Investing in Mobile Home Parks: Your Path to Financial Freedom Explained

John Harcar (00:01.111)
All right. Hey guys, welcome back to the show. I’m your host, John Harcar, and we’re here today with Major Hillard. And what we’re going to talk about is investing in mobile home parks and his journey. Guys, remember at Investor Fuel, we help real estate investors, service providers, I mean, all entrepreneurs, two to five X their business. And we do that by providing tools and resources to help grow the business they want to grow and live the life they want to live. So Major, man, welcome to our show.

Major Hillard (00:33.721)
Yeah, thanks John, thanks for having me today.

John Harcar (00:35.532)
Yeah, I’m excited to talk about mobile home parks. This has been a topic that actually, you know, lot of my guests have talked about. But before we kind of really dive into the weeds of all that, why don’t you give our audience a little bit of background on you? You know, kind of what got you into real estate, a little bit about your journey and what got you here?

Major Hillard (00:53.029)
Sure, yeah. So early age, my father started investing in residential real estate, more rentals. I like to do a lot buy and hold, hold long term, refi till you die. That same strategy.

John Harcar (01:03.98)
Yeah.

Major Hillard (01:05.765)
Right. So I grew up though, but the thing is growing up, as you know, the, management and hassle of the operations is really a taxing. So growing up and seeing him leave family dinners, cancel trips, know, the midnight phone calls, I’d go out with them and unfreeze pipes in the middle of winter. mean, you name it. So it was a real taxing ideal. So was trying to look for a different way out. So in college, I got into college and during the 2008 recession,

was right in my junior year and I decided to, it was a perfect time to get into commercial real estate. So I kind of just jumped in. I got my real estate license anyway. I was determined, started working as a management company for section eight multifamily units. I’m kind of cut my teeth with that, with commercial, which was if I can do that during the recession, I mean, you know, game on kind of thing. So.

John Harcar (01:41.614)
Okay.

John Harcar (01:59.468)
Yeah, right.

Major Hillard (02:00.741)
Yeah, so when I got out of I invested and bought about 60 doors myself in Richmond, Virginia, apartment complexes, duplexes, what have you. Still struggling, so working three jobs still just to maintain all the mortgages, working security at night at multiple nightclubs, you name it. Came across this book in my father’s house called Deals and Wheels by Lonnie Scruggs. It was about flipping mobile homes. having experience with my father.

I got a couple grand, let’s go try it out and flipped them and was able to quit my jobs after three months and five houses later with disposable income coming in and then figured hey if I can do homes why not just do the whole park. So that led me to buy my first park and bought the park and then we sold everything else. I met my wife, we sold everything else and went all into mobile home parks.

John Harcar (02:52.544)
Awesome. So let’s go kind of back in the day for a second, right? You’re in college and you decide that, you you want to get into it. You’re going to do real estate, but you chose commercial. Did this be a two part question? Did all those unfreezing of pipes in the middle of winter and all those things drive you away from the single family part? That’s part one. And part two, what challenges did you have getting into commercial versus maybe some of the stuff you’ve experienced with your pops?

Major Hillard (03:18.189)
Yeah. yeah, seeing that, experiencing the midnight, doing all the evictions myself. mean, growing up, we really didn’t have a babysitter. My father would take me to rental properties, drop me off and say, Hey, pull up this carpet, put up spackle, you know, can’t tell me evictions I’ve done, take the trash in the curb. mean, been there, done that. And then just seeing that firsthand and the time and commitment and the stress, I wanted to find a way to have that passive income. And I love real estate and real assets versus stocks or something.

That’s imaginary so hands on but there had to be a better way and that’s kind of what drove me to it and then I rocked it all started from a movie the I’m sure you’re familiar with the Wall Street with Michael Douglas You recall he’s in the he’s in a limo talking to Buddy and he said he bought that apartment building and sold it for a hundred million this then when I saw that my eyes Well, you know popped open. I was like, oh there it is. That’s it So that was about 14 years 14 years old when I saw that and yeah, I’ve always wanted to get into it and

So the answer to the second part of your question is extremely hard to get commercial real estate. as you know, there’s, know, flipping housing seminars, know, you name it, probate, self storage, all that. But when it comes to actual commercial, it’s very, very a tight niche community, especially at time. It was like a good old boys network. So come in a new green horn, fresh, no one would give me the time of day. And so I had to really just do all the grunt work to learn.

John Harcar (04:35.502)
Mm.

Major Hillard (04:48.019)
and education by myself, investing with my own dollars and reading everything I could. It was just a long process. There’s no easy way to get started into it. And then with the past 10 years, with it being a very good and appreciating cycle, it’s pretty a little bit easier to get into. There’s a lot more education, obviously online, there’s a lot more online.

John Harcar (05:09.176)
Sure.

Major Hillard (05:10.597)
But yeah, learning that in the beginning was more trial by fire and following different brokers. And I figured, yeah, that was the main reason to forget my broker’s license was I need to learn how to do commercial real estate, I want to invest in it. But had no idea. The best way to learn was for me to help people sell it. I can get into their books, get into their mindset, how they manage. And then they just kind of took everything I learned and just started investing myself.

John Harcar (05:25.646)
Yeah.

John Harcar (05:33.582)
Okay. Were there no mentors available, kind of mentorships back in those days for the commercial side or, you know, because a lot of folks, you know, will maybe seek out a mentor or do the whole YouTube you, I mean, kind of one of the two options.

Major Hillard (05:48.101)
Yeah, I highly recommend the mentor route. I wish I could have found one, but again, it was a really tough time. In fact, the office I went into was the premier developer for the Tidewater region of Virginia. They had a four-story office building. The commercial division had, I think, 36 offices. When I came in, there was only two agents working. It was extremely tough time then. But there are courses, there are people you can reach out to. There’s funds and operators.

the way is that there’s a lot of funds now as you know and so you can invest with them and get your newsletters and ask questions and learn that way with your own money as kind of a mentorship and you JV with others as well. That’s kind of how I started out was doing deals and working with others and trying to do favors and you know learning every little bit I could.

John Harcar (06:38.894)
Sure. Yeah. And, and you know, that’s, yeah, if you can find a minute, that’s always going to be the best way because you’re going to learn from other people’s mistakes. You know what I mean? so what type of buildings did you buy commercial? Did you do with commercial? Were they apartments? Were they industrial? What type of commercial were you doing at that point?

Major Hillard (06:56.143)
So yeah, when I started out, was managing apartment complexes. Back to my interview was I showed up to a 226 unit section eight complex behind a truck stop in Suffolk, Virginia. As with no experience in my interview was I had two weeks to figure out who was there, who was leasing, what units were vacant and collect all the rents. And so that was kind of like, you know, trial by fire there. then me personally, I went into duplexes, quads,

in a 20 unitplex just because I was familiar with it. I tried doing the selling of industrial and mixed use. That’s a whole different, each type of commercial real estate is its own animal. But I really stuck more to the multi-family. But then I realized as I owned it, I was running into the same problems as my father had. Essentially, instead of it being 50 or 60 units spread out across multiple counties, it was just 50, 60 units on one block.

John Harcar (07:38.574)
Mm-hmm.

Major Hillard (07:56.239)
You’re still there the management’s tough. You can try to do a third party, which I did and each time I did they don’t really care as nearly as much as you do because you have skin in the game they don’t and they just work all the hard work is just kind of running to the ground so there might be a better way and that’s you know, again, that’s by flipping homes I realized in the mobile home parks what that I only really owned a land and not the home and so it’s made easier to maintain land that it is to maintain a home

John Harcar (08:22.498)
Yeah, no, 100%. Okay, so you’re doing this commercial stuff. At what point did you or maybe what triggered you to go say, mobile home parks or mobile homes at the beginning?

Major Hillard (08:34.689)
Yes, so early on when I was growing up, we had a family vacation house that was on Tappanak River and it was a RV resort kind of style with some criminal homes.

John Harcar (08:44.494)
Mm-hmm.

Major Hillard (08:48.099)
seen the figures of that in high school and in early college. realized, you know, those are doing pretty well and the people are there and they’re paying. And I realized too early on, especially with the section eight, the demand and the list and the waiting list of people of getting into that program is just astronomical. And it’s building by the hundreds by the day. So I realized if I can, there’s only three main, the three biggest markets in the world, as y’all know, is water, food and shelter, right? There’s a three necessities. So if I can get the least affordable,

John Harcar (09:06.734)
Mm-hmm.

Major Hillard (09:18.023)
most affordable option period in housing and with the demand for affordable housing I always knew there’s going to be demand. The most affordable you can get is a manufactured home community or mobile home park and so for me I consider it a pretty safe and recession resistant asset just because no matter what the saying goes in our community no matter what if the things are going well people need cheap housing if things are going bad people really need cheap so no matter what it’s just going to continue

appreciate and the man just continues to grow.

John Harcar (09:51.352)
So what kind of mindset did you have to have when you’re just kind of going into all these different asset classes? mean, some folks might just try to dabble and dabble, but it seems like you win them pretty heavily. So what type of mindset you think helped carry you through all the different changes in the things you were doing?

Major Hillard (10:09.253)
Sure, yes. So John, I’ve got a, my personality and characteristic type is that you’re either all in or you’re not in at all.

And so you go all in, but that’s not to be blind. You have to be risk averse. You have to be able to diversify and alter your course. So I would go in and full intent with all the intention I had in the world to make it a 30, 40, you know, year long process and very successful investment career. But you know, times change, climate change. A good example is kind of like Denver or excuse me, Detroit. Detroit in the 1960s and 70s was the booming manufacturing capital. But if you look to today,

if you held that same asset in that same class in the same location and didn’t give up, you know, you’d be bankrupt. So you’ve got to be able to adjust with the times and also, you know, life changes, you you have, you get married, you have children, you have different goals. I mean, you don’t have this, the average American’s car doesn’t last more than three years. It’s just because their life, their livelihood changes. So once you adapt and figure out what your best niche, which took me a little while. And once I found that I really just dug all in.

John Harcar (11:15.544)
Are there any specific tools or resources that you use, books that you read, podcasts you listen to, things that kind of help you stay on that path and that mindset?

Major Hillard (11:24.963)
Yeah, so there’s a few really big influential books. In fact, there’s one that really got me into real estate altogether because it was a tough time back then. It was the Millionaire Fastland by M.J. DeMarco. He’s got a new updated one called the Unscripted by M.J. DeMarco. know, E-Myth Revisited and a few others, but those two are extremely impactful. that’s what, you know, it’s tough when you get out of school and you see your friends and they all have

you know, five six figure salary jobs right out of school and they’re going on their trips and buying all the shiny stuff. And I got a beater truck outside that’s barely making it smoke in and I don’t know how I’m going to afford, you know, my electric bill this month other than maxing out my credit card. You know, it’s a tough time when you don’t have that income to stay the course and then just realize I’m putting your head down, trust the plan. You’ve done the research, you know, the market have faith in yourself and then, you know, just let it flirt.

Thank

John Harcar (12:25.23)
So let’s talk about kind of what’s your business now and kind of go a little bit more into the mobile homes and mobile home parks. What are the pros and cons for you, right, of the mobile homes versus the traditional homes or the parks versus bigger commercial?

Major Hillard (12:43.277)
Right, yeah, so let’s go over the cons real quick because there’s not that many. The first one is that it’s all DMV based. So if you’ve ever gone to get a new license, how terrible that is. Well, it doesn’t get any better when it comes to mobile homes because mobile homes are considered personal property.

John Harcar (12:47.022)
the

Major Hillard (13:00.741)
Each one of them has a title just like a vehicle. So that’s a little bit difficult However, it does make a little bit. It doesn’t make a lot easier to transfer. There’s no attorney needed There’s no recording of a deed so you can move these things fairly quickly That all because of that It also makes a little more difficult for banks and lenders to understand and they kind of see it as more of a liability because they can move around so quickly as well as insurance You know everybody here is the the stereotype and that’s the other thing is the stereotype

There’s a stereotype from movies like Eminem and then from all the the eight mile Eminem movie and then you know all the tornadoes tornado alleys and all that the stereotype so that’s overcoming that obstacle however you flip side from where we are now inflation and affordability crisis they are really looked at as a favorable housing solution in fact you know Dave Ramsey would always say also depreciating asset that’s not the last two years

multiple studies from multiple large organizations including the Urban Land Institute, ULI, has shown that manufactured homes appreciate at a faster rate than stick-built homes. Because demand forms so high and because of COVID the supply is so low, they are pretty fast in regular assets. So, you know, I would say the biggest issues were again education or what there wasn’t and when I started out there was only one bulk there wasn’t any education on it it was very

John Harcar (14:29.262)
Mm.

Major Hillard (14:30.501)
a niche within a niche kind of thing. And then number two, lenders. Lenders were not very caught on to it. It was more regional or community bank orientated. Larger vendors are getting into it now. However, there are still kind of hiccups with park owned homes or what have you. So when I dove in, what I realized is if I can focus in on these pain points in financing with either deferred maintenance, infill and park owned homes, if I can specialize in that niche, I can get really good discounts.

off-market deals as well as close-on deals no one else can and we have such a huge ability to increase the market value that it’s a win-win.

John Harcar (15:11.054)
Do you ever convert them? Because I know like when I’ve done some, you know, we’ve done some deals on some unbubble homes or manufactured homes, know, they’ve been converted to real property or things like that. I mean, do you guys ever do any of that?

Major Hillard (15:23.269)
I’ve done that before. can do it on singles. Like if you’re going to do a parcel and do that, I highly recommend it because once you do that, then anybody can buy it. FHA, VA will finance it. But on the park side, no, because really the value is in the land. Now what makes us a little different too is that from our 12 years of investing this, we’ve realized there’s a couple of real niches and overlooked assets and income streams people are that, especially in our business that really step over. So we’re vertically integrated.

John Harcar (15:32.322)
Right.

John Harcar (15:37.111)
Hmm.

Major Hillard (15:53.175)
So we have an acquisition fund. Then we have our management company that manages all of our portfolio. Our dealership that will sell, purchase the manufactured homes right off the manufacturer’s lot and deliver it, as well as sell it to our tenants. And then finally, our finance company will finance the sale of that to our tenants. So you can turn one property into four streams of direct.

John Harcar (16:10.947)
Hmm.

John Harcar (16:17.09)
for revenue streams,

Major Hillard (16:19.685)
And then it allows us to move more quicker, more efficiently. They tend to tap here to payments lower and then they never want to leave.

John Harcar (16:27.182)
That’s amazing. Yeah, I can definitely see the benefit of that. besides those other cons, mean, are there any other problems, I guess you could say, or struggles that happen with the bigger parks that you’re dealing with?

Major Hillard (16:43.365)
Yeah, it’s really comes down to financing. like unlike, you know other multi commercial real estate, you’re going to need to put 25 to 30 % down. So in like FHA and Fannie and Freddie, you can get a 10 % down on multifamily. We’re going to have to put almost triple down the management. What I see time and time again is a lot of guys that come over from multifamily or residential get into it and without proper training or understanding the asset and especially your

tenants, it’s a totally different animal than when you have DMV involved. We’re really developers without the red tape and you got to treat it as a triple net lease. So essentially it’s a large triple net lease that you’re letting units rent your space of land because really the values in the land, see a lot of people put a lot more value into the homes than there really are.

John Harcar (17:36.749)
Right.

Major Hillard (17:38.073)
But yeah, really it’s just overcoming that hurdle of understanding the market, how to manage it, how to underwrite it correctly, and then get the lender on board. Once you can do a few and you’ve got a good reputation and then it kind of gets in the autopilot, you can really start knocking down good deals.

John Harcar (17:54.233)
So what does your team look like? I know you mentioned your wife. Do you guys have a big team? Do you guys run lean? What do do?

Major Hillard (18:01.029)
Yeah. So that’s the other thing that makes us great. We’re not overindulgent and fat on different people sucking out fees. There’s a lot of people that just suck out fees and I call them deal peps. They just take one deal to another, suck off the fee and then appreciate it. We’re more, way more hands on. So it’s my wife and I, then we have a CFO who was actually our accountant. He’s been working with us for a little over 10 years. So he saw start with only $1,500 to build out to a four over $40 million in transactions just in the past.

six and a half, seven years. So he came across the CFO, then we have our managers that are on site, so each community has a manager that lives on site, our eyes and ears, gives out notices, helps us with contractors, and then lastly we have a regional, so it’s a three tier management tier structure where you have your on site, your regional, and then it gets on up to us in the corporate office.

John Harcar (18:56.449)
Okay, and how many parks you own?

Major Hillard (19:00.069)
So we’ve sold quite a bit. we’re currently down to eight parks, little over, if we don’t sell what we have right now, a little over 800 pads, but to our biggest, we were running a little over 11 parks, 1100 pads, in three different states. And we live in Florida and we purchase in the Carolinas, Florida and Texas. And that’s the beauty of these kind of assets is that you can own them and be an absentee owner and run it like a

without any issue.

John Harcar (19:31.79)
That’s incredible. And I’ve heard a lot about that and I’ve heard a lot, like I said, a lot more chatter about this type of asset class. So what trends do you see going in that mobile home park way? Any new changes or things that you might see as far as regulations or just anything at all?

Major Hillard (19:49.189)
Yeah, so I’m seeing in the southeast it’s become very pro development. There’s a lot more call for developments of these type of assets. The demand is extremely high. In fact, when I started out, I was buying homes when I was flipping them about 10, 12 years ago, I was buying homes for about a thousand dollars, $2,000 each, and then selling his home between 15 to 18,000 on installment. Well, that same home I would buy for a thousand dollars back then now costs around 20, 25 today.

And we’re seeing one between 40 and 50. So the demand is huge. It’s definitely the cats out of the bag after COVID because during COVID and historically, by the way, the return on your investment and the rental retention rates were way higher than any other type of asset. And so because of that, we’ve had a lot of other operators come into the game, institutional buyers come into the game, just because it’s really seen as risk averse.

John Harcar (20:46.798)
Yeah, man. What advice would you give to someone who maybe wants to start, you know, maybe jump the asset class, get in there, you know, get out of the single family?

know, wherever and get into some mobile home parks or mobile homes in the hole.

Major Hillard (21:02.949)
Sure, sure.

So I would advise number one, read whatever you can, but number two, there’s a designation in commercial real estate called CCIM, which is a certified commercial investment member. And they offer courses. Anyone can pay it and to go to, I know it’s going to be a couple hundred dollars, but through that, I went through that, actually won a scholarship through that, through my brokerage at the time. I won some kind of little award and they paid for me to go. was like 700 bucks, but I learned

more in that three day course than I did in my entire 12 years prior investment or all through college just because it really dives into the different assets, how you evaluate them, you your caps, your IRRs, your NOI, it explains all that thorough detail that anyone considering commercial real estate, I highly recommend take that to understand the lingo, what the figures are, how to evaluate what you’re and how

to be more risk adverse versus just diving all in with your cash. It’d be much easier to spend a couple hundred dollars on that to really learn and understand what you’re looking at versus just buying something. And the biggest thing is all brokers, I’ve got lots of brokers that are friends, brokers are mine that are investors and are our own fund, but all brokers’ numbers are not true numbers. They are extremely exaggerated.

John Harcar (22:32.59)
Mmm.

Major Hillard (22:34.095)
tell you from experience we make it look as beautiful and as positive and as possible but they are just they’re not real numbers.

John Harcar (22:42.562)
Yeah. And would you suggest them, you know, someone searching out someone like yourself, you know, maybe an operator that they could, you know, give a little, you know, pride of prided on value and maybe get a little education.

Major Hillard (22:57.477)
Sure, yeah. so the best way, other than learning yourself, is to learn with a mentor. And the best way to do that is through funds. And so someone like us, where we have our fund, and our fund is called MH Estates Capital Partners, which we’ll give out the information here in a little bit. But anyone can come in and invest and see firsthand and walk through an actual deal, how we evaluate, how we buy, how we manage, all while your investment is getting a really good return.

So you’re able to get invested, understand it, and then get a great return. So you’re getting paid for your education. You’re paying yourself for your education. You’re actually making a profit for it. And at the same time, by the end of it, you might see that you really enjoy just the passive income and rather just let it flow. Because there’s a lot of people like myself that started out, had multiple jobs, are working at a really good… It takes a toll on you to learn this stuff, man. It takes a toll. So if you can invest with someone like

John Harcar (23:45.656)
Hmm?

John Harcar (23:54.04)
Sure.

Major Hillard (23:57.511)
us or anyone in the type of asset that you’re looking to invest in and get a guaranteed return, I mean that’s music, that’s how I wish I could learn.

John Harcar (24:06.35)
Yeah, right. I think that’s all everybody wish they could learn. Now, if folks want to get a hold of you, if they want to reach out, talk about your fund, if they want to invest, if they wanted, how do they get in touch? How’s the best way to reach out to you?

Major Hillard (24:19.875)
Yeah, perfect. So, so I’m on LinkedIn and you can look me up Major Hillard, the fourth. I’m on Facebook. I’m on TikTok. We’re doing a lot of social media campaigns right now. Our website is MHS States, like an estate plural image of States capital partners.com. You can reach out there, schedule a time. We’re available, you know, with it, we will go on. can click a link and see what our times are on schedule time for a call or search me on social media.

we’ve got all kind of posts being done every day.

John Harcar (24:52.398)
Yeah, mean the major cut. Thank you for coming on here and sharing that information. That is great. Great great stuff guys. I hope you enjoyed it and I hope you took some notes and and jogs of some things down and if you guys have any interest in getting into mobile homes mobile home parks, I mean hey reach out to major and just you know, see what you could do or or find someone that’s doing it in your area and get that that knowledge major. you again and hope everybody enjoyed it. We’ll see you on the next one. Cheers.

Major Hillard (25:20.42)
job.