BiggerPockets Podcast 208: Buying 41 Units on Your First Deal + Mobile Home Park Investing with Jack Baczek

by | BiggerPockets.com

Most people begin their real estate investing with a small single family purchase. Some even start with a duplex or triplex. But today’s guest on the BiggerPockets Podcast skipped the intro phase and jumped right into a 41-unit property early in his 20s! Today, you’ll learn how Jack Baczek used a strategy not before mentioned on the podcast to invest in 41 units, as well as his transition to mobile home park investing (and why that niche ROCKS). Jack’s story is truly inspirational, and you’ll walk away from this interview inspired, entertained, and pumped up to take massive action on your own business!

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In This Episode We Cover:

  • How Jack got started with real estate
  • How he stumbled upon what ended up his first deal at age 21
  • What exactly a fractured condo is
  • How he found his first deal of 21 units
  • How he financed this huge deal
  • A warning against hiring the wrong property manager
  • How having parents who invest in real estate affected him
  • Why he sold the 41-unit property
  • Why he made the shift to mobile home parks
  • What a mobile home park deal looks like
  • Reasons to invest in mobile home parks
  • The changes he made to the park to make it rent-ready
  • Why there’s a bad stigma on mobile parks
  • Why Jack fell in love with direct mail marketing
  • The downsides of owning a mobile home park
  • Where is he now in terms of scaling his business
  • What an assignment fee is
  • Tips for trying to read the market
  • What the next five years look like for Jack
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “I think having a good market is really important.” (Tweet This!)
  • “I think it’s important to really focus on good deals with value add and upside.” (Tweet This!)
  • “If you get a mediocre deal, chances are it could go sour. I’d rather try and find something that looks really promising.” (Tweet This!)

Connect with Jack

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About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners -- without the non-stop pitch prevalent around the industry. With over 1500,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!

8 Comments

  1. Justin Owens

    Question for the guest: Have you ever purchased a mobile home park where the seller owns the units and then as a value add, or perhaps expense shrink, work out lease purchases with tenants so they become owners?

    I have seen a few in my area but the seller owns the units and I would like to perhaps split the lot rents from the home payments so that after say 5 years paying (or some type of amortization schedule) on the unit an occupant would own the trailer but continue to pay the land lease.

    Any suggestions on this?

    • Jack Baczek

      @Justin Owens, Apologies for the delayed response, I did not see a notification . Yes, this is very common. So you typically do the valuation as a lot rent only park and then add in some wholesale value or no value for the homes ( or even negative value depending on what kind of homes come with the park). The first thing I would do is figure out who has been in there home for a while and it appears that its cared for. I would get them on a path to ownership ASAP. You have to be cautions that you comply with the Frank Dodd Act on lease options/financing. My favorite is to just give the person a low cash price to own the home and then get out of the equation quickly. Its not always practical especially if you have to allocate some $$ on purchase to the home but getting out of the home business as quick as possible , i believe, is the best way to operate in the MHP business.

  2. Nathan G.

    Good show, guys!

    I want to provide some assistance when it comes to emotional support animals. Brandon nearly accepted a renter with four (4) Pit Bulls because she had an internet certificate that said they were emotional support animals. Brandon said, “Nobody has a good answer…” Actually, there are answers but you have to dig for them.

    (WARNING: PLEASE CONSULT YOUR ATTORNEY!!!)

    The majority of emotional support animal claims are fraudulent. Notice I said “majority”. These people prey on the ignorant, skirt the law, and violate the rules of common decency because they want to take their pets with them everywhere. The airlines are struggling with this problem even more than Landlords. The good news is that if you educate yourself, you can protect yourself.

    Fair Housing allows Landlords to ask two questions:

    (I) Does the person seeking to use and live with the animal have a disability — i.e., a physical or mental impairment that substantially limits one or more major life activities?
    (2) Does the person making the request have a disability-related need for an assistance animal? In other words, does the animal work, provide assistance, perform tasks or services for the benefit of a person with a disability, or provide emotional support that alleviates one or more of the identified symptoms or effects of a person’s existing disability?

    Question #1 is your best protection. If they present you with a certificate from a web site, you can reject it because no self-respecting healthcare provider diagnoses disabilities via a phone call or an online form. These sites literally charge $75 – $100 and then provide fake certificates. Some of them even sell vests and ID cars, even though these items do not carry any weight. They are designed to trick the public into thinking they are trained, certified, official support animals on the same level as a seeing-eye dog.

    It’s also impossible for a healthcare provider to answer #2 through a web site. How can they determine if the support animal alleviates the disability unless they continue to treat the patient? It’s impossible and I am happy to defend this position in court.

    When someone walks in and tells me they have a service animal, I provide them with a couple forms. One is a form asking for a waiver to my pet policy. The second is a generic letter that answers the two questions allowed by Fair Housing. I require the applicant to take the sample letter to their healthcare provider. The healthcare provider has to answer those two questions on letterhead with an original signature. This immediately weeds out any web site fraud. They’ll leave and go look for another sucker. Since implementing my new process a few years ago, I’ve only had a couple people actually apply with a service animal.

    Here are a couple other thoughts:

    1. The law requires you to make “reasonable accommodations” for disabilities. If your insurance provider will not cover a Pit Bull, you CAN reject the applicant. It is not “reasonable” for you to violate your insurance policy or to shop around for a new policy that will cover Pit Bulls. Reject them!

    2. If you read the law closely, individuals can only have ONE service animal per disability. In other words, a blind person cannot have three seeing-eye dogs because one is sufficient. They could have an emotional support animal that helps with anxiety and a separate animal that alerts them to seizures because those are different animals for different symptoms. Or they are allowed to have two animals if one is in training to replace the other one. There is no legal precedent for a person to have multiple emotional support animals. Ask them what the support animals are for. If they have more than one for the same disability, reject them!

    3. Another issue is tenants that sneak a pet in and then claim it’s an emotional support animal after I catch them. I’ve had this happen a couple times. I give them a written notice of the violation and a day or two later they walk in with a letter from their doctor and the ink is still wet! I don’t accept it and am willing to stand in front of a judge to defend my position. I tell them it was a pet when they violated their lease and they can remove it or move out. So far, they have moved out without pushing back.

    I always recommend you contact an attorney or your local HUD office. Provide them with some scenarios and ask them for guidance. They may even be able to help you develop a policy. But be careful! I listened to a top-level representative of HUD last year at a Broker conference and he was unable to answer many of our questions because he had no real-world experience.

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