like he’s helping solve the housing affordability crisis too.

Right now, Jefferson is raising money for his fourth fund in Q2 of 2021, which is a classic 506 reg D situation with accredited investors. When he structures his deals, he doesn’t take any fees up front in a structure he calls pure alignment. He prefers a 50/50 split with limited partners where no one gets sidelined by fees that scrape profit off of the top. I love his idea that investors are in the boat with us, and we don’t get paid until they get paid. I think we can really take it and apply it to every niche across real estate to improve relationships with investors.

What’s Inside:

  • How Warren Buffett has changed the financing structure for mobile homes in the last twenty years.
  • The ways that a city can help or hurt the affordable housing problem using mobile home parks.
  • What Jefferson’s strategy of pure alignment looks like for his investors, and why I love it so much.

Mentioned in this episode​

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