JF2061: What to Look For in Mobile Home Parks With Jimmy Johnson

April 24, 2020 | Joe Fairless | 00:23:04

JF2061: What to Look For in Mobile Home Parks With Jimmy Johnson

Jimmy is the founder of Sanddollar Communities, a mobile-home park acquisition firm. Jimmy shares how he was able to wholesale 14 mobile home parks in less than 12 months so if you’re interested in getting into the mobile home park scene, this is an episode you will want to listen to since Jimmy gives his way of finding the right mobile home parks to invest in.

 

Jimmy Johnson Real Estate Background:

  • Founder of Sanddollar Communities, a mobile-home park acquisition firm
  • Has wholesaled 14 mobile home parks in less than 12 months for a total of 471 sites in 7 states
  • He has also partnered on 149 sites across 4 parks where he helps run daily operations
  • Based in Tampa, FL
  • Say hi to him at: jimmy@jimmyjohnson.co 
  • Best Ever Book: Four Hour Work Week by Tim Ferriss 

 

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Best Ever Tweet:

“Anyone can pick up the phone and call but offering to meet in person is very influential.” – Jimmy Johnson


TRANSCRIPTION

Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Jimmy Johnson. How are you doing, Jimmy?

Jimmy Johnson: Great, Joe. How are you doing?

Joe Fairless: I’m doing great as well, and looking forward to our conversation. A little bit about Jimmy – he’s the founder of Sanddollar Communities, a mobile home park acquisition firm. Jimmy has wholesaled 14 mobile home parks in less than 12 months, for a total of 471 sites in seven states. He’s also partners on 149 sites across four parks, where he helped run the daily operations of those parks. He’s based in Tampa, Florida. With that being said, Jimmy, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Jimmy Johnson: Yeah, definitely. Thanks for the intro. As Joe said, about a year ago I got started in mobile home parks, and wanted to figure out how I could provide the most value to the industry. Everybody needs deals, so I thought the best route to go would be in wholesaling parks and providing those off-market deals. So I kind of jumped right in, and started full-time doing it, working 24/7, just trying to get the parks.

It took a couple months to get the first one, but since then it’s kind of snowballed, and now I’m just 100% focused on just growing the business and continuing to do more and more deals, and just marketing, and trying to find the best ones as things get more and more competitive.

Joe Fairless: What were you doing before this?

Jimmy Johnson: Before this I was working for a multifamily company, and that was kind of my first experience in real estate. Then once I left there, I had a virtual assistant agency where I was connecting entrepreneurs with VAs in the Philippines. I sold that, and then got started in mobile home parks. I went looking for something new to do.

Joe Fairless: What were you doing for the multifamily company?

Jimmy Johnson: Just acquisitions, so helping with the marketing, looking at database building, working with brokers… The whole nine yards, from start to finish, from selecting the areas that we wanted to target, up into naturally closing on the deals.

Joe Fairless: I knew there had to be a competitive advantage you were bringing to the table, because I don’t know of anyone who has started looking for mobile home parks and has gotten as many deals as you did, within the time period that you did, having just started out. So that makes sense; your background was in acquisitions on multifamily, plus you have had a virtual assistant agency… So my guess is – and I’d love for you to elaborate – that you used some of your experience in acquisitions for multifamily and combined that with virtual assistant help, and that’s how you got up and running so quickly… But please, tell us about it.

Jimmy Johnson: You hit the nail on the head. I pooled some of the experience from both. I have done [unintelligible [00:03:41].04] obviously not alone; I have some full-time VAs that work for me and help. They do a lot of the admin stuff, especially the database building, and just helping with transaction management. So I definitely piggybacked off of the experience of both, and it’s been great to just kind of bring that knowledge to the table. O couldn’t imagine having started without either one of those… So it’s been very influential and very helpful.

Joe Fairless: If I want a VA, what’s the best way to find one and bring them on board?

Jimmy Johnson: There’s a lot of agencies out there now. It’s one of the reasons why I got out of that business. You can go with the more boutique companies, or you could obviously go to Fiverr or Upwork. I think still the best way is to go to Upwork and post some ads there, and you’re gonna probably go through a couple dozen before you find that one good person. It’s all about just — you have to have them through task to task. So you wanna give them a couple hours of what a day in the life of working for you would be. If you give that to 100 people, maybe ten will actually do it, and out of the ten, two or three will do it right.

So it’s [unintelligible [00:04:50].04] but once you have the right person — I’ve had a couple who have been working for me for years and years now, and they really know all the ins and outs of the business… So it’s very helpful working with them, and it’s fun. They know so much about mobile home parks, and they don’t even have mobile home parks, obviously, in the Philippines.

Joe Fairless: [laughs] And what’s their compensation?

Jimmy Johnson: Between $2 and $4/hour as the base. I hire people that are more in the rural provinces, not right in the city, and then I give them a bonus for every deal closed that’s pretty substantial, so they make a good living there.

Joe Fairless: And what’s a bonus for a closed deal about?

Jimmy Johnson: $500. Over a month’s salary for them.

Joe Fairless: With your background in acquisitions for multifamily and with having owned a virtual assistant agency, talk to us about your specific approach that you take — or let’s talk about when you first started. What did you do exactly to get your first deal and get those leads coming in?

Jimmy Johnson: Nothing too fancy… It’s just the cold-calling, direct mail, meeting with sellers… You have to kind of put yourself in the shoes of who you’re reaching out to. I knew I wanted to target mom and pops, and out of the 14 last year, the average age was over 70, of the sellers that I worked with. So you’ve gotta think what does your seller — what kind of marketing are they gonna respond to. They’re not gonna probably respond to ringless voicemail, or texting. These are people who want cold-calls, and they want you to see them in person.

Joe Fairless: Okay. Well, in order to cold-call and direct mail and meet with them and know who they are – average age over 70 – you’ve got to be able to find them. What did you do exactly to put together your database?

Jimmy Johnson: I kind of picked the states and the areas that I wanted to do after doing some research on BestPlaces.net. It’s one of the good websites for metro research. After deciding, then I would figure out how many counties comprised that area, and then I would go county to county, go to their website… And some of them were easier than others, where you could search a list of mobile home parks, others you have to call them…  So kind of just getting a base list of what are the 100 mobile home parks in the area, just what’s their address. Then a lot of them, just due to these mom-and-pops, if you just google the name of the park and the address, it’s their cell phone number that’s often associated with the Google listing, because they don’t have a lot of technology and systems in place. It’s often them who is answering everything, from leasing calls, to maintenance… So just kind of calling that way is how I got started quick. And then since then, I’ve developed some systems with the VAs for different paid softwares and whatnot, for doing skip-tracing… One of the easiest, quickest ways in how I got started was just county research and then googling parks.

Joe Fairless: What was the easiest experience finding the mobile home parks in the county, and then can you describe the hardest experience?

Jimmy Johnson: The easiest, depending on state and the county, was just going on their website, and you could just search “multifamily, 2-5 units, or 5-10 units” etc. So they  had a listing that was just mobile home parks. So that was perfect, because —

Joe Fairless: It distinguishes between apartments and mobile home parks?

Jimmy Johnson: Yeah, as well as commercial and retail and industrial. They just had everything broken out, and all you had to do was download a list.

Joe Fairless: Okay.

Jimmy Johnson: So a lot of the more tech-savvy counties have that. That’s maybe 30 minutes total to get to that, and get the data downloaded. So that’s the easiest.

Then the hardest was counties that don’t have anything at all, and kind of having to call them and see what they could provide. And even harder on top of that is the counties that won’t provide the data at all, and then having to actually go on Google Maps and just search street-by-street to pick the parks, and then google. That’s a couple-day to a week task to get that done.

Joe Fairless: And when you create your database, what are the fields that you input for information?

Jimmy Johnson: The basics are obviously address, and then city/state ZIP, the whole nine years; always parcel ID number, because that’s the easiest way to look it up, especially when you’re digging deeper into the data. A lot of people will forget to put that.

In addition to that, you want as much info about the owner as possible. So whatever corporation they own it in, or if it’s in their personal name, the husband or wife’s name, any partners… And a lot of this you could find on the county’s site when you’re looking up ownership.

I wanna know where they live, because that can always be a talking point. I live down in Florida; a lot of sellers often do, even if it’s a park that’s in Georgia – I could say “Oh, it looks like you live in Orlando”, and then that can get the ball rolling for communication and whatnot. So just as much info… Google the park and see what’s near it; if it looks like there’s any new development, or if there’s something prominent that’s right around the corner… Just anything that you can kind of stand out with a talking point, compared to just “Hey, I wanna buy your park” and that’s it; so it looks like you don’t even have any info.

Joe Fairless: Besides mentioning that the area code is Orlando, so it’s “Oh, you live in Orlando”, is there any other way of saying “I see you live in Florida” without acting creepy to them, because you’ve been internet-stalking them to get all this information?

Jimmy Johnson: It kind of depends on the person. A lot of times they’re like “How did you  get my number? How do you know who I am? How do you know I own the park?” They’re like “I thought it was hidden.” And you’re like “No, you could look it up in two minutes online.” So there’s always that kind of creepy right off the bat feel if it’s the first time somebody’s calling them… But I always just say “Oh, we just get it all from county records. It’s all public data.” You just notice that “You live in Florida. I do, too. Are you down here now?” I try and segue it into an in-person meeting.

Then they kind of open up more and they’re like “No, I’m only down there in the winter. I love fishing”, and then we start talking about that… So it’s really just “Hey, it’s public records data, that anybody can look up.”

Joe Fairless: Okay. So that is building the database and putting together the team… But then you’ve got to actually close on the deal, and I introduced you earlier as having wholesaled 14 parks in less than 14 months for a total of 471 sites across seven states… So what are some tips you have for taking it from initial conversation to actually closing on it, or in your case wholesaling it?

Jimmy Johnson: Great question. Right off the bat, like I said, you wanna have some conversation points ready about the area… Especially if you’re not super-familiar with it, you wanna do research, even if it’s a new major employer is coming to town… Just anything to talk about. Or if you have friends or family or partners in the area. So just getting started with those talking points. And then one of my biggest tips is you wanna try and meet these sellers, with any type of wholesaling, I think, as soon as possible… Because anybody can pick up the phone and call, but offering to meet is very influential.  So I kind of start planting the seed right away. You know, “Hey, if you wanna get together in person”, and you kind of talk through the details. Because with a park, there’s a lot of info that you need, from how many park-owned homes, how many tenant-owned homes, if it’s private or public utilities… So it is a bare minimum 30 minutes to an hour of just exchanging information.

Once I have those basics, I then start to come up with my offer, where we have to be, and make sure we’re in the same ballpark, and then just start pushing for that in-person meeting.

Joe Fairless: Okay, so you mention what your initial offer is on that first call?

Jimmy Johnson: A lot of times they want to know, but I try not to. I think with anything, you want the other person to name the price first, just because you never know what’s gonna be said… But I’ve been most successful with one that doesn’t come up until actually in-person; because they see you have some skin in the game, you’ve taken the time to meet with them, where maybe 9 out of 10 other people haven’t.

Then once maybe walking the properties or sitting over lunch or coffee, then towards the end it’s “Alright, let’s talk numbers”, and that’s when I most address bringing up the actual final offer.

Joe Fairless: You wholesales properties in seven states over a period of first 12 months… How do you determine which people to go fly to meet with or drive to meet with, versus not?

Jimmy Johnson: Another great question. You lose some of them, because you get there and they want quadruple of maybe what it’s worth, and that’s why a lot of people wanna just shoot off that offer right off the bat. But the ones where I know I’m definitely going is — I had one where I was working them for 6-9 months, and we were talking every week or two, and it was “I’ll sell them next month” or “I’ll sell in a couple months. I’m not ready yet”, and then finally something just clicked after six months of talking. I had the rapport built up… And he goes “Yeah, I’ve had a rough couple weeks health-wise, I’m getting older… I’m done. Can you meet this week?” And I’m like “Okay, this park is across the country. I’m down in Florida. How about next weekend?” And he’s like “No, Friday is good for me”, and it’s Thursday. And I’m like, “Um, how about Saturday?”, and he’s like “No, it’s tomorrow. I have Bingo on Saturday.”

So I went online as we were on the phone and looked up tickets to Kansas City, booked the flight, and met him there the next day. So when they’re ready, they’re ready, and time [unintelligible [00:14:49].17] so you’ve gotta jump on it.

Joe Fairless: Yeah, I would hope most people would find the way to get themselves to Kansas City in that scenario. Earlier on — and you answered this, so I guess we won’t talk about it much more, but how do you determine who do you got meet with and go fly with… But certainly, that was a hot lead, to say the least.

Jimmy Johnson: Yeah. They’re not all ones, though… I drove eight hours two weeks ago, up to Northern Alabama, to meet with an owner, and it was one I was working for a while; I thought I had it in the bag, and he ended up selling it to a  college friend of his, so… A lot of times the time is wasted, but I stop at other parks on the way and kill a couple birds with one stone, or get lunch with some investor… So I try and make it where it’s 4-5 things happening, and not just a one-stop sort of thing.

Joe Fairless: Let’s talk about the four parks that you help run daily operations… What is your role?

Jimmy Johnson: Two of them are with one partner, two of them are with another. One group is much more out there, looking to grow. They have six parks total, so I’ve kind of assigned one to them, and we enjoyed doing business together and wanted to keep working together… So we ended up doing two more I partnered on with them. With that, there were more turnarounds, heavy lifts, and we all play our role. One person’s in charge of leasing the property up, another person is in charge of dealing with contractors… So for that one, I kind of just have my one lane, and I’m helping with just infill, bringing homes in, leasing homes, selling homes.

The other two, it’s more with a passive investor, so I’m kind of running 100% of things. They’re more stabilized. Still value-add deals, but not needed for a five-person team. So with that I’m taking everything from tenant calls, down to taking visits to the property, and moving in homes, and really everything, A to Z.

Joe Fairless: What’s your least favorite part of managing the operations?

Jimmy Johnson: I wish they were all closer. I wish I could basically be there more often. I have one park that’s only five minutes away from my house, so that’s great, and it’s the one that’s running the bust, because I can be there. And then I have another one that’s in Oklahoma, and that one – I just wish I could be there more. It’s tough to fly out there for a day just to do something that’s maybe not a high priority… So I think when you’re not there as often, obviously things kind of fall behind. So really, the least favorite part is missing out on some of the more day-to-day stuff by being remote.

Joe Fairless: And what do you think is the monetary benefit to the park for you being closer? You mentioned some of the smaller day-to-day stuff that’s not as much of a priority, but you said it is operating the best when it’s closest to you… So what exactly is it that you’re doing that is helping with operations?

Jimmy Johnson: I meet with my manager there once a week. It’s just walking through — I park the car, and then I kind of walk. The tenants see me there, and it’s kind of — not that fear of “The owner is here”, but more of like it’s more active, and there’s a presence… So just kind of less problems, less complaints; they all know me. So it’s that, and then… We’ve just had somebody move out last week and we had a tenant moving in there the next morning. So it’s just quicker turnovers. We’re doing a small expansion there, and it’s just easier to manage that. We’re adding eight homes in… So it’s just a lot easier to pop into the county and do what needs to be done.

The on-site managers do this at the out-of-state properties, but just being able to oversee this one — I think it’s running more efficiently, and I work a lot closer with the manager there. He does other kind of side-projects at the other parks, and he actually travels to them… So it’s just kind of better relationships, and more smoother communication, just being on-site more often, and doing that  weekly walk.

Joe Fairless: Do you have weekly phone conversations with the Oklahoma manager?

Jimmy Johnson: Yeah, with all of them. It’s a minimum of once a week. So we typically do Friday afternoon, and it works well. I think it’s good for both sides. They like to kind of update and share what’s cookin’, both good and bad, and then of course, I like to stay on top of it equally. So it might be overkill to some, we could probably do it twice a month, but I think a quick 15-minute call is worth its weight in gold.

Joe Fairless: Based on your experience, what is your best real estate investing advice ever?

Jimmy Johnson: Definitely trying to meet sellers in person. I think it’s one of the biggest reasons why I’ve done 14 parks in the first year… Because I’ve gone the extra mile and I meet these people when nobody else is.

Joe Fairless: And I’m guessing at the beginning you chose to wholesale just to build up some cash reserves. Is that something that you are continuing to do? And if so, why? …compared to just buying them with a partner and doing it yourself?

Jimmy Johnson: Yeah, definitely, this year the number one focus is still wholesaling parks. About double the number that I did last year. And with wholesaling, everybody wants the deals… So just for like being the guy with the deals, then you’re able to partner. A lot of times people will say “Hey, instead of the fee, how about I give you a piece of equity in the deal?” So I’m building up ownership in multiple parks, as well as building up the cash with the assignment fees. I’m learning a ton and getting to know everything, from people buying their first park, to the institutional groups who are [unintelligible [00:20:19].16] ten or twenty. So it’s a great way to meet just so many people, in really any market that you want.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Jimmy Johnson: I’m ready.

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [00:20:39].16] to [00:21:23].24]

Joe Fairless: Best ever resource that you use to stay sharp in business?

Jimmy Johnson: I really like BestPlaces.net for staying on top of what’s cooking in areas, and metros, and cities, and just the demographic.

Joe Fairless: What’s some mistake you’ve made on a transaction?

Jimmy Johnson: Time kills deals. Dragging my feet on a couple things and kind of letting things fall behind. You’ve gotta just stay on top of it and just put in the hours to get them done quick.

Joe Fairless: Best ever book you’ve recently read?

Jimmy Johnson: Pretty generic, but 4-Hour Workweek. I always revisit that one. I think it’s good for anybody in business.

Joe Fairless: Best ever way you like to give back to the community?

Jimmy Johnson: Super-simple, but once in a while just buy something for somebody behind you in the line at Starbucks. I do it about once a month, and it’s always just such a feel-good moment.

Joe Fairless: And how can the Best Ever listeners learn more about what you’re doing?

Jimmy Johnson: You can email me, jimmy [at] jimmyjohnson.co, or you can also go to my website, sanddollarcommunities.com. You could reach out that way. I’m on top of both of those every day.

Joe Fairless: You came into this business just ready and raring, hitting the ground running. It’s impressive how you got 14 mobile home parks in less than 12 months wholesaled.

Jimmy Johnson: Thank you.

Joe Fairless: It really is. They’re tough to find, as you might know… I don’t know if you agree with that or not. I know some people in the industry and they have a hard time finding them. Bravo to you. And thank you for going through your process in detail for how you did it. So any mobile home park investors listening, they can learn. And I’m sure everyone has an abundance mentality, so thank you for sharing that.

Jimmy Johnson: Yeah, I appreciate it. Thank you.

Joe Fairless: I really appreciate you being on the show. I enjoyed our conversation. I hope you have a best ever day, and we’ll talk to you again soon.

Jimmy Johnson: Right back at you. Thanks, Joe.

 

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