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Show Summary
In this conversation, John Kucewicz shares his journey into mobile home park investment, discussing the unique appeal of this asset class, the strategies for acquiring parks, and the challenges faced by owners. He emphasizes the importance of education, community development, and understanding market dynamics, while also addressing the issues of distress in mobile home parks and the need for effective management and tenant relations.
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Investor Fuel Show Transcript:
John Casimir Kucewicz (00:00)
Okay, so the returns that we heard that people who invested in mobile home parks were making was astounding. It was actually somebody from the Northeast who happened to know some family members of my wife’s. And he was chasing mobile home parks and a really fast turnaround in the oil and gas industry out in West Texas, making the range of 40, 50%.annualized ROI and we thought, okay, that sounds pretty good. It’s better than what we’d experienced in the single family fix and flip world. so, we thought about that and we came to realize that you don’t sell the land. You rent the land. In essence, a mobile home park is a parking lot for a mobile home and the beauty of a mobile home for someone, it is truly affordable.
Dylan Silver (02:22)
Hey folks, welcome back to the show. Today’s guest, John Kucewicz is a mobile home park investor who invests in mobile home parks throughout the country. He’s based out of New Braunfels, Texas with his wife, Sharon John. Welcome to the show.John Casimir Kucewicz (02:40)
Thank you so much, Dylan. It was great to be here this morning.Dylan Silver (02:43)
Great to have you on here. Mobile Home Parks. I love talking mobile homes. But before we hop into mobile home parks, I want to ask you how you got started in real estate as a whole. How did you get started?John Casimir Kucewicz (02:56)
Well, interestingly, as a youth, my father was a real estate broker up in the Northeast and I didn’t understand landlord friendly versus unlandlord friendly. My dad encouraged me to get my license at the age of 18, which I did. I didn’t do much with it. And I saw my dad attempted to do a six family house. And that was hard times, but it always stuck in the back of my mind. The real estate really has legs.And by accident, I guess you can say, I bought some land that I thought I would build a house on at one point in time. I flipped it. made a profit, bought another one, flipped it, made a profit. And then some layoffs came in my industry. And I decided, you know, I need to do something in between the time that takes me to get a new job in the oil and gas industry. And we got a plan.
We first heard about real estate through a book called Rich Dad Poor Dad. I’m sure a lot of people know that. And we paid for courses over the course of I think it was two years or more, the equivalent in today’s dollar of over $100,000. So we caught the vision, caught the vision during a layoff reading that Rich Dad Poor Dad book and thought, okay, we’re going to give this a shot. So
Dylan Silver (03:56)
You was talking. Yeah.John Casimir Kucewicz (04:16)
My wife and I decided we’re going to try to do one of each and everything that we were taught. The only thing we didn’t do was international land development. We did go down to Costa Rica to look at land development. Came close, but it wasn’t quite for us. the good news for me is when I got laid off, I came away with $600,000. This is right after the crash in 2008, 2009.So we had some money to fall back on. And we spent a lot of it on learning about real estate and then buying real estate. And then finally figuring out eventually you run out of your own money and you have to learn how to syndicate, right? You have to learn how to syndicate. So I went to class to learn how to legally raise money. And one other important thing here I mentioned to you off air that my wife is my partner.
And I know that when my wife gets excited about something, I’m going to catch on to her train. I am not going to dampen her excitement. And she said, let’s do mobile home parks. And I said, OK, I’m going to catch on to your energy. And we’ve been doing that since 2013.
Dylan Silver (06:18)
Mobile home parks, so different asset class, right? Because especially as a realtor myself, mobile home parks aren’t always considered real estate, even though when we think about a place that you live, they are definitely a segment of housing, but they need to be affixed to the ground on foundation. So there’s reasons why, you know, they’re a different segment in many cases. What was the…draw what was the excitement that really captured you and your wife.
John Casimir Kucewicz (06:51)
Okay, so the returns that we heard that people who invested in mobile home parks were making was astounding. It was actually somebody from the Northeast who happened to know some family members of my wife’s. And he was chasing mobile home parks and a really fast turnaround in the oil and gas industry out in West Texas, making the range of 40, 50%.annualized ROI and we thought, okay, that sounds pretty good. It’s better than what we’d experienced in the single family fix and flip world. so, we thought about that and we came to realize that you don’t sell the land. You rent the land. In essence, a mobile home park is a parking lot for a mobile home and the beauty of a mobile home for someone, it is truly affordable.
real estate. We talk about affordability. We talk about the unattainability for first time homes for home buyers. It’s truly affordable. And my wife and I, amazingly enough, we have sold mobile homes for as little as $1. That’s a whole nother conversation. We can go into it, but a typical mobile home, a really beautiful one, that’s got granite countertops, all of that, a single wide, nice single wide, $80,000, $90,000.
And people can afford that even if they’re two wage earners that are just making a little bit more than minimum wage. So we feel really good about providing truly affordable housing. I grew up in a house. It was a cold water flat. We heated the house in a coal stove and I had to, my job as a kid was to empty the coal ashes out into the yard. It was a mess. My dad taught me how to use tools. So if, if you can think about
me learning how to use tools and rewire the house. started rehabbing at the age of seven with my dad. So even though eventually I went into the oil and gas industry as a geologist. So we like that. It feels good to be the landowner. It feels good to provide really good quality housing that’s affordable to a segment of the population has a really hard time finding a fixed home on the ground. And they can use that as a step up.
Dylan Silver (08:47)
Ciao!Yeah.
John Casimir Kucewicz (09:11)
to ⁓ regular stick-built home.Dylan Silver (09:14)
And you know, this alternative housing segment is sorely needed because even in places like Texas where the home prices are not as much as the East Coast where I’m at right now and where you grew up, it’s still not super easy to get into a home, especially you know post 2007, 2008 crash and change in regulations. So there’s still a huge swath of the population, especially younger population.who are what I would call, know, renters by necessity. So it’s not like their goal is to be renting and they may have a nice place, but they feel in many ways locked out of home ownership. But in having a mobile home, that is kind of that on ramp. You’re beginning to see, you know, an end path there or an end goal there. I wanna pivot a bit here, John, and ask you about acquisition.
in the mobile home park space. we were talking before hopping on the show here. It’s not like they’re building new mobile home parks all over the place. Although I know you’re actually in the process of building one. How are most folks and how are you and your wife acquiring these mobile home parks?
John Casimir Kucewicz (11:07)
Our first one came from a Loopnet ad. We had attempted to reach out to brokers who specialize in mobile home parks, didn’t hear from any of them, finally went to Loopnet where there’s a saying that Loopnet is a place where deals go to die. And we did buy our first one and we built a relationship with the broker. It was a small park, it had 24 lots in it.And that broker, after they knew we could close, brought us another one and then a third one and then a fourth one and also introduced us to this project that’s a to be built mobile home park. So you build these relationships with the brokers and then once they know that you can close, they put you on their A list and you get references, get emails, you get listings from them. Once they know
you know your business. Somebody starting out that would need somebody like my wife and I to be able to be ⁓ either key principals with them or sponsors because they know we have the experience to get it done.
Dylan Silver (12:15)
Now, when we talk about people who are selling mobile home parks, such a cash flow heavy asset, I imagine there’s tons of interest in those mobile home parks. What would cause a mobile home park to sit for so long if the cash flow is so heavy?John Casimir Kucewicz (12:32)
They get old. Now, I don’t know if you know how old I am or if I told you, but I go back several years. I’m at an age now where I don’t have to do this if I don’t want to. I’m at an age where I’ve had to be taking my required minimum distributions from my IRA for several years now, but people get tired. And mom and pops who…have lived in the park for years and they hear the hard luck stories from the tenants who can’t pay their rent or don’t want to pay their rent. They get worn out and they get behind and they don’t say you either pay or you can’t stay. So my wife and I started out being kind of softy, soft hearted. My wife is a, she’s a retired RN, although she still keeps her RN and we want to fix people. We want to help people.
So these older people who maybe had mobile home parks for 40 years and don’t keep the revenue up, they don’t raise their rents to market rent, they’re starting to get really tired and really worn out. And it’s those individuals who we find are the best individuals to work with to negotiate and buy their park. And of course the brokers are good at this too. They understand the difficulties that mom and pops have.
Sometimes there are people who own parks, they’re out of state and they haven’t done a good job keeping them up. They’ve let the houses fall apart. And we have to bring in a lot of capital in order to fix roads, to take out problem trees, to rehab the homes. So it does take a big push in the beginning to have a good capital stack to do the upgrades that are needed to bring the park up to, yeah.
Dylan Silver (14:07)
Right.Sure sure
Do you have any
guidance for folks who are looking at mobile home parks as far as raising the capital. We talked about syndication and how you really educated yourself on the syndication process. But you know when you’re comparing mobile home parks to self storage to multi family to single family mobile home mobile home is different right. So I’m imagining you know when you’re broaching the subject of investing in mobile home parks.
It’s a different conversation.
John Casimir Kucewicz (15:32)
It is. And initially, my wife and I developed our own spreadsheet in order to determine whether the metrics would work for a mobile home park. a of different parts to that. Even comparing to an apartment building, have differences because you sometimes own the homes rather than just simply renting them. So the advice that I would give is you connect with somebody who’s already done it, right?and you find somebody who’s got a track record of being successful to their investors, you learn about syndication because there are things you can say, there are things you cannot say. It depends on your audience. And if you say the wrong thing, you can end up in a lot of trouble, potentially go to jail. You don’t want to have that to happen. So you need to find out what are all the pieces.
that make a mobile home park deal work. And personally, my wife and I teach now, we’re part of a group of about 4,000 people. We teach mobile home parks, other people within the network that we belong to teach other asset classes in commercial real estate. We personally work with the individuals who join that group on a two, three, four times a week with calls specifically to train them, bring them along.
teach them what they need to look for, and then potentially partner up with us, or we partner up with them to help them acquire their first mobile home park. Now, we also learn from other individuals who own over 5,000 mobile home lots around the country. We still can learn, you know, we still can learn. So we go to networking events, we find out who’s doing what, what’s the secret sauce to their
Dylan Silver (17:08)
Yeah, that’ll do it.John Casimir Kucewicz (17:18)
their success. That’s really important. Education is absolutely key even after you’ve been doing something for a while. Always keep learning.Dylan Silver (17:32)
It’s huge. It’s huge. mean, if you’reif you’re not learning, eventually something’s going to going to catch up with you. I think there’s a in the greater real estate landscape as a whole. We’re starting to see that if you’re not on the ⁓ A.I. it’s going to catch up with you, even if you don’t like it. You know, I there’s a lot of people right now that are saying, well, I just want to talk to a human. Right. But I’ll tell you, some of the A.I. is is human like. I do want to pivot, though, here, John, and ask you
about what the hangups or obstacles are in mobile home park ownership. What things should people avoid? How can you run a mobile home park more efficiently and effectively?
John Casimir Kucewicz (18:13)
Okay, so pitfalls potentially are if you have a septic system for your park, a drain field, or you own the water supply, there are special requirements and expertise that you need to know what it takes to run those systems that are going to be licensed and regulated. We started out with our first two or three parks that had septic systems, pump systems,water systems, and it’s complicated. initially thought, no problem, because I have a degree in hydrogeology, I can understand the mineral chemistry of the water. But there’s always things that unless you work with somebody who’s done that before, stay away from them. If you’re going to be a first time mobile home park dealer, don’t get a park that’s got a lagoon. You might take a park that has what’s called a sewage treatment plant or package plant that’s with it. But
I would not recommend that for a first time mobile home park buyer. You’re going to find individuals also who are going to resist or not like rent raises, right? And it’s a people project. You have to know how to work with people and you need to be good to them, right? If you’re going to raise the rent, make sure you provide something for them. One park that we bought a year ago, October, we just put in a brand new playground.
The kids had no place to play. were, you know, riding around on their bikes and things in the street. That’s not particularly safe. So you also want to improve the neighborhood. All So you have to have the capital to do that. Landlord friendly states. We talked about that. What are the landlord tenant laws? Make sure you know what they are. And there are a lot of costs associated when you own a park. Typically you’re going to own all of the water lines.
all the sewer lines, you may have a pump station that pumps the sewers back up into the city sewer. You got to understand that type of mechanical issue or hire somebody. And if you’re going to own a park out of the state and you’re not around there, you need to make sure you have a team on the ground that you can trust your park manager, your maintenance team and be prepared.
Dylan Silver (20:33)
Yeah. Yeah.John Casimir Kucewicz (20:37)
to change them because sometimes they’ll be great for a long period of time and sometimes they’ll begin to let you down and you have to be prepared to have backup. So I think the hardest job for a mobile home park owner, if you’re the asset manager. Now it turns out that my wife and I did it all. We were the asset manager, we’re the syndicator, but now in…our process, we’re starting to have other individuals who’d like to take on those roles, making it a little bit easier for us so that we can travel four or five times a year on cruise ships. So I don’t mind saying that when you do it right, when you do real estate right, you get to have a lot of time with your family, your loved ones, your friends. But those are some of the key things that I would mention for somebody just getting in.
to the mobile home park business.
Dylan Silver (21:33)
They aren’t making any more mobile home parks. There’s not too many going up. What is the reason for that?John Casimir Kucewicz (21:41)
Well, because you own the land and it’s not like real estate, your taxes are much lower, right? We pay taxes on the land, but not on the mobile homes. The mobile homes are considered automobiles, if you will. And so if you think about what does it cost to register your car or pay taxes on a vehicle,on a yearly basis, it’s lower. those municipalities make far less income. And if you have a mobile home that has, let’s say an average of two kids per home, right, and they go to the schools, and school taxes are relatively low in terms of collections from the park, they don’t like that so much. And then there’s a bad rap about trailer parks. And the problem with that is some
Park owners have let their parks go. They let the roads go They haven’t encouraged their residents to keep their homes in good shape, you painted Their driveways taken care of and and so the the trailer park Mindset, you know drug dealers and problem people You avoid that and in our business by doing a very good background check
on the individuals and you become highly selective on who you let into that park. We do what’s called transforming the culture of the people who live in the park. And that’s a process. It might take two to three years before you’ve done that, where people have pride of ownership. And when you look down that road, it’s a beautiful road, the trailers are all painted, they’re new, they’re taken care of. One of our parks, we actually have people who have Teslas.
in, you know, and probably they can afford their Teslas and their charging stations because it doesn’t cost them that much to live in a in a mobile home, own their home and pay the ground rent.
Dylan Silver (23:43)
Hey,we were talking about it earlier. It’s you know critical that people have alternative housing and you know an on-ramp into home ownership and mobile homes is one of the ways that they can do that. Tesla’s is interesting in the mobile home park. I wanna ask you specifically about this idea of the distress and you know dilapidated mobile home parks.
When we think of investment properties, right? uh typically when things become distressed, there are more offers, there’s more interest. And we’re seeing that in the mobile home park space. But it did for, it seems like decades have this reputation of distress, of not necessarily the most desirable places to live.
How were the investors themselves, the mobile home park investors, letting these properties become so distressed? Was it, it was handed down to them from the family? Was it, they got in as maybe a smaller mobile home park and then it expanded and then it became maybe unmanageable? Why was there so much distress in this space?
John Casimir Kucewicz (24:59)
Most of the time is because the park owners did not keep pace with rent raises. That’s the key. That’s where oftentimes the rents we see are 100 % well, 50 % below market value. We have parks where the rents are in the $250 a month range. Well, really the market allows them to be in the $400 a month range or $500 a month range here where I live.And then the Romfels area, it’s a $600 a month range if you can find the space to put your mobile home. Now, when a home becomes so dilapidated, let’s say it’s even a pre-HUD, Housing and Urban Development model, sometimes you have to demolish them, have them taken down, right? And then you look for replacement. And what my wife and I have done, we’ve gotten dealer licenses so we can deal directly with manufacturers and bring in
a brand new home as long as the market allows for the sale, affordability again, of a brand new home to an end buyer. And an end buyer wants to buy a brand new home if they see that that park is improving, that the roads are in good shape, the lawns are trimmed, trees are taken care of so they’re not going to fall down and crush somebody’s car or the roof on their mobile home.
So it does take capital. And if somebody has been a mom and pop and they haven’t kept up with maintenance, right, then it’s a problem. So you’ve got to keep on managing the expenses, right? Forecasting them properly. Proformers are key. So many of your listeners, I’m sure, know what a proforma is. You have to stress test your proforma.
for higher interest rates, because most of the time you’re going to have a five-year balloon note with your commercial real estate. So you have to forecast it. What if the interest rate doubled? Right? Can you still give your investor a return? What if it goes down pretty quickly? Can you do a refinance and cash out, which we have done and got the majority of our investors’ money back to them even before we sold the park? And they love that.
Dylan Silver (26:58)
That’s right.John Casimir Kucewicz (27:21)
because the remaining capital in that deal gives them incredible returns, 60 % annualized in their remaining money oftentimes. Now, is it harder to find these kind of deals these days? Yes, it takes a lot more work.Dylan Silver (27:31)
Yeah.I’ve heard a little bit about this. These days it is more challenging, but I’ve also heard that six years ago or longer ago that people were projecting five-year returns and getting two-year returns. And as an investor, you love to hear that. But it’s a different space right now and not just in mobile home parks, in practically every segment of real estate. So the good syndicators, the good operators,
are really savvy because they’ve had to navigate arm rate loans that have gone up and markets that have been challenging where it’s tougher to be a seller right now in many cases. are coming up on time here though, John. Where can folks go if maybe they’re interested in investing in mobile home parks? How can they reach out to you and your team? How can our audience get a hold of you?
John Casimir Kucewicz (28:34)
Okay, so the easiest way is through my email address, which is john j o h n at panorama fund.com. that’s P a n o r a m a f u n d.com [email protected]. And then I’m also part of a group that’s called massive masters. 4000 people or more.We belong to a group of REIAs that are the largest in Texas. I’d be happy to share that with individuals. If you want to take individual training, there’s a way we can do that. But I’d be happy to speak to people and make time for you. We do have one website. Amazingly enough, Dylan, we have been able to be successful without even having a functional website up until about a year ago. And that website is TR.
MHC.com I believe. I don’t even look at it. My wife got it set up. But you can try that. I’m going to try that actually after we get off the call.
Dylan Silver (29:44)
John, it was great to meet you and thank you so much for coming on the show today.John Casimir Kucewicz (29:49)
My absolute pleasure. You have a great day and hopefully we’ll be talking again soon.
