Ryan had a job in the banking world, didn’t like it, looked for a way out, found his way out with real estate investing. We’ll hear how he was able to take the leap to being a full time investor, and how he closed his first deal. We’ll also hear how he has scaled his business to owning over 500 mobile home pads. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
Best Ever Tweet:
“We are obsessed with getting people on the phone” – Ryan Narus
Ryan Narus Real Estate Background:
- Real estate investor for the past four years
- Has closed on $20 million in mobile home parks, currently owns 8 parks and about 535 pads
- Based in Charlotte, NC
- Say hi to him at http://www.archimedesgrp.com/
- Best Ever Book: Never Split The Difference
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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, Ryan Narus. How are you doing, Ryan?
Ryan Narus: Great, I’m honored to be here. Thanks for having me.
Joe Fairless: Well, I’m glad that you’re on the show, and looking forward to our conversation. A little bit about Ryan – he is a real estate investor and has been one for the past four years. He’s closed on 20 million dollars in mobile home parks. Currently owns eight parks and about 535 pads. Based in Charlotte, North Carolina. With that being said, Ryan, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Ryan Narus: Absolutely. So I woke up one day with a corporate job, and realized I hated it, and realized I needed to find an escape because I was stuck. And I refused to take what the world gave me, so I picked up books, I read everything I could, I picked up the phone, I called anyone I could… I looked at about 100 or more different possible business to buy, because I realized I needed to be an owner. And it was Rich Dad, Poor Dad and 4-Hour Workweek…
Joe Fairless: What was your job?
Ryan Narus: I started off as a car salesman, because I graduated in ’09, which was the worst year ever to graduate, other than the great depression, for jobs. I was sold this idea of “Hey, go to college. You’ll get a good job, you work at a good company for a long, long time…” That might have been true for my parents, but that’s definitely not true for us millennials today… So I just refused to take what the world gave me, and I went out and I just for years met people, learned, tried to figure out who I was and what I wanted to be, and eventually I buddied up with a childhood friend, Ian Tudor, and he turned me on to mobile home parks, and I said “Hey man, if it’s anything like the show Trailer Park Boys on Netflix, sign me up, because that show is hilarious.” And I found that it matched my skillset extraordinarily well.
Flash-forward – no money, no experience, no network, four years later I found my way into over eight deals, because we’ve sold out of a few… I hope that your listener base hears my story and goes “You know what – why am I making excuses? If this guy can do it, I can do it.”
Joe Fairless: Well, let’s dig in there… So I had asked “What was your corporate job?” and you said you started out as a car salesman, but what was that last job that you were hating? That’s what I was wondering.
Ryan Narus: Banking.
Joe Fairless: Banking. So what were you doing exactly?
Ryan Narus: I was in THE leadership program… [laughs] Which turned out to just be a lot of hype and not a lot of substance, and it was probably everything that you would guess. “Hey, come on in. You’ve got an MBA… This is a big bank. We want you to be a future leader”, and then you get there and you’re ignored, and you find you’re doing copying and pasting more than actually providing a ton of value; and then you go and you do something no one else has done, and provide a bunch of value, and you get a pat on the back and that’s it. And then it’s “What have you done for me lately?”
I’ll put it to you this way – a friend of mine, my best friend just started a business, and he was a former banker as well. We were having lunch the other day and I told him “At your bank, in the next five or ten years, were you in any danger of basically having your job removed and being able to walk away with a couple million bucks?” Because that’s his exit. He wants to in 5-10 years sell his company for a couple million bucks and ride off into the sunset, maybe start another business, maybe do something else…
And we both were laughing because we were like, there’s literally no way that a bank would ever be like “Oh, you’ve done such a great job scaling this, that and the other thing. Here’s a couple million bucks. Go retire, go do something else that you wanna do.” The United States of America is about the ability to go and start your own business and chase wealth, and I’m just so glad I did that.
Joe Fairless: When you were in banking, noted on being in the leadership program, but that isn’t what it was cracked up to be, or at least positioned to you… But what were you doing? You weren’t a teller, it doesn’t sound like. What was your role within banking?
Ryan Narus: I was in operations. Anytime something like a credit default swap trades, I was the guy behind the scenes, making sure the trade is made properly.
Joe Fairless: Got it. Sounds riveting.
Ryan Narus: [laughs] That’s why I’m gently trying to steer the conversation away from —
Joe Fairless: No, I get it, I get it, but it’s important to know where you came from and what types of skillsets you were using then, and what you’re using now. Okay, so that was four years ago… So I’m decent at math, I can subtract; that was around 2015, correct?
Ryan Narus: Correct.
Joe Fairless: Okay, around 2015 you had your corporate job in THE leadership program for a bank, and you were in operations… Then what?
Ryan Narus: I’ll unwind this… [unintelligible 00:07:03.13] wanted to be a salesman. Went and sold cars for four years, loved it, until I didn’t anymore… Because I realized — I sprained my ankle once playing basketball, showed up the next day in crutches, trying to sell cars, because I realized I wasn’t getting paid sitting at home with ice on it.
Joe Fairless: That’s gotta help you sell cars, when you’re out there in crutches…
Ryan Narus: Believe it or not, it got a lot of attention.
Joe Fairless: Of course.
Ryan Narus: I can’t remember… It’d be funny if I sold a car that day, but I don’t think I did. I don’t remember… But I just remember that day; I don’t wanna get a promotion to the finance office, because that sounds miserable. And then the sales desk sounds miserable, and then 20 years goes by, I’m a general manager, and the best advice my general manager had for me was “Go start your own business. You know why? Because I never see my kids!”
So then I went and got my MBA, because I figured “Alright, maybe my MBA will show me what business I wanna start, and give me that toolkit to go start a business”, and it did, because in 2015 I met back up with Ian Tudor during my internship between my first year and second year of MBA, and then my second half of my MBA I spent starting the mobile home park business, and then I was a year in banking, working on my mobile home park business while working full-time, and then I quit to go full-time in mobile home parks in June of 2017. So as of today, we’re almost two years into it full-time.
Joe Fairless: What was the first deal you did, mobile home park, and what was your role in that deal?
Ryan Narus: Our first deal was an 89-lot park, 1.525 mil acquisition. We wanted to use that as a training wheels deal. So we grabbed that deal and we went out to try to get debt financing, and we reached out to 40 banks, and I am proud, Joe, to tell you that I got 40 no’s. Every single bank rejected me. And here’s the sad part about it – that deal has been an absolute home run in terms of debt coverage ratios and anything a bank would be looking at… And we still just got nothing but rejections, which… I think it’s important for folks listening in that have never started a business before – you can’t let no stop you. Because eventually what we did is we brought in some investors who were outstanding, and we decided we wanted to be a fly on the wall, and learn.
So our first deal was more about “Okay, how can we monetize this and how can we educate ourselves?” And our second deal was really our first deal, because that was our first deal without training wheels, if that makes sense.
Joe Fairless: You mentioned the person’s name… Who is “we”?
Ryan Narus: Ian Tudor is my business partner, and I have not asked my investors if I have permission to talk about them, so I’d prefer to leave them out.
Joe Fairless: Yeah, I would have never asked for your investors’ names, but your business partner is Ian Tudor – okay. How did you meet Ian?
Ryan Narus: Believe it or not, we grew up in the same neighborhood, and if you asked him, he would say he absolutely hated me growing up. [laughs] But we kept in touch, and we bumped up when I was doing my MBA internship in Miami, and he was in Orlando. We hung out a bunch of times, discovered we’d be great business partners, and four years later talking almost every single day. We’ve grown a business, and were able to quit corporate America, and have done pretty cool things that we probably had no business doing, just because we refused to stop when we were told no.
Joe Fairless: On that first deal, what did he bring to the deal in terms of value, and what did you bring to the deal in terms of value?
Ryan Narus: Sure. Ian is an underwriter, so that’s what his background is in. And he found a new up-and-comer broker, who was weak in underwriting. So what she was doing was funneling him off market deals, so he could help her underwrite, and also teach her. So he provided value to this broker, and she provided value to us. Because what ended up happening there was we got a look at a great deal before it ever went to market. So that’s where he brought the value to that first deal.
Where I brought value to the first deal was my networking, because eventually we ended up finding the right bank, and we ended up finding the right investors… But I don’t think it’s fair to necessarily put that in those buckets, because we were both wearing many hats during that process… But if I was to just say “Boom, this is what Ian did. Boom, this is what I did”, that’s probably — with a little blurry in the lines, that’s probably how I’d put it.
Joe Fairless: Of course. Even after many deals, the lines are still blurred on, and responsibilities.
Ryan Narus: Yes.
Joe Fairless: But that’s helpful to categorize them, at least for this conversation’s purpose. The up-and-coming broker that Ian met – how did he meet her?
Ryan Narus: Straight networking. Ian and I are obsessed with getting people on the phone. It doesn’t matter if you’ve never bought real estate before, or if you own billions of dollars of real estate – we wanna get you on the phone. I’ve gotta say, Joe, that most of the times when I reach out to someone, especially when I started, they were not interested in taking my call… So I’ve gotta say, of the 100 people that both of us reached out to, probably less than half actually took our call, and she was one of them. Probably because she too was just starting out.
Joe Fairless: And do you remember how Ian found her, to initially reach out?
Ryan Narus: Man, that was four years ago… That’s tough. But I will put it to you this way – we hit any avenue we can. We ask people “Hey, do you think there’s anyone that would be cool for you to introduce us to, and vice-versa?” We do LinkedIn, we do Facebook, we look people up online… There’s so many avenues. Any stone that we can unturn, we try to unturn. So that would be a great question for Ian, but those two just hit it off. They’re still buds to this day, really close friends. You’ve just gotta turn up the rocks and see what’s under them.
Joe Fairless: And was there a particular focus on mobile home parks at the time, so that’s the type of people you were connecting with? Or is it just more general?
Ryan Narus: Absolutely. The primary goal at that time – and really still – is anyone who has any interest in mobile home parks, I wanna talk to you. Whether you bought them or not, you own them or you don’t, I would love to get on the phone with you. That was our focus at the time, and we really decided mobile home parks fit our skillsets extraordinarily well; this was going to be it.
We’ve looked at marinas, we’ve looked at RV’s, but we keep coming back to our skillsets are set for mobile home parks, so it’s almost exclusively been mobile home parks.
Joe Fairless: Okay. And how do your skillsets fit mobile home parks?
Ryan Narus: Straight car dealership. When I graduated in 2009, undergrad with a degree in psychology and a big dream of being a salesperson, business-to-business, and no one was hiring… And I went “Alright, well I guess I’ve gotta settle with car sales”, it taught me everything I needed. It was probably the best job I could have ever not realized that I needed to have… Because it was rejection every day you show up.
So it’s learning how to get basically punched in the face, and then when that next customer walks through the door, if you’re not smiling, you may cost yourself a sale, so you have to learn how to pick up your own emotions rather quickly… Because that next person walking through the door – it’s not fair to them that your boss just yelled at you, or you just blew a sale because X, Y or Z, or someone was calling you a scummy car salesman, even though they’ve never met you before. That plus persuasion, overcoming objections, negotiating, organization, learning how to use business analytics, statistics – all of that was perfect for mobile home parks, because it is a lot of learning how to deal with confrontational situations, be it [unintelligible 00:14:44.09] yourself and your business… Because people don’t just flock to you. You have to put yourself out there to get them to come to you, and have to have word of mouth.
So it’s a lot of sales, it’s a lot of marketing, it’s a lot of organization, it’s a lot of things you would not expect you need if you just listen to the hype stories about mobile home parks, which are “Wow, it’s a great investment. They’re ten-caps everywhere. Buy it from mom and pops, and you set it and forget it.” It’s quite the opposite. And mom and pops in and of itself are a sale; you have to convince them that you are not like everyone else who’s calling them… So I’ve gotta say selling cars was probably one of the best things for me in terms of enjoyment, yet it fits this industry like a glove.
Joe Fairless: How do you differentiate yourself when you’re having those conversations, to position yourself not like everybody else who’s calling them?
Ryan Narus: With the mom and pops? Well, one big thing is I speak Spanish, I’m on my properties, I do not have a fund, I do not have pressure to acquire. I go for the long game. I like to show up at folks’ houses – obviously, if I’m invited – and shake their hand.
Joe Fairless: I have a feeling you’d show up even if you weren’t invited.
Ryan Narus: True story, I have done that before. I showed up at a woman’s house and we ended up watching Wheel of Fortune, and we had such a great conversation. It pulled over into The Price is Right, so we ended up spending a couple hours. And I’ve got a baby boy on the way, and she texts me every now and then and asks me how my wife is doing with the pregnancy, so… Look, you have to be different, and the way that I want to be different and I have been successful being different is I’m doing things no one else wants to do.
Who wants to go and knock on someone’s front door? Who wants to pick up the phone every morning and get yelled at and hung up on? Who wants to do anything other than call someone and say “Will you sell me a property right now? No? Okay.” Hang up.
I constantly am looking to put myself in situations that differentiate myself, and one big thing I’m not afraid of is being embarrassed. If you ask my wife, she hates it. She’s like “You’ll literally walk the dog in dress shoes, dress socks, athletic shorts and a tank, because you just don’t care what people think about you, but I care what people think about you… And it’s weird, dude.”
Joe Fairless: You’re doing mobile homes… Why are you knocking on front doors?
Ryan Narus: No one else is doing it.
Joe Fairless: Whose front door are you knocking on?
Ryan Narus: Sellers. Potential sellers.
Joe Fairless: Sellers. So their residence, where they live, you’re knocking on their front door, or…? Help me understand the situation.
Ryan Narus: Absolutely. I’ll give you a good for-example. There was an elderly woman who we called a bunch of times, had wonderful conversations with, but every now and then she’d just disappear for 30 days… And one time she kind of casually was like “Oh yeah, sure, come on over.” And long story short, she set up a time for us to go over, and we went over and she was in the hospital. We met her whole family, and long story short, we ended up knocking on her door several weeks later when we figured that she was probably back… And yeah, literally we showed up at her residence.
Now, it wasn’t completely cold, out of the blue, “Who are you? Go away. This is trespassing.” This was more of a warm knock on her front door… But we have done that several times. I’ve also done the cold knock on the front door as well. I’ve showed up to mobile home parks and just walked into the office… But all of the above because what’s happening in our industry now is you have wholesalers coming in with Boiler Room types of telemarketers, just trying to find the low hanging fruit. You have tons of brokers and you have tons of folks sending mailers, and the competition has just exploded.
I do anything in my power to be different, because otherwise I’m no different than anybody else who’s calling and sending mailers, and doing all that stuff.
Joe Fairless: Has walking into the office cold resulted in a completed transaction for you?
Ryan Narus: It has not. We are getting very close with one, but I will say that one that we did close here in Gastonia, North Carolina, right outside of Charlotte – it wasn’t knocking on her front door; we showed up at the property with an LOI, and a contract, after months of talking with them. And the reason why we showed up is because the seller said “You know what – we like you guys, we wanna do business with you guys, it sounds like the price is right, but we just wanna wait until January 2019 for tax reasons.” I remember Ian did this, and I’ve gotta give him all the praise in the world for doing this, because he walked me through the objections that the seller threw out, and I said “Show up at the property when we know she’s there and we’re at least somewhat warmly invited.”
Joe Fairless: Yup.
Ryan Narus: So in other words, “Hey, Ms. or Mr. Owner, are you around then?” “Yeah, we’re in our home right now.” “Great, do you mind if I stop by?” “Yeah, sure.” So he shows up with the contract and the LOI, and I told Ian, “This is what we did in car sales, this is what you’re gonna do when you get there. You show up, you give them the pitch…” You say “Hey look, it takes 60-90 days to close, period.” Because it was August. “Why don’t we go ahead and sign this contract, just in case the economy takes a dip. We know the price, the economy takes a dip, this price is locked in; we will do literally everything we have to do with the bank, and the appraisals, and the surveys, and everything, so that way on January 1st, 2019, all you have to do is sign it and it’s done.” And then just sit there and don’t leave. [laughter]
It took over an hour… This is a hysterical story, because he showed up, he walked them through it, same objection, and then he said “Well, why don’t we go through the contract?” and she said “We’ll just leave it here.” He said “Okay.” And he left it there, and he just sat there. Created an awkward silence. Didn’t say anything, which was by design… And that awkward silence unearthed another objection, and then–
Joe Fairless: What was that?
Ryan Narus: It was just that “Well, I’ve gotta go through the contract.”
Joe Fairless: Which is legit.
Ryan Narus: Legit, right. But it’s also a dodge, too. Because “Oh yeah, leave it here”, and then you leave, and then they got you out of there. So then it was “Great, I’ll wait right here while you go through it.” Well, I’ve gotta finish this sub-floor job.” “Okay, I will wait in my car then.” Then he went out and waited in his car.
Joe Fairless: I’m surprised he didn’t offer to help with the sub-floor job.
Ryan Narus: I hate to say it, but neither of us are very good handy folks, so…
Joe Fairless: Still… He could do something. Move some materials around, or play some Spotify, play their favorite playlist, at least from your phone, while they work…
Ryan Narus: That’s actually a great idea. I might try to offer that. Like “Hey, you’re doing some tiling work. You definitely need an extra hand here. Let me help out.” But here’s my favorite part of the story – he went out and he sat in his 2006 Honda CRV, with very limited, questionable air conditioning, in the hot North Carolina sun, in the middle of August… And waited for her to walk back out, which she did. And then he sat in his car, with the window rolled down, for what he described to be forever, and they went through every single line of that contract, and he left with a signed contract that day.
So when I say my skillset — and our skillset really, Ian’s too, because he doesn’t have sales experience, but he is a natural salesperson… It fits like a glove, and that’s just the only way you can compete when it is a hot market right now. Because it is a seller’s market right now.
Joe Fairless: Thinking about one other mobile home park that you’ve closed on, what’s one other way that you found the deal?
Ryan Narus: Networking has been phenomenal. I’ll give you a good for-example. If an outfit is selling their way up; in other words, they maybe built a giant portfolio on two and three-star, and now they’re selling while the market is good up to four-star properties, a lot of times you can snag something off market, because someone knows you can perform… Eight mobile home parks, 20 million dollars, plus you’ve heard of me, and we’ve talked several times, and maybe we’ve had a beer, maybe we’ve had a lunch, maybe we joke about the NBA together… I’ve had several looks at several properties, a lot of which I’ve passed on, but several which we’ve closed, from bigger name folks, who were like “Look, I don’t wanna put this to market, because I don’t wanna see a bunch of knuckleheads who’ve never bought stuff before. I’d rather just sell it at a fair price, get it off my books. This is less than 10% of my company’s overall revenue, it’s a liability to me at this stage. You guys are growing, you’re comfortable with two and three-star assets – here’s a fair price.” Boom. That’s one way to do it.
Then another off market way — obviously, networking is huge, and then also I know a ton of folks through my podcast who anytime I see a deal, I pitch it off to them, and I’m happy to do that, so… Literally not even an hour ago a broker brought me a deal off market, that I had already looked at, and I immediately connected her with someone else. So there’s plenty of folks within my network who have reached out to me, who I am happy to pitch something off to you. So networking is huge.
If you’re listening in right now, reach out to me, reach out to folks like Joe, because you never know. If you’re like “Hey, I’m looking for something in Greensboro, North Carolina, about this many units”, if you’re in the back of our minds and we have good deal flow, we see a lot of deals, we’ll think of you. And if you’re like me and you like helping other people out, you get something off market from a broker; you make a cold call and the deal doesn’t make sense for you – we’ll call you. And that comes right back to me, I’ve done several deals just like that.
Joe Fairless: Taking a giant step back, based on your experience, what’s your best real estate investing advice ever?
Ryan Narus: Bet big on yourself. I don’t know if you’ve ever watched the Austin Powers series – they’re totally silly movies, with Mike Myers in it, but there’s–
Joe Fairless: I’m not a fan, but I know it.
Ryan Narus: [laughs]
Joe Fairless: I hate those movies, but go ahead… [laughs]
Ryan Narus: I don’t blame you… There is one line which I was sitting down with a single-family home flipper, just as “Here, let me help you out, man” kind of thing, because I don’t do single-family home flips… But it was one of the best meetings I have ever had, with a newbie home flipper, not interested in mobile home parks, I’m not interested in his – we sat down and he hit me with a line from Austin Power, from the fat, bad guy who says “I’m unhappy because I eat, and I eat because I am unhappy.” And he hit me with the real estate equivalent of that line, which is “I can’t go full-time, because I don’t have deals, and I don’t have deals because I’m not full-time.”
And when I pressed him on that, I said “What’s stopping you from quitting your job, going and living in one of your flips to cut expenses…? What is the one thing holding you back right now from increasing your deal flow?” And he’s like “Man, if I could just go full-time…” and I was like “Can you get a job, in 12 months?” If you just said “In 12 months, if I can’t make my business happen by giving it full-time effort…” and he looked so uncomfortable, Joe; he was so uncomfortable, but he was like “You know what, you’re right.” And I’m proud to say that he’s not gonna just quit his job tomorrow; he’s gonna take the next 3-6 months to plan for it, but he is gonna do it. He’s gonna bet big on himself. Obviously, plan because he’s got kids etc, but it’s gonna take some prep, because it took me a lot of prep too, to go full-time; even without kids it took me a lot of time to prep.
So don’t just blindly jump into it. But here’s the thing – if the one thing stopping you is deal flow, and you are confident you can get that deal flow if you devoted your full-time to it, what are you gonna say when you’re 80 years old, looking back on this, when you’re in your early thirties or twenties, or even in your forties or fifties? What are you gonna say? Are you gonna say “Boy, I’m glad I stuck with the job that I hated?” or are you gonna say “When I was a young lad, I had the courage to bet big on myself. And if it fails, even though it failed, I learned so much and I’m glad I took a chance on myself.”
Because if that’s the worst you’re gonna say when you’re 80… The flip of that is “Boy, I quit corporate America, I literally work from my couch now, and I get to do what I want, when I want, and I live my career dream.” If that’s the upside there, why wouldn’t you bet big on yourself? So that’s probably bar none my best advice to anyone looking to break into the industry.
Joe Fairless: Amen to that. We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?
Ryan Narus: Let’s do it!
Joe Fairless: Alright. First, a quick word from our Best Ever partners.
Break: [00:27:25.14] to [00:28:14.22]
Joe Fairless: Okay, real quick – best ever book you’ve recently read?
Ryan Narus: Oh man, that is just so tough, because there’s so many I wanna talk about… Probably Chris Voss, and I’m gonna forget the name of–
Joe Fairless: Never Split the Difference.
Ryan Narus: Never Split the Difference, bar none best negotiation book I’ve ever read.
Joe Fairless: A mistake you’ve made on a transaction?
Ryan Narus: Not checking the water bills.
Joe Fairless: Best ever deal you’ve done? Which one?
Ryan Narus: Probably a countryside mobile home park, because it was a huge win for the residents, huge win for us, huge win for the investors. Everybody won.
Joe Fairless: Best ever way you like to give back?
Ryan Narus: My time. Call me, email me. It doesn’t matter what type of real estate you’re getting in, I want to help you and I want to talk to you.
Joe Fairless: And how can the Best Ever listeners learn more about what you’re doing?
Ryan Narus: Ryan Narus, just literally google me, shoot me a line. All my contact information is there, my podcast is there, all my YouTube videos are there. I have nothing to sell, I have everything to give, give, give.
Joe Fairless: Ryan, I enjoyed our conversation thoroughly. I love your never-quit, very resourceful, gonna-make-things-happen approach, a do-whatever-it-takes type of attitude, and I loved hearing the story about Ian and the sale that took place in August, when perhaps it for most people would have taken place in January or not at all taken place without that perseverance.
Thank you for being on the show. I enjoyed our conversation. I hope you have a best ever day, and we’ll talk to you again soon.
Ryan Narus: I loved it, Joe. Thank you so much for having me.