Garret (00:03.527)

Good afternoonA another guest in our studio, Sean Hart, how are you? I'm doing very well. So the topic today is mobile home investment. Sean reached out to me, audience, just because this is quite a unique space. Obviously this is a real estate investing podcast, but.

Shawn Hart (00:13.399)

Good, how you doing?

Garret (00:28.123)

Why don't we back up, Sean, and why don't you tell the audience a little bit about your background and how you came into the space?

Shawn Hart (00:35.102)

Yeah, so I actually started, so at 17 I got hit by a drunk driver, which pretty much ended sports for me, got in a lot of trouble. Went into some dark places for about five years and finally decided one day it just kind of clicked and realized I needed to get my stuff together. Actually moved from Florida back up to New York and I was working 96 hours a week and at a gas station.

After that I went to some more blue collar jobs loading and unloading trailers and I just kept thinking like there has to be a better way. There has to be an easier way than to just constantly break your back for the next dollar and I found that in real estate and I actually started out as a long term investor so I bought rental properties and we house hacked and that's how we bought our first three properties until the cash flow started building up and we were able to purchase them and we ended up buying.

29 units enough for me to be able to retire from the trucking industry. I ended up getting my CDO in there. And two years, about a year later, I ended up getting my real estate license. And my goal now is to help people just like myself, you know, especially people that are blue collar, just trying to really save for that retirement and build that retirement and learn to invest differently than just their 401k to be able to have the same opportunity that I've had and show them the way.

Garret (02:01.807)

Okay, you kind of snapped your fingers. I feel like I went through Back to the Future and or the Matrix and missed an entire segment there. Tell me a little bit more about how you went from zero to 29 units there. I mean, yeah, enlighten us a little bit.

Shawn Hart (02:28.448)

Oh, I don't know what happened there. So yeah, I started out, we bought, my wife wanted a house and I, you know, I didn't want a mortgage. And so we, you know, I kind of started doing some research and I found duplexes. And that was kind of the thing was, you know, it was like, hey, we could move into this. And at the time I found out we don't need 20 to 25% down. We only need three and a half percent down. So.

You know, my wife kind of fought me on it and her mom was like, that's a fantastic idea. You know, of course mom knows best. So then all of a sudden it was a great idea. So that's what we ultimately ended up doing. Moved into one side. We had a tenant on the other side. They paid our mortgage and then we had a little bit leftover. I ended up getting my CDL, you know, making a little bit more money. So we were able to save up. We did the same thing for the second house. So we ended up doing 5% down on a conventional loan, moved into it, rented out the unit we were in.

So we did that three times. And then after that, we had enough cashflow coming in every month that we were able to save that up. And then we took it and bought fixer upper properties instead of just turnkey properties and started doing more of the construction, more of the rehabbing, have that equity built into the property and then ran them out for maximum cashflow.

Garret (03:52.995)

Okay, so you moved from, like how often were you moving in this or did you stay in, sorry, I might've missed that. Did you stay in one or?

Shawn Hart (04:02.18)

Yeah, so we stayed in the first one for a year, the second one for a year, and the third one for about six months before we bought our own house.

Garret (04:08.963)

Okay, right, okay. Yeah, I love house hacking. I haven't, I have some relatives that have done it. I've got a guest coming on in a couple of weeks that is almost an expert in it. So you're doing this house hacking and then was that catalyst kind of to be able to the real estate portfolio? Like we do see this, but I kind of want you to dissect that a little bit.

Shawn Hart (04:32.728)

Yeah, so that was the catalyst that got us moving into being able to purchase more properties without having to move into them. We were able to go from having to move into these where the cash flow builds up and you start buying more properties and you start getting more of a monthly return, you're able to basically become self-funding where the cash flow coming in is enough every month to start building up.

so that every couple months I can buy a house without using my money, it's the rental income money.

Garret (05:08.411)

Right. And then you said you got your Realtors license. Where in this journey at what point did you decide to do that?

Shawn Hart (05:14.192)

So that was actually last year, I went and got my real estate license. We ended up moving out of New York almost four years ago, came down to Georgia and that's where we're at now. And then last year it was just one of those things where I realized I could help a lot of people, a lot of people in the same place that I was in and I really wanted to do that and I knew having that real estate license was kinda gonna give me a little bit more access to be able to help people.

versus just being a traditional investor.

Garret (05:45.455)

Okay, so 29 units and the majority of the portfolio you said are duplexes or there's a little bit of a mix now.

Shawn Hart (05:54.488)

Yep. So we've got single family duplexes and triplexes.

Garret (05:57.859)

Okay, so speak to me about mobile homes. I mean, you reached out, I don't invest in them. I mean, up here in Winnipeg, Canada, obviously we have different options there, but what made you even look at that asset class?

Shawn Hart (06:13.84)

So when we moved to Georgia, we realized, compared to upstate New York, the housing prices are astronomical. In upstate New York, you can buy a turnkey house, stick built for $125,000. Coming down here, it's so much different. It's 300, 400, 500,000, just for like your standard house. And it was one of those things where it was like, there's not really anything, any affordable housing left.

for people that the average American can only afford about $225,000, $250,000 house. And yet you've got all these houses in the $400,000, $500,000 range. Where's the divide? Where do you find the opportunity to provide affordable housing? That's how we found the mobile homes, the manufactured homes.

Garret (07:06.211)

Okay, so manufactured homes, maybe explain that just again, for the audience, what are we talking about here?

Shawn Hart (07:14.78)

So your manufactured homes are built in a factory. In the case of a double-wide, it comes in two pieces. They bring it out, you buy land, you clear the land, you get a nice space for it, you grade it, and then they come out and they actually set it on footers, concrete. They build up concrete footers for it so that it can sit level, and they come out and they level it, and then it's what you call marry it together, so that way it's an actual home, and it sits on that land.

and you have the option to either leave it separate from the land and have like a DMV, like a tag, or you can marry it to the land and retire the title and then it becomes part of the land as well, the improvement of the land.

Garret (07:58.099)

I see. So it's either a vehicle like a mobile home, if you will, that's on the land and it's a designation. And then if you want, it can sort of say, okay, it's no longer a vehicle. It's a house. That's an asset. Part of the land is now being what sold together.

Shawn Hart (08:02.908)

Mm-hmm.

Shawn Hart (08:15.896)

Yes. So as long as it has a permanent foundation.

Garret (08:19.267)

Okay, so I have so many questions, Sean. So let's back up, because I don't wanna be all over the place. When you speak about a manufactured home, what comes to my mind is an RTM, ready to move home that we might have up here, but sometimes those are, again, they're built the same way, cottages and things like that, they might be double wides.

but not necessarily in terms of thinking about it as a mobile home that's being put on blocks. Cause a lot of the RTMs up here are being put either onto a slab or onto a poured foundation for a basement. Is there any difference there?

Shawn Hart (09:04.444)

I don't think there's really much of a difference. I've actually never heard the term RTM. That might just be more of a Canadian thing. But generally speaking, based on the way you're explaining it, I'd say it's almost exactly

Garret (09:19.695)

Okay, because when you said mobile home, I was thinking like trailer park or investing in trailer parks. I think what you're talking about here is more of, well, why don't I let you explain it instead of me guessing.

Shawn Hart (09:33.2)

So it's exactly the same thing, mobile home parks. So generally you can have it in a park or you can have it on an individual lot.

Garret (09:37.267)

Okay.

Shawn Hart (09:42.48)

So what we do is individual lots. Oh, you're good. So what we do is we do individual lots where you can actually buy that mobile home or that manufactured home and put it on your own personal lot. And as an investor, you can buy those mobile homes, put it on a lot that you've purchased, do the foundations, the decks, all that, get them ready to sell. And then you can sell them off to an end buyer, someone that's looking to live in that property or rent it out.

Garret (09:42.955)

Okay. And what are you proposing here? Sorry, I interrupted you. Go ahead.

Garret (09:50.399)

Okay.

Garret (10:12.163)

Okay. And what attracted you to this considering that your personal investments are in singles, duplexes and triplexes?

Shawn Hart (10:21.068)

It was, well number one, it's always an opportunity. You know, anytime an opportunity presents itself, you wanna take advantage of those opportunities because they don't always last long. And two, it was the aspect of, this is truly affordable housing. This is something that most people can afford that are working.

Garret (10:42.575)

Okay, so run some numbers for me then, maybe some comparisons. I mean, I know, I mean, this is probably anybody in North America listening, but let's take an, maybe scale it. Maybe there's an average, you're in a market with a $300,000 single family home price, okay? For a three bedroom, 1400 square foot house. Speak to me in that same market what the cost would be to buy land and put a mobile manufactured home onto it.

Shawn Hart (11:12.496)

So I can tell you just from the mobile homes we're doing right now, generally, if you stay outside of the bigger cities, you're gonna be roughly between $10,000 and $15,000 an acre. You're gonna buy that, you're gonna buy the mobile home, it's gonna be between 70,000 and 80,000. The permits are usually seven, 800 bucks, nothing crazy. And then you've got your guy that's gonna come out and he's gonna clear your land, he's gonna grade it, you need a septic tank.

Garret (11:24.735)

Okay.

Shawn Hart (11:42.452)

in most in a lot of the counties that we work in and that's for your sewage. So that's going to be roughly about $12,000. You're going to have somebody come in and pour your concrete footers. That's usually about 4,000. Your mobile home is going to arrive. They're going to marry it together. Your delivery of that mobile home is usually about $12,000. Once it's on the property and it's married together.

You're going to need to do your block foundation, your permanent foundation. That's about $5,500. And then you've got decks that are about $7,000. And the guy that does your septic tank in our case also does your water lines. And then you have your electric and your water taps, depending on what county you're in your water tap. For, uh, price changes for one of the counties where it's 1600 bucks. And then you have your electrical come out, which is generally about a thousand dollars.

Garret (12:36.143)

Okay, so all in that sounds like another, I don't know, 25-ish.

Shawn Hart (12:45.147)

Yes.

Garret (12:46.247)

Okay, 25 plus your land, plus how much did you save for a typical manufactured home?

Shawn Hart (12:56.832)

Usually between 70 and 80 thousand for brand new.

Garret (12:59.227)

Okay. So all in, what would you estimate there for everything?

Shawn Hart (13:04.196)

Generally you're going to be all in, depending on the price of the land. It's going to be somewhere between $140 and $155, $160.

Garret (13:11.951)

Okay. And that's in a market. Like I said, that happens to have about a $300,000 entry point. Okay. And then what are you doing with these? Are you renting them out? Are you selling these to ordinary folk? What's the end goal here?

Shawn Hart (13:28.56)

So it's gonna be up to the investor. Some of them rent them out, some of them sell them. If you sell them, generally, you're gonna be somewhere in the 215 to 240 range on a sales price.

Garret (13:39.967)

Okay.

Garret (13:43.717)

OK, so there's an upsell here too.

Shawn Hart (13:46.142)

Absolutely.

Garret (13:47.703)

And then, um, if somebody chooses to rent them out, so you've got a 200 to 15, 240 K, uh, market value. You're into it for one 40 to one 60. So you're getting about 50 to 75 K of equity instantly. And then you choose to rent it out. Obviously put down 25%. I know I'm doing numbers and I'm not going to have this on the screen audience. I apologize, but, um, kind of do my rain man thing. Mortgage of 120.

Shawn Hart (14:11.182)

Oh

Garret (14:17.063)

What are we renting these things out for in this perceived market?

Shawn Hart (14:21.264)

Depending on the area here in Georgia, they can go anywhere from about $1,200 to $1,500 a month.

Garret (14:26.127)

Okay, okay. So I mean, the 300K house, what are they renting for in your market right now?

Shawn Hart (14:34.76)

Usually somewhere between $25,000 to $2,700 a month.

Garret (14:39.279)

Okay, so about an extra thousand dollars, but at the same time, you have that, the mortgage is a lot, lot less. And these are brand new, right? So now you're getting maximum rent. What about things like maintenance costs? I mean, with brand new, obviously there's a good thing there to another benefit.

Shawn Hart (14:48.686)

Right.

Shawn Hart (15:01.208)

So the beautiful thing about it is they come with 10 year warranties because they are brand new.

Garret (15:05.663)

Okay.

Garret (15:09.211)

Yeah, very intriguing. What has the interest been like? Like how long have you been doing this?

Shawn Hart (15:16.484)

So we've been doing it for about eight months now. The interest is astronomical. We have preferred lenders that we're using, and we're just constantly just feeding them leads. We do a lot of social media ads, and people give us their emails, and we send them out to the preferred lenders, or get them scheduled to do showings and stuff. And it's been insane.

Garret (15:43.315)

So what about the, you said like 10 to 15, I'm looking down here because I have my notebook, 10 to 15 K an acre, how big of a lot are you trying to scope out for these things?

Shawn Hart (15:55.664)

So it's gonna depend on the county. Each county has a minimum lot size that's required for manufactured homes. The county that we're typically in is an acre and a half.

Garret (16:02.952)

Right.

Garret (16:06.627)

Okay. And I mean, at least up here in Canada, if we're rural like that with a septic tank or septic field, I mean, a lot of those rules come into play. Would that be the same down there where you are? Okay. And is that, is there a reason why you're targeting rural rather than, I don't know, a suburbial lot or something closer to a city center?

Shawn Hart (16:16.966)

Yes.

Shawn Hart (16:29.34)

So unfortunately, when you get near bigger cities, there's a lot more restrictions. They don't allow mobile homes in a lot of areas. There's very limited spots that you can actually put mobile homes in when you get into cities, into bigger cities. And I actually just read an article before I hopped on here. Hagerstown, Maryland is actually loosening their regulations on mobile homes. And they actually put like 200 out last year.

because the housing prices are getting so out of control that this is becoming the most affordable option for people. And it's not like it used to be back in the 60s and 70s. These are nice mobile homes. These are top-notch. I mean, you get the same upgrades in these that you would a stick-built house.

Garret (17:16.055)

Oh, I know. And you could argue that they're better built because they have to withstand the rigors of delivery.

Shawn Hart (17:21.556)

Absolutely, and they are they're built to HUD specification

Garret (17:25.723)

Yeah. Would you want to expand on that?

Shawn Hart (17:28.732)

So HUD is your governing agency that says they have to be built basically to the same standard as a stick bill house. You have to have certain spacing on your framing, you have to have certain insulation, you have to use certain floor. You can't just throw them together like they used to be able to do before the 70s.

Garret (17:50.523)

Okay, so up to code, obviously. I mean, when I say I'm gonna sort of expand on that for the audience, at least with my knowledge here of what we call RTMs, manufactured homes, when you have basically a house that's stick built on site, it's you pour the foundation or whatever it's going to be, or a basement, and you're stick building this thing all over.

And that's fine. The framing is there. And then you're going to put typically your wall board or your dry wall and, you know, and you're finishing it, but then it gets painted. And everybody knows when you've got a house that moves, what happens? We get cracks in it. So at least up here in Canada, when we, when we build these RTMs quite honest, you know, we might put plywood or OSB, um, on top of the studs before the wall board or the drywall, because it has to withstand the rigors of that, that delivery.

and prevent the cracking and everything else. So I would argue that those houses are better built. They probably have better sound transmission class type of filters on it too, would you agree?

Shawn Hart (18:59.694)

Yeah, absolutely.

Garret (19:02.179)

Okay, so what, we're talking about investment here too. I'm curious, passive investing, this is a term that you used for this. They might not understand that. Can you maybe explain what it means in the context of mobile home investments?

Shawn Hart (19:20.208)

So when it comes to the mobile home investment side, we have the experience, the knowledge, and the systems in place, especially right here in Georgia and parts of Florida, that we can actually do A to Z one stop shop. An investor comes in, all they have to do is write the checks. We handle everything from ordering the mobile home to pulling all the permits, the grading, the septics, the decks, everything. So all they have to do is write checks.

and then they get a big check back at the end.

Garret (19:53.599)

Okay, and that's as an investment presumably because they're injecting funds into the project and then it's going to be sold? Okay, what about if somebody wants to come in and put a tenant in place? What happens then? What do they do?

Shawn Hart (20:01.563)

Yes, sir.

Shawn Hart (20:10.704)

They can either do, so we have a management fee. That's what we charge to go along with this. So that management fee comes into play when they sell it at the end. But if they do choose to go ahead and put a tenant in there, they can either pay us out on the management fee in cash, not cash necessarily, but check, wire, or they can do a cash out refi. However they choose to do it, we just have the management fee that we have to be taken care of as well.

Garret (20:36.839)

Now, when you say management, you're talking the project itself, right? Okay, and then at that point, then somebody wants to put a tenant in place. When I think management, I'm thinking property management because we have a property management company as well. Do you refer out so that like, cause I'm thinking an out of town investor might reach out to you guys, write the checks, but they want to actually get passive income and cashflow from this cause it sounds like there's a good opportunity here.

Shawn Hart (20:40.216)

Yes, from start to finish.

Shawn Hart (20:49.924)

Hehehehe

Garret (21:05.779)

How would you direct them at that point?

Shawn Hart (21:07.92)

So we actually have one of our great agents here. She's actually filling in as our broker right now. She also does property management. So we actually can refer them to property management as well.

Garret (21:23.847)

Okay, so then it truly becomes a long-term passive investment.

Shawn Hart (21:29.156)

Yep, and all in house.

Garret (21:31.119)

Okay, what do you see in terms, I know it's only been about eight months, but you said, you know, things are really, really busy, lots of interest. What is the ratio that you see in between people who want to just get the quick money versus the slow nickel, if you will, for the long-term rentals?

Shawn Hart (21:48.336)

So I would say generally as a whole, from what we've seen in the investors that we work with currently, they're all selling them.

Garret (21:58.383)

Okay, why would you think that is? It's just because the upside is just so good for the short money.

Shawn Hart (22:05.532)

I think for the fact that it's about a four month process, start to finish and you can get quick cash and a lot of them, I don't know, manufactured homes in the past, there's kind of that stigma that they don't hold value, they wear down super fast. And I think a lot of our investors don't want to hold onto that with no appreciation in the mobile home. So I think it's just kind of that stigma that if it's not going to value.

Garret (22:29.576)

Okay.

Shawn Hart (22:35.12)

10 years from now, then I should just sell it off.

Garret (22:38.155)

I see, okay. Yeah, sorry, I've got my long-term property management hat on there, so, because passive investing, of course, is you wanna return on your dollar. And correct me, did you just say four months? That is incredibly fast. Yeah, walk us through again, just sort of expand on that. So, you know, you said land, and like kind of do a deeper dive for the audience.

Shawn Hart (22:52.74)

Yes.

Mm-hmm.

Shawn Hart (23:06.32)

So step by step we're gonna find an area that makes sense for to buy a parcel of land that's zoned for mobile homes. We're gonna go out, we're gonna walk it, we're gonna make sure that it works, purchase that piece of land, like I said about 10 to 15 K an acre. Once we have the land secured, we're then gonna move along, we're gonna go and start applying for permits. We're gonna pull all the permits that we can, there's very specific orders you have to do them.

So it can get complicated, which is why we prefer the passive investor as far as the mobile homes go, just for the fact that them trying to figure out the permits, especially when it changes per county, gets very complicated. From there, once we get the permits, we get our guy out there to clear the land. He grades the land, the initial grading comes out. They'll throw the septic tank in. At that point, the mobile home, generally, I believe it's about 10 days for them to...

fully build and stock the mobile home. So within two weeks, you've got, you can get the mobile home out to the land as long as you have the permits. And then the moving company brings it out. They put it together. You've got a little more grading that needs to be done like around the mobile home, you know, generally in the yard septic tanks in, you got to connect all your plumbing. Now you need your foundation. You get your decks on during that process.

And then there's a couple more permits you have to go through during the process, you know, make sure that it's up to code. They come out to check on them and make sure the work's being done correctly and up to par. Once that occurs, we're going to put, we're going to start marketing them when they're about 80% done so that we can start bringing people in and showing them, Hey, this is what we got going on. And hopefully, you know, the goal is always to have them under contract before they're even finished so that we can close here. It's roughly about 28 days to close.

Garret (25:01.691)

Wow. Um, well, that's so organized. I love it. I mean, I flip a lot of properties here and I'm thinking like some, I mean, minimum it's four to six months when you flip a property and you're dealing with older things for probably less profit than what you're talking about. I mean, obviously there's different ways to flip up here flipping. We don't have a lot of like bouncing up and down in terms of property values. So

we just have to try to find a distressed property in order to flip it. What you're talking about here is almost a sure thing. However, let's challenge you a little bit. What is the sales like for mobile homes compared to a traditional detached single-family home?

Shawn Hart (25:47.5)

What do you mean by sales so

Garret (25:50.939)

Well, I guess days on market, that type of thing. Obviously it's a lower price point. So there's a lower barrier to entry. So I mean, is that basically all it is? And you're just seeing that they sell even faster than comparable types of asset classes.

Shawn Hart (26:04.54)

I would say yes, absolutely. Because your audience is different than your traditional buyers, you're in a little bit of an area of people that never thought they would be able to own anything. So when they have an opportunity to own something, they're all over it. And these are people that need affordable housing.

Garret (26:25.519)

Okay, so my next question then is financing and I'm gonna ask this in two parts, one from the investor themselves and one from the homeowner. So let's work backwards. Is it harder to find financing on a manufactured home as a first time home buyer or just a buyer itself compared to a single family detached?

Shawn Hart (26:48.924)

So we actually have the mobile home dealership license in house, which also means that when we put it on a permanent foundation and we list that property, it is eligible for USDA, FHA, conventional, all of them.

Garret (27:04.527)

Okay, so there's no complications. Okay, not like buying a cottage or something that's not built on, you know, stilts or something like that.

Shawn Hart (27:06.268)

Not at all.

Shawn Hart (27:10.94)

Nope, it's fully same traditional financing you would get with a stick belt home.

Garret (27:16.163)

Okay. Well, that's easy. Um, let me ask the second part question then as an investor coming in, are there any other types of challenges that, uh, that you're seeing or can foresee with a, an investor coming in with cash?

Shawn Hart (27:30.94)

I don't foresee any roadblocks or anything. It's just more so, you know, we have been doing this long enough now that we kind of have, we're known within the counties that we're in, and that's tremendous. And it makes it a lot easier when you go in and, you know, you know the order of everything. You know, obviously interest rates play a huge part. You know, the higher the interest rates go, it prices people out of the market. So as long as they keep coming down, this is only going to get more and more.

Garret (27:59.683)

Okay. And what typically in your market do you have to put down as a down payment?

Shawn Hart (28:05.212)

So are you talking about for the end buyer or for the investor?

Garret (28:09.42)

For the investor, because you said about 140 to 160 all in.

Shawn Hart (28:14.3)

So the mobile home itself, depending on how many you buy, you can actually get special financing from the manufacturer themselves, and it's 10% down.

Garret (28:24.98)

Ah, okay, that's a good wrinkle.

Shawn Hart (28:26.428)

So that'll, yeah, so instead of paying 70 to 80 thousand in cash for the mobile home, it's 10% down.

Garret (28:36.207)

Okay, so and that's because you're ordering it from a factory and it's not attached to the land yet.

Shawn Hart (28:42.62)

That's just the special financing they do through the manufacturer. That if you order so many mobile homes, that they actually do the financing in-house.

Garret (28:49.275)

Okay. And then what about the land? How does financing work for that?

Shawn Hart (28:54.428)

So generally you can go and get more traditional financing on the land or you can just pay cash generally, you know, 10 to 15 thousand and it's such a low barrier to entry for what most investors are used to that generally they just buy cash.

Garret (29:11.419)

Well, yeah, I mean, you said 10 to 15 an acre, you said acre and a half, call that, let's even call it 15, and then 10% of a 70 to 80K manufactured home. I mean, so basically you're probably putting in 25 until the end. I mean, there must be something else.

Shawn Hart (29:15.516)

Mm-hmm.

Shawn Hart (29:25.788)

They're so, yeah, so you still have to pay for like the greater, the septic, all that. So generally you're in for somewhere between 45 and 60 on average.

Garret (29:34.243)

Okay, yeah, of course. Okay.

Garret (29:40.771)

Okay, 45 and 60 for four months. And plus whenever it takes to sell, right? And then what are the typical, okay, yeah, I forgot you said it takes two weeks to build these things, incredible. I'm loving this by the way, my mind is going, going why would I even do my next flip up here in Canada? And I have to worry about it's minus 20 outside today.

Shawn Hart (29:50.396)

So that actually includes 30 days to sell it.

Shawn Hart (29:58.332)

Okay.

Shawn Hart (30:10.524)

been called here too.

Garret (30:12.667)

Yeah, we won't go there though. We won't go there, Sean. And then I'm trying to do the math here. Like we said, 60 to 80K. So if you can come up with, I mean, that's almost like a 60, 70 ROI, isn't it? Am I doing my 60% ROI even higher? It's almost double.

Shawn Hart (30:26.236)

Yeah.

Shawn Hart (30:33.244)

Yeah, you should be right around there.

Garret (30:35.771)

Wow. Okay.

All right, yeah, I'm just, I was gonna ask you what the advantages are. I think we're covering a lot of them. Do you see any other risks or disadvantages in this asset class?

Shawn Hart (30:42.684)

The only risks that I see associated with it is the rules, the ordinances. As growth pushes more into areas, there becomes more restrictions and obviously the more restrictions, the less we can do in those areas.

That's why we generally stay outside of those. But like here in Georgia, we're right up the I-85 corridor. I mean, all the growth is coming up right to Greenville, South Carolina. So I say probably about another five to seven years before it's going to be difficult in this area to be able to get it done. But there's many, many areas that it can happen in any state, really. You just got to work within their rules.

Garret (31:37.827)

Okay. And when you say getting it done, I mean, if you've had it done already, the rules are kind of just sort of creeping out where it's outside of that rural center. Is that like what we're talking about?

Shawn Hart (31:47.9)

Yeah, once the growth starts coming up, they generally start getting a little more restrictive on where the mobile homes can be because they want the big fancy houses. They want people to drive up I-85 or get off an exit and see these big, beautiful buildings. You know, there's such a stigma with manufactured homes that it's still basically like that 1950s, 1960s thought process of this is just like a shack that people are like, I don't want those anywhere near.

our city center. But the reality is it's not like that anymore. These are built almost to the same standard as any other home.

Garret (32:26.043)

Yeah, well, you mentioned that you have taken the route of buying an actual parcel of land. Is there any interest or have you explored an actual park and what would that look like?

Shawn Hart (32:38.62)

So we have, we've thought about doing mobile home parks. We haven't done one yet and we will in the future. It's just really learning the codes, learning the process. You know, it's a lot more expansive. It's almost like doing a development for stick-built homes. That's kind of the standard, even though, you know, it's a lot simpler process for us to get the mobile homes out there. The general consensus of getting the approvals, getting...

you know, the zoning changes if necessary and getting the permits pulled for it is a little just, there's a lot more paperwork involved and knowing the process. And until we know that process start to finish, that's just not something that we're going to explore until we're firm on it and know that it's going to work.

Garret (33:23.671)

Okay, so what makes a good area for a target for you guys? What are the criteria you're looking at?

Shawn Hart (33:29.82)

The biggest thing is zone for mobile homes. Generally a rural area, that's where you're going to find a lot of people that generally just kind of want somewhere to live. They're renting and they would prefer to own something. A lot of these people, they just don't think they're ever going to own anything and this is an opportunity for them to get in. And one of the big things that we've actually been doing is we've been doing closing cost assistance.

Garret (33:33.151)

Okay. Yeah.

Shawn Hart (33:57.532)

So our investors are actually giving anywhere from $5,000 to $10,000 in closing cost assistance, and some of these people are getting in a home for as little as $1,000.

Garret (34:08.091)

Wow. And are they getting the money back like these investors?

Shawn Hart (34:11.772)

It comes, it'll come off of the top, off of their profit, because it's assistance, but it also helps sell these houses even faster. Because when people see I could get in for $1,000 into a home, you know.

Garret (34:19.955)

Sure, yeah, even lower barrier to entry.

Garret (34:27.371)

And it's brand new, right? It's brand new. Yeah. Amazing. Boy, so anybody who's wanting to try to get into this on their own, let's say that they're not in Georgia. Any advice or tips that you might send to them?

Shawn Hart (34:28.38)

Brand new, with 10 year warranty. Mm-hmm.

Shawn Hart (34:45.884)

I would say learn the codes. That's gonna be your biggest thing. You need to know your codes and ordinances. Know your state laws and regulations and your county and the city if you're doing it inside city limits. So it's expansive. You really need to look into it. You really need to learn the process, but it's very doable. And you do not need a real estate license to do it. The only thing you need the real estate license for is to sell the home at the end.

Garret (35:12.443)

Right, but of course you could sub that out if you really needed to, right? Wow. Yeah, I think this has been really, really helpful. So in terms of trends and looking ahead, what do you see in this space and how can potential investors prepare for those developments?

Shawn Hart (35:15.484)

Absolutely.

Shawn Hart (35:33.916)

I see we're going to go in two directions. We're going to have a renter, more of a renter nation, where people are renting instead of living, because they don't want the responsibility of maintaining a yard in the house. And you're going to have people that go towards the mobile homes, the manufactured homes, because they are affordable. And people want somewhere affordable that they can live so that they can live outside of paying bills.

Garret (36:05.742)

Okay, any other tips or tricks that you would recommend for people here?

Shawn Hart (36:12.156)

Get involved, start investing. If you're on the fence, make the jump. It's hands down, in my opinion, it's the best thing you could ever do. It's the greatest alternative or supplement to a 401k that you could ever have. And historically, the stock market's been 10%. I mean, your ROI in real estate can be exponential if you do it right and get with the right people.

Garret (36:37.243)

Yeah, no for sure. I wanted to pivot for a moment because we've got a couple more minutes here. I'm very passionate about being an entrepreneur, a business owner. Can you share maybe a little bit about your journey, that pivotal moment of you kind of touched on it, getting out of the trucking industry, but what was the real, the light bulb that said I have to do this?

Shawn Hart (37:03.356)

One of the big things, just the back breaking work, my shoulders started hurting, my knees started hurting. So I was actually delivering the grocery, 40,000 pounds on a trailer into like 7-Eleven convenience stores running up and down a ramp. And your back hurts, your knees hurt, your shoulders hurt, you're sleeping in the back of a moving truck, it's just not good sleep. There just has to be a better way.

Garret (37:34.587)

Yeah, no, for sure. I think we've all done that. And now that you're, you know, a business owner, an entrepreneur, I mean, how many employees, what does the operation look like?

Shawn Hart (37:45.596)

So we actually run it just right here in our real estate office. It's generally the agents in the office we have about four or five agents that do it pretty consistently.

Garret (37:59.455)

Okay, and then obviously all of the research that you guys have had to do to, I mean, you're kind of glossing over it because I don't think it would be that easy for somebody to just go off into whatever county they are. Any mistakes that you guys made at the very beginning that you learned from?

Shawn Hart (38:20.412)

So the first round of mobile homes that we did, we actually bought from a retailer, a third party retailer. They had the mobile home license and it was a nightmare. These mobile homes showed up missing siding, missing light bulbs, missing cabinets that were just crooked in the house. And we had a hard, hard time getting these people out here to fix it, even though it was their responsibility to fix it because it happened before we owned it.

and in transit.

Garret (38:52.019)

So when you say retailer, you're talking about a dealer as opposed to the factory. Okay, and how did you, or can anybody go to a factory?

Shawn Hart (38:54.268)

Yes. Yes, sir.

Shawn Hart (39:00.572)

So, generally you have to have a mobile home dealership license in order to go to the factory. You could realistically go to the factory, but the odds of them selling to you are next to none because they do work for volume.

Garret (39:14.655)

Sure.

Okay, so you guys have your license then. Okay, so what was the, so again, I love this kind of stuff, right? So you buy from this retailer, it goes sideways on you, you've got all these warranty issues, how hard, or what was the next step in your thought process? Hey, maybe we should go get our own license.

Shawn Hart (39:19.164)

Yes.

Shawn Hart (39:37.892)

So we actually ended up stepping in. We have a handyman service that's connected to our brokerage as well. So we ended up having to step in and take on a lot of that work ourselves out of pocket. And it was just one of those things where it's like, hey, this is the test run. This is, we need to make sure this is even a viable option, even with us doing all this extra work.

There's still profit involved. There's still great margins. And then from there, it's like, hey, you know what? We can bypass this problem if we just had the license. So one of our other agents here in the office, he actually went out and got the license.

Garret (40:16.547)

Okay, because for the retailer, when you buy something from them, who's doing all of that grading and lot clearing and marrying the things together, all those things you said at the beginning of the podcast.

Shawn Hart (40:28.092)

We still have to go out and find our own people to be able to do all the other things. The only thing the retailer does is sell you the mobile home and bring it to you.

Garret (40:37.647)

Okay, well, delivery is delivery, right? Once you figure that out, it probably you control it a little bit better, maybe even get it cheaper. Yeah, what a no brainer. I mean, that's just brilliant that you guys did that. Okay, and then my final question regarding like sort of the business, when you are now in the day to day, what does scaling look like for you guys? Cause I'm always interested in that, you know, employees and how do we build this? And what happens if there's

Shawn Hart (40:39.708)

Yep.

Shawn Hart (41:00.124)

So we're looking, we're going to push for 200 this year. We're going to push for 200 mobile homes this year. And scaling, we can bring in other agents.

Garret (41:07.483)

What happens if people listen to this podcast and now you've got a hundred people trying to get in? Well, I mean, good problem to have, but how does scaling look like for you in this business?

Garret (41:23.432)

Wow.

Shawn Hart (41:28.828)

We can train them underneath us and make sure that they understand the process. We can teach them the process, you know, generally so that we don't have to be involved with every step we can have. We kind of delegate that responsibility to another agent. And we'd also like to get outside of, uh, you know, Georgia and look into other states. And I mean, I'm not a huge fan of reading, but when it comes to the real estate side, I'll read the Bible of real estate.

Garret (41:45.871)

Of course.

Garret (41:57.771)

Absolutely. No, that's amazing. Very enlightening. Before we end the podcast, I ask every guest this question. So my audience knows this is coming. So this is the Investing to Win podcast. How do you define success and what does winning look like for you?

Shawn Hart (42:15.388)

Success, and I know it's different for everybody, success for me is seeing other people succeed with me. As we grow, as we continue to do more and more and push to be the best person we can be that day, and my big philosophy is, especially I tell my kids this every day, you need to give 100% to what you're doing for what you have that day.

It doesn't have to be 100% every single day. It has to be 100% of what you have to give that day. That's success. Becoming just a little bit better every day. And as you grow to bring other people with you, doing it by yourself, it gets lonely. Real estate, I'm sure you know, real estate can be a lonely journey. Investing can be lonely. And when you have the opportunity to find people that are like-minded, like yourself and myself.

To be able to bring them along in the journey and really do it together is a complete game changer.

Garret (43:18.399)

It's a win-win. All right, well, thank you so much for enlightening me. I learned a lot today, another asset class that I almost barely knew existed. And I'll throw your contact info in the show notes so people know how to get in touch with you if they're interested. And we'll do a whole bunch of promotion on social media on this as well.

Shawn Hart (43:18.972)

Absolutely.

Shawn Hart (43:39.612)

Awesome, I appreciate you having me on. You too.

Garret (43:42.352)

All right, take care, Sean.