Mobile Home Lease-to-Own Fund Explained | Monthly Payouts

K. Barth Williams (00:00)

And so what they also did was they started their own lease to own program. And the success of their program is what really the fund is built around. And so just to describe that a little bit, if I may, what they’ll do is, and the great thing is about 40 % of their lease to own clients are people like them. They’re hardworking people that have landscape companies. They have construction companies.

They mow lawns, but they work hard every day. but they may not have earned enough money or they have a lot of write-offs or they just can’t show the income like the bank needs to get approved, but they have cashflow. They have a successful business. And so that was a niche that they found that they could help people with.

Skyler (02:08)

everyone, welcome to the Investor Fuel podcast. I am your host today, Skyler Byrd. And today I am joined by K. Barth Williams. He is in the finance world and we are going to be talking about the fund that he has put together with Mobile Home. So this is absolutely a first for me. I’m really interested in this. So K. Barth, thank you very much for joining the podcast today.

K. Barth Williams (02:28)

Well, thank you, Skyler. It’s great to be here today. I look forward to our conversation.

Skyler (02:32)

Absolutely, me too. So let’s kind of get started like this. Can you give everybody listening out there just a little background on your world, ⁓ kind of where you came from, how you found your way into mobile homes and creating the fund?

K. Barth Williams (02:45)

Oh, excellent. Thanks. I have 35, 30 years, 30, 35 years in the finance industry. Insurance, I have spent, cut my teeth in the business, uh, started off in insurance, life insurance, got into estate planning, and then got into financial planning as well. And so that’s the majority of my background. Also been involved in, uh, two other fund companies. Uh, one of the fund companies that helped build up to about $50 million of assets.

That was back in the life settlement days back 20, 30 years ago. I was in the life settlement game and we were buying life insurance policies and built a great fund around that with great returns. and the kind of stumbled upon this opportunity. Honestly, I went to an insurance conference and ended up meeting my current partners now at insurance conference and he was there, offering himself as an alternative investment.

And that’s really how the conversation started.

Skyler (03:39)

Okay, excellent. So tell us a little bit about it. How is this structured? Exactly what is the fond? How does it work?

K. Barth Williams (03:45)

Excellent appreciate that. So really what it starts off with is a great story and It was the really it was a story about the brothers that I fell in love with so if you don’t mind I’d love to share that story with you and your viewers It’s Chris and Matt Laveau and these two young men were math teachers in inner-city Houston and we’re dating back to 2009 I believe

about 17 years ago. Actually, that’s a little more than 15, 17 years ago. And they were teaching and not earning enough money. And so they decided to start a construction business, Laveau Brothers Construction on the side. And so in doing so, they got into doing remodels and things like that and stumbled upon some mobile homes that someone had purchased and asked them to remodel them for them. So they remodeled these mobile homes.

refurbished them, gave them to the flipper basically, the guy was a flipper, and so he flipped them and made a bunch of money. Well, the opportunity came for them to actually haul about 10 or 12 mobile homes out of a park that someone needed them moved. I can’t remember if it a city or they were condemned, but they took these mobile homes and spent the summer refurbishing them. And in doing so,

He offered them to sell and someone came and bought, the whole lot of them. They’re like, this is crazy. they knew nothing about this business. And so as time went on, they realized that they could actually flip mobile homes themselves. And so, the great part of story is they are now teaching, working on the weekends, working at night, working during the summers to really refurbish and flip mobile homes. so.

This business is really founded on that hardworking element of the American story, right? Just two teachers trying to make life better for their family. After several years of working summers, weekends at nights, they finally had a year where they were now refurbishing them and flipping them as well. And so they finally had a year where they made $500,000 and they said, I think we could do this full time.

So that’s really the part of the story that I just love is how they kind of just got introduced to this business and kind of ran with it kind of the same way for me as well. I got introduced to the business. Now we’re going to.

Skyler (06:50)

Okay, excellent. So you got introduced to them and I believe that wasn’t too long ago, correct?

K. Barth Williams (06:56)

Yes, that was October of 2024.

Skyler (06:58)

Okay, all right, so tell me about the fund, exactly, how does it work, how did you come to be involved, tell me about that.

K. Barth Williams (07:06)

Okay, so I met one of the brothers at an insurance conference and we just started talking, started sharing and kind of a romanticize our meeting was we were walking on the Santa Monica pier. There was a event that day at the conference. So we got away from the conference and we just started talking and he started telling me about his business and the story that I shared. And in 2020 is when they actually finally decided to open up their first dealership. And so from 2020 to 2020,

five now. They opened up their third dealership earlier this year and now in the next two months, next two weeks, they’ll have their fourth one opened up in eastern Texas. they’re really moving. But the other part of the story that they’ve been able to develop is they have their own service companies. So they’re actually six other companies, seven other companies that support the dealerships. so

From 2020 to 2024, they did 18 million business, $18 million of business at the end of 2024 between the dealerships and the services. So it’s been a great uphill climb. And so when hearing the story, it’s a success story, it’s an American built story from the foundations, but it’s not about the money. That’s the great thing about it, Skyler, is it’s about affordable housing. And so…

I knew nothing about the mobile home business at all other than where I used to live and you drive by, you know, broken down mobile home parks, dilapidated homes, you know, that was my idea of a mobile home or now a manufactured home as they call them. But in Texas and in the South, it’s huge business. October of last year alone, over 1,800 mobile homes were delivered.

So it’s a massive business here. There are acres and acres of empty land that have been set aside for people to build their home and buy an acre or two acres, whatever. So it’s a massive market and it really addresses affordable housing in the U.S. which has become an increasing problem. I ⁓ just moved, but I’d lived in Idaho for 30 years. in those, those 30 years, I watched the population quadruple and I watched a

brand new home, entry level home, three and a half times more than what it costs when I first moved there. And we see that all over the country, right? And so affordable housing is a huge problem and they are at least doing their part to solve it. Now the other issue is people getting approved. Now technically 54 % of all people that apply for a mobile home loan get turned down.

Skyler (09:19)

Absolutely.

Yep.

K. Barth Williams (10:12)

And so that really interests me as well as what do you do about that?

And so what they also did was they started their own lease to own program. And if that lease to own program, the success of their program is what really the fund is built around. And so just to describe that a little bit, if I may, what they’ll do is, and the great thing is about 40 % of their lease to own clients are people like them. They’re hardworking people that have landscape companies. They have construction companies.

They mow lawns, but they work hard every day. but they may not have earned enough money or they have a lot of write-offs or they just can’t show the income like the bank needs to get approved, but they have cashflow. They have a successful business. And so that was a niche that they found that they could help people with.

⁓ and so with that niche, these people will come in and put 25 to 30 % down. And I think that’s one of the keys is there’s a large sum put down to make the purchase. Number one.

Skyler (10:56)

and rest.

K. Barth Williams (11:06)

Number two is then the payment is still less than local rent cost, which I think is key. So if they’re saving $800, $500 a month, what they would pay to rent an apartment or rent a house, that’s a big key to affordable housing. Number three then is a reasonable term. So for four to seven years. If they actually do get banked,

Skyler (11:22)

Absolutely.

K. Barth Williams (11:29)

financing, the bank wants to finance that mobile home for 20 to 22 years, 25 years. We’re going to finance at least the own home for four to seven years, 84 months. So they can go into a home, have a reasonable payment and be homeowners, have all the equity and have it paid off in seven years. And so I believe it is that part of the program that secures them to make those payments, to stay committed to the loan. And that’s why

After 8 million loans that they have executed, they’ve had less than a 2 % default rate.

Skyler (12:02)

That’s incredible.

It really is. And I love it. I love that you give them terms that are closer to that of maybe a car loan than a home loan. That’s awesome. That’s great. Yeah.

K. Barth Williams (12:09)

Yes.

Well, we all have purchased a car, right? These

days and in purchasing a car, at least for me, there’s always a countdown in your head, right? You know, because you can count down months, right? 48 months, 60 months. Those numbers feel tangible. They feel real now, but we’ve never had that in buying a home. And so in buying a home, you can really see the light at the end of the tunnel. And so it becomes really a partnership between

Skyler (12:23)

Absolutely.

K. Barth Williams (12:39)

dealership or now the fund and that lease to own person where we’re here to serve you and you’re here to be a homeowner in a short period of time and make a difference for your family and so that’s really what’s exciting about this business and this fund.

Skyler (12:53)

It’s awesome. I love it. It’s like you said, it’s addressing a huge issue in the country right now with affordable housing. And let me ask you, like as far as the fund is concerned, what are some of the benefits of investing in the fund? Like why would I do that as opposed to going out and try to invest directly in a mobile home investment or something like that?

K. Barth Williams (13:13)

Excellent question. And here’s the thing. There’s tons of things these days that anybody can invest in, right? I mean, now we have Bitcoin, real estate’s always been a big thing. You know, you can buy notes, whether it’s tax notes or anything. So there’s all kinds of options. So I’m not going to say that we are the best option out there for everyone. And we’re not looking for everyone to invest with us. I think our ideal investor is someone who

probably has some real estate background, but maybe not, but they understand the housing crisis. They understand monthly cashflow, right? And they understand the fact that when someone has 25, 30 % down personally, that we’ve really secured that loan. We’ve secured that note. so to me, that’s what makes this different. But to kind of give you some of the features of the fund that… ⁓

Skyler (14:41)

Yeah, please.

K. Barth Williams (14:43)

And to make it simple, all I really did in building the fund was I just built some features around an already existing successful program. $8 million in four years. It’s a lot of notes. And they’ve done a very good job of creating that portfolio. So all I did was just create a fund that then enhanced it. So some of the main features of our fund now, the greater affordability fund that we’ve built, because they’re all greater taxes, right? ⁓

we’re a greater tax facility, we greater fund. Number one is, is it’s a monthly cashflow. So we’re gonna pay monthly cashflow as we like to say mailbox money, right? I think that’s one thing where it’s key. A lot of real estate investments you have to hold. You’re waiting, you’re waiting three years, you’re waiting four years, sometimes you’re waiting five years, because they have to build the building, right? Here with the three or four dealerships that we have, we can…

Skyler (15:28)

Mm-hmm.

K. Barth Williams (15:32)

create anywhere from five and 12 of these lease to owns every month at about an average of a $75,000. So we can do three quarters of a million to a million dollars a month or just lease to own notes.

One of the features I like is the fact, yes, monthly cash flow. The second thing is this, is I think the biggest thing to investors is how do I get my money returned to me? I mean, I think that’s, they say that that’s as important, right? Is the return on your money, right? Is the return of your money. And so what I designed about the fund was since it’s cash flow, I don’t want to hold your money. You know, yes, Skylar, I went to an Ivy league school, but I didn’t finish. I’m an Ivy league dropout, right?

Skyler (15:56)

Absolutely. Yeah.

K. Barth Williams (16:11)

And I’m not one of the famous Ivy League dropouts either, but you know that had been my goal was to work in Wall Street and be a financier and things like that, but it didn’t work out and I’m kind of glad that it didn’t. But I did not want to manage people’s money. Okay, I wanted to manage the fund, but I didn’t want to have to manage and hold on to money for years and years and years. And so what I designed was we will return capital annually somewhere between 15 and 18 % of their capital every year.

Skyler (16:39)

Now that’s pretty impressive and you also get depreciation, is that right? Yeah.

K. Barth Williams (16:43)

Correct. Good point. Yes.

So, so yes, so now we have monthly cashflow, we have capital return, and because the fund owns the lease and owns the property. So technically the way we’ve worked it out is when someone comes to the dealership to buy their brand new home for them, their affordable house, the fund will buy that home and then execute the lease with the purchaser. So now the fund owns the home. We own all the title. We own all the property. That’s

involved and so we own those assets. Because we own those assets, we now can pass that depreciation on to the investor. Now, whether they qualify for bonus depreciation or whether they don’t, talk to your tax consultant, right? That’s what I’m supposed to say. But I will say this, I built it specifically for depreciation because I knew that was important with past clients I’d worked with. In many cases, that was the tax.

Skyler (17:25)

There you go.

K. Barth Williams (17:35)

and synapse is what makes a difference for them. So we added that as well.

Skyler (17:39)

Yeah. No, I love these type of funds. It’s a great way to actually get invested in real estate, get a lot of the benefits without having to put up with all the hassle that can come with it, especially for somebody that’s newer to it. So yeah, I love it. And let me ask you, so right now you’re in greater Texas or in Texas, do you?

K. Barth Williams (17:53)

Yeah.

Skyler (17:59)

Are you ⁓ expanding outward to any other states at this point or is it just going to be Texas for the time being?

K. Barth Williams (18:05)

Oh, good question. Let me, let me answer that question with one. I forgot one other feature here of the fund, which I also think is important. I can’t believe I forgot it. So, uh, with the fund, we’re also offering a 10 % preferred return each year. Okay. But the key that I think makes it different is this is let’s say an investor puts in a hundred thousand dollars. The fund is a five and a half year fund. So every year, every month they’re getting cashflow.

Skyler (18:19)

You okay?

K. Barth Williams (18:32)

Every year they’re getting capital return and every year they’re getting 10 % on their original $100,000. Here’s the kicker though. Year one, two, three, four, five, you invested 100,000, you get 10 % on your 100,000. But even though every year you’re getting your capital returned to you at 15 to 18%, so we’re decreasing the amount of capital you have at risk, but at the same time you’re still earning that

10 % on your original investment. So what really happens is by the time we get to year four, by the time we get to year three, your return is higher than 10%. Your return goes to 12%, goes to 27%. Eventually ends up at 55 % return because you have $9,000 invested and you receive $10,000 of interest.

Skyler (19:21)

That is my favorite feature right there. I love that part. Yeah, I was hoping you were going to be bringing it up from our conversation earlier and I’m glad that you did.

K. Barth Williams (19:24)

Yes.

Yes, I love that part too. And the reason I love that part is because it shows consistency. It answers that big question of the return of my money. And it now makes us a very competitive fund with the returns. Right? And it’s not flashy. It’s not smoking mirrors. It’s just basic monthly cash flow that now we’re just paying out.

Skyler (19:43)

Yep, absolutely.

K. Barth Williams (19:52)

And when I realized that it worked that way, that the model could work that way, it was very exciting because investors always want to ask about risk, right? So let’s go back and answer your other question. So the brothers for greater Texas are always about expanding. And what’s interesting is that most of the mobile home sales in Texas are new mobile homes. The affordable

Skyler (20:00)

Absolutely.

K. Barth Williams (20:12)

or the used market is actually just a growing market. And they have really created a foothold in Texas. And so even though we’re currently in four cities, actually I should call them our co-sponsor, we’re in four cities. The goal is about, there’s about a place for 10 to 12 dealerships throughout Texas. And then for the South, we’re looking at probably another eight that would go from

here through Louisiana, Mississippi, and Alabama. And so the goal would be about 20 of them over the next five to eight years.

Skyler (20:46)

Awesome. All right, so you’ve got some good plans for expansion here coming up. And that’s always like hearing that. And yeah.

K. Barth Williams (20:53)

Yeah, I

think that our fund could get to be about a hundred million dollar fund and where, you know, if we have 20 dealerships producing a million dollars of LTO business or a million and half of LTO business per month, yeah, there’s that need for those, that type of capital.

Skyler (21:11)

Absolutely. And again, I love that it’s helping with affordable housing. Again, I think it’s something that definitely needs to be focused on right now. And it’s a great way for the right people to start investing in real estate and not have to worry about the headaches that can potentially come with it. So I’m all about it. yeah, Barth, as we kind of come up on time here, before we go, can you?

tell anybody if we have some accredited investors out there that are interested in your fund, how can they get a hold of you?

K. Barth Williams (21:39)

You know what? I like to things simple. Okay? I like to keep things simple. Our website is www.grateraf.com. Okay? But my phone number is (208)860-5956. Send me a text. That part I love. And then my email is barth@greateraf.com. And so keep it simple.

We’re not about flash, you know, we’re not about trying to throw the big party and wine and dining investors with lobster and champagne. That’s not what it’s about. It’s not who the brothers are, right? They’re just hardworking Texans. And we just want to help them help the investor, their money work hard and their money get returned to them. And they earn a very good interest rate at it that well. we solve.

at least our portion of this corner of America affordable health.

Skyler (22:31)

Excellent. Love it.

All right. And Barth, again, thank you very much for joining here. I know I got a lot out of this. And of course, for all of our listeners, if you took something of value away from this conversation today, go ahead, hit that Subscribe button. We’ve got more conversations like this coming down the pipe all the time. And we will see you all on the next episode.