If you’re looking for a mentor, partner, or lender, this episode is for you. You’ll learn how Ryan Murdock went from small-time landlord/property manager to major player in Brandon’s growing mobile home park empire; how he’s the perfect complement to Brandon’s DISC profile; and how they find, underwrite, and finance multi-million dollar deals.
Ryan is a modest, down-to-earth guy with a keen awareness of his own strengths and weaknesses, and this episode will show you how you can develop that quality to find the right partner and level up your business (and life!).
Brandon: This is the BiggerPockets podcast, show 355. What’s going on, everyone, this is Brandon, host of the BiggerPockets podcast, here with my co-host and our guest today. We have two people. Mr. David on the camera here, and Mr. Ryan, live in the sea shed. What’s going on, fellas?
Ryan: Morning, guys.
Brandon: Hello. What’s up, David?
David: Not much, dude. I have been traveling all over the place. I just got back from Nashville and then Long Beach, and then Philadelphia for David Van Horn’s investor summit, and I’m finally sleeping in my own bed.
Brandon: Welcome back home. Now you’ve got to get on a plane and come out here and hang out with Ryan and I. We could’ve done this in person, but you’re like, “No, I don’t want to…”
David: I don’t know that I’ve ever said that before.
Brandon: All right, so today’s show, the reason we’re doing this is we’re actually interviewing Ryan. Now we talk about Ryan a lot on the BiggerPockets podcast, because Ryan lives here in Maui. He’s part of my team. We’re partners on a bunch of stuff. And we thought it would be fun to actually interview Ryan and tell the story of where that came from, and all the lessons we’ve learned from like him doing little deals on his own, me doing little deals, and powering together. So that’s kind of the plan today.
Ryan: Thoroughly entrenched myself in your existence.
Brandon: Yeah, so it’s great, we’re like grafted together. But before we get to that, let’s get to today’s quick tip. David, quick tip, go!
David: Today’s quick tip is be like Ryan. On today’s show, you’re going to hear what a perfect example, a case study, in being a good employee and being rewarded for it looks like. Ryan masters several things, including getting stuff done, humbling himself, taking action, approaching Brandon the right way, helping make Brandon a bunch of money, and himself money in the process. If you are frustrated that you are not getting where you want to go, look at what Ryan did, do what Ryan did, and you should get what Ryan has.
Brandon: Wow, very good. Look at that. Be like Ryan.
Ryan: That’s awesome, get some T-shirts made.
Brandon: Good. All right, so by the way, guys, you may hear to noise right now. We’ve got landscapers working around my property right now as we’re recording today, so don’t mind them. We actually bring them up later, and there’s a point to why landscapers are here. No, we didn’t do that on purpose, but it brought up a good conversation point, so if you hear the noise, forgive us. This is a live show right now. That’s all I’ve really got. Without further ado, let’s get to our interview with Mr. Ryan.
Brandon: All right, Ryan, welcome back to the BiggerPockets podcast.
Ryan: Morning, sir.
Brandon: This is cool!
Ryan: Yeah it is, truly a pleasure to be here. Thanks for having me back.
Brandon: Yeah, any time man. All right, today is going be kind of a different episode, obviously, because we’ve got you and me here in the studio, in the sea shed.
Ryan: Sea shed.
Brandon: I have to be very careful how I say that. The sea shed by the sea shore. And David here is on the screen in front of us, which is kind of cool. His head’s a little smaller than normal. That’s okay.
David: That’s cause my shoulders are getting bigger. It just looks that way.
Brandon: There we go. So this is going to be a little different show, so David is going to be more interviewing a little more of us, in that, well, we’ll still be interviewing together, but we’ll make it happen. We’ll wing it.
David: We’ll see how much mic time I actually take from Brandon…
Brandon: I know.
David: And how much he backs away.
Brandon: I usually take quite a bit of it. So in fact, I’m going to let you, David, start the line of questioning.
David: Well that’s amazing, hopefully I get to keep going after that. So we’ve got a power couple on here today, Brandon Turner and Ryan Murdock, two very good friends of mine who are currently crushing it in real estate. And I would like to start by asking how you two lovebirds met?
Brandon: The podcast, right?
Ryan: Yeah, the podcast originally. What, three or four years ago, I had applied to be on the BiggerPockets podcast, got accepted, did that show, it was fantastic. Tried to reach out to Brandon afterwards, but he completely ignored me, as most superstars do. But I didn’t give up there. It was, I don’t know, three or four months after that podcast…
Brandon: You should’ve started the e-mail with “Will you be my mentor?”
Ryan: I think that’s what I did! Yeah, I figured that was like for sure. Like, what can I do for you to help you out? Yeah, but no, it was like three or four months after that, Darren Sagar was hosting a meetup in New York, like he does. And being fresh off the 4-Hour Workweek, and having some other changes changes in my life, like I just felt that it was right to randomly book a flight to New York on a Wednesday afternoon to go fanboy over Brandon at this meetup, which I did.
Ryan: So you were there, I met you briefly, I think we spoke for 30 seconds, I said something awkward and weird, and then just disappeared to the backroom, like I typically do.
David: That’s Brandon’s love language.
Ryan: Yeah, and you were mobbed the rest of the…but it was a great meetup, you gave your presentation and one of the things that you spoke about, which is something that you had been talking about on the podcast, was your search for a mobile home park. You had a 10/31 deal going on, you had just sold your first property, the clock was ticking, you had to find another property, and you wanted a mobile home park, and you kept saying, “50 lots, public water, public sewer.” And standing in that room, it was a great presentation, but to myself I’m thinking…
Brandon: Thank you.
Ryan: Yeah, no, we’ve heard the mobile home thing a thousand times, I know he’s looking, it didn’t register that I would actually play any part of that at all. So I flew home, and like the next week, we had a local meetup in Bangor, Maine, where I was living at the time, and one of the guys there mentioned offhand that he had a mobile home park that he was looking to sell. The words clicked, he said, “It’s 50 lots, public water, public sewer.” And I’m thinking to myself, “There’s no way that Brandon is going to want to buy a mobile home park in Bangor, Maine, but I can’t pass up that opportunity.
Brandon: How would you describe Bangor, Maine?
Ryan: Probably about like Grace Harbor up in Washington, like small, Podunk, blue-collar, like not a whole lot going on. Usually ten or fifteen years behind the rest of the country on trends and other things. I mean, it’s a great little community.
Brandon: It is.
Ryan: It’s a great place to invest in real estate, but it’s a small..
Brandon: And cold.
Ryan: Small and cold area. I think we get seven months out of the year is just cold and miserable. The summers and fall are beautiful, but the rest of it is just cold and awful.
Ryan: This guy at the meetup who had the mobile home park, I said, “Ed,” his name’s Ed. “Send me the numbers to that park. I’ve got to at least see if I can pursue this a little bit.” So he did, I looked at the numbers and I remember sitting at my computer for an extended period of time with the e-mail typed to Brandon, “Hey, this is probably not something you’re interested in, but I just at least wanted to send it to you.” And it wasn’t really that I expected that he would be interested in this park, it was more like, I just wanted to stay engaged with Brandon. Like, just stay in communication with him, and it was a way for me just to send something other than, “Hey, buddy, how you doing?” Like I had a thing that I could send.
Brandon: That’s funny.
Ryan: So I sent the e-mail and it was, I don’t know, a half hour later, whatever, you sent me a text.
Brandon: I’m pulling up the e-mail right now.
Ryan: Yeah, you sent me a text and it was something to the effect of, “Hey dude, thanks for sending me that. I’m about to get on a flight, I’ll analyze it on the plane.” And right there, I’m like, “Yeah, victory! Like, he responded, I maybe added some value, even if it doesn’t go anywhere, but here it was.” So that to me was a win.
Ryan: It got better, like six or seven hours later, I got an e-mail and a text message from you, to something of the affect, “Dude, I’ve analyzed hundreds of mobile home parks over the past couple of years. I like this one better than any of them. Would you like to partner on it?” And I almost fell out of my chair. So one of my initial thoughts was…
Brandon: Well, yeah, cause I was like, “There’s no way I’m going to buy a property 3,000 miles away from me, in a market I don’t know.”
Ryan: But my initial reaction was, “Oh my god, I’ve oversold this thing. He doesn’t know Bangor, Maine, he doesn’t know this is a C-class park.” Like it was a pretty depressed park, it was serious value add project. So I think my next e-mail to you was like screenshots of the Google Street View and said, “Make sure you note the overturned shopping carts and exposed belly fat. Like, this is a rough park.”
Brandon: Yeah, I found the e-mail: “The park is rough, which equals management intensive, but the numbers may work.” That’s funny.
Ryan: So long story a little less long, you agreed to come out to my house and hang out for a couple of days, we were going to do due diligence on this park, it was like, I don’t know, 400 degrees below zero. It was just absolutely cold, miserable. We went out there, we marched through, I don’t know, a dozen vacant, blown-out, burned-out mobile homes. Did our due diligence. We did a meetup that night, which is pretty cool, a local meetup.
Brandon: Did we meet Ed that night? I don’t remember if he was there.
Ryan: I think he was out of town. Yeah, we didn’t meet him then.
Brandon: Which by the way, so you invited me to your house. No, you invited me to a hotel.
Ryan: Yeah, no, this is great, because you said you were going to come out, and I’m thinking, “Okay, Brandon doesn’t know me at all. Like, he’s not going to want to stay at my house, but I’ll at least offer it up.” So I e-mailed you, I said, “Look, you’re welcome to stay at my house, I’ve got an extra bedroom, but you probably don’t want to do that. It’s two nights, here’s the hotels I recommend.” And you responded back, “Oh yeah, no problem, I’ll stay at your house.” And I’m like, “Holy crap.”
Brandon: Well I remember at the time thinking like, “If I’m going to go into business with a person, I’ve got to be able to spend the night at his house.” Like that was my actual line of thought.
Ryan: Yeah, that was a bold move. Cause you had no idea.
Brandon: Well I was like, “He could murder me, and then I shouldn’t go into business with him.” That was my…
Ryan: Yeah, so the funny part about that was the spare bedroom that I had, one of my side-hustles forever when I was doing real estate was doing eBay. So I was dragging home junk from yard sales and old Jeeps and parking them out, and my spare bedroom was my inventory warehouse. So I had like industrial shelving and just the walls are trashed, the trim is beat up and the room is just beat to death after five years of inventory storage. And Brandon, I think you were kind of like, five or six days later, so it was like my own little episode of Home Makeover, where I took all the crap out of that room, repainted the whole thing, fixed the trim, repaired the blinds. I didn’t have any furniture, I went out and had to buy a bedroom set, like a bed, a nightstand, a lamp, a rug, like all that stuff. And right before I picked you up at the airport, I even had a painting that I bought at Lowe’s, hung that on the wall.
Brandon: That’s funny.
Ryan: This whole thing to get ready for Brandon. So you came, you had no idea that the room hadn’t been like that for years. Pulled it off. Conned you into partnering with me on that park.
Brandon: I was like, “That’s a normal guy.”
Ryan: Yeah, so we closed, I don’t know, a month or so later, and off to the races.
David: So this is a case study in the right way to approach somebody. I know we’re joking around a lot, but you were able to cut through the noise and get ahold of Brandon, get him to sleep in your house on your first date – impressive from many different angles – and eventually get him married to you in business. So I’m fascinated, I think there’s a lot of people that can pull out of Ryan’s story, to be completely genuine, the right way to approach somebody and how to add value. Cause we say all the time, “Add value,” but that is obviously no good to you if you don’t know how.
David: So tell me what happened next. How did you guys pursue this park together? How did you partner on it? What ended up happening?
Ryan: You want to go over the partnership structure?
Brandon: Well, we brought in Mindy. I think we mentioned, Mindy hosted the BiggerPockets money podcast, I won’t say business podcast, money podcast. So Mindy had been a good friend for a number of years. We’d done some money stuff and she’s lent money, private money in the past. So we brought in Mindy and we said, “Hey, do you want to partner on a mobile home park?” Cause I had some of the money, not all of the money, and so Ryan put in a little bit of money, I put in my 10/31 money, and then Mindy put in hers. And normally, just a caveat, normally you cannot put 10/31 money into a partnership or syndication, so it is not a partnership. What is it?
Ryan: [inaudible 00:09:37]
Brandon: There goes that leaf blower.
Ryan: Right on cue.
Brandon: Right on cue.
Ryan: There will be three or four more by the time we’re done.
Brandon: That’s the downside of living in Maui, I guess, leaf blowers all the time. Anyway, we’ll be fine. Where was I?
David: You formed a tenancy in common.
Brandon: Yeah, tenancy in common, that way we could do a 10/31. There’s a couple ways to do that, there’s like DST or a TIC. Those are the two ways to take 10/31 money into a group. So we each own part of the mobile home park, it is not a partnership.
David: Yeah, TIC is basically just a way to hold title. There’s several different ways to hold title, that’s one of the ways to do it. So here’s something interesting I can add to this. While all of this was going on, I was hanging out with Brandon at his house in Washington, I believe right when the long-distance book was getting ready to launch. And we were talking about the insane stress he was under, trying to find something to put 10/31 money into. Does that sound familiar, Brandon?
David: And I’m hearing about this awesome dude, Ryan, who’s like clutch when you really need him, and he found this deal, and Brandon was like, it literally came down to like the last minute, didn’t it? Like it was the last day. If that doesn’t describe what it’s like to be Brandon’s friend, I don’t know what does, cause everything comes down to the last day, just like that.
David: Okay, so you guys buy this deal. Now tell me, how did you split up the work that was going to be done? Because if that had gone bad, you guys wouldn’t still be partners today. So what was it like once you guys had to actually operate it?
Ryan: Yeah, it worked out pretty well. Initially, I was going to self-manage the entire thing. I got a chunk of equity, I did put money in, but I got an additional chunk of equity just for being kind of the boots on the ground guy, which is a great angle for anybody that doesn’t have the money and has the hustle. Like those opportunities do exist. But at the last minute, I decided that managing the day-to-day operations of that park, while I was qualified to do it, wasn’t the best use of my time. So I went back and hired the property management company that I had worked for for about five years. Great operation, the main real estate management, they run a very tight ship and I knew they could do a good job with the park, they would do probably a better job than I would and it would save me the hassle of having to deal with the 50 lot mobile home park that really was in pretty rough shape at the time.
Ryan: So they dealt with the day-to-day, the rent collections, the maintenance calls, the day-to-day headaches. But what I took on was more of an asset manager role, where I was overseeing, there were some lots that needed some infill, we had ten or twelve homes that needed to be renovated. So I was meeting with the contractors, I was kind of doing the bigger picture stuff that typically the management companies struggle with a little more. Like they’re very good at the day-to-day, but sometimes they’re just out of their comfort zone on doing renovation-type stuff. I did some other work with getting permanent permits for the park. I had to go in front of the planning board to get some zoning things changed. It’s all stuff outside of the scope of day-to-day management. So I took on that role, which I think I did very well with, meanwhile the management company dealt with the day-to-day, so I didn’t have to worry.
David: And Ryan, where did you learn those skills that you implemented when you were managing the projects?
Ryan: Well, I had been managing property for I don’t know, ten years. When I first started out buying my own small, multifamilys, I started a property management company at about the same time, and I grew that to roughly 200 managed units. I did that for about five years, which then led to the opportunity to join forces with that bigger management company. I went to work with them, brought my business with me, and I worked with them for another five years or so. So I knew property management and specifically, I knew that management company inside and out. So if there were any issues, like I knew all the people there, I knew who to go to for the right answers and to get things done, so it was a great arrangement. I like working with them and they like working with me and it was a great fit.
Brandon: Which we had Jessie McCue, so he was on the BiggerPockets podcast and he’s been on the BiggerPockets business podcast. Anyway, Jessie’s awesome, he runs that company.
Ryan: He’s an absolute rockstar.
Brandon: Yeah, he’s a rockstar. One thing just to point out there I thought was interesting, you brought it up, I don’t want to leave until we at least mention that like the fact that you brought value to the deal, I mean, you did bring some money, but you wouldn’t have had to. It’s more like you, I think the money you put in was like the money that you paid out for random things in the property.
Ryan: Yeah, originally I wasn’t going to be required…[crosstalk 00:13:38] You had worked it out so that I didn’t have to put any cash in, but I kind of felt compelled and excited to throw some money in, just so I could have some sort of skin in the game and for that, I got additional equity.
Brandon: Yeah, but so what was cool is like, this applies to anybody, especially if you are somebody who lives in a market that there are deals, if you can be the person that finds the deal, you can bring somebody that brings the money. I talk about that all the time. David talks about it all the time. There are a lot of people who live in the middle of the country, or in these side pockets areas, like well I lived in Grace Harbor, you lived in Bangor. There are deals there. Networking, connecting with people on BiggerPockets is such a great way to make magic happen.
Ryan: Yeah, it was a perfect example of what you talk about all the time. You’ve got to have the deal…
Brandon: Yeah, the deal triangle, triad. Yeah, you’ve got to have the deal, you’ve got to have the hustle…no, the hustle, the knowledge and the money. You don’t need all of them, you need two of the three.
David: Well, I like that Ryan had the knowledge, because he didn’t just sit around and say, “I want to invest in real estate, I need to find a deal.” He said, “I’m going to go work for a property management company and learn the fundamentals of being good at this. So when his opportunity came, he was prepared. And I know that there’s some quote that probably Hal Elrod said about preparation needing hard work or something.
Brandon: Probably. I think it was like Ben Franklin, but you know, we’ll give it to Hal.
David: Well whoever you want to credit to, cause that’s what you do. So credit yourself.
David: But Ryan was ready when his moment came, so I think that that’s awesome. Now you two are both hanging out there in Brandon’s sea shed in Hawaii. How did that come to pass?
Ryan: So it was what, about nine months after we bought the mobile home park, you had hired me to go out to one of your other apartment complexes in Ohio to do a little bit of work there. But I think the real relationship…
Brandon: You’re the mercenary.
Ryan: I was the mercenary, so yeah, gun-for-hire, just flying around, reeking havoc everywhere. But I think the real relationship was formed, or Brandon’s trust in me was just seeing like how we worked together through the mobile home park. Like there was a lot of work that had to be done there, and we were able to collectively do way more in a shorter period of time than we thought we were going to be able to and we just worked well together.
Ryan: So I was coming back from some consulting gig I was doing somewhere, I can’t even remember where now, on the mainland. But I got a text from Brandon saying, “Hey, I just bought this house in Maui, can you come out for a week just to help me get settled. I’ve got a bunch of stuff to do. I’ve got to get my truck and my shipping container and like all this stuff. Will you just come out and help me?” So yeah, I booked my flight before you had a chance to change your mind. Came out for a week and pretty much just never left. I think I was here for about five seconds before I decided that Maui was fantastic, how do I make it work that we can move out here.
Brandon: Yeah, the landlord-tenant laws are very strict here and so I can’t get him out. So now he just won’t leave.
Ryan: Yeah, he’s got to at least know six months before our court date and then [inaudible 00:16:26], I’m going to nail them on there too, so I’m good here for at least another…
David: Ryan would know, he worked for a property management company.
Ryan: Yeah, I’ve got it down.
David: Like when a prosecution attorney goes to the defense side.
Ryan: Yes, precisely.
David: So I wanted to ask you Brandon, from your perspective, why did you ask Ryan to move out with you? When did you know this is somebody that I want to partner with on a bigger scale? How did that develop?
Brandon: Yeah, so this actually goes into a lesson that I think is actually really important for everybody who are thinking about bringing in partners or employees or just anybody in your business that you’re going to be working with. Ryan and I built it slowly. What I think people oftentimes make a mistake of it like, “Oh hey, you and me are like the same person! We should partner together.” We naturally like people who are like us. Ryan and I are exactly opposites. Like when we go DiSC profile, we have exactly the opposite DiSC profile. Exactly. So I think that’s one of the reasons that we tend to work really well together. The fact that at first I went and hung out with you for a little while, then we did a deal together, a specific deal, and it worked out well. Then I hired you to help me with another one of my properties. That worked out well. Then I asked you to come out just for like a week to come to Hawaii. I just traded him a plane ticket in exchange for helping me. So at every step, we’re feeling each other out, like do we like working together and how did that work. So that’s kind of how I approached it and every time I needed something done, Ryan was just really good at getting things done. That’s why we call him “The Mercenary,” it just worked. That’s how we moved from there to, let’s do a little bit more, let’s do a little bit more, and that led us to where we are today, buying like crazy. Does that answer the question?
David: No, not really. Not at all. What feeling did you have when you were like, “This is the guy, I want him to move here and start a business with him.”
Brandon: Yeah, well, I mean I can tell you the moment that I thought it.
David: Yeah, like when did you know you were in love? That’s what I’m getting at here.
Ryan: The sunset on the beach, very magical.
Brandon: Exactly. It was a couple things, one particular thing that is I had a shipping container from Washington state with all my crap loaded in it, had been dropped off at the port here in Maui, and I had no way of getting it from there to my house. The next day, it was parked in front of my house, being unloaded. It was just like, it was just done. I was just thinking like, “How cool is that, just to have that done.” Which is a fairly complicated thing, which actually goes to my point I make a lot, nothing is hard, it’s just steps that you haven’t defined yet. So it wasn’t like it was hard, I just didn’t know the steps to figure it out. So Ryan figured it out. And I remember thinking that day, “This would be amazing to have more of this in my life.”
Brandon: Plus, it’s not like Ryan’s…so when I bought this property, I live out here in Hawaii, it has a, what we call, an ohana. So there’s an extra house on the property. It’s like there’s the main house, then there’s actually the downstairs, which we use for family and friends and maybe someday, Airbnb. And then there’s the backhouse, which is completely separate, I don’t know, probably 50 feet off of the back of my house. It’s almost like a separate lot. In fact, in Hawaii, I could separate it someday, they call it CPRing it. But anyway, I think you were the one that asked, “What would it look like…”
Ryan: Yeah, that was one of my tasks was you tasked me with finding a tenant while I was here. And I did.
Brandon: Exactly. He was like, “Well, what if I just moved in back there.”
Ryan: Yeah, because at the time, you were looking for an assistant, you had some other tasks that needed to be done. I was certainly looking for a change of physical location, because I had had enough in Maine, and I was at a point in my own portfolio and my business there that I could start to look for something. My wife and I were actively looking for places in the southern U.S., warmer climates, somewhere to escape in the winter. So I just took those things and said, “Loo, you’ve got a need for an assistant and for some help. I’ve got a desire to get the heck out of a cold climate into a warm one. Certainly partnering with you and being exposed to your world and the BiggerPockets world and David, you were out here that first night I showed up and like that super surreal world.
David: I think I set the plate for you, bro. I think it was me telling Brandon, like, “You need an assistant.” That’s all we talked about for like a week is how great it is when you have an assistant. And what I’m noticing that hasn’t been mentioned here, and I’ve noticed this about you too. You are the guy that gets stuff done, GST. If you weren’t “The Mercenary,” that’s what we would call you. You are so good at that.
David: When something needs to get done, Ryan steps in and he does it. He doesn’t make excuses, he doesn’t say, “I don’t know how.” It’s this amazing feeling you get when you’re like, “Hey, can you help me?” He just does it and he does it quickly. And if that’s something that somebody learns how to do, you become incredibly valuable no matter what you do. And most of the time, we get in our own way. The stuff that stops us from getting stuff done is not our own intelligence, it’s not our resources, it’s our own emotions that are like, “I don’t want to feel stupid. I don’t want to make a mistake.” That type of stuff. And Ryan just doesn’t care. He will just get in there and do it, and Brandon recognized – from what I’m hearing – I need a little bit more of that in my life.
David: And so he invited you to live with him in Maui now, and you guys have an awesome business going together. So I kind of want to get into that. Can you guys share what Ryan’s current role is within the business that you are building.
Brandon: Sure, I’ll take that for a second. Originally, I was like, “I don’t know what you’re going to do, but let’s just call it like executive assistant, even though you’re not an executive assistant.” I don’t know what better name to give for everything.
Ryan: Yeah, we had to get really creative with the job. [inaudible 00:22:51] So I was executive landscaper, I was the pool boy, I was the driver. Like whatever he needed.
Brandon: Yeah, whatever needed to be done. Cause we were like, “How do we keep Ryan out here and make it justified to be able to do that?” What’s funny is he’s moved completely from executive assistant to something very different. Today, your title is VP or acquisition. Like, you’re basically running pretty much the entire side of the business that involves finding mobile home parks and other properties, getting it through closing, dealing with all that stuff. So he’s running all of that, and then from there, Brian Murray, who wrote a book called, “Crushing it in Commercial Real Estate,” he’s been on the show a couple times, Brian is our asset manager. Brian runs everything from that point on, so it’s kind of the two halves is Ryan running pre-purchase, Brian running everything after, and we’ve got Mike and Walker in there as well right now. Ironically, I brought in another, cause I lost Ryan as my executive assistant, I brought in Mike. That lasted a week before Mike was promoted. Now Mike is basically investor relations, that’s like what he does and he’s amazing at it. And so he’s running all investor relations. So it’s just interesting how like, every step you’re trying little things and giving people more and more based on what they’re doing.
Brandon: Which is why, I mean David, I know this is something that you harp on all the time, is this idea of doing good in your job. Why so many people are like, “It’s just my job. It’s just my day job, I don’t need to do good at this. I’m just going to do the bare minimum, I’m going to get by. I’m just a waiter, whatever, I don’t need to do extra work. I’m just a waiter, I’m going to do the bare minimum not to get fired.” But Ryan is like, “How do I do the best job possible?” And then going from living in Bangor, Maine, to running a multimillion dollar, the fastest growing mobile home park business in the country. I think that’s true, it probably is.
Ryan: I think it is.
Brandon: Zero to 1,300 units under contract in three months, whatever it is. Crazy.
Ryan: Very fast.
Brandon: Yeah, very fast. How did we get there? Because at every step, he just excelled. So, good job. Thanks.
David: Ryan, do you have advice that you can share on how you were able to excel?
Ryan: It’s funny cause I remember in the first couple of weeks, I was bored, like looking for things to do to stay valuable, and I was out raking leaves in the yard. And David, it was your voice in my head that says, “If I’ve got to be a landscaper, I’m going to be the best landscaper I can be.” And just keep doing it and keep pushing. You look at what I had done in my business prior to that, out raking leaves in the yard was presumably a step back, but I knew it was worth the sacrifice to move forward, light years ahead of where I would’ve gone otherwise, without that opportunity. So yeah, just be the absolute best that you can be at whatever the task is at hand.
David: One thing I’ve noticed about you Ryan is even if you’re the one raking leaves, while Brandon and I are drinking tea or something, like watching you as the hired hand, there’s never a feeling like we’re better than you.
Brandon: Uh, Ryan, you missed a spot over there.
David: Yeah, exactly. Could you keep it down? Could you tell the hired help to be a little more, yeah. That’s never the case. When we hang out, it’s like we’re all three buddies and we’re the same, and I just noticed that there’s a lot of people that would object to that and say, “I’m not going to go rake leaves. I was an executive at” whatever. I know that Ryan didn’t have that pride, he was very humble about it and I don’t think there was ever a point where I ever felt like Ryan’s any different than me, he just has a different role than what I’m playing. And in a different world, I could be the guy that ends up raking those leaves. I mean, life changes very, very quickly, and I think that’s something else that we should commend you for, that people should hear, is having the humility to do what needs to be done, not taking the place of honor, not getting all the attention – which you’re now getting because you did do that – but you just executed that perfectly. Like they could probably make a movie about the extent of Ryan.
Ryan: The Mercenary!
David: Yeah, and you’re good looking enough, you could play yourself in the movie, which is even better. Okay, so now you guys mentioned that your business is growing extremely last, obviously because you have the right people in place. You’ve got Ryan there and Brandon, two very talented people who both understand. Brandon, you’re kind of the visionary, you see what needs to happen. Ryan, you’re the executor, you go carry out that plan, and the two of you work very good together. Can you share how your business started, what the vision is for it, what troubles you had, how it grew, where you’re at now. I’m very interested to hear about this growing mobile home park business.
Ryan: Want to go with the vision?
Brandon: I mentioned that a few weeks ago on the BiggerPockets podcast, the episode that Jay and Carol Scott interview me on the business podcast, but the quick answer, so we had this thing called a vivid vision on my wall, up there on the wall here. But it’s basically the idea of like, I knew I wanted a thousand units in three years. That was basically it. I wanted to own 50 million dollars of real estate, a thousand units in three years. And the way I got that was working backwards, from what I actually wanted, which was a team of fun people doing meaningful work. I worked backwards from that goal and that outcome, and said, “What do I need to justify a team of four or five fun people in Maui, hanging out, working hard and having a good time?” And then from there, I built the vision. Then obviously a thousand units in three years, we’re going to need a bigger goal, because…
Ryan: Yeah, we’re there.
Brandon: We’ve got 1,300 units under contract, we haven’t closed on them all, we may not close on them all. As of the date this comes out, we should have just closed on the 168 unit. We’ve got 260 coming up here in a few weeks probably to close, and another…
Ryan: Yeah, it’ll be 1,300 total if everything closes in the next three months from now. Yeah, so it’s been a pretty meteoric rise.
Brandon: Yeah, and Ryan really is running almost everything, because we’re in acquisitions, so everything from he’s managing a team of deal analysis guys we brought in, including we just brought in a gentleman named Walker. What’s the last name?
Brandon: Of course, Walker Meadows. So we just brought in Walker Meadows to be kind of our lead everything finance, underwriting-related. He’s awesome. So Ryan runs all of that now.
Ryan: Yeah, and that’s kind of the fun thing about bootstrapping a business is it’s fun and challenging at the same time, trying to figure out when and how to pull the trigger on help. I mean, you take it back to the landscaping thing, that was one of the first things that we got removed from my plate. As soon as I got busy enough, we had to rake leaves and I couldn’t rake leaves anymore, it wasn’t the best use of my time. Mercifully, we were able to hire a landscaper and get that off my plate.
Brandon: Which is why right now, there’s landscapers working like all around, you can hear the buzzing in the background.
Ryan: Yeah, so you follow that through the natural progression of building a business, where first it was just kind of me and you, and we’re looking for deals, we’re underwriting all the deals. We would sit in the shed for hours and underwrite deals, to the point that, okay, we need help doing that because it’s keeping us from doing other things. So we brought in a team of underwriters, we brought in a team of acquisitions people. Even watching their roles evolve, because when you start out and you bootstrap, you only have one or two people. Every additional person you bring in is just a dynamic change to the roles and responsibilities, where unlike if you have a company with 200 people, and you hire one or two more, they don’t have that big of an impact.
Ryan: But when you start out with one or two people and every time you add that second, third, fourth person, you’ve pretty much got to reevaluate everybody’s roles and responsibilities, because you’re delegating a lot of this stuff out. It’s absolutely key that you have the right people to do what it is that you need them to do. From a skillset level, which I was always more like, “We’ve got to hire for skill. We’ve got to hire for skill,” Brandon was always more of a, “We’ve got to hire for personality,” and I’m definitely leaning your way now, because we’ve had people that were skilled that just weren’t a good fit, and I’m now seeing that personality plays way more into it than I thought.
Ryan: Because the people on our team now, I absolutely love working with them, they do a great job, they exceed expectations every time. Like every time we’ve added one of those team members, it was like pulling the drain out of a sink. All the stress and like the million things that I would have to do or you would have to do, it’s like *shwoop,* it’s just gone, because now you’re delegating to other people.
David: You know, Brandon, I heard you one time quote Mark Cuban, and you actually gave him credit for it, which I’ll give you credit for doing, that business isn’t sport and that’s why you like it. And as you were talking Ryan, what I was thinking was most of us when we’re new tend to only focus on the skill aspect of business. Are you good at your job? But there’s actually an entire new dimension to it, that is can you hire other people to do it, which is very, very tricky. It’s to me like four or five times harder than even just being good at the job. It’s very similar to an athlete who has mastered one part of their sport, but if they can’t do something else, then there’s a weakness and they can’t win, the defense can stop them, and that’s what it made me think about.
David: And the other thing I thought about is how with a new business, like what you guys are describing, the growth is a lot like the process or mitosis in a cell. You have one person that does everything. Then you bring in a Ryan, and now that splits into two people that do everything. And then Ryan’s job becomes overwhelming, and he splits into two more as you leverage off landscaping and other things. And as long as every split is a good hire, you can continue to grow and you can even grow rapidly. But one bad hire stops everything, because then you’ve got to stop, get rid of that person, fix all the mistakes that they made, put a new person in there, let them get up to speed. When you’re in the process of trying to grow a business, all you think about is, “Why do people suck? Why can’t people just not suck?” Because it’s so much easier if they wouldn’t. That’s why I’m commending you, Ryan, because you were the guy that didn’t suck and look how quickly things shot off for you.
David: Can you share some of the struggles that you guys have had, as far as your scaling? Cause you don’t really sound like you’re stressed or overwhelmed. I would imagine with the pace that you’re growing at, there’s got to be a lot of worry.
Ryan: Yeah, if we had done this podcast maybe six or eight weeks ago, I would’ve been a very different me, I think sitting in this chair. But we’ve been able to bring on some quality help and get some systems in place that we were lacking, and I think part of that is just not knowing what we wanted. Our initial focus on the mobile home parks, our net was way too wide.
Brandon: Way too wide.
Ryan: We just didn’t know. We weren’t sure what to expect and what we could find for deals. But what we found quickly is that we were just overrun, because we were casting too wide of a net. We had to continue to refine those criteria, to the point where it was just much easier to make an automatic yes or no, this is a deal we want to pursue or not. Where before there was just way too much ambiguity.
Brandon: Can we give some specifics? Like what we were originally looking for?
Ryan: Yeah, because again, we really didn’t know how hard it was going to be to find deals, so we’re looking at everything. Like some of the things that we have now, that used to be negotiable and maybe we’ll pursue this park, maybe we won’t, are now like a hard yes and a hard no. Initially, we were looking at parks with private utilities, so wells and septics, we weren’t crazy about them for them not to have them, but we were still underwriting those as we were going through. We’ve gotten to the point now where if there’s private utilities, we don’t even want to take a look at, it’s a automatic no.
Ryan: Do we perhaps pass up some good deals? Yeah, maybe we’re going to miss one or two, but the amount of time that it took analyzing and underwriting bad deals, it just wasn’t worth it. We had to cut those things loose. Stuff like private utilities are an automatic no. We’re looking at specific population criteria in the MSA, so we want what, 100 and something thousand people within ten miles. Minimum percent park-owned homes. We want some vacant lots, but no more than like 30 perfect, because that causes complications with financing and infill. So we’ve really tightened our criteria from “we’ll look at anything,” to now there’s five or six hard stops on something that we will just cast aside.
Brandon: And that’s so hard to reject a deal that might be good. We’re looking at these deals, I’m like, “Ugh, it’s only got 48 units, but man, the numbers look solid.” What I learned is the opportunity cost of even looking at those deals, is not worth the fact that we probably would get a deal occasionally. So it’s better to have the really strict criteria and know exactly what we want, because we talked about that on other shows too. Now that every major broker in the country that own mobile home parks, we want them all to know, oh yeah, that’s an open door capital deal. Because it’s got a 125 units, it’s in this MSA, it’s got this vacancy, that’s perfect for open door capital. So they’re going to shove it to us, because we’re just known as that type. We’re like, “Oh, we’ll take anything,” and then we’re rejecting all over the place.
David: Well let’s look at the foreshadowing of how you two even met. It was because Brandon was very specific about what he wants. 50 units, public water, public sewer, whatever it was. That it was stuck in Ryan’s mind, and I think that there’s a lesson to be learned from that, is that FOMO, the fear of missing out, that if I turn away a deal, and I don’t look, I could miss the deal of the century. It’s almost like having a lack of faith, and it will always come back to bite you. You have to have the faith that I know what I’m looking for, there’s plenty to go around, I need a smaller filter, and the right one will come to me.
David: All right, so can you guys break down who’s in charge of what as far as your company right now? What are the different roles people are playing?
Ryan: Brandon’s role is to come up with all kinds of ideas. My role is to pretty much say no to all of them. That’s it in a broad sense.
Brandon: It’s like BiggerPockets, by the way, all over again. It’s like I come up with the ideas and Josh is like, “no.” I come up with the ideas, Josh says, “no.” Which is by the way, I spoke on this at the BiggerPockets conference, BP Con2019 that we were at, I mentioned the skill of saying “no” is such a valuable skill. Cause most people says “yes” on default. Saying “no” on default is actually a better option. So the other day, we were looking at this property a block from my house. It’s a vacant lot with a little house attached to it and it’s a perfect development. It’s potentially a $200,000 profit development deal. And I’m like, “Ryan, let’s just do it.” And his answer was, “No.” But I’m like, “It’ll be no work at all, we just bring in a general contractor, they handle the whole thing.” He says, “No.”
Ryan: See, that’s the other key. So it’s a very strange dynamic, because Brandon, you just heard him say, “It’ll be no work at all. This will take five minutes. No big deal.” And I’m in my mind thinking, “This is like an eight month, full-time project for three guys.” So the truth is somewhere in the middle there, likely, but Brandon’s like, “Oh, no time, this will cost like five bucks, five minutes.” And I’m like, “No, this isn’t even close to that. This is going to drag on forever.”
Ryan: Like I said, it’s a very interesting dynamic of the balance of you firing off idea after idea after idea – some of which are actually brilliant, a lot of them are not – and like, I don’t have any of those ideas. I am not good at coming up with those ideas, but I think I’m good at filtering those, and putting on some sort of realistic can we do this or can we not? I think you guys have talked about on the show before, was it Steve Jobs or whatever, he would say “no” to great ideas, but you just can’t do everything. You’ve got to pick your path and stay focused on that, or else you’re just scattered all over the place.
Brandon: Yeah and to go into the company structure a little bit, so there’s a book called “Traction,” I don’t know, David, have you read “Traction” yet?
Brandon: So “Traction” talks a lot about this idea of defining every role in your company. This is not just “Traction,” a lot of people talk about, define the role, not the people. So when I made my vivid vision thing on the wall, at the bottom of it, I didn’t actually print it on the thing, but I actually defined what the company would look like. So there would be a CEO, like that would be me, that’s my role as visionary. There would be an asset manager, they’re in charge of managing the asset. There would be a finance person, basically a CFO kind of character. There would be an acquisitions person. Under the acquisitions person, there would be an analyst person, cause that’s part of that. There would also be a salesperson that’s in charge of cold calling. I had all these roles specified, and now we’re just plugging people into them. We’re changing a little bit…
Ryan: Yeah, we’re starting to get some real structure. It’s you obviously as the CEO, I’;m beneath that, and then I oversee Walker Meadows and Mike, who are our underwriters and investor relations people. Then we’ve got Brian Murray as our other asset manager. My goal is to keep as much off Brandon’s plate at this point as possible, for a variety of reasons, most of them good. So I’ll try to deal with anything I can internally with our team, with Brian, Walker and Mike, and only bring you the higher level stuff that we really need your input on. I try to insulate Brandon from an much as possible. Because he’s got a million other things he’s doing. He’s doing podcasts, he’s raising money. Like he has his role. He doesn’t need to get bogged down in the minutiae of the day-to-day business.
Brandon: And my job right now is raising money. Even though Mike is our investor, Mike Williams, shout out to Mike Williams, Mike is awesome, but he’s our investor relations, so he takes it from there, but it’s my job with my Instagram, with going to speak places. My job is to talk about the business, so I can raise money from a credit investor, so that’s what I do.
Ryan: And if I’ve got any problems that I just can’t overcome for a variety of reasons, or its a super-high level decision, only then will I bring it to Brandon for some input. And hopefully that’s a quick conversation, this is where we’re at, yes or no, and onward we go.
David: Ryan, I’m telling you, if you had a twin brother, if you could clone yourself, I would pay you so much money. I mean, I would never steal you from Brandon, but what you’re describing is literally what we dream about having in our lives, is someone that has that mindset. I want to take as much off the plate of the CEO as I can, and if I have to go to him, I’ll have everything lined up, it’ll be a very quick conversation, I just need to know this or that, and then I’m going to go execute it.
David: What we find as business owners is that most people say, “Tell me what to do. What should I do?” And they run to the CEO to say it, or maybe not the CEO, but the decision-maker, with every single thing, because they don’t want to stop and Google something. They don’t want to make a phone call to someone else and say, “What would you do in this situation?” What you want to be is the guy that goes to the CEO and says, “Hey, I’ve talked to these three people, this is the common theme that comes up with all of them, are you okay with us making this decision?” Rather than, “What should I do?” And the CEO says, “Go call these three people,” you come back, “Here’s what they said.” That’s the problem, and if people could adopt the mindset that Ryan has, they’d become very wealthy very quickly, because there’s just not a lot of that in the world. I mean, I’m definitely looking for my own Ryan, I’m looking all the time. I’ve been struggling trying to find that.
David: But you see when the two of you get together, like that magic happens. Boom, you guys are doing really good.
Brandon: They call that rocket fuel, right, when the integrator and the visionary line together. There’s that phrase, the guys who wrote “Traction” wrote a book called “Rocket Fuel,” and that’s what it is. When Josh Dorkin and I got together at BiggerPockets, it was rocket fuel. Because at that time, Josh was the visionary, I was integrator. When you bring those two parts together, it’s rocket fuel. And when you bring us together, I have shifted roles to more visionary, but yeah, very interesting.
David: That’s absolutely. No, no, I think that’s a great point, because when people are picking a partner, like you said, they usually pick somebody who is just like them. Or they’re doing it for emotional reasons. “I’m scared, I don’t want to do this on my own.” But you’re going to give away 50% to someone you don’t know, why? Because it’s easier to just not, nobody likes to take the jump alone. My buddy Daniel Del Real says that all the time.
Brandon: On that note, not to lead the conversation that you’re leading, but we should talk about Brian Murray.
Ryan: Yeah, I was going to say, we need to.
Brandon: That’s a good segue from that point.
David: Why don’t we do that? What role is Brian playing, and how is that helping your business?
Brandon: I mean, officially, he’s the asset manager, but really, he’s rocket fuel squared.
Ryan: Yeah, that’s an interesting story because there was some hesitation on your part and my part to bring in another partner. I mean, equity is valuable, so you don’t want to give away anymore than you absolutely have to. But there does come a point, and this has proven itself clearly, that the sacrifice in equity to bring Brian Murray on as a partner is paying off tenfold already in overall deal experience.
Ryan: Like the skills that he has and his strengths are ones that still Brandon and I are lacking, so he’s that third piece of the puzzle. He brings just a wealth of experience in this sort of syndication and these sort of deals that this magnitude that neither you or I have. We understand how it works, but he brings a certain level of credibility, expertise and experience that I know I’ve certainly leaned on a ton. You’ve had many conversations with him and we’re bouncing ideas back-and-forth and he’s just been solid. There’s no way that we would be where we are right now today.
Brandon: No chance.
Ryan: With the volume of parks without his input and influence. No chance.
Brandon: And this is that whole idea of like, you are the average of people you associate yourself with. When we got around Brian, Brian does big deals. He owns tens of millions of dollars in real estate. He wrote the book, “Crushing It In Commercial Real Estate,” one of the biggest real estate books out there. He was on an episode by the way, Episode #126 of the BiggerPockets podcast, and Episode #212.
Brandon: But we met him out here, I invited him out because I just knew he was a cool guy. We invited him out for this mastermind thing that we did last year, a lot of you guys heard about it, it was like the most incredible four days we’ve ever done. It was unbelievable. But anyways, we invited like twenty people out here, had a few days of unbelievable masterminding, and fun stuff, and Brian was part of that. David decided to go to Atlanta instead of coming to my…you wanted to be on CNN instead. Whatever.
Brandon: So Brian comes out here and here’s a great example, I’ll tell a quick story, and I might have mentioned this in the other episode I did with the vivid vision, but if not, I’ll say it again here. Brian asked a simple question during that time. So are you going to put a waterfall into your syndication. And I didn’t know what a waterfall, I mean, I knew what it was…
Ryan: You never gave it any thought.
Brandon: I never gave it any thought, because I was like, “This is hard. This is complicated. I’m not going to do it.” And in a five minute conversation with Brian, he’s like, “Well, you know…” and he kind of explained a waterfall is basically a way of, when you split a deal with limited partners, when you’re raising money from limited partners, that it changes, the equity split changes the better the investment does. So the better the deal goes, the more money the general partners make. That’s why in a five minute conversation with Brian, we decided to add a waterfall in. It actually incentivizes us to do a better deal, but I would’ve never done that had Brian not pushed me on that. And those happen over and over and over and over.
Ryan: Pretty certain that conversation on surf boards too, didn’t it?
Brandon: We probably were on a surf board when we talked about this, but that whole idea is just further evidence why you need to get around people, even if it means going to work for them. Brian will probably hear this, but if Brian asked me to work for him, I’m not sure I would’ve done it necessarily, but that would’ve been a smart move. So like if you’re listening to this podcast and you’re brand new to real estate, go find somebody to work with or work for, intern for, get their dry cleaning for, it doesn’t matter, get around people who are going to push you. You can walk your way to the next level and try to get to the next level by yourself, or you can just get around somebody who’s already there, and they just pull you to that level. They’ll pull you up there just naturally.
Ryan: Yeah, the other big part of that too is just staying engaged. For me to get from where I was to sitting here now in Maui, I didn’t do anything magnificent, it wasn’t anything that anyone else couldn’t do, but I stayed engaged. I got on that plane and I flew to New York randomly to go hang out at a real estate meetup because you were there. I went to the meetup back in Bangor to meet the guy who had the mobile home park. I sent you that e-mail with that park in it. So all those little pieces, none of those are difficult or something that anybody else could do, but just staying engaged. Keep your name out there. Don’t be annoying and like send fanboy e-mails all the time, but try to add value to people’s lives and keep yourself in front of as many people that you think that could positively influence your life as possible. Anybody can do that. Get off your couch, go to a meetup. Stay engaged on the forums. Just stay engaged.
Brandon: Get off the couch and go to a meetup. Ryan. That’s a quote right there.
David: And you gave credit to Ryan. You are coming along so well.
Brandon: I know!
David: Those meetings that you’ve been going to have really helped.
Brandon: Thank you. Thank you. I’m progressing through life. I’ll get a picture on my wall that says that quote, and then Ryan, Brandon.
David: All right, well I think that’s great advice and I think this is a good time to move along to the deal deep dive. All right, so it is time for that part of the show where we will dive deep into one specific deal with out guest/guests. So Ryan, do you have one in mind?
Ryan: Yeah, I think we’ll keep going with that mobile home park?
Brandon: All right. The one in Maine?
Ryan: Yeah, so we’ve already talked about how we found it, but I guess we can go over some of the numbers.
Brandon: Do you want to do this alone, Dave, or do you want me to ask the normal questions that I ask?
David: No, I want you to go in it with me.
Brandon: All right, we’ll go into it together. We’re going to deal deep dive together. Hey Ryan! What type of property is this?
Ryan: This is a mobile home park.
Brandon: And how many units were in it when we bought it?
Ryan: It’s all for 50 lots, but I think there were 46 functional lots, a lot of those were vacant or contained homes that needed to be destroyed. But 46 functional lots.
Brandon: Yeah, and I think there were like 42 that were good homes, and then there were what, 12 vacancies, remember that?
Ryan: Yeah, there were 12 vacant ones.
Brandon: I think it was like 30-ish that were there.
Ryan: Yes. That were actually functioning.
Brandon: Out of like 50 zoned, there were 30 actually rented or sold.
David: And you found this at a meetup you were at, right Ryan? You heard someone talking about it?
Ryan: Yup, so that was a local meetup that an investor had put on and this investor, this is another good tidbit for somebody, this investor didn’t even own any property. So he wasn’t really technically an investor, he was a guy who wanted to get into investing, didn’t know what to do, there wasn’t a local meetup in our town, so he hosted one in his living room.
Brandon: That’s funny.
Ryan: Yeah, and all of us other investors in town had been kicking around the idea of doing a meetup and should we do it, how should we do it. And analysis on the meetup, like where is it? Who do we have speak? How do we put this together? Where this guy just comes out of the blue and has a meetup in his living room. And it was a great meetup and it’s still going on, that was what, a year and a half, two years ago, and it’s still a monthly meetup. It’s grown, he doesn’t have it in his living room anymore, it’s at a public place. He has a speaker come every time, but it was great.
Ryan: I found the mobile home park there, and I also found a seven-unit that I ended up closing on a few months afterwards. So just in that one meetup in that guy’s living room, I got two great deals out of it.
Brandon: That’s cool. All right, how much was the property?
Ryan: I think it was $1.1 million?
Brandon: I think that’s what it was.
Brandon: They were asking for more than that, right? 1.2?
Ryan: Yeah, it was 1.2, we settled just under 1.1, and then during due diligence, when that day you and I walked through, we found a lot more homes that were vacant and in much worse repair than we had anticipated, so we were able to go back and negotiate a seller credit at closing to deal with some of those vacant homes.
Brandon: Yeah, and it was like 100 and something thousand.
Ryan: I think it was 140-160 thousand dollar credit at closing to deal with what I think were 12 mobile homes that either needed to be destroyed or completely renovated. They were bad.
Brandon: Cool, and then how did you negotiate that?
Ryan: Back-and-forth, and Brandon really kind of took the lead on coming up with the different negotiations. You used your patented three option plan.
Brandon: The three option offer.
Ryan: Yeah, and I don’t remember what the different things were, but you presented three options to the seller, which I know was right out of your playbook.
Brandon: Tall, grande, venti offerings.
Ryan: Yeah, I know, but not to make somebody feel like they either need to take it or leave it, here’s three options that work for us. Which one of those three works for you?
Brandon: Yeah, it gets people thinking which one versus yes or no.
Ryan: Yeah, cause you don’t always know somebody’s complete situation, where one of those maybe way more advantageous to them then another one, and they’re all good for us, right? We made all three offers, so he picked one, and we went with it. It turned out being he was going to sell or finance 80% of the purchase for what, 20 or 25 years, at a pretty attractive fixed interest rate, so we didn’t have to involve a bank, which was great, especially in the mobile home park space. Especially in a value and mobile home park, with a lot of park-on homes, those are typically the top to finance through banks, so we were able to avoid that altogether.
Brandon: Yeah, shout out to Ed. Young guy Ed.
Ryan: Young Ed. Sorry Ed.
Brandon: Apparently, once I said old guy, we bought a mobile home park from an older guy, I think I said older guy, what I meant was older than me. But anyway, he gives me a hard time every time I talk to him now. Young buck Ed.
Brandon: Cool. Oh, it’s my question. How did you fund it? How did we fund this, Ryan?
Ryan: I guess we kind of went over that already. Seller financing on 80% of it and then the down payment and the reserves and the renovation costs were raised a little bit from me, but mostly from you and a bigger part, Mindy.
Brandon: Mindy and Carl, yeah.
Ryan: Who were using self-directed IRA, or something along those lines.
Brandon: Yeah, they retirement accounted it.
David: What did you guys end up doing with this park?
Ryan: So we renovated, I think eight of the homes, we trashed three or four of them, like they were just beyond repair, so we had to smash them up.
Brandon: SMASH! Ryan literally went over there and Hulk smashed them.
Ryan: Yeah, smashed them with heavy equipment, stuffed them into a Dumpster and got them out of there. So that was kind of my job while I was there in Maine on-site for the first year or so, but when I moved to Maui, that posed a bit of a problem that I was no longer the asset manager for that park. So we ended up hiring another guy to take that role.
Ryan: A guy I met on BiggerPockets, his name is Tristan Thomas. Super good guy who specializes primarily in mobile homes. So I think he has a mobile home park of his own, but he does a lot of just fixing and flipping mobile homes. So he was like the perfect guy, who was already plugged in to that area’s network of wheeling and dealing mobile homes.
Ryan: So we tapped him and his expertise to fill out the remaining vacant lots in that park and it was just two weeks ago that he finally purchased the last mobile home that we needed to fill the last vacant lot in that park, which I thought was incredible, especially with the short seasons in Maine. Like you only have the summertime to actually move these things. You’re not doing it in the winter. I think there were eight to fill this year, and I was thinking to myself, “There’s no way that he’s going to be able to pull that off,” and I told him this would be two years, at least, and he did. He got all the last eight vacant lots filled and we’re at capacity now. It was a huge accomplishment.
Brandon: All right. Outcome. I know I went from what, 12K to…
Ryan: Yeah, I remember, I don’t have the exact numbers in front of me, but the gross income when we bought the park I think was right around 10 or 12 grand a month, and now it’s at 25 thousand a month. So I don’t know what that boils down to, but it’s substantially better that it was when we took over.
Brandon: Yeah, the cool thing about mobile home parks, one of the things that attracted me and you to them, is that when you infill these properties, you can add all this income, but there’s no real additional expense.
Ryan: Yeah, very minimal expense added.
Brandon: Very minimal addition expense to that. The management costs a little bit, but like the water bill? They’re paying their own water at this place. They’re playing their own garbage, right?
Ryan: We pay garbage…
Brandon: Okay, but they’re paying water.
Ryan: But they’re paying all their own utilities, beside garbage. The water, they’re paying their own electric, they’re paying their own heating, fuel, all of that. They’re taking care of their own lawns and shoveling their own driveways, so we don’t have to deal with any of that.
Brandon: Yeah, there’s a term when I was out there raising money for the fund that we just closed on, we call that a cash flow fund, because what mobile home parks can do is they can provide really good cash flow because one, they provide good cash flow because they’re mobile home parks. But they also have the ability to grow, even in spite of a recession. If we hit a recession, we can still add more units in and people will still want to live in mobile home parks, it’s the lowest, cheapest housing you have in America pretty much, other than homeless. So people still want to live there, so it’s cash flow now, growth later, but it’s not growth dependent upon the market. Cash growth is the new term we’re inventing.
Ryan: So it’s very recession [crosstalk 01:09:57]
David: All right, last question. What lessons did you guys learn from this deal?
Ryan: I don’t know how many times I have to go through this to learn this lesson, but always budget more than you think you’re going to need for improvements. So like repairs, overhauls, renovation. It always costs more than you think it’s going to, and we’ve certainly gotten better with that, but every time, I mean, I don’t care what size the project is, there’s always a surprise. So you’ve got to make sure you adequately account for that, whether it’s just going through your numbers and just tacking on an extra 20% or whatever it’s going to be, but you want to have that extra slush fund above and beyond what you think you’re going to need.
Brandon: Very good.
Ryan: Luckily, we had that. We were very well funded and were able to handle those surprises without any serious ill-effect. But if we weren’t well funded, we would’ve had a problem.
David: All right, well that was the deal deep dive. Now let’s head over to the fire round.
Brandon: Oh, fire round.
David: It’s hard when you’re on that side of it, huh Brandon?
Brandon: It is weird. Fire round questions, all right. This is the part of the show where we fire a bunch of questions from the BiggerPockets forums at you freely.
Ryan: This scares me.
Brandon: Dan from Charlotte, North Carolina. When someone asks you “What do you do in real estate?” What’s your elevator pitch?
Ryan: I don’t have one. That’s something I’ve been trying to work on, like I can’t explain what I do, cause it’s so many different things. I’ve said to myself so many different times, “I need to come up with a ten second thing,” and I usually just stare blankly, and say, “I’m in real estate.” No, it depends on the day. I mean, right now, it’s we’re investing in mobile home parks all across the country and adding value to it, but I don’t know.
Brandon: I actually like saying, not that you asked me, but I’ll answer the question, I like saying, “I actually buy trailer parks.” And I like to say the word “trailer park” instead of mobile home, when I’m with investors, whatever, I say “mobile home parks.”
Ryan: Depends on the audience.
Brandon: But yeah, a random person, I say, “I actually buy trailer parks.” It’s a great conversation starter. Everyone goes, “Wait, what?”
Ryan: “Have you seen Trailer Park Boys? That’s exactly what we do.”
David: That explains the beard.
Brandon: Yes, exactly. But it’s a great conversation starter, and because every conversation, for me anyway, leads to can we work with this person someday? Can they work with us someday? Can we help them? Can they help us? So when I say, “We buy trailer parks,” like it gives the opportunity for, “Well, what does that mean?” “Well here’s why we do it.” And then maybe there’s a way they can help me. Maybe they want to invest in my fund. Maybe I’ll want to hire them some day down the road and do something. Who knows?
Ryan: Yeah, and it’s surprising when you tell people, like the initial chuckle at trailer parks, but then within a very short period of time, they’re usually quite fascinated with how it works and what you’re doing.
Brandon: Yeah, all you have to do to explain is, “We just own land, and people who own their own houses live on our land and pay us money, and they do their own repairs with their units.”
Ryan: And you start to see the wheels turning.
Brandon: And they’re like, “Really?” It’s funny.
Ryan: It’s always a fun conversation to have.
Brandon: Which is not really quite a doozy as, “We own land,” obviously, but there’s a little bit of work involved there.
David: All right, question #2, this is from Herm in Northern California. Do you prefer Home Depot or Lowe’s? Any tips on getting supplies at either of them?
Ryan: Lowe’s, hands down. I just like blue more than orange. It’s as simple as that. No, I don’t know, I’ve just always been a Lowe’s guy. It’s like wherever I’ve been working, Lowe’s was just closer than Home Depot, so I always just went there and just got accustomed to it. I’m a creature of habit. If I have any big ticket items, I will shop usually both stores, but I’ve always just had a commercial account with Lowe’s and better discounts and just a better relationship with those people. But either or. I wouldn’t fault anybody one way or the other. It’s a personal preference.
Brandon: I have always been a Home Depot person, cause we didn’t have a Lowe’s in Grace Harbor. Now that we have a Lowe’s here, Lowe’s is a newer property and easier to get in and out of, so I go to Lowe’s more often. Sometimes I find better stuff at one versus the other, because they do have different stuff. But Lowe’s is just a lot easier to get in their parking lot then Home Depot is, so I go to Lowe’s. It’s actually a good lesson for anybody in retail…
Ryan: You can drive through the lumber yard.
Brandon: Yeah, and you can drive inside the lumber yard.
David: Yeah, nobody’s asking me, but I’ll say I hate both of them. Brandon and I joke about this when I visit him in Hawaii. He always wants to go walk through Home Depot and I hate that place. I hate the smell of fertilizer, I hate that there’s no [crosstalk 01:14:08], I hate the wide open aisles full of just nothing that I’m interested in at all. I hate that you can never find someone when you need something. I mean, there’s a lot of places about those stores I don’t like. But Brandon is like a kid in a candy store.
Brandon: I love that place. I will just walk through when I’m bored and just walk through it.
David: You do! And you’re a weirdo, man. I don’t get that.
Ryan: You never know when you might stumble on a deal.
Brandon: You never know. Those clearance things at the endcaps, those are great.
Ryan: Let’s buy all seven of these sinks, cause you never know when we’re going to use them.
Brandon: All right. Jessica Todd asks, “Hey all, I have a tenant with two large flags draped over a second floor balcony, both very clearly expressing his viewpoint on certain topics. I’ve received two complains regarding one of the flags, they feel the large size makes it seem his viewpoints represent the entire building. While they don’t bother me, I want all my tenants to feel comfortable in their home. I don’t have anything expressly written in my lease against that, and I worry if I ask him to remove one or both, it’ll be a violation of the tenant’s freedom of speech. Any recommendations?”
Ryan: Yeah, it’s time to update your lease. I always had in my leases “No signage or political flags of any kinds.” I think we’d allow like an American flag, but no other signage, because it just opens a can of worms. It has nothing to do with, like do I believe your political stance over somebody else’s. It always causes problems. It’s just a good blanket statement. No signage of any sort in your apartment at all.
Brandon: Yeah, we have like no sheets in the windows, no signs outside your, yeah.
Ryan: Yeah, easy way to do it. So ride out the rest of your lease, if you’re in a lease with somebody, and then your next lease, when you update it, make sure that’s in there.
Brandon: We should probably get your flag down from the beach.
Ryan: My Bernie sign?
Brandon: He’s got a 40-foot picture of Bernie Sanders hanging out of the back.
Ryan: Yeah, I have a Trump sign and a Bernie sign, just to keep everybody guessing.
David: Keep them on their toes, right?
David: All right, last question from Tim Sweadburg. “I’m in a bit of a rut, so my question is this. What motivates you to stick with real estate investing? How do you push through the cruddy parts?”
Brandon: Great question.
Ryan: Yeah, because there’s no shortage of cruddy parts. I just don’t know what else I would do that would afford me this kind of lifestyle. I’m not college educated. I’m not super intelligent. I’m not very creative.
Brandon: Ryan’s very insulting.
Ryan: Yeah, but I don’t know what I would do that would allow me to have the lifestyle and the freedom that I have now. So that keeps me motivated and kept me motivated for the ten years of hell in building my business and down in the trenches of bottom-of-the-barrel property management, just misery, was that okay, this is still my best opportunity to get to the life I want.
David: I like that.
Ryan: And it’s finally now paying off.
David: So just set the bar extremely low and then the cruddy parts don’t seem so cruddy.
Ryan: Welcome to my life, David.
David: That’s probably good dating advice as well, if you think about it.
Ryan: Always right there too, yeah.
Brandon: If you can’t reach your goals, just lower your standards.
David: That’s exactly right. Lower your standards and raise your average. [crosstalk 01:17:02] used to say that all the time. Brandon, any advice from you that isn’t horrible, like what we’re saying right now?
Brandon: I don’t know. You have to hear the story of the people that have got through the muck, and I think that helps a lot. Having people see us, I mean sometimes I feel like I’m showing off, like, “Hey, I’m in Maui here, and I’ve got this cool, we surf and we body board and all that stuff.” But I hope people look at that now as Brandon and Ryan are showing off their cool stuff, but this is what’s possible if you can get through the muck.
Brandon: Yeah, if you can get through it, this is what’s possible. And it’s not that we don’t work, it’s just that we also haven’t been able to do the lifestyle that we want now, because of the real estate. So it’s worth it, stick through it, people.
Ryan: Yeah, absolutely.
Brandon: Anything you want to add to that, David? That’s a good question.
David: I would say that’s why I’m a system’s guy, cause every time something goes wrong, I go in and I change the system, so that either it won’t go wrong the next time, or we prepare for that to happen, so we try to cut it off before it comes. That’s why I’m so encouraged, because every time you get that “This sucks,” you go back and say, “Where could I have prepared for this to prevent it from happening?” Tweak your system, you don’t have to worry about it anymore, and then the next time you go through it, you’re not as worried about it.
Brandon: That’s why David is so smart, that’s why he’s hosting this thing today.
David: Yeah, but it doesn’t matter how smart you are if you don’t have that rocket fuel, you know what I’m saying?
Brandon: Well somebody come be the rocket fuel to David. All right, moving on to the next segment of the show, it’s time for our famous four. The part of the show where we ask every guest every week the same four questions, we asked you this last time, we’re going to fire them at you again. Before we do, let’s hear from Jay Scott and what’s going on this week on the BiggerPockets business podcast.
Brandon: All right, listen to the BiggerPockets business podcast, make sure y’all subscribe to their show.
Brandon: All right, favorite real estate-related book, Ryan?
Ryan: Favorite book, I’m going to exclude present company, because you guys’ books are great, but what I just read was, actually I’ll give another shout out to Brian Murray. I just read his book, “Crushing It in Apartments and Commercial Real Estate.”
Brandon: That’s what the book, I mis-titled the book.
Ryan: It truly is a fantastic book, if you’re interested in commercial real estate. I tend to gravitate more towards no nonsense, no fluff. If someone is writing an instruction manual for me to do stuff, that’s what I want. Brian’s book is similar to that, but he does have stories in there that are not just like tangent stories, but they’re great examples of the point that he’s trying to make. I listened to that on my trek across Northern Minnesota, where it’s just like five hours of straight driving on no sleep. So listen to that book. It was enough to keep me awake and keep me engaged. But I found it funny because the only time I had to hit pause on that was when I was taking calls from Brian Murray. It was pretty funny to like, “Oh wait, I’ve got to stop Brian Murray to talk to Brian Murray.”
Ryan: David, I haven’t read your book yet, but if you would agree to check in with me after like every three chapters and summarize with some personal input, I would love to…
David: I think if you just hang out with me long enough, you’ll hear it.
Ryan: Go on another road trip. Brian’s book is fantastic. I recommend it to everyone.
David: Yeah, that’s cool.
Brandon: Can you explain real quick why you were driving through Minnesota, like that whole story’s kind of cool.
Ryan: Yeah, that was a whirlwind, so that was after I left BP Con, that was kind of a last minute deviation in my flight home, was originally going to be with you, but we decided to ship me up north to go on a couple of scouting trips for two mobile home parks that we were going to, they were in the midst of making an offer on, and for a couple of reasons, we decided it was good for somebody on the team and go there. Number one, so we could lay eyes on it and make sure, because you never really know, like you can read the OM, you can do Google Street View and you do all of that stuff, but until you actually set foot and walk the park, you don’t know for sure, like the real feel of it and if you’re going to like it. It was important for us and it’s also important, I think, for the seller to see that somebody from our team had actually set foot on the property.
Ryan: I remember back doing property management, I wouldn’t even rent an apartment to a prospective tenant, sight unseen, because you never know. For good or bad, they have certain expectations that they see from the pictures that they think about in their mind, but when they show up, it’s not what they want. That doesn’t help anybody, cause then they’re trying to get out of it, you’ve already committed to them and turned other people away, so it’s the same thing with looking at properties and on a bigger scale, these mobile home parks are even more critical that we have a good handle on what we’re offering on, and that the seller knows that we’ve got a good handle on what we’re offering. I think it makes the offer more competitive.
Brandon: Yeah, just going that extra mile when you’re going to make an offer for somebody, whether it’s a huge commercial deal or you’re trying to buy your first duplex, how can you add something that makes the seller go, “Oh, that person’s legit,” or, “I like them,” or, “They’re serious about this, I’m not going to waste my time with someone else.”
Ryan: Yeah, if I had three offers in front of me as a seller and two of those people hadn’t been to the property, one of them had, and the offers read close, or maybe his was even a little less than the other two, I would go with the guy that’s actually put his hands on it and seen it.
David: Beautiful. Okay, that was a lot for your favorite real estate book. We got a ton of value out of that question.
Ryan: You can never ask that question again.
David: How about your favorite business book?
Ryan: Business book, I think I mentioned this one last time, but “4-Hour Workweek,” and I know it’s a little cliché, but nothing changed my life more than reading that book at the time that I read it, it just changed my entire perspective. You don’t need to be physically attached to your business at all time. If you are, then work towards – if this is one of your goals, and was it for me to travel and see the world – work in your business so that you can get to the point where you’ve got systems in place where you don’t need to physically be there all the time, or you can manage that thing from anywhere in the world.
Ryan: That’s a perfect model to what we’re doing here, where the business that Brandon and I are in now, we can based at it anywhere, right? So why not Maui? “4-Hour Workweek” all the way.
David: All right, I know what the hobby I want you to talk about is, and it’s you rescuing everybody’s lives in the Hawaiian ocean. But is there any hobbies other than that, and then please do touch on your Baywatch ways.
Ryan: I don’t like to throw the term “hero” around loosely for anything, but I mean, you brought it up. If that’s what you’re alluding to then I guess I have no choice but to take it.
Ryan: No, I like to spend a lot of time at the beach. Brandon likes to surf, I take the easy way out and do body boarding.
Brandon: Save lives.
Ryan: It requires way less paddling and actual physical work. So I do that, but no, there’s been a couple incidents in the past year or so where there were some people in distress, distress swimmers, mostly tourists who don’t know the local water conditions and how dangerous it can be. So I do freelance as a lifeguard, and have dragged people from the brink of death, up on to the beach.
Brandon: I mean, the rip currents, they’re pretty crazy.
Ryan: They’re nasty.
Brandon: They’ll suck you out.
Ryan: It’s scary.
Brandon: Yeah, and some people just get sucked out and Ryan’s out there with his boogie board.
Ryan: And it’s to the point now on this one particular beach, I can see it happening, cause it’s the same spot on the same beach when the conditions are right and you see swimmers, I just get sucked out there and I just sit and wait at this point. I know that they’re going to be in trouble and sure enough, a head will go underwater, or they’ll start waving their arms and then I’ll know that I’ve got to go get them. So I’m not the only one, it’s a pretty common thing there, were surfers and body boarders have to rescue people.
David: Isn’t it funny how it’s like a small little, innocuous sign that says, “Hey, be careful. There could be a rip curl.” And then you’re watching people almost dying in front of you.
Ryan: Yeah, people don’t take it seriously, and I think that’s an issue like all over the island everywhere now. There’s signs for everything, like “Danger! Look out! Danger! Look out!” At this point, you don’t know what to believe or not. Cause they’ve got to gear everything to the most frail and weak person in the world, so how do you really know what’s dangerous and what isn’t? And I know I was surprised, only having been here a year now, the power of the water. There are a couple of times where I got caught off-guard. I could’ve easily been one of those people that got swept away, and maybe someday I will be, because of some stupid thing that I did. So I can only hope that if I’m in trouble, somebody’s there to drag me up on the beach.
David: Well I promise you, I’ve gone out with Brandon snorkeling before, and I was using a mask that they call “The Widow Maker,” which I was informed kills people all the time. It was the only one we had, and so I’m like, “Okay, Brandon, I’m going to use it anyway, just stay really close to me and if you see me start floating without moving, come get me out of this carbon monoxide Hell that I’ve fallen into.” And Brandon stayed at least 50 feet away from me at all times. Never looked back even once the entire time. So don’t rely on him to save your life, that’s the advice I’m going to give you that maybe will save your life. Find a real friend that values…
Ryan: You want to invite me next time. I’ve got your back.
Brandon: Ryan was standing on the shore, watching with binoculars. He was good.
Ryan: I’m all over the place. I’m everywhere.
David: Love it.
Brandon: The Widow Maker, for those who don’t know, it’s those full mask snorkels.
Ryan: The whole face mask, yeah.
Brandon: That have like the one monocle that goes overtop, I don’t know what you call that, one mono…
Brandon: Mono-orkel. Anyway, they sell them at Costco, so they can’t be that bad.
David: They’re so great, I risked my life. It was worth it. I mean, they work so good.
Brandon: Yeah, it’s really nice, and you can see a whole lot more and your whole face is in it.
Ryan: It’s so much more fun when you’re light-headed and dizzy.
Brandon: What they say is people die snorkeling with them because carbon dioxide builds up in there.
Ryan: Carbon dioxide builds up and people pass out or they get close and then you can’t pull the mask off. It’s all anecdotal, I don’t know if there’s anything.
Brandon: Yeah, I don’t know if there’s actually science…
David: Yeah, well we know Brandon doesn’t believe it, cause he was way out there, not anywhere close to me.
Ryan: Yeah, you’ll be fine.
David: Oh, carbon dioxide-schmoxide.
Brandon: The odds of dying in the car on the way out there were far greater than you dying with your little…
David: That’s true, that’s a good point. I was already a survivor. You believed in me.
Brandon: I believe in you.
David: That’s why you did it.
Brandon: All right.
Ryan: Toughen up.
Brandon: There you go. Number four: Ryan, what do you think separates successful individuals, successful real estate investors from those that give up, fail, or never get started?
Ryan: Persistence, for sure. If you’re persistent enough in anything, I think you can accomplish whatever it is that you want. You can be very smart and very savvy, but if you’re extremely lazy and just have no ambition or motivation to do anything, you’re not going to do anything. You can be an idiot with all the persistence in the world and like one of those little battery-operated cars that just keeps banging off the wall, you’ll eventually turn around and hit your target. So I think above all, persistence is where it’s at. Now hopefully, you don’t self-destruct while trying all the wrong things first, so you still want to educate yourself and make intelligent decisions, but if you just keep at it, you’ll get there.
Brandon: Cool. All right, well that was good. Well, we’re going to get out of here. David, do you want to ask the last question, and then we’ll move on to our outro?
David: Yes, Ryan, tell me where can people find our more about you?
Ryan: Yeah, we didn’t mention it, but I do work for BiggerPockets, so you can hit me up there. [email protected] Shoot me an e-mail and I’m trying to build my Instagram, I’m going to overtake Brandon at some point, I think I’m only a half million followers behind him. Ryan.Murdock21 on Instagram, you can find me there.
Brandon: All right, well before we get out of here, we do have, because we’re obviously in the same place now, so we don’t have to like kick you out and talk bad about you behind your back, like we normally do.
Ryan: Now you just do it right in front of me.
Brandon: No, but before we get out of here, first of all, Ryan, thank you very much. You’ve been a rockstar.
Ryan: Thank you guys. Now let me take a time out cause I want to thank you Brandon and you’re wife, Heather. You guys have been just extraordinarily generous to me and my wife and like facilitating this entire move and putting yourself out and you’re trusting me. So I do want to make that on the record.
Ryan: Thank you. I appreciate it.
David: Classy move, Mercenary.
Brandon: Classy move, Mercenary. All right, so before we get out, there is a fly in my face, before we get out of here, I do want to read a pro shout out. Every week now, we’re going to be talking about a pro member who’s doing awesome stuff.
Brandon: So today’s pro shout out is Jeremy Ellicox from Newport News, Virginia. He used a VA loan to buy a live-in flip, right near his job. Purchase price was like $189,000, he’s saving a bunch of cash because he was paying $1,500 bucks a month in rent. This is straight out of Scott Trench’s book, “Set For Life.” Lowering expenses, getting as much income as you can, building an equity into property, so anyway, shout to Jeremy. And hey, remember, if you want a chance for a shout out on the BiggerPockets podcast, e-mail us at [email protected] That’s [email protected] and put the words “Pro Deal,” P-R-O D-E-A-L in the subject line. Again, [email protected], subject line Pro Deal. And share the details with us. That’s all we got. So, want to take us out David?
David: Absolutely. He is BeardyBrandon, we have Ryan.Murdock and I am DavidGreen24 on Instagram. Let us know what you thought of this episode.
David: Ooh, Ryan.Murdock21. Thank you. Kind of similar to my 24. We have a good little thing going on there. Anyways, this is David for Ryan “The Mercenary” Murdock and Brandon “Doesn’t Care If His Best Friend Dies” Turner, signing off.
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