#37 - Exploring The Investment Potential Of RV Parks: Insights From Andrew Brown

when we do our meetups we share

everything we don't charge for it we

just invite people out it was killing me

that people were losing money investing

on real estate in Austin Texas it was

just killing me um so we just share uh

and when you do that you find other good

people welcome to the path the passive

podcast we talk about Building Wealth

and empowering lifestyle through

commercial real estate investing for

Tech professionals I always wish that

other Tech professionals reaching

Financial Freedom had documented their

Journey along the way so I'm doing it

for the rest of us join us as we explore

stories many failures and Lessons

Learned along the way I hope you enjoy

and

subscribe uh Andrew thanks so much for

being here I appreciate you taking the

time uh I just I just wanted to start

off with you know the the big sort of

anchor thing here is that you raiseed $6

million on a project

congratulations about that that's quite

that's quite a fe I know you've been in

real estate for a bit and you know we

talk about that how you got here a

little bit about your career Etc as we

sort of Peel back the onion and you know

hear more about your story learn more

about you your ambition experience and

all of the goodness that you have to

share but talk to me about this $6

million you raised talk to me about the

project how did the project come about

you know the challenges the good things

the unexpected things uh I want to hear

about this yeah see you don't I don't

think you wake up first of all thank you

um you don't wake up and say uh hey I'm

going to go get $6 million and you go

out and you just get it that doesn't

just happen if someone had told me when

we started in our real estate careers

and when I say we the collective we is

my wife and I she's my not only my chief

wife officer but also my my chief

technology officer because I I have

trouble with my phone um and and she has

a technology background so it's it's a

collaborative effort when we started

into real estate if someone had told us

anything more than you're going to fix

and flip a house keep some for rentals

that that's what we thought we were

doing and you know it's fun to look back

and say how did you go from point A to

point B and it's literally just becoming

comfortable with it um you know my our

backgrounds both my wife and I were in

the corporate world um we worked you

know we did did what our parents told us

we went to school got our degrees got

our our Advanced degrees went to work

got good jobs did well in them and then

we both had a similar experience and

that we um I did so well in my job that

uh my company decided to sell off our

part of the

company thanks Andrew good job um my

wife had a very different experience I

think she's more qualified than I am in

the technology space especially she

she's what is referred to as a bio she

interfaces between the business and the

technology guys um and during a reorg

she got forgotten about they literally

forgot her um so she waited and went to

HR and they said oh your boss will get

in touch long story short it it kind of

opened our eyes and said you know what

maybe you don't need to work for someone

else maybe maybe this is a a sign to go

do something else and so we got into

investing and again we got our did the

same thing got educated learned from

experts and how to do it um

the going from from flipping a house to

a $6 million raise is just a matter of

you flip a house then you see you can

flip a larger house then you see all the

problems with that and think well I

could build a new house and not have to

deal with someone else's problems then

you could build a larger house all of a

sudden you're building a a $1.2 million

house on Sixth Street in in Austin wow

um then you start thinking well but we

wanted rentals we could do a rental okay

or we could do an apartment building and

get 100 Doors right away or we do an RV

park and get 81 doors right away um the

good news is over time by doing it

repeatedly

um and then you know people see that

you're doing it the right way and doing

the right thing and having success all

of a sudden Banks want to lend to you

investors want to lend to you and uh six

million would have seemed insane when we

first started this and now it's you know

our next project is 19 million and it's

just a matter of scale that's awesome

congratulations and uh you know the step

by step of you know there's always a

bigger fish there's always a a bigger

thing uh to do and you know the the

getting comfortable with it comes

through the education of doing it the

practice of doing it talking to people

being a part of network like you said

learning from experts you know this The

Six Million you know dollar raise I mean

we could sort of back into some of those

other things too I just wanted to make

sure you know we commend you and

congratulate you on that for your chief

wife officer your cwo and your CTO I

love that acronym that's a good one uh

now was that that $6 million raise was

that for for that RV park that was

specifically for the RV park um we we

fortunately had good enough

relationships with banks and our

business plan was strong enough that the

banks were willing to lend on it but

they do want you to have skin in the

game they want you to at that point they

wanted 25% Equity um what we had done I

guess this was um I this is my first

first of all this is my first time on a

podcast so thank you for um I'm no

longer a podcast virgin thank you for

that

our um our way of doing it is we did

meetups we did local meetups here in

town where we'd invite people out to

properties and they'd see it before we

started then they'd see it during then

they'd see it at the end and by doing

that every month month after month for a

course of years again people saw us

having the success um for the RV park we

needed to raise

about 400,000 to purchase the property

we reached out to five investors they

all lent us they all said yes and we're

of and running from there outstanding

yeah it's uh it's interesting how how

how networking and circles go have we

both found out that we were the part of

part of that group too but I'd never

heard of you before because you were

there much before me um on on this but

as as it goes you're in Austin I'm in

Austin um uh you know you talked

about the the scale right the ladder of

you know first thinking from corporate

to you know rentals and then building

that house and then building you know

quote unquote mord doors you know I I

hear a typical path and sort of myself

included of going from you know single

family to something like multif family

talking about more doors it makes a lot

of sense to you know do more doors from

Apartments but not an RV park what was

the decision- making from going to an RV

Park from single family great question I

love answering it because it probably

helps to understand a little about me so

I grew up um I grew up playing soccer

okay I know this sounds way off base but

I promise I'll get there quickly no no

it's good tell us about you I'm uh I in

general till I had my both my hips

replaced I'm generally the fastest

person out there and as a kid playing

soccer you would think the fastest

person you're going to be up front

trying to score goals chasing everything

down that that would be your job as the

fastest person out

there not so much for me um my mindset

I'm a risk manager at heart it's what I

am

um so I'd be out there they'd be trying

to push me forward and I'd be looking

behind me watching our defense so it

never worked for me until I switched and

and switched into a role that made sense

for me which was on defense um similarly

in the investing world that hasn't

changed who I am is not changed

fundamentally which is I've always found

that fascinating that you can't change a

tiger stripes right that that kind of

thing y I'm still a risk manager and

people say but you invest in real estate

that's that's inherently risky isn't it

not if you do it right um you get

educated um the question you asked was

about multifamilies like Apartments uh

versus an RV park yep I looked at I look

at RV parks as less risky um number one

the capital expenditure is less um

you're you're buying land and you're

building a glorified parking lot is what

you're building you're buying building a

parking lot with utilities and some

amenities um that also means your

capital expenditure is less because

you're not building

vertically so I'll give an example of

what a conversation I just had with our

bank one of our one of our banks that we

work with they had a project that

started the same time as our RV park

which was right as covid was getting

ready to hit okay no one saw that coming

Apartment project someone was starting

an apartment

contract yeah project and no one saw Co

coming there there's no way to predict

for that um

the difference is is our project we went

over budget on ours I I'm not even

embarrassed to say that because you know

you hear on the news that the inflation

rate in this country during covid was

six and a half percent well not on

Building Products on most of our

building products it was touching 30%

inflation well you can't plan for that

in with a loan that's why Banks got hurt

you you just can't really plan for that

the difference is we went over budget

but our business plan was so strong and

our our exposure was less because we

weren't building vertical that even

though we went over budget by close to a

million

dollars our investors actually did

better they're actually doing better

because of Co and it's funny I made a

note to myself I have to be careful how

I say

this no one wants a recession no one

wants the economy to do bad no one wants

anyone to get hurt no one wants Co to

continue no one wants any of those

things but our investment actually got

better during those the flip side of

that is a lot of multif family a lot of

apartments that were being built that

started the same time as us they got

eaten a alive by construction costs and

the bank told us about one he said

they're two to three million in the ho

with no C there's no hope of catching up

their business plan doesn't account for

it so it'll just become an empty job

site for for years until the value of

the land comes up and someone else come

in and do something with it um the risk

manager in me caused me to do that I

didn't see Co coming it just luck skill

I don't know great I love that that

comparison and thanks for answering the

question that way too but uh you know

the the sort of uh character you're

dangling for me to pull on here is um

you know to make it painfully obvious

and you know just laid out I know that

you love to you know teach and the

education component here too so I

appreciate you being here for this exact

point is um how did it do better you

know uh

specifically um you know it makes sense

you're talking about uh where multif

family Andor apartments right are

vertical like you said you know and you

mean that by literally is that one two

three four type of stories or literally

building up and needing the materials to

do so yeah right right uh and the design

that goes into that versus something

that's almost effectively 2D maybe 3D if

you have some stuff to put in the ground

right but uh talk talk me through how

did it do better yeah so yeah it's funny

my see this is why my wife and I usually

do this together because she would nudge

me for being too negative all you said

Andrew was that you're you went over

budget by close to a million um

initially when we started this was going

to be a let's say a $5 million project

where in six years the value of of the

investment would be close to eight

million

um instead it became a $6 million

project and the latest projections with

actuals built in because were open and

we have stuff coming in puts the park at

close Worth close to 12 million in now

five years okay um and what drove that

are a couple things

one when covid

hit um it the RV park industry was

already booming RV sales were already

booming there was already a movement to

smaller homes tiny homes were nothing

knew so there was already a movement in

that direction but Co hit and all of a

sudden everybody's like wait I can work

from home and the technology exists to

allow me to work from home then it

became not only can I work from home I

can work from anywhere well RVs are the

only thing that let you do that if you

want to work at a beach this week if you

want to work in Galveston for a couple

weeks if you want to head up into the

mountains head towards Colorado that's

what allows you to do it so all of a

sudden occupancy rates and Rental r

rates actually went up for RV parks

during what was basically a recessionary

period um you know we even saw

apartments that the rates coming down as

recession kicked in we were very

different yeah and you know I I don't

want to compare it to um you know people

the old uh example is when times are

good people drink when times are bad

people drink alcohol is safe to be in

sure sure when times are good luxury

buyers buy nice RVs and travel in them

when times are bad it actually becomes

your most affordable housing out there

right and so it it kind of fits in the

same realm yeah yeah except one is a

little bit better for your health maybe

just a

little but we're not doctors here

so anyway um yeah thank you for spelling

that out uh I'm gon I'm gonna come off

um I think really great for my audience

here from the perspective that I'm very

ignorant about RV

um I know how to spell it I've been in

one before but um you know many of us uh

Tech professionals you know in my in in

the in the bubble in my head about many

of the people I'm thinking of right now

maybe haven't been in RVs before and so

uh if you could just talk to me like I'm

five or you know like 100 level here for

just a minute or two um you know you

sort of touched on it but the RV park

right Recreation vehicle uh this is that

2D effectively a parking lot some

infrastructure that's there you know you

roll up you you plug in you pay your

dues you're there for x amount of time

you pay your temporary rent and then you

go is that about

it not necessarily so um and first of

all talking to to the audience who's

never been in or traveled in an RV um we

started this investment before I had

ever traveled at an

RV so it was completely research

analytical based because that's my

background and it it just made too much

sense and at some point I said you know

what if I'm going to own a baseball team

I should probably know you know how many

outs are in an inning or how many

innings are in a game right yeah so um

you we we rented an RV and drove it from

Texas to San Diego and uh it was it was

good it was it was interesting and we

learned a ton and here are the things we

learned one just like if you're in a

neighborhood in here in Austin you talk

to your neighbors you got a lot of

different people you got a lot of

different ages different backgrounds

different ethnic backgrounds you got all

over the place you know you come to the

holiday season you can tell who there's

people

celebrating different holidays there's

it's all over yeah so RVs are the same

um most RVs most RV users over the past

decade over 50% were Baby Boom Boomers

okay you had people who were aging out

and and just getting to a fixed income

and it was a nice lifestyle for them uh

now it's changed a little uh you've got

Millennials who really don't want or see

the need for the huge house that their

parents or their parents parents coming

out of recession era or Depression era

and World War II were like get the

biggest house you can and then be poor

you know I think you and I had chattered

about the the Rich Dad Poor Dad analogy

that the biggest house you can and then

don't be able to afford to go anywhere

and work your tail off every day don't

invest and and hope you die before you

run out of money um that's not the

Millennials that you people make fun of

Millennials a lot but they're pretty

sharp um they' they've got some things

spot on um living in a smaller home in a

smaller footprint that's more

environmentally conscious that's less

drag on on their finances so they can do

the things they want to do some people

say that's greedy I think that's

fantastic you're only on the Earth for a

certain period of time you might as well

you not spend it trapped in your home um

so it's uh one type of person again

you've got seniors that are living there

because it's a lifestyle now you've got

Millennials living there because it's a

lifestyle and it's really funny to go

into parks and

see it's it's a big split and everybody

gets along and it's kind of funny um

there's also different types of Park

there's destination Parks so think the

RV park uh in the Florida on the coast

somewhere

uh there's RV parks uh in National

Forest you go to yed stay in an RV park

and go hiking all day it's

fantastic um the park we have yes we're

the first one we opened it's a couple

miles from from Lake Travis which is

great but it's also 19 miles from Apple

it's 19 miles from Dell it's right off

of you know you're close to easy access

to I35

183 I don't know if everybody's local

and understands what I'm talking about

but it's it's basically easy access to

get if you need need to be at the

airport if you need to go to a meeting

if but in the short run as long as you

have high-speed Wi-Fi going throughout

your Park y anybody will stay there then

you've got a split you've got some

people who are there in andout they're

called In-N-Out parks where they go in

for a weekend and leave we have bunch of

people coming in in April because we

have an eclipse going through Austin um

so we have a bunch of people coming in

for a week to to celebrate that but we

also have a large group of people who

are living there full-time

yeah they are living there and it's it's

a lifestyle thing and you'll see their

their slip empty for a week every once

in a while it's because they went and

drove somewhere and then they come

back I gotta admit that that sounds like

a lot of fun um I'm like dude I need to

I I love the you know uh be a um I like

your baseball analogy baseball team

analogy of you know if you're going to

own the team but I'm but you know

driving your quote unquote driving and

learning your asset class you be a user

or you know real estate is is so

understandable in a lot of ways because

we all live in some housing hopefully

and so um uh and so to that end it's

like you know I've been talking about

this trip with one of my brothers to go

from like you know uh Boston area down

to like Florida that could be that could

be the thing do it you need to do it

yeah yeah take the scenic route don't

just head down I95 head through the

mountains in the Carolinas head do some

of that yeah absolutely absolutely I

mean that'd be a good you know maybe

seven eight n n day thing to go and do

make some memories uh along the way uh

but I think you

know what you said about the the

Millennials like lifestyle as well as

you know just continuing to look forward

you know as we talk about you know

different we're talking asset classes

but we're talking about social

implications too right and the

generational aspect um really just cool

it covers the different Cycles of

generations um and like you were talking

about with Baby Boomers and just coming

back uh and wanting you know to have the

millennial generation and what they've

learned from their parents and things

that you know can quote like um Hard

Times create you know for for easy you

know easy times create uh weak people

that whole type of thing but anyway the

point I making is really as we continue

to look forward I mean even gen Z is an

example more experience-based and want a

smaller footprint and want to go do

things and so this is conducive to that

too so as we think about Trends you can

you continue to see this asset class um

being something that's great to invest

in and people continue to use because of

how people are uh behaving is that true

it's incredibly true and if you talk to

your marketing folks they'll they'll

tell you jenz and the Millennials are

the two target groups right now because

the senior group is all the older

generation's already there the Baby

Boomers are already there there's growth

there but it's it's limited but in the

younger Generations it's definitely

there and again it was they were already

kind of there and then it was a mindset

and a and a a social change that

occurred during during covid that that

oh we're okay to do things we want to do

now that's fantastic and and you just

mentioned experiences you know one of

it's such a simple thing to do um you

know we've got a big open air Pavilion

at at the park north northwest of Austin

and how hard is it in Austin to find

someone to go out there and play an

acoustic guitar on a Friday and Saturday

night um we've got fire pits out there

put out all the fixings for some Moes

and just create an an environment for

people to to gather and be social and

again got the high-speed internet

through the park so people can they can

do whatever they want um that's it's

it's figuring out what people wanted

that's never changed it's never

changed it sounds amazingly cheesy on

paper

of you know you you create community and

this and that but I think there's

something super cool when you actually

you know you read on paper and you go

and see and to have the fire pits and

have those The Pavilion and stuff like

that to be there um and you know that

itself is such an amazing value ad too

and I think it's uh super cool so um you

talked about you

know longer term type of what what do we

call them um uh residents tenants what

is the correct terminology we got to be

careful there now now we get into the

details of investing we actually part of

our our loan structure we have a small

an SBA loan Small Business Association

loan and the Small Business Association

doesn't want long-term residents so our

contracts are month-to month but they're

they're longer term there are people who

are going to be there six months a year

um we have people that have been there

since we open the park and we don't see

any sign that they're going anywhere got

it I wasn't actually aware of that but

that's really interesting it's SBA loan

and that's for looking at it as a as a

business versus as a investment vehicle

like real estate right um wow okay uh

let if we have time I want to pull in

that thread later but just looking at

the model so we have a mixture of we'll

just we'll just call it for the sake of

conversation longer term residents uh

destination parks and then In-N-Out

Parks um based on the type

of customer mix that you have uh what do

you what is your build criteria what is

the risk manager you like to see there

for you so I'm I'm an unus I'm an

unusual risk manager um my my last I

guess corporate job was I was brought in

as the guy look as a risk manager I can

stop all your losses but I'm also going

to kill all your business you're not

going to bring anything in but I'll stop

all your losses congratulations on that

um I'm more the you know how do we do

this in a smart way

so if a monthly the monthly rental rate

is say $800 a month or you can bring in

um $60 a day from a daily rate it's much

more lucrative to bring in the daily but

there's a tradeoff you have some

vacancies you've got you don't build the

community as much um there's more

overhead because you're having to manage

that um we're targeting right now about

a 50/50 split

and the nice thing is when you build in

the right area again real estate it's

never changed location location location

if you build it in the right place if

you build it on a busy card or if you

build it close to something people want

to be near if it's close to where people

need to go um we actually have the

ability to kind of uh tug on those

strings and say all right we want to

flex this direction we want to flex this

direction and um that's we expect to be

in that position in the next six months

of being a to decide who do we want

there what do we want it to look like do

we want it more lucrative but it's a

little bit risky or I could have in that

location I could have 100% long term

that that's super interesting it's uh

it's cool right because in my mind you

might have an AB or C multif family

right uh but even let's say you're the

developer sluer you've built it you know

you're you you're at the lease up phase

which is get everyone in there um and

arguably if you have a a bclass type of

property you want b-class tenants to

support your you know that to support

your local market but since you're

you're selling um you know call it what

it is time on parking spaces to make it

super dumb down I like that uh then you

can pull the strings of your own um

customer mix and Market it how you want

it especially if you're like oh well you

know we have this Eclipse thing we can

Market that uh and you don't have to

worry about not the right fit um

customer for the apartment uh class that

you originally intended yeah right yeah

yeah so RV parks and first of all I

already jotted down you just created an

acronym tops time on parking spaces I

love that I'm gonna find a way to use

that that's gonna be in a spreadsheet at

some point so thank you for that this

this whole hour was worth this was worth

it for that um no we uh

so you don't we don't use Ab and cclass

for RV parks but they probably should

right um there are luxury RV resorts

they have um Stone like custom walls

built around them gated entries people

pulling in rigs that I

mean Drive the drial the motor coaches

that are up near a million dollars

pulling in there on a piece of land

those exist and and it's one one class

then you've got parks that are basically

dirt with utility sticking out of the

ground um they have them in Midland

Odessa in the oil fields they call them

they call them man camps is what they're

called um we thought one of them had a

chain Ling fence around it and then we

realized they never put the fence they

just put the poles so someone couldn't

drive through um they're just Bare Bones

uh and even where we built you know our

job we were trying to be just a little

nicer than everyone else but not over

the top yeah and we found it allows us

to charge a little more um we got a

complaint for example our the only

complaint we've had so far real

complaint uh somebody a gentleman

complained because we do background

checks

okay Sor we're making a safer place for

you I was like you know what sir I I

believe you're a good person but I don't

know everybody and I've got a

four-year-old and I need him to be able

to run around in the park and be safe

yeah so if it doesn't work for you I'm

sure there's better park for you um so

there there are different classes in RV

parks and you'll when you do that trip

from Boston down to Florida because I'm

going to push you on that um you'll

probably see some of it on our trip to

San Diego we stayed in a park that was

all truckers it was all people heading

out west driving past the big amazon

factories but just picking stuff up and

moving it and there's different classes

that there are got you got you now uh

yeah great great additional context I

was just thinking like your ability to

quote quote pull the different strings

to get different you know uh make it

favorable environment for different

types of customers literally at will

with some lag time to implement and

change your strategy and pivot is is

actually quite cool uh so you know sort

of pivoting from here you know I like

the perspective you know you bring in

the the risk management aspect you know

gave some background um about yourself

as well here but I have to ask the

questions right we've been we've been

comparing from single to RV and not why

not multif family but it sounds like why

not isn't this might be ignorance on my

side too it it definitely is but but why

not mobile um you know mobile home parks

uh as how does that compare here in your

mind yeah no great question so we should

probably talk about that there's modular

which is anything that's built in a

factory that could be an RV a mobile

home home tiny home anything that's not

stick built on a site is considered

modular I will tell you there is a

stigma about

modular U there's a lot of small towns

that you can't do modular okay but I'm

going to put in a half million dollar

modular home that's better built and

nicer than anything else in your little

town and you're saying I can't do it um

people hear modular or mobile and they

think run down mobile home

parks um so it's kind of a stigma

attached to it um right or wrong if you

go into a nice mobile home once the door

closes you you shut your eyes you don't

know you walk around once you open your

eyes you don't know you're not in a nice

home they can be done up really nicely

um they don't hold their value and then

versus an RV they they tend to get run

down and then versus an RV which is

built to be driven on the road they

don't have the mobility

and part again this is me as a risk

manager saying there's additional

utility to being able to move it it's

not something that's just I mean you can

move a mobile home but it's it's work um

yeah RV is much simpler um we just saw

it as being much more flexible and I

like the flexible from from a risk

management standpoint uh you know

another example of that is out at the

park we've got and then the one we're

building we've got right now we've got

73 RVs and then we had eight more spots

and we decided to put tiny homes on them

and Airbnb them well they're the same

hookups and all of a sudden as Co hit

and then the market started changing

we're like all right let's invest in

eight cabins put them there and what's

interesting is those cabins rented out

faster than the RV slots because people

wanted them and it gives you the

flexibility to do that um once you've

built a mobile home park converting it

down to an RV park it's it's not as

simple and again just just the

drivability gives you more flexibility

that's that's why we preferred it it

felt like the direction we were going

cool I I that makes perfect sense I just

had to ask the question uh because you

know especially from like I said similar

to the sort of the background like I've

never really I've never done the RV trip

and you know I I appreciate the the the

push there we talk about that too uh I

get some tips um but directionally it

was you know just comparing at a 10,000

foot view the different asset classes

makes a lot of sense about the the RV

side um so let's talk a little bit more

before we pivot here a little bit more

about you know the asset class so the

value we've been talking value and that

makes a lot of sense the type of you

know customers that are there how they

you you think about two different sort

of you know metrics amongst many more

I'm sure of the daily rate versus a

monthly rate you know financing looks

like SBA we don't have to we don't have

to St on this one but are there other

types of financing that usually is in

used as well is it real estate financing

or is it traditionally just SBA yeah no

so SBA is a good option um SBA will not

lend on

construction in 99% of the cases they'll

do it in some unusual cases for

manufacturing but um SBA Loans to

businesses so the bank has something

worked out with the SBA called a 504b

program where the bank will lend the

money on the construction then after

construction is done it's called a

debenture they'll take onethird of the

bank's loan and SBA takes over onethird

of the loan so the bank has just lost

onethird of its risk which is fantastic

and believe it or not the SBA goes into

second position and on top of that the

rates are about as low as you can get

super so that's why we did that um I

will say it was incredibly difficult to

get um working with our government sorry

for everybody out there that's listening

that's works for our government you guys

are difficult to work with um getting

the loan was I'd rather go to the

dentist um but long term the payoff is

there there we go we got it done and

we're serving the community uh um cool

the financing so let's uh so all the

infrastructure the hookups the you know

every the you know goes in place we

start you know the marketing T-minus you

know number of days before a build is

complete so that we can start getting

you know accepting customers so to speak

and then the um and then the operations

uh sort of happen so you know since we

we're now talking tops if we're now

talking um had to throw in there and

make it official uh time on parking

spaces um what is uh what is what do the

operations look like um yeah so so

operations we um you know I I kind of

glossed over this going from the the

corporate world to the entrepreneurial

investor world one of the biggest

challenges is I'm used to having an

accounting department I'm used to having

an HR department a legal department I'm

used used to having that technology

department which again fortunately I I

that's why I married my wife um she's

gonna hear that I'll get smack for that

but um no I'm used to having those

things in place and one of the things

you need to do as an entrepreneur is is

think what's my time best spent doing at

the end of the at the end of the day my

job as in a developer role is finding

the deal and finding the money for it

that's that's my job running an RV park

is not the best use of my time I can

make more per hour Finding better deals

so um we outsourced it we found a

nationally uh a National Property

Management Company and all they do is RV

parks and they are running the show and

I just had my check-in call with them

last yesterday nice we go over what's

important and they ask me questions and

I answer and they run it and I pay them

a fee for that and it is worth it

perfect got it I mean absolutely I

completely agree and so again just at a

high level I only ask that question um

you know I love the investor frame

because highest and best used for

ourself too as entrepreneurs but the but

uh the the perspective is you know like

places have to be maintained um uh you

know like the parking spaces the you

know The Pavilions the cleaning general

cleaning cleaning maintenance security

that kind of stuff make sure the tech is

there like whoever is taking care of the

the wireless as an example all all the

basics pretty much

right yeah so again i' I've outsourced

most of it and then there's some

additional benefits to RV park some one

that I didn't bring up when we were

talking about why RVs versus mobile

homes or apartments uh tax

benefits the Improvement on the land is

pretty minor for an RV park versus other

things um I don't have buildings I don't

have things attached to the ground so so

the taxes are lower and insurance is

lower so those are benefits there's

another big benefit of um an RV park if

you see a rundown RV park it's because

someone's not trying doesn't know or

isn't trying to keep it nice um what we

have in place is you know I live in a

decent neighborhood with a homeowners

association and I may think those people

are crazy and have too much time on

their hands but you know what they keep

the neighborhood looking nice and that's

fine um you can set up the same thing

with an RV park he when someone checks

in they sign and here here's piece of

paper here are the rules um and if

someone doesn't follow the rules we're

friendly about it and if they don't

follow the rules again we're a little

less friendly and when I say we it's

property manager not me um after that

you don't have to go through an eviction

process it's a vehicle you can tow it

nice got it everybody in an RV park

knows that and by knowing that it kind

of pushes good behavior once they see so

we've gotten a lot of compliments on the

park we just opened how neat it stays

how clean it is how safe it is and I'm

kind of chuckling about it with my wife

because like we really didn't do

anything we just said here are the rules

and just show people they have to follow

them so I always I always found that

very interesting yeah I love it and I

know I was uh poking a little more on

that one but the reason why I was is

just because knowing that you're taking

care of things

that the owner level is important but

just like you would have you know

understanding your asset class like

there's evictions it's a similar process

so I don't want to spend more time on

that I I do want to you know um make

sure we have time to talk about you know

things like some of the different trends

that you were seeing as well I think

some of the you know the frequently

asked questions that you have are you

know things like are these planning to

stay around you kind of mentioned but I

think one of the FAQs you get is about

tiny homes as well do you want to answer

some of the FAQs that you get yeah

absolutely thank you I appreciate you um

asking me that so one question we get is

are RV parks a trend uh and you know we

we touched on this before that that what

is a trend um you know I I one example I

love is the carpet industry I know it

sounds way off Bas but if you don't know

history people didn't have carpets this

was a a mid1 1900s thing the only people

had carpets and rugs were were wealthy

people because they could afford these

expensive rugs and afford to take care

of them and afford to clean them and

then all of a sudden manufacturing

allowed us to manufacture rugs for the

Common Man and all of a sudden everybody

had to have Wall toall carpeting

including in bathrooms and places where

you don't want carpet right sure well

now look around and people don't want

carpeting they want their wood floors

and we've kind of done the cycle but

there was a trend there where for like

60 years and even nowadays you go into

new homes and they've got a lot of

carpeting in them but for about 60 years

there everybody had to carpet have

carpeting so was that a trend or was the

was the trend the wood floors or was the

trend you know because it's kind of back

to solid surface um so it's really

important to understand what's a

trend You could argue everything's a

trend it's just how long does a trend

last is the way I think about it um are

RVs a trend sure we houses a trend big

houses sure neighborhoods a trend you

know we're Farms a trend when everyone

had to have a farm so tiny homes uh are

great um not only all tiny homes are

created equal but the definition of a

tiny home is it's got to be under 399

square feet it actually allows it to

count as an RV and that's that's what we

put out at our site so just a little

little knowledge for everyone that's

what a tiny home is um I I would say the

trend was what happened again the the

depression error mentality of we got to

get a big house I think that was the

trend I think this movement to smaller

more affordable homes homes and then

being able to experience the world or do

things with with the money we have

rather than spending it on on the house

where we shut our eyes for for onethird

of the day I think that was the trend um

I'm not saying it won't change but just

what we've seen with technology allowing

people to work from anywhere uh I would

say that's that's kind of getting back

to where people want to be so whether

it's a trend or not it's it's going to

be here for a while so I'm I'm not

really worried about that um

I think that's kind of a a sort of fun

follow-through conversation because you

were looking at the X amount of decades

for history there you covered a couple

um from manufacturing to other you know

socio economic changes to the type of

housing we have and you know the

different world events that took a play

but speaking on world events you know

this is you know a podcast for you know

technologist Tech professionals part of

that is you

know the pandemic Etc Amplified being

able to

work live do uh with with mobility in

mind and as that continues to to be even

more you know disconnected or connected

the way you want to call it to a single

location I think that does make a lot of

sense right the risk manager and you

what are some of the signals that you're

looking at for Trends from the the

forward-looking

perspective yeah so I I'll give you an

example of so

RVs again low risk because you can

pretty much put them anywhere but then

there's what's The Next Step Beyond that

if if people are moving into smaller and

but want the mobility that goes with it

um I'll give you an example of a group I

just spoke with that they're

developing I think most people probably

know what pods are for for moving

everybody used to use moving trucks and

then all of a sudden pods came out where

they drop something in your driveway you

fill it and they stack them and move

them wherever you need them um and

they're all because they're all the same

size you can stack them you can ship

them you can store them different in the

same kind of places um there were people

doing that with housing now there the

the start of it was with shipping

containers they're all exactly the same

size and let's say you live in one in

Texas but you want to live in one in

California okay you could either pick

yours up and move it there and there's

already a base for it to plug it you

literally just drop it in it plugs in

just like our Outlets are all the same

size wow um and again it's not it's

still a tiny home it's still Mobility

it's still in that RV genre um but you

can you can there are trailers for them

there you could literally treat it like

a regular RV um but it's in the same

genre and it's it's kind of exciting to

see how we're we're getting away from

what was traditional in this country for

for so many years uh building bigger

houses and bigger neighborhoods and

seeing that people want something

different now and that it's because of

technology so I guess I need to say

thank you to everybody on this podcast

all the technology people thanks for

making this possible for letting us do

what we want to do yeah yeah I you know

just just like you said I you know I had

a couple light bulbs go off for for me

too just listing about that because you

know there I I've heard of things like

sustainability technology for a while

and seeing how that's getting played in

as well I'd have to really think about

that but this this is like the the start

of another really big wave of how it

will continue to evolve as you have you

know these mobile Home Spaces right that

can be moved around so uh this is

actually a really exciting place to to

be um with the Ford momentum and growth

yeah part of it for part of it for us is

you you asked you know moving from there

are people who become experts on single

family houses and that's fantastic you

should be an expert in whatever area

you're in be an expert at it and be

passionate about it um they're people

the same for multif family what I'm deep

diving into now is that RV and modular

space because

I think the future is there I think all

the projections show the future is there

and then it's exciting and I'm kind of

passionate about it my wife you

mentioned sustainability one we're

building north of here is going to be

around a farm a sustainable Farm we

basically want if the world goes crazy

around us yeah they'll be fine in this

one little location in their modular

units yeah yeah no this is super cool uh

I could Riff on this with you all day

long I'm sure um uh okay so thinking

about the next step here obviously

people are you know here to learn about

the different asset classes Etc um you

know I'm passionate about how Tech can

also be involved which is why you know I

took pause and had a light bulb moment

here but also it's about return on

energy return on effort return on

investment right and so um talk to me a

little bit about uh who's the right you

know investor that you would want to

come and invest with your deals who's

you know how how should they be thinking

about where RVs fit into their

portfolio yeah so there's it's funny we

see we've generally seen two different

types of investors we've got a group

that um let's say on one end of the

spectrum you've got hard money lenders

that take their their money their

retirement money and lend it out for

Investments and they charge points they

charge High rate and there's a lot of

risk inherent in it um then on the other

end of the spectrum you've got people

who I guess would stick their money in a

in a money market account and probably

be losing versus what's happening with

the dollar um so RV parks are neither

they're kind of different um there's an

annualized return there are there are

one nice thing about an RV park it

generates revenue on day one because

it's so low on the capital side versus

the revenue it brings in it generates

revenue on the day it opens so that's

kind of nice uh it brings in cash every

month but not huge amounts it's more

mailbox money

um the real value is you're building a

business and because you're building a

business and you have those revenue

streams coming in that's where I

mentioned earlier you see that we we put

in six but it's going to be worth close

to 12 in about five years um when we

annualize that even adding in all the

delays and construction delays because

of covid and everything that happened

there um we're still looking at an

annualized return of over 20% for our

investors so the right investor is not

someone that needs they need money

coming in right now that's more someone

who should be loaning their money out

doing it carefully and seeing higher

returns with a little more risk it's

more for someone that wants to learn it

but is kind of in a passive space and is

okay with just a little bit of money

coming in now knowing that in five six

years it'll be worth a lot more and I I

encourage people to read and look up um

there's two large companies equity and

uh Sun

properties they're just buying up RV

parks uh we got calls to buy our RV park

before it was opened wow and they just

they're just buying them because they

realize what the value is going to be

over time so we're looking forward to

you know four five years from now as we

start getting some significant offers as

the value goes up sitting down as a

group of investors everybody invested in

the first parket saying all right let's

let's celebrate let's drink some wine

and let's figure out what we want to do

do do we want to sell it do we want want

to hold on to it do we want to refi do

we want to sell off part of it right you

know recognize our returns but hold on

to a piece knowing that it's a cash cow

um there's some good opportunities that

go with that but to answer your question

in short it's not someone that's looking

for the quick hit return right now uh

it's someone that's looking for nice

study over the next few years but then

the payoff at the end it's hard to beat

it's really hard to beat yeah I think

that speaks to your sort of overall

investment and what I'm sort of picking

up here uh mental thesis which is have

the flexibility and transform as the

environment does um and so you have

multiple exit

strategies yeah and look we've the the

properties that the the three that we've

got right now um we buy them just a

little bit outside of town not in the

busiest area generally in place where

the highest and best use is not even yet

multif family or mixed use there's

limited what you can do on this land

right now that doesn't mean that in five

years the highest and best use won't be

something different here's the cool

thing because you've put you've just

built a glorified parking lot you could

literally pick it up buy a piece of land

further out put the business the RV park

business down there and now you've got

this piece of land that's worth a heck

of a lot more than when you started and

then it's that's again another fun

discussion do you sell it do you build

on it do you lease it out to someone

else let them do it and just write you a

check every month and all the investors

that have invested with us because we we

bought in a smart way they own that land

too so they get to be part of that

decision so it's man that is fascinating

because they get to exit in two

potential ways into that new one or stay

in the yeah big difference between that

and multif Valle wow that's super cool I

I actually hadn't yeah that's really

cool um I guess just to summarize for

for listening what you know you were

just talking about which is a huge aha

you get to keep the land where

potentially the path of progress goes

out to the Suburban rural area and as

things continue to build you can take

what you those parking lots move those

parking lots to somewhere else that

might be you know 5 10 15 miles continue

on the outskirts um you know outskirts

and air quotes and then repurpose rezone

whatever to potential multif family

whatever it is uh just transform it to

whatever the need is um where the

original location was super interesting

and then from the investing side um

you're talking uh the the mailbox money

the steady income what is the

development timeline on the glorified

parking lot yeah the glor that's funny I

I got to call start calling it The

glorified parking lot but it is it's

what it is so from the time you put a

shovel in the dirt it's nine to 12

months wow okay it's a very short

timeline and when you look at why banks

will lend to you the biggest risk to

Banks is time they don't know what's

going to happen dur that time period to

rates to materials when you tell them no

we'll be operational 9 to 12 months that

that kind of that's music to the years

of a banker that's music to the years of

the investors starting getting day one

dollar but all all things are aligned um

all right I wna I want to do a couple

rapid fire her things because I want to

make best use of your time here and I

appreciate you being here

so uh piece of advice that you've you've

heard in the past that you know has

impacted you that you would tell

others so um I'll try and do this

quickly uh for anybody that's not old

enough doesn't remember who Ted Turner

is or was um he's he's a little weird

but he's a very wealthy man owns most of

Montana now and had an opportunity to

hear see what he did in Atlanta he owned

a very high-end shopping mall with a

with a parking lot a parking deck

attached to it and it was right in the

financial district in Atlanta and one

year it was announced that he was

basically giving the mall to the city of

Atlanta

everybody's like what the heck is this

guy doing and then when we dug into it

we realized in the contract he was

giving them the

mall and he had had losses that year and

he was offsetting stuff and but he was

holding on to the parking deck yeah and

the parking deck he owned for 30 years

tax-free I'm sorry he had to pay $1 a

year for it that was in the

contract he owned a parking lot and it's

funny that that hearing that story while

I was in business school stuck with me

to now we talk about it being a

glorified parking lot I'm like I'm just

like Ted Turner I own a parking lot um

so it's uh parking decks parking lots

they're they're pretty lucrative so

that's it's it's not always about owning

the the quote sexiest thing in the world

I think most people would think a

high-end shopping mall is a lot sexier

than a a smelling Parking Deck with

fumes in it um but a smart man yeah yeah

I love it it's uh I mean we don't really

want money we want the outcomes that

money give us right that's right and so

uh cool what keeps you going today

you've got this successful career you're

talking about your cwo CTO uh you know

talk to me about um you know what keeps

you passionate and and waking up well

you probably can't tell my age by the

fact that my beard I don't look trendy

and cool like L you I just look old it

comes in not even gray it's white um I

think you reach a point in your life um

one you just want more out of life more

can look like a bunch of different

things it could be I want to do more I

want to do more with my family with us

it's our kids um we just want more for

them you know we're not spoiling them

but we want them to see the world we

want them to experience things um that's

what keeps me going our one of our

children is uh considered special needs

I don't consider him that but he's he's

on the autism spectrum and he's probably

smarter than both of us put together um

but when we realized we needed him to go

to a different special school that was

going to cost the equivalent of college

education

the nice thing is when you're in the

investing realm you can do that you can

as an entrepreneur you can say okay I'm

just going to change gears do something

different generate some more Capital so

I can do this um those are the kind of

things that keep me going and um it's

it's a lot of giving back um my wife

wants to create a school to teach

business um to to to kids because we

don't necessarily do a good job of that

in our schools and the schools don't

necessarily want you to come in and do

it uh so she wants to create her own

school well that will take some funding

so that's what we're doing I I want a

school that's better for kids on the

autism spectrum because it's hard it's

difficult um and to do those

things we need to be successful

so we'll talk offline if there's other

things I can do to help uh donations or

stuff like that give you a platform in

the future um I believe in that too on

both of those uh outstanding the the the

impact and then you know you're talking

about that from the last one here is you

know what would you tell what are things

that you wish you knew about investing

that you would tell the you know the

30-year-old who's looking to you know

follow follow some of the path that

you're talking about here wanting to get

some of the freedom but also

impact yeah so as long as you're your

values and your ethics and you and I had

chatted about this you know who what

type of people do I like to let work

with yeah people with one ethics need to

be Beyond reproach there's bad people in

everything there's bad people in

business and schools and churches

there's bad people everywhere um there's

also a lot of good people well real

estate does that as well and what we

found is that the the good people tend

to congregate and and be together so

what I would say is make sure your your

your net worth is your net work I you've

heard that phrase um that goes with

values as well you know you want to hang

out with right people um my wife and I

like to we used to phrase the abundance

mindset when we do our meetups we share

everything we don't charge for it we

just invite people out it was killing me

that people were losing money investing

on real estate in Austin Texas it was

just killing me um so we just share uh

and when you do that you find other good

people and as long as you're around good

people and that goes for if you're

investing you're gonna need good Banks

you're going to need good developers

you're gonna need good construction

you're going to need find who those good

people are do your due diligence make

sure they really are good people that's

who you want to learn from that's who

you want to do business with and grow it

from there thanks for being here Andrew

I appreciate you sharing everything

thank you for having me yeah um and uh

you know I'd love to send some people

your way to invest with you as well

where can people find you to learn more

about this and just connect yeah so so

again my chief technology officer also

my chief marketing officer officer uh is

not with me today um best way to connect

with me is uh just drop me an email is

really the best way it's Andrew homes

forthewin H mes f r t h w n Andrew

atomes forthe win.com I love sharing

information I do have a teaching degree

so sometime sometimes it get a little

teachy or a little preachy but I do love

sharing and again if there's anything I

can do for for you or your audience as

far as helping them understand what the

opport unities are whether it's with us

or someone else uh happy to do that love

doing that outstanding I'll make sure to

put this in the the show notes and you

know we'll make sure it's marketed to

the right places for people to get to

know you so appreciate you thank you

thanks for joining us on another episode

of path to passive we love connecting

with our listeners and those on the path

to architecting their wealth and

improving their lives feel free to let

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