On this episode of the Mobile Home Park Lawyer podcast, Ferd talks to Joshua Diaz, a new MHP owner about his experiences so far in the industry. Joshua discusses what he’s found surprising for better and for worse as well as what tips he can share with us through his experiences so far.
“You will miss stuff. And you know, you’re going to learn, you’re going to miss stuff anyway. It’s just, we’re going to try not to miss the big stuff.”
0:00 – Intro and background to Joshua Diaz
4:16 – Ferd says the best deal he did was the deal he didn’t do that he shouldn’t have done
5:28 – Joshua explains what he has learned so far from MHP so far
8:49 – Joshua suggests surrounding yourself with experts and never be afraid to ask for help
10:33 – Ferd asks Joshua about what surprised him for better and for worse since getting into MHP
14:16 – Joshua’s park manager is friends with almost every single resident in there
15:22 – Joshua shares his advice which is don’t be afraid of being creative
18:04 – Ferd suggests getting a property manager eventually but Ferd prefers to do it himself at the start
20:07 – Joshua says use your connections
23:53 – Ferd talks about how he needed to find a small time player to take his trash because it was just one road in and out and you can’t turn a truck around 25:12 – Joshua advises to expect the unexpected
27:08 – You can find Joshua Diaz on Bigger Pockets and on LinkedIn or you can reach out to him via email at firstname.lastname@example.org
Ferd Niemann: Welcome back mobile home park nation. Ferd Niemann here again today for another episode of the mobile home park lawyer podcast. My guest today, I’m glad to have him on here. He’s recently a new mobile home park Owner-Operator, he’s getting his feet wet. He’s out of New York city, but he’s like many. He doesn’t want to invest in mobile parks in New York city or New York state. So he’s moved to the next couple of states over. We’ll hear more of his story in the coming minutes. Please help me welcome Joshua Diaz. Joshua, Thanks for coming on.
Joshua Diaz: Hey, thanks for having me Ferd, how you doing today?
Ferd Niemann: Hey, no complaints, man. Beautiful sunny day here in Kansas city, which is rare this week. It has been raining like crazy, but all good here. What about you?
Joshua Diaz: I wish I had what you had. We just got past the heat wave. It was pretty rough. We hit what is it? 105 yesterday, 50% humidity. And I had to work, so it’s a little rough. I’m glad it’s a little bit over now. Now it is seventies.
Ferd Niemann: Oh wow! That is a big drop.
Joshua Diaz: It was pretty wild.
Ferd Niemann: Well, great man. Well, I know you a little bit. Our audience may or may not know you. So maybe tell us a little more about your background and how you chose MHP and how you got started. And then we’ll dive into some of your first projects and lessons learned.
Joshua Diaz: Yeah, sure. My background is a simple average blue collar guy. I currently have a full-time job in security, union guy, average salary, 40K nothing really special. I’ve been in New York city my whole life. Apartment living is pretty much all I work with. As far as how I got to where I am now, I can primarily thank bigger pockets for that. That started the real estate itch in general, bought my first duplex because of it about four years ago. Decided putting a lot of work, but this not so much coming out of it. I mean, it’s doing okay, but you know, I’ll need to get a lot more of those in order to make a real impact. So I started looking around, looking at apartment buildings, strip malls, that sort of thing. And the podcast actually kept mentioning mobile home parks once or twice. At first time I didn’t really think much of it. You know, everyone has the stigma and I had it as well. I was like, oh, I don’t want a trailer park. It’s all a mess with that. But then they kept talking about it and I really started doing some research. And I decided this model, especially the park owned homes, not the park owned, the tenant owned home model is right up my alley. It fits with my schedule and everything. So I decided to jump in, [02:35 inaudible] with more information, though some other podcasts from Ryan [02:38 inaudible] found yours, just started digging in on the commute to, and from work. I just listened to everything. I probably went through at least three a day just coming and going on the commute. Yeah, it helps when they’re in 30 minute blocks because it process a little bit easier. Some of them like kind of long with the other ones, but yeah, I just did as much as I could, did research over a year and decided to jump in with the help [03:03 inaudible] and one of his mentorship programs and joined that. And once I was out pretty much in last year, November made my first attempt. Used Zoom for that as you know, and it didn’t really work out. Then I went to the second attempt and that’s the one that stuck and now I’m an owner of a small 15 space mobile home park.
Ferd Niemann: No, I think it’s great that, you know, takes offers, got to make offers to find them and stick and you got to find deals that is right for you. I’ve talked to some guys earlier today and they are like, what’s the best deal that you did. And like the best deal I did is the deal I didn’t do, that I shouldn’t have done because you get four really good deals and then you blow it all on the fifth one, [03:51 inaudible] feel so good anymore. So I’m just try to do it, get a base hit on every bat, you know, and just don’t strike out that way, you know, and that’s [03:58 inaudible] approach, but I think it’s what works for most people, especially as you have, you know, you got a full-time job, probably not going to take the deal. That’s 200 pads, it’s got to redo the sewer and a 150 vacant and 50 people are sex offenders. And you know, there’s going to be, there’s a lot of hair on that. So getting a couple of on your belt, that is good. So tell us, you know, as you’ve been in the business now for a little bit, what are some lessons learned? I mean, there’s always, I always tell people the first three months is the hardest and then the next three is still hard. And then it starts to get like, okay, I think I can do this. Maybe I’ll even do it again, but it’s always, in my opinion, even now we buy a new park. It’s like, oh, here we go. First three months. Sub meter, impose rules, demo houses, you know, get rid of bad tenants, increase the rent. Here we go. You know, that’s just the hardest part, but that’s my experience. Tell me more about what you’ve learned so far.
Joshua Diaz: Well, I’m going to go to both of the parks that I attempted the failure and this one, because they both told me very different things. I think it’s super valuable. I’m going to that first one. It was about a, it was 104 spaces. So I tried to start big. And that was my first lesson. I think I tried to go a little too big, too fast. And I went a little bit over my head, which is fine. You know, you got to go at your own pace. It was about half empty. A quarter of the homes needed to be rehabbed. I found out pretty much at the last minute, there was some abandonment homes because someone just died in one. So there’s a lot to tackle right off the bat. And a lot on top of that, I didn’t have the money. So I was also trying to find some partners at the same time. So there was too many moving pieces and that would be the main takeaway from that one. Like just starting out. You probably don’t want to go for too many. You don’t want to make it too complex. And that’s what I try to do. And ultimately that’s why I backed out. There was just too much too fast. And I decided I would probably going to mess up somewhere major. Cause there was a lot, so much work that had to be done with this. So that was mostly that one. The one I have now I’m currently in the process of pretty much redoing all the leases and the last owner, I don’t know if it was just something they typed up themselves or just found something offline. But yeah, I have, I’m in touch with a lawyer now in a PA about the leases and pretty much told me it’s not really legal. So I’m like, okay, I’m going to have to send my own out via certified mail and all that. And make sure you get on board because if anything happens, God forbid it’s not going to end well. So it’s similar to what I had with the duplex, which I still have now. It’s a lot of things that previous owner did is either cut corners or they took it way too easy. I mean I’m a laid back, but not that laid back. So there’s a lot of little things to fix and the glove logistics that go through. So for anyone who is getting their first park, you want to take a look at that, because there’s so many little things you can easily miss. And I missed the [07:05 inaudible] before this guy told me what was up. So there’s still a lot of pieces, even though it’s smaller, but this is more manageable than trying to go too big. But you know, you just got to look out for all these little things. So I’m just going to go through it one thing at a time here.
Ferd Niemann: No, I think that’s wise. I tell people all the time. This is not an easy business. It’s not uncomfortable. I don’t call it the real estate business, I call it the operations business. Very management intensive. And you got to have systems, you got to have checklists or you will miss stuff. You will miss stuff. And you know, you’re going to learn, you’re going to miss stuff anyway. It’s just, we’re going to try not to miss the big stuff, we want to try to, for example, yeah, Make sure you’ve got a valid lease, right? Because you don’t want to immediately have a problem. Make sure you don’t have like safety issues. There’s a lot of different moving parts, but that’s good you’ve done it right from the beginning. As far as get educated, you know, work with other professionals, and then tackle something that is manageable and then just little bit at a time. You’re not going to turn around everything in a day and that’s all right. Go ahead. Sorry.
Joshua Diaz: I was just going to say like you said, just surround yourself with professionals. One of the first things I did was joined the Pennsylvania mobile manufactured housing association and they gave me all the information for the Pennsylvania lawyer I’m using now. And they have a wealth of resources that I can always go to. So it’s, you know, never be afraid to ask for help or never be afraid to ask period. You just don’t know what you don’t know.
Ferd Niemann: No, I think that’s right. And I see you on other forums on Facebook and LinkedIn, since I know you’re also connecting with people on there. That’s a good thing to do is network with other operators. When I got started, if those things were available, I didn’t recognize them. And I didn’t use them as like, I didn’t know anybody else who was operating. They might go to the same hometown, like, oh, you got some mobile home parks for [09:03 inaudible] people. And like, these people are, I am going to learn from, they’ve been doing it for 50 years the same way. Like how do you get sub meter water? And then they’re like, what do you mean? [09:15 inaudible] Never heard of that. So there’s just definitely good places you can get that kind of information. Get that kind of networking is definitely important, especially, you know, when you get started and you’ve got a small team, you know, a smaller budget, you can’t afford to hire a regional manager with five years’ experience. You need to learn it yourself and need to try to get free resources. And then you’d be able to do one, goes okay, [09:40 inaudible] another one. You continually get better. And that’s important. What would you say is the most surprising thing that, you know, positive that you didn’t expect when you’re thinking about getting into business, what has surprised you that’s better? And what has surprised you that’s worse, I’m putting in a spot, but can you think of anything?
Joshua Diaz: I mean, a good positive would be this mobile home park to have now. Everyone is like, it’s super great. I mean, I’ve heard that most residents are like more laid back type, but as far as like working with me, the guy I had in there who’s the acting manager now, he’s been living there for about 16 years. This is the kind of guy who would give you his shirt off his back. And I wasn’t really expecting that. I mean, yeah, I was expecting a you know, cordial relationship, but this guy like goes beyond and he takes care of everything and he’s like, oh, don’t worry. You know, text me, call me anytime. And it’s like, I was a little surprised by that. I was like, wow, this is like a down to earth guy here. And I just wasn’t expecting it.
Ferd Niemann: That’s good man. Finding good management and good maintenance personnel is always a challenge. And when you find them, you really appreciate it. Because it’s hard. It’s not easy. It is like Oh my gosh, this guy is the best thing since sliced bread. But a lot of times you’re like, is there anyone here that can even read the water meter? Or they can even post a notice. Sometimes Yes, Sometimes no.
Joshua Diaz: Yeah. The funny thing is that the old owner like try to warn me about him like, oh, watch this guy. And I’m like, oh, okay. So I’m sort of like watching, like I get, I don’t get any bad vibes or anything like that. And then I found out later him and the previous owner had a blow out over something else. Like, oh, that’s just something personal between them. That has nothing to do with how he’s running the park and you know, taking care of things. So yeah, you know, you got to trust, but verify. That is a saying, right? Just trust, but verify. It’s like, okay, I’ll trust the old owner. I mean, they’ve had the park for decades, but at the same time, you know, when doesn’t seem right, you got to investigate.
Ferd Niemann: You know, it’s interesting when you hear these stories like this, we just bought a park in Missouri a month ago and we hired a hard greeter who lives in the park and this guy’s named buddy and half the people say, oh buddy, he’s great. He’s been here forever. Everybody knows, buddy. He knows everything about the park. He knows where the sewer lines need to be fixed and where they don’t. And then I have other people say, you guys are hiring, buddy, buddy is a disease, buddy is a problem. And he’s the worst ever. And then I asked the old seller, what do you think of buddy? And he’s like, buddy was my manager for years, buddy is horrible. Okay. But which is it? Then I’m like, buddy seems amazing. So it’s again like watching him like, what’s the deal and it’s not like because he’s stealing, did he [12:43 inaudible]. But for us, like he doesn’t control the money. Like he can’t steal from me. I mean, he seemingly is not walking around drunk and driving heavy equipment. And like, what’s the problem. No, one’s accused him of any sort of inappropriate behavior, breaking into a home or, you know, chasing women or something like that. Like what’s wrong with buddy and rumor, personality, who knows, right. The person has violations, doesn’t like the guy that issues violation notice. So it could be that. So it’s just, it’s important to kind of keep your [13:15 inaudible] keep it constant review. But sometimes you got to give people the benefit of the doubt, you know? And watch them closely, but so far, this guy I’m like this guy’s good. It’s been a month. There was no problems. It’s just only good. What am I, unless he’s going to later come to me and ask for permission to get the rent paid in cash, you know, I’m not going to let him do. I feel comfortable with him. So you got a guy similar to that, that is valuable to you.
Joshua Diaz: Yeah, for sure. I know with my park manager, pretty much he’s friends with every single resident in there. Well, except for one who is a, well, we can talk about that too if you want. So a sudden challenge comes out of nowhere, but as far as the manager goes, like he’s friends with everyone, every single resident that I’ve been in contact with now, and they’re all pretty much senior citizens. So when they’re laid back, they’re laid back. But yeah, they’re like, oh, that’s my friend. Like one of them said, oh, that’s my best friend. Like he takes care of us and all of that. So if I listened and just got rid of [14:22 inaudible] drop of a hat, I probably had some serious problems. I would have had a revolt probably, cause they sing his praises. So you know, I’m glad I didn’t, you know, go by just the first thing I heard. Double check everything.
Ferd Niemann: Get that second opinion. That makes sense from getting bids on tree trimming to, you know, failed sewer lines, giving people a second chance. What other tips do you have for other people kind of in similar situations, you know, where they’re coming from regular day job, looking to invest on the side looking to, you know, jump into a new deal. What advice can you give from your experience?
Joshua Diaz: Be open to being creative. Because a lot of how I even got this park and the funding for it was being creative. I borrowed money from family, which I’m currently in the process of paying back little by little. So yeah, Private lenders, family, friends who are willing to do something like that. Not saying that they have to sign that, you know, on the loan for you or anything like that. But if you can do that starting small, definitely. Like I said, you know, you don’t want to go too big and get yourself in a mess, even if you can’t afford it, which I couldn’t. And basically we had to do something else to build up to it, do that. Like I said, I started four years ago with a duplex and it’s, you know, it’s appreciated pretty well. I’ve just refinanced out of that. And that’s where most of the money came from. So it wasn’t even something related to mobile home parks, but it ultimately helped me and my goal. So, you know, just explore all the avenues you can because you never know what can lead where or what sticks, you know, don’t be so rigid. That’d be the best thing I can tell you on that.
Ferd Niemann: No, that was good advice. [16:15 inaudible] talking about your duplex, I still have a couple of duplexes actually, but you can learn skills from duplex business you can bring to the mobile home park business. A lot of it doesn’t care, you know, but a lot of it does and in your case money of it carried over, but you’re dealing with leasing, dealing with contractors, dealing with showing, dealing with vacancies. Dealing with [16:33 inaudible] you know, a lot of it carry over. So I think it’s important to whatever background you’ve got, you know, see if some people, you know, if you’re a dentist, you are probably not going to bring new skills as if you were a general contractor, but the dentist [16:50 inaudible] has skills also that will be beneficial in the next business operation. So I’m a big fan of, you know, look at your past, bring what you can, if you don’t have enough, then use what you can and, or figure out where your blind spots are, hire it out or partner up.
Joshua Diaz: Yeah. And you can learn as well. To this day, I’ve never used a property manager, everything I’ve stumbled through it. I’ve hit brick walls and bashed it with my head. All the experiences from that duplex onward, you just got to do it and you can learn and read all you want, but it doesn’t really come to you until you actually do it and see what happens. So that’s what I feel.
Ferd Niemann: That’s a good point. I’ve got a friend who asked me, Hey, should I, I want to get in this business, I got a full-time job. Should I hire a property manager? This is for doing a couple of single family or duplex. I’m like, look, at some point, you’re going to want a property manager because property manager is not that much fun, but also you can’t scale once hire other people. But in the Beginning there was no way I would outsource it. You know, I would be the guy to change the locks and paints doors, mow the grass. Just to get a feel for that, moving the appointment, do the showings, answer the calls, organize, scheduled the plumber, meet the plumber and it kind of sucks, but you get the feel for it and you get a feel for which makes you more empathetic with your future property management staff. Like I know what it’s like to get the tenant to call you and yell at you, cuss you out. I know what it’s like to meet the vendor and he didn’t show up. And that’s not fun. And when you experience that and like, you know what, she’d probably appreciate my property management staff, my future parking greater more because, [18:35 inaudible] when I did that crap, that is all the time and holy cow, you know, it gives you a different perspective, right?
Joshua Diaz: Yeah. It helps you build the systems that you can later use to scale up with in the first place. That’s how I have my system now. It’s mostly Google drive and a file cabinet. It’s small, but it’s something that works that I put together from everything I’ve learned and yeah, I am telling you, what you would just say reminds me of a funny story from the duplex. I have gotten that 12:00 AM call in the middle of the night saying, oh my pipe in a basement, just burst. And it’s currently flushing right now on a Sunday. This is on a Sunday. Guess what plumbers don’t do on a Sunday? I scrambled and reached out to an uncle, used to be a former contract. And he happened to know someone who actually like did a personal favor to have a plumber come out later that Sunday when normally they’d be like, you’re out of luck. Yeah, Use your connections. That’s another thing. If you have connections, use them, make friends, family, and you never know, ask, I didn’t know my uncle was a contractor for 30 years. He apparently built a whole bunch of houses up in Middletown, New York. I would have no idea, but I didn’t tell him about the business. Like, oh yeah, I just bought this house here. He is like, oh, did you know I used to build houses there? No, I didn’t know that. Well I do now. Yeah, He’s great.
Ferd Niemann: That’s great. It reminds me of what my dad used to do for situations like that. When we find a house. So he would put like an orange, like a little sticker you see on like a Christmas gift or something, string an orange sticker and it would say, master water shut off or gas shut off or whatever else he’d want to identify. He’d hang it right there from the pipe. So that there’s all these pipes and nozzles and where’s the vent and all this crap and people and the average tenant or even me, or you would not even know, but he’s getting there and looking at, he’d label these things so that a situation like that, he can tell the resident, go find the orange tag, turn it off. It’s the water shut off. And what happens sometimes what you would do is you’d recognize there wasn’t a water shut off. It was at the street on the city main like, okay, that’s a problem. So then you can tell the city, I couldn’t install the shut off valve and mobile homes, man, especially this last winter, it was so cold in the Midwest, we had several lots where they didn’t have a functional shut off valves. And I’m like, now I’m like, I need to put it, make sure there is a shut off valve on every single lot. Because if the pipe burst in, which case they did several times for freezing, I came, turn the water off. [21:10 inaudible] the whole park. Well, I’ve got to give notice to do that and I want to make sure do it right. [21:14 inaudible] everybody else and just a big pain. So yeah, you can, That’s just another lesson learned. We stumbled on accidentally, label, assess in the beginning, what you got and what you don’t and then label it. Then I’ve learned to look underneath the homes and see what the underbelly looks like. And is there a proper insulation, is there a proper vapor barriers, skirting, these sort of things, they are not, in most cases are not going to be deal breakers when you’re underwriting a deal. But things you can [21:43 inaudible] in your due diligence that you can later remedy early on in the ownership cycle. So that the big problem never happens. It’s just basically preventative maintenance, right? It’s one of those, you know, you don’t look at it until it tells a problem. I’ve had houses that don’t have water heaters. I didn’t think to open the closet and look into the water heater. I’m just like, of course it has a water heater. Well, no, it doesn’t. Poof! Thousand bucks. Well, it happened four or five times, like, man, I would’ve paid 5,000 less for this park. Diligence is the mother of good luck, right?
Joshua Diaz: Yep. And that’s not just looking at papers and reports. It’s making those phone calls. I pretty much called every single contract that we service that park and got their information from their end. And that’s how I also found out like all the additional services they can do to make life a little bit easier when the time comes, the same guy that does the gravel for this park that I’m going to get that paid eventually. But right now he just fills in with gravel. He also does the snow removal. The owner was using someone else, I think it was a little more expensive, but if this same company can do it for a more reasonable rate. Yeah, Why not? But I wouldn’t have known that if I didn’t ask.
Ferd Niemann: Yeah. That makes sense. And again, it’s always good to find good vendors and yeah, a lot of these guys do more than one thing. It’s just finding guys reliable and has insurance or signs a waiver, or you have the insurance to cover them for things like liability. You know, that’s always, it’s always a concern. I’m at one park in Des Moines where there’s the road system is such that it’s just down the back straight shot. There’s no turnaround. There’s no loop. So most of the trash companies wouldn’t do the work because you can’t turn a truck around. They don’t feel like backing up all the way onto a busy street or backing down in all the way. So I was like, crap, I didn’t never thought about that before. Can’t get a trash company. So I had to find some little, small time player with a pickup truck and [23:54 inaudible] pick up the trash by hand and you know, lesson learned. I know next time I see a little street with a straight shot, I might have to get a non-professional trash carrier. Well guess what? The non-professional trash cuter probably doesn’t have general liability insurance, Workers’ comp. Now I got to dig into that. What’s that going to cost me or him? Or is there a waiver? Is there something else? And it’s just, you know, something that I didn’t think about, but came up now I think about it. So that’s what you’re doing is, stuff that you now thought about that you may not have some of it you learned from others, some of it you learn at school of knocks, but it’s still learning.
Ferd Niemann: Always be learning.
Joshua Diaz: Yes man, it is great. All right, Joshua, I appreciate your insights and your tips, before we jump, anything else you want to share or say before we go and if not, where can people find you?
Joshua Diaz: Well, yeah. I mean, last thing I can really say is like expecting the unexpected. I did mention briefly earlier about eviction that just suddenly happened. This came out of nowhere, literally. So just one month, this past month, just no payment, tried to reach out nothing. The father of the residents in there reaches out and said, I’ve been trying to get my daughter out of there for like the past month now even bought another house for her. She’s not talking to me anymore. And her and her boyfriend are just in there. And now the other residents are complaining because they’re doing all of these sorts of things now. He also just likes say, I’ll sign over the home to you, like a 1960 old. I’ll just sign it over to you if you want to do the eviction and just take care of it. Cause I’m done with this. So yeah. He’s like, oh, he doesn’t even want anything for it. He just wants me to take it off his hands. Like, I’ll give you this house for free, I’ll sign it over. I go to my notary and all of that. And actually have the title now in hand. And that’s the weirdest thing that, I’ve never even heard of other people coming across that, but apparently there’s some sort of, you know, inter family issues or whatever. I’m not going to get into that. That’s not my business, but now I have a home, one park owned home with a resident I now have to evict, which is why I’m glad I have that lawyer now because he’s working me through this whole process. Now there’s a lot of moving pieces. So yeah, So expect the unexpected because I had no idea that was going to happen, but it is. And now it’s something I’m going to have to deal with.
Ferd Niemann: Good advice. Next time you’ll have a hundred more of those.
Joshua Diaz: I’ll be ready now. I’m taking notes of everything. I always write down a little journal and things. So yeah, that won’t catch me by surprise anymore.
Ferd Niemann: All right, Joshua, good stuff. You want people to reach out to you? Where can they find you?
Joshua Diaz: Yeah, I mean, I have my account in bigger pockets. It’s pretty much my name Joshua Diaz. Like you mentioned, LinkedIn is also there. Same thing. You’ll be able to tell it’s me, because of the hair. Other than that, if people can reach out to my email, if they want to like, you know, get some more personal advice or they’re doing something and they want, you know, second opinion, they can always reach out to my email. It’s email@example.com. It’s basically my full name first, middle last put all together.
Ferd Niemann: All right, man. Well, I appreciate it Joshua, have a good rest of the day. Thanks for coming on.
Joshua Diaz: Hey, thank you for having me. I really appreciate this.
Ferd Niemann: You got it.
Joshua Diaz: All right. Take care.