Ep. 53 | Interview with MHP Owner Danny Grisa – How To Avoid Contractor Problems

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On this episode of The Mobile Home Park Lawyer, Ferd speaks to Danny Grisa. Ferd sold a mobile home park to Danny in the past, and Danny has come on to speak about his journey, and some valuable tips he has picked up along the way.

 

HIGHLIGHTS:

0:00 – Intro and background on Danny
5:56 – Danny talks about his contracting background how that has affected his real estate
8:33 – Mobile home parks are very hands-on and definitely aren’t passive
12:09 – Danny and Ferd talk about some of the biggest mistakes you can make
18:33 – There’s no one way of operating a mobile home park
21:35 – The structure is driven by circumstances but circumstances can change
22:24 – Danny has parks that need more stuff and he likes having a park manager who is basically his assistant project manager
25:19 – Danny talks about how he has 2 sets of eyes on every park-owned home
29:20 – Ferd asks Danny to share any other good tips to share with the audience, Danny talks about how to find good workers and how he manages it
40:11 – You can get in touch with Danny through his phone number at 760 333 0004 and you can ask him anything about what Danny and Ferd have talked about today.

 

FIND | DANNY GRISA:

Phone: (760)-333-0004

 

FULL TRANSCRIPTION:

Ferd Niemann: Welcome back mobile home park nation. Ferd Niemann here again today with another episode. Got another great guest for you. This guest is, he has the distinct privilege of having bought a mobile home park from me and he saw my podcast. So apparently it went okay. Still have a good relationship. He’s a mobile home park owner, operator. He’s a general contractor by trade. He’s got a lot of world travels and experience that I’m jealous of. He’s got an interesting last name that he’s going to tell us about as well, please help me welcoming Danny Grisa or is it Grisa? Danny, tell us a little more and tell us about this last name. Cause I just found out 30 seconds ago that I’ve been saying it wrong for a year.

Danny Grisa: Yeah. So, I’ve been correcting people to say it wrong for years basically. And I kind of got sick of it. So, two weeks ago, my wife and I were like, you know, it’s technically it’s pronounced Grisa I guess. My family though said just pronounce it Grisa and I’m like, well it makes no sense. Everyone always pronounce it Grisa. So, we decided two weeks ago, it’s going to be Grisa from now on. So, I don’t have to correct anyone. And that just makes the most sense with how it’s spelled.

Ferd Niemann: Maybe you should convert it to like a symbol, like Prince or something that it just be, you’d be even more infamous that you have this unique first name, last name symbol. But in the meantime, I guess we’ll go with Grisa. So, congratulations on the new name. I know you.  For some our audience may not know you, tell us a little bit more about your background and how you got into MHP.

Danny Grisa: Yeah. So, interesting story. It’s been a journey for sure. I don’t think anyone ends up here accidentally to kind of have to intend to get there or something. But I started out 16 years ago as a professional golfer. I only started out trying to hack it out in mini tours and before I even had a chance to get started, I was laid up and I had like an injury on my shoulder and X, Y, and Z. And my girlfriend at the time, her stepdad was flipping houses. And so, I was interested in what he was doing, and he was just, he’s making a buck ton of money. It seemed really fun, really cool. And like, Hey, you know what? I should give this a shot. This would be something I think it’d be good. I can play golf whenever, you know, I’ll play golf for fun instead of having to play off for a living. And so, he kind of became my mentor. And through that, I learned a lot of the ropes of the business and he encouraged me to get a job in the industry and I became an appraiser. And that gave me a lot of really good experience. And then at the same time, he and I started flipping houses. So, I had, I kind of had like a nice well-rounded experience. And through that, I flipped a bunch of houses until things went bust and I saw him lose everything, a 65-year-old guy, basically my mentor. And he lost everything. I mean, he had worked decades and he ended up getting a divorce and then moving with his kid in Albuquerque, New Mexico. And I’ve just, I’m watching this unfold and I’m just like, I never want to be the guy that’s 65 years old, loses everything moves in with my kid to Albuquerque, how do I avoid that? And I’m like, you know what, I’m going to buy rental properties so that no one can ever take them away. As long as they’re cash flowing and hopefully even free and clear, they are mine. No bank can come and just swoop them up for the values go down and all of a sudden underwater, which is what happened to him. And so that kind of started me on a chart of like, okay, passive income, you know, how do I develop passive income? And so, I started flipping houses again, when the market got better. And I would just, you know, flip three and buy one and I built a bunch of rental properties up. And so that kind of introduced me to the whole industry as far as passive income and rental properties and things like that. And how I got into MHP was I’d actually, bought rental properties. 2016 decided I was good to go. It didn’t need to do any more. I had enough and I wanted to, I wanted to go experience life. So, want to go travel. Basically, renting my house at Airbnb. My wife left her job as an attorney a year before she turned partner, but we decided we’re going to live our lives for experiences rather than things. And we went and traveled for four years and got back later this year. And it was actually while we were traveling and I’m like, you know, completely out of the real estate game, I had all my properties managed by a manager. And I mean, I was just in neutral, you know, and a friend called me up and said, Hey, a past business partner. Hey, I got this mobile home parks making all this money, blah, blah, blah. And I’m like, yeah, I’ve always known cash cow, mobile home parks are cash cows. Like, I always knew that being in the industry for a while, but never really had like a foot in the door. And so all of a sudden I’m like, okay, like, yeah, I mean, I’m traveling, I’m like in Austria, like I can’t do anything, but he’s like, Oh, well it just needs a lot, we need money. Like I have opportunity. I just didn’t have cash. I’m like, all right. So, we figured out a way I put some cash and got a money guy. And so that’s kind of how I got into it and made a lot of mistakes along the way. But that was kind of how that ended up happening.

Ferd Niemann: Great. You’re a contractor as well. You didn’t mention that background.

Danny Grisa: Yeah. I kind of skipped over that. Otherwise that would have been like a 10-minute model.

Ferd Niemann: That’s great. But I’m like, I didn’t know you were an appraiser, but I knew you were a contractor because that’s where I have seen you work on a lot of stuff and that’s obviously you started off, you know, you have, you know, good construction background with flipping houses. You kind of have to learn that kind of stuff. And then the MHP, you came in more as a second partner to my cash guy, but you’ve obviously become more active in last several years. So, tell us about the contract background, how that’s impacted your MHP business.

Danny Grisa: Yeah, for sure. It’s been a huge impact, honestly, because mobile home park is basically development project. I mean, unless you buy some, a turnkey or you’re a REIT or something, I mean, you’re going to be in filling lots or, you know, you’re going to be repairing the mismanagement that was there. Which a lot of times means, you know, physical repairs in the property and things like that. So, I mean, it’s a development project. I mean, you take a park, that’s got 60 spaces, empty spaces and you fill 20 in. I mean, that’s like a little subdivision of your adding, so not to mention everything else goes into it. So, it’s a huge part of it. And that experience definitely has helped me give me an edge, I would say on making it less stressful and a lot more doable with a lot more unknowns. Which is always the biggest factor is just eliminating the unknown. So, you have more confidence that you can get things done more efficiently, but how I got into contracting. So, the whole story, you know, I’m flipping houses 2007 market goes Bust. And I mean in Southern California, Riverside, I mean every six houses was boarded up. The landscaping’s dead, you know, trash outside, windows broken. I mean, it was like Armageddon. It was bad. And I’m like, okay, I have all these skills. I know how to flip houses. You know, there’s no one out there fixing anything, flipping anything, you know, no one’s remodeling. And I am like the only people having money and doing anything are the banks. They’re the ones who have all the inventory. So, I was like, all right, someone’s going to fix these houses. So, I started driving to streets and calling realtors and just said, who’s going to fix your stuff?  Like, I don’t know, we’ve got to figure it out. I’m like, all right, I’ll be the guy. We have to get licensed. No bank wants to pay anyone unless you’re licensed. And so, I’m like, okay, I’ll get licensed. So, I got licensed as a contractor and started doing that and that developed four years of craziness. And I was just so, so busy fixing banks. And then they would refer me to owners if the bank didn’t want to fix it. And so, I’d fixed it for the owners. And that kind of started my whole contracting business, which continued until we left in 2016 to go travel. And I sold that to another contractor and off we went. Oh yeah. And then, so as far as the mobile home park stuff, so yeah, so I came into it kind of as a passive guy, I was like, all right, I’ll be, you know, the guy that just feeds the deal money or make sure that there’s money there for the deal and you know, the other guys on the ground. And it’s a good setup until it’s doesn’t work.

Ferd Niemann: MHP business is active. I got a client that’s like, I thought this was passive investing. This is an operational business, especially when you have park owned homes and that’s where the GC scale comes in. But in general, yeah, it’s definitely hands-on. I think there’s a lot of misinformation out there, Oh, you can do this three hours a week from your desk. It’s like, no, not really.

Danny Grisa: Yeah. I mean maybe when you’re done, I mean, if you put all the two or three years into it and like I’m used to flip where it’s like two or three months, and when you’re doing any kind of a mobile home park, I mean, you’re going to be into it for two or three years. I mean, most cases, you know, you’re going to lots, you are going to raise rents, whatever it is. You’re going to be in it for a good while until maybe you can get everything well well-oiled, and you’ve kind of completed whatever your goal was or your performer, what have you. So, it’s a lot of delayed gratification for sure. But yeah, so we got into it and we bought the wrong parks. Didn’t know we were doing; thought I knew what I was doing. And that’s the biggest mistake, which I want to tell you, Frank Ralph, yourself, you go to the Frank Ralph’s bootcamp, he’ll tell you, but you don’t cap the park-owned homes. You don’t cap the rent. And that was, I mean, I came from and always rental properties, all single-family for the most part, I am like, Oh, I know how to do this. Like, yeah, I’ll just rent this stuff out, like a scattered apartment building. And I’m like, no, that doesn’t work. It’s complicated. You know, there is a difference between the ground lease and the home lease, and you have to know that otherwise you’re going to end up hurting yourself and overpaying. And that’s what we did. We overpaid, bought the wrong demographics and eventually figured out the right stuff. But as things are starting to slowly go the wrong direction, that’s when I had to get involved. I’m like, okay, I got to like, you know, jump in here and sink my hands into this. And then, you know, eventually figured it out, once at a bootcamp, and I’d already learned everything at that point and kind of just got, got myself slapped in the face a little bit. Like, gosh, I wish I had come here two years ago. But anyway, that’s how I got into it. And now we bought the right parks. One of the parks I bought from you is one of the right parks for sure. And yeah, it’s been fun to at least use all the stuff I’ve learned from the school of hard knocks. And, to use it to buy the right parks, manage them the right way.

Ferd Niemann: Right. And I want to touch on that park owned home incomes. That’s a good point that a lot of people do miss is, you know, I tell people you can make money on park-owned homes for sure, but this is different kind of money than in a lot rent. So if you buy the land, the land rent 200, you may be capped at a seven or eight cap, if the home rent is another 400, it’s probably not advantageous to cap it. If you’re going to cap it, you should adjust your expense ratio from say 30% to 40% to at least 50, in my opinion. And then in addition to the higher expense ratio, thus lower NOI ratio, if you’re going to cap it, you should add it. I’d say 400 basis points. So, 12 caps instead of eight cap or what I prefer to do. And I know you do as well. Look at the shell value of the asset. If it’s 12,000 houses, then call it for 12,000. What can you sell it for? Don’t say, Oh, it’s $400 a month. Well, that’s extra, that’s $4,800 a year and a 10 cap that is $48,000. People we’ll put $48,000 evaluation on a $12,000 house. So look at the shell value, or if there’s a contract or deed or some sort of seller note, you can look at the value of the outstanding note with some, there’s some level of risk in those homes coming back to you. So, you can possibly discount the note. If there’s interest on the note, then sometimes I don’t discount it because there’s an interest component, but I think that’s a good point that a lot of people make mistakes on it. And I see it all the time with brokers, I’ll see a listing of, oh, it’s a seven-cap rate cap. I’m like, okay, great. I’ll look at this eight cap. And then you look at it and like, no, it’s a four cap. You just included a bunch of parks owned home income or RV income, the same cap rate as the MH. And it’s just a different animal. So, I’m glad you brought that up because a lot of people still make that mistake.

Danny Grisa: It’s the number one mistake for sure. I mean, I looked at it and we probably overpaid by 20% on property. If you ever pay by 20%, it’s a longer road for sure to bring it back to profitability.

Ferd Niemann: Now, let me ask you on that. On the 20% example. Did you have a bank loan on these and did the bank finance the Park owned home debt?

Danny Grisa: That was the other mistake, you know, if we had gotten bank loans, there were at least been some check and balance. Some other eyes looking at it, telling us, Hey, maybe you guys are paying for this or, and that didn’t happen, you know it was owner carries on both. And so that’s, it just set us up for failure. The wrong way to do your first deal, that is for sure.

Ferd Niemann: Sure. The owner carry, it’s funny, you mentioned that too. I wondered on that if you paid cash or carry, because some banks are sophisticated enough, they won’t count the park owned home rent or they’ll count it, which they think they probably shouldn’t do, but don’t want to lean on the mobile homes. So that makes them look a little harder. If there’s a lien of mobile homes, they may want 5- or 10-year paper, which kind of jacks up your bill format instead of having a 20, 25-year amortization, because the payments speak up, but choke you more. So, I’ve had some, I’ve had banks financed me on park owned homes before as part of the purchase, but they really, they prefer not to. And I prefer them not to. Then you have a no release price on the homes. But on the seller finance, what I see people do is I should probably do a podcast on these mistakes with seller finance and what sellers do sometimes is they get somebody to overpay by offering really long memorization, really low interest, or they sneak in the park owned homes or they know it’s got a bad survey, things like that. Because a bank will sometimes make you do the survey, bank will sometimes make you do phase one. People sometimes, I had a client, he got lulled into sleep with. He was just going to do everything because of seller finance. And I said, you need to get a title report now. You need to get t0 phase one now. He said, I’ll do it at the end. I’m not buying it yet because it doesn’t work, I’ll just get the money back. And I’m like, or I’ll just give the property back. I’m like, you don’t want to give the property back at the 11th hour when you’ve already sunk years of time and money into it. Some people just, I think that’s one of the oldest tricks in the book of the seller is, I’ll make it. I think they’re really good terms basically, to dupe somebody to buy the property.

Danny Grisa: Yeah, lulled to sleep is a great way of describing that. Because you get passive like, Oh, you know, I don’t have to worry about all these hoops and loops and red tape and it’s easy. Well, yeah, it comes at a cost though. I mean, you have to watch your own back then. Cause there’s not a bank that’s going to be making sure the I’s dotted and T’s crossed. And that happened to us. I mean the first park we bought, it ended up having no survey, you know, I’m looking back. I’m just like, Oh my gosh. I mean, every mistake, you know, bought a property with a lagoon, the lagoon is in a flood zone. Is that even possible?

Ferd Niemann: Maybe, maybe not. Yeah, that is bad.

Danny Grisa: Is that even possible? We didn’t even know that till like two years later, which is, it’s just like what? And then I probably could have even got a bank loan it. And it was in a small town, you know, too far away from everything. Which is kind of leads me into some other stuff too as far as contracting, you don’t want to buy a park in a small town, that’s too far away from other big towns. Cause you’re not going to find any good help, you know, and it’s going to be really hard both as vendors and also as park manager. But yeah, if we had tried to get a bank loan on that one, we probably couldn’t have found one. Because a bank would have said, that’s too rural and we’re not going to do it. You know, it was a town of 10,000 and it was an hour away from the next town that was bigger than that. It’s just too far. And so that would have been a big, a good check and balance we didn’t have, because we just said, Oh yeah seller finance.

Pros and cons of each. So, seller finance has its pros for sure. You know, non-recourse being one of them, but yeah, you get stuck at a deal with Laguna, and the flood zone, that obviously impacts your exit strategy too, because then the next buyer may not make the same mistakes, you know, and my dad and I joke and say greater fool theory. Is there a Raider fool that’ll buy it, you know, and we all make foolish mistakes? So, it’s just, okay, if we try to live up and trying to get out of them so to speak by finding someone else. But I had a park at a lagoon, and you know, eventually got heartburn about it and said, you know what, I need to sell this thing and sold it to somebody else. They had a due diligence period that was, I don’t know, 60 days. During that due diligence period, the permit lapsed. But we didn’t forget about it. We sent it in, but it was the government was slow. It was due April 30th or whatever. And these guys closed on May 5th and the permit had not yet been renewed and they could have been screwed. They didn’t even know about it. They didn’t think about it. On May 5th they closed in two weeks later, the permit came in the mail that we had applied for three weeks earlier or something. It just took a while. We sent down to them, Hey, by the way, your permit showed up. And they’re like, Oh, okay, thanks. It is possible the permit would not, it had violations. They do an inspection on this and stuff. So, I just, you know, I got rid of the lagoon to, you know, a greater fool theory and the guys got lucky. But there’s definitely concerns with you know, when you make mistakes, I’ve done and made mistakes too. You make a mistake, okay, how do I, you try to mitigate later, but it’s definitely can make you sleep a little tougher at night.

Danny Grisa: Well, yeah, I mean, one thing I learned through doing all of my flips and construction and everything else is, I mean, I worked for a lot of investors as a contractor. And even though I was investor myself, I could get stepped on cheap and I could see it through an investor’s eyes. And so, I ended up working with a lot of investors, but I got to see how they worked. And I got to like take little bits and pieces and put them in my quiver, you know, all those little, those arrows and put them in my quiver and figure out how I like to do things. And all those little pieces of that puzzle add up. And it’s kind of created the systems I have today, which has helped me be really successful mobile home parks. But you know, you learn from other people that have all also learned and you know, Frank’s a great teacher and there’s a lot of stuff to learn from him. But I mean, also he’s huge. So, there’s only so much you can learn that apply to what you have, right. Starts getting the nitty-gritty stuff. And I mean, buying that park I bought from you Ferd and seeing how you guys operate was awesome too. Because you guys have been to it longer than I have and done more than I had done. And I got to take little bits and pieces already in the last year of some of the stuff and how you guys do stuff and has helped make my operations better. And that’s, what’s fun. And that’s why I enjoy doing this and talking to other people that they’re also doing it, sharing notes. There’s no like one way of operating a mobile home park in this business. You know, it depends on the mobile home park. Depends on your style. It depends on the size. Depends on the location and your management style. You know, I don’t know if there’s, there’s probably a dozen different ways of operating a park. I mean, do you have a park manager? Do you have a park reader? You know, do you pay your manager $2,000 a month and have him basically as like an assistant project manager, you know, or do you pay him $800 a month and they just kind of, you know, do some of the basic stuff and that’s that, you know, are you pay him lot rent, you know, and you just have to be a greeter and they just, they basically just, you know, handoff violations and do real basic low-impact stuff. And it’s interesting, you know, it’s definitely, it’s a creative process in a lot of ways. Cause you kind of have to build your own systems of how you want to do stuff and you have to be scrappy as well. Cause it’s, I mean, I’m a contractor, like I mentioned before, it’s kind of like a development you know, your developer developing the same, also head of the HOA, right? I mean, you’re the ones handing out notices and violations and you’re also the management company collecting rents. I mean, you got like these three hats and they take different skills and all of them and you have to deal with them.

Ferd Niemann: Absolutely. I agree with you. I mean, I kind of say, you’re basically the city manager as well. I mean, because in some parks, like the park we sold you, that was one direct bill water, sewer. So that one, you don’t have it, but at some parks, you’re actually providing the water, providing the sewer, you’re providing your bills, you’re enforcing the rules, like the police or the codes department. And you’re obviously doing some personnel management. You’re like, you have a little HR department, you’ve got a customer service department. You’ve got obviously all the blocking and tackling of regular operations and maintenance and management. And it’s definitely, it’s a fun game. I enjoy it and like, I think it’s great. You say, you continue to learn from other people. I think that’s huge. And I have the benefit of, you know, from my legal clients and we’ll see, get under the hood with a lot of different guys, a lot different gals and, Hey here’s how they’re doing something like, Oh, I didn’t think of that.

That’s a good system. I should start doing that on my end. And then there’s things that I’m better at than them and vice versa. So just like you can just continue to grow. And I think you hit the nail on the head with how there’s so many different management tactics. I think the management tactics and structures are the deal often drives them more so than the personal, then like my preference or your preference. So, you know, we’ve got one part where the manager lives in the park and does almost nothing. And we pay him $75 a month. We got another guy who is making $45,000 a year managing the park. That’s a lot more moving pieces, a lot more home infill. I mean, you can’t, you’re not going to pay $45,000 when somebody working two hours a week. But the deals have kind of, and then I’ve got one right now where we’re about done with the big infill and this manager is really good. I want to relocate. I’m looking for another property in that trade area to hopefully relocate him. Cause I don’t want to let him go back to his regular day job, you know? So, the structure is, you know, kind of driven by circumstances and then the circumstances change. You know, I thought about, if you think, the movie, the godfather when they replaced the conciliary, he said, Hey, you’re at wartime, Conciliary now we’re at peacetime. So, we need a different guy to be the, you know, the chief of staff, if you will. And I’ve got a manager who’s really good at sales but is not as good at personnel management. So, the vendors, the subcontractors, they all kind of just like this guy, but I love him because he sells houses, sells a couple of houses a month. But he’s almost done selling, so like, okay, now I need to move him somewhere else, have him go sell somewhere else. And I’ll put a better operator manager in there to, just run, then be a stabilized park.

Danny Grisa: For sure, and one of the things that I’ve learned most of the parks I bought have either a large infill component and now I’m starting to get parks that, I’m probably going to buy maybe two or three more parks, I own six now, and then I’ll probably be done. But I keep saying that and I keep buying more. So, who knows? But I generally have like bigger projects that need more stuff, you know, that need more turnaround aspects of them. Maybe they’re two-thirds of the way there, but that last third is a good amount that needs to be done. And I like having a park manager, that’s basically my assistant project manager, especially since I’m out of state, I’m in California, all my stuff’s, you know, pretty much in the Midwest and or the Southeast and, you know, I need eyes and ears out there I can trust that. That can tell me what’s up, send me pictures that can kind of be my eyes and ears on the ground. And you’re not going to get that for a $1,000 a month. I mean, $2,000 a month is kind of like the minimum to get the right person and maybe get some bonuses and stuff like that. But once that Park’s done and it’s kind of like a well-oiled machine, it’s all full and everything’s good to go. I mean, paying them $2,000 a month, doesn’t make a lot of sense. It’s not $2,000 work anymore. You know, that’s, you know, $500 a month work or something like that. You know, you just kind of collect the checks and hand out some notices, you know, more or less. So yeah, it really depends on the park where it’s at, you know, and you know, what your plans are, but you know, you get some good people by doing that. And we have a great manager right now in the southeast. And we’re done with those projects, I’m like, I almost want to get more projects because she makes life easier. And I want to keep her busy because once these are all done, then what? You know, and then what do I…

Ferd Niemann: You don’t want to fire her, fire her for a good performance? Like you’ve done a great job in the project. Now you’ve put yourself out of work.

Danny Grisa: Yeah, exactly. Now you get a 40% pay cut. It’s just like.

Ferd Niemann: I am on same way. You want to find more work to keep her busy. I’m doing the same thing I told you about my manager who’s just so great. And it’s like, he’s almost done with his project. Like, all right, I need to find something within hundred miles of it so that I can give him another job. And he’s got a full-time job. So, he doesn’t need the money as much as like, I just need, I want, I just gave him $5,000 bonus last week. Like, I need you to keep moving, man. You’re just, he’s just a hustler. So same sort of thing as your gal in the Southeast, it’s like, keep him busy there and take care of them and all that. But you touched on, you briefly went over something I want to address. Because you’re from California. So, there’s a lot of people, you know, California is a great mobile home parks state, to many respects, but it’s really competitive, really expensive, and lots of regulations. A lot of people in California say, I’m not buying in California. You’re obviously buying elsewhere for a variety of reasons. Tell us about your process. And this is one of the process that I’ve learned from you, how you have two sets of eyes on everything, because you’re not really one of those set eyes. You’re the third set, two sets of eyes on a park owned home remodel, and how you work with the contractors and the managers and greeters to make sure things are being done and buttoned up when you’re not there to look at it.

Danny Grisa: Yeah. That’s the scariest part for sure. And that’s the reason why he never got into it. You know, it was always like, Oh, mobile home parks, cash cows. And I’m like, I’m in California. And I looked at them out here briefly. And when I was doing all my stuff, you know, in early 2010 when everything else, but it just didn’t pencil. And so, I’m like, all right, well, I’m not set up to buy a property out of state. I don’t know how to do any of that. You know, that’s scary and it is daunting, but there are ways to do it. And I’ve been forced to figure a lot of those out because I was traveling and just managing my stuff how to figure out how to do that. But the best thing is the systems, you have to have good systems by far. You have to be very organized. You have to be available on the phone and make sure that you’re basically how you want your people to be. You know, you want to answer the phone every time, because you want them to answer the phone every time. You know, you want to be really clear and organized cause you want them to be organized. People will follow the lead. But you know, those are more details that the bigger picture is lots of pictures, honestly, you know, pictures. I have a picture guide of how to take pictures. I’ll give it to you. It’s a manual of you know, a floor plan of a home. And here’s where you take a picture and here’s the direction you point. And like, you know, I have like eight tips, you know, good lighting, make sure that it’s not too dark. Make sure it’s not blurry, clean your lens. So, it’s clear, because those are my eyes. You know, you can do a video, but it’s not, to me, it’s less good. It’s harder to go frame by frame. It can be blurry. You know, there’s sometimes issue with connectivity and stuff, but send me some pictures and I can figure it out. And so, what I’ve developed is, like you said, kind of three sets of eyes. So, I have, let’s say we’re doing a park model. So, our park owned home model, we have the contractor who will be out there. He does his work. He’ll take pictures and send them to me in order to get paid, but I’ll also have the park manager go out there and send me pictures as well, to make sure that, you know, she thinks it’s our, he thinks it’s all done right. And cause that for sure, the contractors don’t take pictures around the things he doesn’t want you to see, you know, and that’s just, it’s a given, just assume.

Ferd Niemann: Yeah, perfect. It’s like, yeah, not exactly. There’s three other walls that have holes in them.

Danny Grisa: Oh, Oh yeah. No, I mean like literally, Oh yeah. The door that has a hole in it. We’ll just open that door. So, you don’t see the hole in the backside of it. I mean, it’s just, it’s so typical. So, but you still ask them to take pictures that way. They’d have some accountability, you know, they make sure, and this is the extra pictures that you can get because no, one’s going to give you everything you want anyways. So, I have that I have the park manager take their pictures and then all go out there probably, you know, probably two or three times a year. Now during COVID, I’m going out less. I haven’t been at the parks in eight months. But I haven’t really had a need to, as soon as I feel like I need to, then, you know, I’ve figured out whatever, I iron out, whatever crease I have. But having, you have to have two sets of eyes at minimum and you know, having your park manager also handle any repairs is a huge mistake. You know, that’s number one thing I would say is, do not have your park manager do any work. Don’t have them swinging a hammer, nothing, you know, all they are, they are quality control and you have to have that right person that can see the details to be that person, if you’re going to operate out of state like I am.  That’s critical. I mean, I know Ferd you guys operate mainly within a radius that at least up until a few months ago, I know, I don’t know if you guys have branched out, but you have a radius where you guys can go out and see a park, you know, you can drive there in the day and be there. And if you can’t do that, you’re going to have to make sure you get someone else that can look at it the way you would look at it. And so, you know that that’s, it’s a bit of a craft to make sure you find that right person, but that’s a huge part of it so that you don’t have a bunch of issues.

Ferd Niemann: Got it. No, that’s wise. It’s a great tip. What other tips or tactics or, or horror stories do you have that you want to share, if any?

Danny Grisa: You know, here’s a good tip. So, to find contractors, this is the most difficult part. Because if you have a good contractor, you don’t need a park manager that’s cracking whips and you don’t have to go out there and do damage control. You know, it all starts at the bottom and kind of works its way up. So, if you can find the right guys, a lot of problems get solved automatically. And that’s been probably the biggest value add I’ve had in this whole thing. And so, I mean, it’s really basic, honestly. I mean, before actually it’s still Craigslist. I’ve tried Facebook marketplace. Haven’t had very much luck finding good contractors on there. A lot of tire kickers, it’s a good place to find people to buy or rent. But as far as running contractors, Craigslist has been the best. You know, it remains the best. It’s been the best for five years, six years, maybe longer. But I’ll post an ad, you know, and I tried to everything with as minimal phone time as possible. So, I try and develop systems that don’t require my touches and they just take care of themselves. Also, I don’t like talking on the phone that much in particular anyway. So, it’s kind of linked itself towards a system like that, but I’ll have an ad post and they’ll basically say, Hey, this is what we’re looking for. And list some specific things that every guy will have to do. You know, painting, drywall repair, flooring install, skirting install, those are kind of like the basics. So at least you’d know whoever’s applying, isn’t going to be a guy that just install doorknobs or does basic work. You need someone that can really get in there and do everything you got to do. So, it’s shortened to the point. And it has, if you’re interested go to this form and I have a Google form that has a whole bunch of questions I put in there and It’d probably would take them 10 minutes to fill out and you know, they’ll have to think about some stuff and they’ll have to find some information. And that’s kind of like a first test. If they’re not serious, they’re going to see our form and they’re going to say screw it, I am looking for an easy buck. This guy’s making me work and you’re going to eliminate half the people right there. And those are the half you don’t want. And so, the growth of the form, and even then, I had people fill out half the form. Okay, cut those people out. They don’t take the time to fill out the form. They’re not hungry enough. They don’t care enough. I don’t care about them either because they’re not going to care about your product. They’re going to care about just getting a dollar and that’s not the person you want. I want someone that actually cares about what they’re doing, because then they’ll have the detail orientated enough to want to do a good product. Not just, you know, as soon as they’re done five minutes later, they have their handout, Okay, where’s my money, right? That’s not what it’s about. Obviously, you have to make money, but you want the person that really cares about what they’re doing, and they are out there. And so, the form is probably the number one thing. So, I asked a bunch of questions in there. And it helps me figure out who this guy is. Is this a small handyman? Who’s just going to do some repairs. Cause that’s good to have, or is this a guy that can handle $5,000, 6,000 job, incorporates all those things I mentioned before, you know, whole host of different stuff, you know, is he set up for doing, you know, smaller jobs or is he used to doing $30,000 jobs? Cause if you take the guy that’s done, you know, 10, 30 and 40,000, our jobs since his last three jobs, you’re going to give them your $3000 job. And he’s going to bid it for $10,000.

Danny Grisa: You can generally judge that guy. Cause he’s got a nice shirt with a company name on it and a nice hat. And you’re a pro, but I don’t need that level of pro sometimes. I mean, you want somebody that’s, you don’t want the most expensive guy, right. Or the cheapest guy. Is that generally how you look at it?

Danny Grisa: Yeah. Yeah. For sure. Sometimes the cheapest guy will be, cause like, you know, we paint a picture of professionalism and so they say they want to work with us and that’s the kind of guy you want. Cause they want the steady work and I know you can provide it. And so sometimes we’ve had guys in the first couple of jobs they’ll bid low, but they’ll bid low purposefully because they want to get the job and get their foot in the door. So, I don’t always throw out the lowest one, but I generally look at it and to see if that’s the case or if just a guy that’s just bidding in low. Cause he wants his first check and he’s going to run. I’ll never see him again. But it’s tough, because the guides you want, you can’t afford. And a lot of times the guys you afford, you don’t want. Cause they’re too cheap. And there’s a reason why they haven’t made it.

I had a guy recently paint my office, my handyman were all busy. So, I get my wife’s put us something on dump deck or Pinterest or wherever and found me a new painter. And the guy’s like this was on Sunday, Sunday morning. And he’s like, I can be there one. I was just like, okay, what about, do you have enough work to do this every day, I got several offices here. He’s like, yeah, I’m free tomorrow too. And I’m like, they’re out of work, which tells me something, you know, and had a problem with the guy. And it was a one and done thing. It was like the fact that you were, you know, the best guys and they’re like, hey you know, I need to look for a mobile home setter right now. There’s one guy down here that’s always available. He is a good guy. He’s like, I’m booked for 120 days. It’s because he’s high quality, everybody’s lining him up. So, the guy that’s available now is probably not the right guy.

Danny Grisa: It’s tough. I mean, it’s an art form and I mean, I’ve only figured this out because I’ve done it so many times. I’ve probably done over 700 remodel jobs and I’ve included the mobile home park stuff, but just in single-family. And I had just so many experiences going through all this. I’ve kind of figured out, okay, these are the right guys that I need. But the sort of it is you need a guy that’s either, he has just enough experience to where he can, he’s on his way up. That’s my wife, she just got out. One of the guys that’s on the way up. And you know, maybe he was working for a contractor, but now he’s on his own. And so, he’s hungry. He has the experience, but maybe he hasn’t established some stuff like he’s not 15 years into his career. Maybe he’s only, you know, he’s maybe got five or six or eight years of experience, maybe he’s only one or two years into his own business. So, it’s like, okay, he’s had enough experience running his own, I mean it’s particular, it’s very specific. It really is to get the right guy. But this is what it is. You don’t want to have him be the first day running his own business, because he will know how to manage mine. You don’t want to have him be 5 or 10 years into it. Cause then he’ll be too expensive for you probably, he is good. He’ll already be busy like you mentioned. So, you want him kind of in the early stages of that. So that’s one type of guy that you could get, you know, first year or two out in the zone after having lots of experience worked for the contractor, that perfect guy, you see that guy and I’ve seen him come along. I’m like, this is the guy. And you know, he shows up, I just look at the application. I’m like, that’s who he is. And he shows up and I’m like, good, that’s who we thought he was. And you know that guy is still working for us right now in a park we have in Oklahoma. And the other guy is the guy that does have all the experience. And he’s been to a 10, 15, 20 years maybe. But you know, his work has gotten slow for whatever reason. And maybe he just a couple of jobs infill, because he’s got maybe four crews. Maybe he’s doing lots of jobs, he’s got three or four crews going at once and he doesn’t want a crew sitting. And so, you’re the overflow. You’re not the big margin, but he knows he can kind of keep his guys always busy. So, you relieve him of having that stress of keeping the crews together. Cause you always have to have consistent work. Otherwise your guys will scatter, you know, as a contractor. And ultimately that’s probably the best guy, cause he’s professional. He knows how to run guys. He can do it really efficiently, but can he do it for the price you want? That is the one thing, you’re generally going to overpay for that guy. Maybe by 20%, 10 or 20% from the other guy I mentioned, but that’s only got one- or two-years’ experience out on his own, but the more sophisticated guy is going to make your life super easy. He’s going to know everything. He’s going to do everything. He’s going to get it done really well. He’s like a well-oiled machine and it takes minimal contacts, minimal communication you know, almost no punch lists or go backs. And those guys are out there. They are, but you have to be willing to pay a little bit more for them. Not a lot more. There’s plenty of guys they’ll do it for a lot more. You have to find a guy that’s willing to do it for a little bit more and train him a little bit. You know, that’s one thing I’ve done is, you kind of want to be a team, you want to feel like it’s a team, you want to foster that element of team. Not like, Oh, you’re the contractor and I’m over here and I’m the landlord, you know, pulling the strings. You want to be like, I want to help you succeed, but we have limited budgets. We can only afford so much. I wish I could pay you more. And I can’t, that’s just the way it is. But if you’re willing to do the work, you can make a margin on it. I can help you figure out how to do it more efficiently. And a lot of guys will just say, okay, what do you need? What’s the price? Just give me the price. And so, I’m in the process of kind of developing a flat rate system and I haven’t dialed it in yet, but I was like, okay, painting houses by 50, you know, shutters are $200 bucks. You know, flooring is dollar square foot, you know with labor plus materials or whatever. And just being like, this is our boiler plate. This is our price list. And a lot of guys they like that.

Ferd Niemann: It takes the bid work out from them too and the measuring and stuff. They’re just, if they know it’s reasonable, like, okay, yeah, I’ll do it for that. It only takes one or two times to figure out if that was worth it for you.

Danny Grisa: Yeah. Yeah. For sure. I mean, there’s a guy right now doing work at the park that I bought from you guys. Ivan, he’s awesome, but I mean, he gave me a bit of $5,500. He was like, I’ll do it for $4,500. I’m like my budget’s 3,400. And he was like, okay, let me think about it. The next day he came back, and I gave him like, some breakdown specifically of each item and what I had price for it. A lot of guys will just, they’ll just throw out a number like, okay, I’ll be here for a week and a half. I need to make $500 a day. And I’m like, okay, well, $500 a day is like, you know, $70 bucks an hour or something, it’s like, let’s like this isn’t a one-off job. I mean, you’re going to be doing work for months and months and months as I continue to throw your stuff, like let’s figure out a reasonable price. And he did, he took it for 3,400 bucks and he was like, you know what, you’re right. I can make money at that. And it won’t be a lot, but it’ll be a little and you keep giving me work. And so, you know, it’s a bit of a craft to do all that. But it’s doable. But I mean, if you’d go into it without having to experience, I happen to be in a position to have, I can see how it’d be difficult to find the right guy. You have to go through a lot of bad guys. Even I have to go through a lot of the bad guys, even still to find a good one. I just, I stub my toe a lot less often because of so many systems and things and knowledge I have.

Ferd Niemann: No, that’s great. I mean, I think that’s part of your special sauce. You’ve got the contractor experience that makes the park owned home remodel, not as much of a pain for you as the next, and park-owned home remodels are at some point, it would be a Achilles heel for business. They can become a money pit. They can become a time suck. They make your life more stressful. If you can, you know, cut out some of the pain points by using systems and processes like you’re doing you know, obviously you’re better off for it and it’s going to make you more motivated to do the next deal and go into a goal faster and everything else. So just great stuff. Great tips. Appreciate it, Danny, where can people find you or do you want to remain hidden? Where can they find you if they want to reach out to you?

Danny Grisa: Yeah. Yeah, sure. No problem. I mean my phone number is probably the best, text me, call me. (760) 333-0004. Pretty easy number there. (760) 333-0004. I have my Facebook page too, but that’s just for like, you know, renting, selling properties and stuff, but yeah, just give me a text. You want to reach out, have any questions, have a deal you want me to look at, just general questions about remodeling, contracting, dealing with stuff on park owned homes, whatever, you know happy to answer.

Ferd Niemann: All right. Thanks Danny. I appreciate it.

Danny Grisa: You got it. No problem. Thanks, Ferd.

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