On this episode of The Mobile Home Park Lawyer, Ferd talks to Jon “Mr. Landman” Fisher, a broker out of Illinois. Jon gives some advice to the listeners on selling, he also gives his thoughts on the current market and what effect the presidential election will have on the market.
“This is the hottest market the mobile home park industry has probably ever seen.”
HIGHLIGHTS:
0:00 – Intro
1:21 – Jon gives his background and explains how he got into the mobile home park business
5:49 – Jon explains how usually he loves the people he works with and that people can usually feel as though they can trust him
8:32 – Jon’s give advice to sellers about being prepared
12:45 – Don’t overwhelm the buyer, and be honest
15:49 – Jon says that this is the hottest market the mobile home park industry has probably ever seen
18:40 – Jon is running into some funding issues because the banks are hitting the breaks until the elections
20:14 – If Trump wins, Jon believes the market is going to explode
FULL TRANSCRIPTION:
Ferd Niemann: Welcome back mobile home park nation. Ferd Niemann here today, interviewing a special guest out of Champaign, Illinois. Our guest is a real estate broker, he focuses on mobile home parks. He’s licensed in the state of Illinois, started in the state of Indiana. I have had the privilege of buying two parks from him and had him engaged to help me on a current park that we’re chasing on an acquisition side, but he’s been a good guy to work with. Appreciate him coming on today. With me today is Jon Fisher, “Mr. Landman.”
Jon Fisher: Thanks for having me Ferd. I’m also licensed in South Carolina and Georgia.
Ferd Niemann: Holy cow. You’ve been working hard since I last knew. Undersold, that’s good. So Jon, tell us a little bit about your background and kind of how you got into the mobile home park business and just, you know, what it’s like, and then ultimately I’d like to know what you like about it, what you don’t like about it, and then we’ll kind of go from there.
Jon Fisher: Well, I honestly just fell into the mobile home aspect side of it. For 22 years I owned a, I have a rather unconventional pedigree, prior to getting into real estate just shy of three years ago, I owned an international swine genetic firm.
Ferd Niemann: Yeah. That’s a unique background. How do you go from that to the mobile home park business?
Jon Fisher: Well, so not knowing what I was going to do. I was terribly burned out. I was pretty successful in my previous occupation, but I was burned out and I wasn’t happy. I was depressed. And so, I closed it down on July, 1st of 2017, not the only one I was going to do. And four months later, after not being able to get a job that really, I thought suited me, I just decided I was going to get my real estate license. And at that time with my agriculture, my farm background, I decided I was going to try to focus on selling farm ground in Illinois and Indiana. And I’m still focusing on that. And I still hope to sell thousands of acres of farmland over the next couple of years. But as a young realtor, I didn’t have many listings and I was six months into my real estate career without a single listing. And my Indiana farm broker called me and said hey, you know, we were contacted today about a mobile home park in Taylorville, Illinois, which we bought. And they said we’re not interested, do you want it? And at that time, I would have taken the, you know, a dump anywhere. I would have taken any listing that could have been. And I’m like, yeah, I don’t know anything about mobile home parks, but I’ll take it. So, I had a friend here in Champaign County and I called her up. I’m like hey, you know, I don’t know. I didn’t know that they sold them by the pads. I was so green. I had no clue. So, she kind of gave me an education. And she told me about Mobile Home University and Mobile Home Park Store. And so, I got the listing, and I did my best I could to a write-up on it and advertise it on Mobile Home Park Store and Kirksey and LoopNet. And within the first 24, 48 hours, gosh, I had at least 50 phone calls, had three offers. And it just kind of mushroomed from there. And about a month later, I got a call from a guy in Peoria. He said hey, I saw your listing in Taylorville, you know, I’ve got a little 11 pad over here, would you help me sell it too. So, I am like, two parks in a month there might be something to this. So, I just ordered a mailing list. I started writing to people and now just shy of three years later. I’m just about to list my 32nd park this week.
Ferd Niemann: Wow. That’s great. I’m glad to be part of the first one. That first one was a hairy deal too.
Jon Fisher: It was awful. Definitely cut my teeth on that one and learned a lot. You know, you were very difficult to go up against just because you had so much more knowledge of the industry than what I did, but you were definitely very educational. So, I’m glad you were part of that first deal to help me out.
Ferd Niemann: Okay, good. If you say something bad about me, we’re never going to air this episode. So difficult to go up against, but fair, reasonable and I closed. That deal, I remember the hardest part of that is these gas lines, man. Everybody else doesn’t know the details on this park, the utility company had broken their easements. And they put their gas lines in the, basically the most convenient lots or space for them from house to house. And they violated the location. So, it was about $105,000 to relocate the gas line. So it got me in a big fight with the utility company and we actually had that under contract and then dropped the contract because it was, there was a number of issues with it that came up in due diligence, but then glad we, you know, that’s the kind of lesson learned, keep a good relationship, even when you break up on the deal and we were reasonable, you are reasonable. We came back later; he came back later, and we got it done. And you know, win-win, and had that park for about two years and really put a lot of money into it and fixed it up, I actually just sold that park in July. So, kind of a two-year flip, but several hundred thousand dollars of cap x and mobile homes into it. But overall, done really well for us and this community and everything like that. So, you appreciate just as a good deal. And then I’m glad we got to work on it and working on another deal, you sold us as well. Obviously, you like, knowing you, I know you like dealing with people and you’re good I think with, especially with older sellers and a lot of the kind of your farm relationships I think help with that. So, I mean, is that kind of, your niche is building relationships with sellers. I mean, is that, and I think I’m kind of wondering, like what do you think is the best part of your job and what’s the worst part. Some people like the relationship, some people hate it and like the transactional side.
Jon Fisher: Well, I mean, 99% of the time, I love the people that I work with. You might remember that very first transaction we were just talking about. There were three heirs involved. Two of them were the nicest people on the face of the earth and the third one from California, if you would’ve told him that water was wet, he would have argued and said no. And so, then you have clients like that, that sometimes, you know, maybe that’s the reason why I’m bald. Clients that make me pull my hair out. But you know, I think I’m fairly charismatic. I think you know, I’m fairly positive and I was raised where a man’s handshake is his word, and I think people can kind of sense that you know, I’m being honest with them and I’m shooting them straight. And you know, I had one guy call me one time about listing his park and he goes, you know what, I probably get five letters a week from people wanting to sell my park. He goes, and I saw your logo and saw that you were a farmer, and you can always trust a farmer. So, I’m calling you, and I listed his park.
Ferd Niemann: That’s awesome. That is awesome. My dad, you’ve met my dad. He grew up on a farm, and then he had a family grocery business in the midwest and Illinois. And one thing he always told me was if you can hire a farmer to do it because a lot of these farmers would come into interviews like these kids already got up at four in the morning, they already milked the cows. They have discipline. They learn discipline, they work hard, he said, man, you never had problems with them. It’s the people that are coming in off the streets, their first job, just shirts untucked, smoking the cigarettes as they walk in the interview. Like those guys are a problem. It’s the farmers and then the military vest, he just like you are hired. You know, you’ve already kind of earned it. So that’s a, you know, a positive stereotype, I think for sure. But anyway, that’s great. You know, Jon, you’ve obviously been in business now several years kind of went from, just get started super greens to having quite a few listings and sales. What advice can you give to other people listening to this podcast? And in particular, first-time buyers, I get a lot of calls and questions from first-time buyers, just in my legal practice or just find me on LinkedIn or Facebook or friends. And I’ve had several of them this week. And some of them are pretty bleak. I mean, just completely fishing in the dark. And I don’t have time to take every one of them and answer every question and call. So, if we record this, we can, you know, a hundred people, a thousand people could listen to your answer. So, if you have any advice and what you did right. And then also like, you know, the school of hard knocks, what did you, what did you learn that didn’t work out so well that you can maybe help others, so they don’t have to make the same mistake. And if it’s not your mistake, maybe a deal you’re in, you know like you mentioned this one difficult seller, maybe something like that, anything you can share on that is great.
Jon Fisher: Well, the only thing I can say if you’re on the selling side is have your numbers ready. You know dealing with a lot of mom and pop operations, you know, a lot of times the record-keeping amounts to a shoebox back, you know, on the side of the kitchen drawer where they put all the receipts. That’s sometimes can make it challenging for us. And sometimes on the buyer side too you know, everyone wants to do their due diligence and The Mobile Home University and all these other programs that you go through that try to teach these first-time buyers, you know, they give you the list of due diligence items you should ask for. And you know, I had one park where I specifically put mom and pop operation, very, very limited financials, very limited due diligence, and got the deal under contract. And I get the request for due diligence items. And it was eight pages in 126 questions. And I just…
Ferd Niemann: It’s overwhelming.
Jon Fisher: I read the offering memorandum. So I mean, and you know, there’s, you know, with some of these situations, I understand that there’s an element of risk going into parks, where you don’t have true financials, but and a lot of times, you know, also those mom and pop deals, even though they can’t prove the financials, in most cases they’re probably more profitable than what you think because they’ve been taking cash or need the tape.
Ferd Niemann: Right. And I’ve lost several deals like that. I think that deal we bought from you, not the Taylorsville deal, but the Rantoul deal where the seller had, I think it was three parks and seventy-five single-family houses and they were all in his personal name, personal checking account.
Jon Fisher: He already pulled out his wallet and how thick it is. How much cash he had in there.
Ferd Niemann: He had a hundred checks and thousands of dollars in there. And I was telling somebody yesterday, that’s the most stubborn old man I’ve ever met. That guy he wanted was like 7, 17, and 54 units and was like 500 each. He’s like, the seven-unit park can’t be worth as much as the empty, you know, 500 each, 500K in my jeans. I remember like that was yesterday. And then we had to sign a contract and he said so can I have my money now? Like no, we’re going to like do some due diligence and stuff. Oh, okay. Well, whatever cash, check, I don’t care. And I legitimately think, old Jack, he thought I was going to give a duffel bag full of a half-million dollars. And he was a little disappointed that he had to go home with nothing, but we got it done. That was another fun one. But that’s definitely great.
Jon Fisher: Jack called me one time after you were doing your due diligence and had all your inspections going on. And he said, he’s had so many people out here looking at this park, I think he said everyone but President Trump.
Ferd Niemann: You know, speaking of President Trump, I know your daughter’s named Reagan. So, we talked about President Reagan. My favorite quote is for due diligence is, you know, President Reagan always said trust, but verify. I say don’t trust and verify. And that’s what I was doing, Jack. I was not trusting you. And I was verifying everything. So, no offense, but that’s kind of the way to do it. But I was, I am working on a case in Illinois, not in Illinois, Nebraska right now. And my client has a big due diligence list. Like you referenced and similar deal, like an old seller. Like I kind of told him, Hey, it’s kind of a judgment call. I don’t know the seller. I haven’t talked to him. You do, you may want to put that, all that stuff in the Christmas list, full items, put that in your contract, but you may want to wait and just put buyer will ask you for some stuff, ask you for some stuff under due diligence, and then you tie it up and don’t overwhelm them. And then you, you really evaluate what you need. Like on the deal with Jack, I didn’t need his tax return. I didn’t need his P & L, because I knew they were garbage. So, I had to recreate my own. Now that’s harder to do on your first deal. And it’s hard to get good banking relationships. So, I had been in relationships where they, I get to tell my banker, look, here’s my proforma. I just, you know, I looked at the tax bill, the trash bill, the electric bill, everything else is my opinion based on the site visit. And it’s kind of reconstruct the proforma and I had an existing relationship. I probably couldn’t have done it on my first deal, but it was able to, so yeah, that’s definitely good advice to have as a seller to have your numbers together. So as a buyer, what you’re saying is really, don’t overwhelm the seller perhaps, or any other, you know, kind of a newbie.
Jon Fisher: And to be honest, I mean, you know, that’s the other thing we’ve run into. I had a park listed here that was about two months ago. I had a tremendous response to it. In fact, I had 13 offers on it within the first 24 to 48 hours. I can’t remember, 13 offers. And this one couple from the west coast texted me, called me, friended me on Facebook, then had the other partner contact me, and you know me and my phone is just going off the hook. I just out this bulk and you know, my bulk emails now go to over 5,000 investors. So, when I send out a listing for new markets like I’m a country station given away Garth Brooks tickets. So, my phone lights up and I’m not trying not to screen calls. I’m just, I can only talk to so many people at one time. And so, you know, she’s very aggressive which is fine. You know, you have to be aggressive in this market because there are so many people looking to get into this asset class. But you know, all cash, it can be all cash. So, we accept her deal verbally. I sent over the contract to her. Hasn’t been two hours yet since he said all cash. And then she goes, oh our situation has changed. We need that cash now; it has to be financed. Two hours.
Ferd Niemann: That just kills you. It just kills you from a character perspective.
Jon Fisher: So needless to say, she was unfriended from Facebook, blocked on Facebook, and she was removed from my mailing list because I’m not going to deal with customers like that, that are going to try to play games. I want to deal with people who want to, you know, I’ll treat you correctly. I’ll be honest with you. You just be honest with me and it makes everything go so much easier.
Ferd Niemann: That’s so frustrating. I had a, I’ve not dealt with this REIT. I tried to get them to do actually a joint venture one time, but there’s a, one of the big REITs, supposedly one of their game plans is they tie something up, tied up for million dollars, 30-day DD, don’t work on it at all. On day 29, due diligence is ready to die. They’ll send a letter or an email, we need a 25% concession, or we’re not going to close.
Jon Fisher: Get those all the time.
Ferd Niemann: And they didn’t do any work. Like you were saying, me and that guy in the example, Jack, I’m on-site, it’s obvious that I’m working the deal. I’m trying to make it work. It was just a bluff. And then if the person, the story is, if the person says, no, they just move on. If the person says yes, then they say, okay, now we got it priced at a reasonable price. Now we start looking at it. It’s like, that’s kind of, if I was the seller that piss me off so much, and I don’t know how you can become a big player and have that kind of M.O. But apparently, that’s how things fly.
Jon Fisher: Unfortunately, it’s more common than you would think.
Ferd Niemann: Yeah. You would know. I don’t deal with nearly as many sellers as you do, but let me ask you this. I can kind of tell from some of your other comments that, you know, I think you’re hearing the same thing and seeing the same thing I’m seeing in the current marketplace. As we sit here in the fall of 2020, just kind of in this COVID world, are you seeing just crazy levels of interest from buyers and crazy pricing? That’s what I’m seeing here in the Kansas City area, and then I’m looking regionally as well. But any tips on the market or any just, what’s your general consensus or comments on where you see the market at, and where you see it going?
Jon Fisher: This is the hottest market probably the mobile home park industry has probably ever seen. I brought on six, I think this summer, and it’s either four or five of the six I had under contract within 48 hours and three or four of those were at list price or above. So, from that aspect, it was crazy. Just to give you a little idea of how much or how many more investors are looking into this asset class right now, I think in November, my email mailing list had 1,400 members, and now I am at over 5,000. And you know, those are just people who, you know, have, you know, contacted me on the Mobile Home Park Store, maybe Kirksey or LoopNet, or, you know, however they found me. But, you know, I basically harvest those every time someone contacts me, I harvest those email addresses. And so, I’m to the point now where I really don’t need to advertise online. I can pretty much, you know go from a mom and pop deal to, you know, $10, $15 million park with everyone on my mailing lists, I feel confident I could sell every park I could get just from my mailing list I have right now.
Ferd Niemann: That’s unbelievable. And what’s unbelievable too is one, you haven’t been in the business for 25 years. That’s all relatively recent, you know, list accumulation. But then also you’re in the midwest. I know you’ve got licenses and done some deals outside, but like, I don’t think you’d buy anything on the west coast and the northwest, for example. So none of those buyers have seen your listings out there, that are finding you in the midwest and then getting kind of get your midwest deals and that should show I think that level of national interest. I’m seeing the same thing. And that’s why I’ve been looking more lately at joint ventures and kind of coming in as a lawyer or a partner on deals because I’m just going by myself, or just dad and me, the pricing is so crazy. There are deals going on for three, four, five cap. I’m just not going to pay a four cap on a deal that doesn’t make sense. I’ve got an investor pool that has a different fact banner or different yield requirements. And maybe I can take, you know, 30% of the deal and then give them 70% with the return and some sort of with a cash on cash, that fits their profile. But I just, it’s unbelievable. I don’t think it’s a bubble personally. I think it’s just the secret’s out. You know, we are going to be the darling of COVID is what I’ve been saying because our collections are so good, the fundamentals of our business are so good compared to some other asset classes. And I’ve done a lot of retail as well and other single-family and some multi-family as well. And I just have almost no interest in those right now. It’s just MHP is the way to go. And I think people that are burned agree and they are proving it, you know, they’re voting with their feet, they’re voting with their wallets. And I think it’s great for guys like me, guys like you that are already in the industry already have, you know, skills, experiences, knowledge base. It’s exciting. I mean, I’m looking forward to the next six months, next six years and what this all looks like.
Jon Fisher: Well, something we didn’t talk about right now we’re kind of running into some funding issues. Some of the banks and some of the investors out there are kind of pumping the brakes a little bit until the election. So, I’ve got two or three deals right now that are kind of, are they going to go? I don’t know, hopefully, you know, I’m doing everything I can. But you know, I did have one deal today that fell apart and the investor just simply said, I don’t feel comfortable buying this park right now until after the election. So that’s something else that you know, for the next couple of months, we’re going to have to deal with.
Ferd Niemann: Is the election, I know there’s always some kind of uneasiness with people in an election year. Do you think, are they waiting, like if president Trump wins, they’re going to do it, if Biden wins they are not, or vice versa, or is it just, we don’t know because of the whole eviction moratorium or are they giving you any more color as to why election specific?
Jon Fisher: I think if Trump wins, it’ll be full steam ahead, you know, it’ll be an 18-wheeler going downhill, honking the horn saying, get out of the way. I think everything’s going to be really good again. And if Biden wins, I don’t think it’s necessarily going to stop it. I think it just, people are going to, you know, pump the brakes a couple of times, just, you know, kind of check, look over in the left lane, look over in the right lane, make sure everything’s safe. And then, you know, hopefully, things will continue as long as, you know, interest rates stay low. And you know, I don’t want to get political here, but I do think that if Trump wins that this market’s going to explode here in the latter part of the year.
Ferd Niemann: I got to show you this hat. I agree with you. I agree with everything you said, but I wish Trump would wear this on election day.
Jon Fisher: Make trailer parks great again.
Ferd Niemann: Make trailer parks great again. That should be a trademark for our podcast here. I probably get in trouble if I started doing it, what is that acronym? TPGA. It doesn’t really have the same ring as MAGA 2020, but anyway, we’re doing our part, Make trailer parks great again. Jon, appreciate you coming on today. Appreciate your help. Look forward to working with you again in the future. And wish you the best.
Jon Fisher: And if anyone wants to contact me, feel free to reach out.
Ferd Niemann: Yes, please. Tell them that. I’m still a rookie at this podcast that, where can they find Mr. Landman?
Jon Fisher: www.mrlandman.com. That’s www.mrlandman.com or Jon Fisher. Jon, without an H, jonfisher1991@gmail.com.
Ferd Niemann: All right, thanks, Jon. I appreciate it.
Jon Fisher: Thanks, Ferd, talk to you soon.
Leave a Reply