Ep. 18 | Broker Mini-Series: Interview with Kris Wessel


On this episode of The Mobile Home Park Lawyer, Ferd talks to Kris Wessel about all things mobile home park. Kris talks about the current MHP market and offers his advice on how to get noticed if you are a first-time buyer.


Keep watching the market and looking for opportunities on properties. I think we’re going to continue to see stuff come up. Anytime there’s change, that creates a lot of opportunities.”



0:00 – Intro and background on Kris
3:02 – Kris sees a lot of new people getting into mobile home parks, but not very many new attorneys focused on them
4:09 – Most new people coming in fall somewhere between small buyers and 50-million-dollar equity fund buyers
4:53 – Kris gives his tips on how to get noticed and taken seriously on your first buy
7:14 – Ferd asks Kris about what his typical day to day looks like
9:48 – Kris is seeing low cap rates being preserved and a great deal flow in the market right now
11:36 – Kris is asked about any tales he has from the school of hard knocks and tips he’s picked up over the years
14:05 – People should keep watching the market and look for good opportunities as there should be some continuing to pop up
14:43 – Kris goes through his favorite and least favorite parts of his job



Ferd Niemann: Welcome back mobile home park nation. Ferd Niemann mobile home park lawyer here again today with another episode. I got a great guest today for here. Another broker, it’s part of our mini-series on brokers. We’re going to get his insights, our brokers with NAI Heartland. He is an MHC, MHP broker, got over 10 years in the industry out of Wichita Kansas, who works throughout the nation. Please welcome Kris Wessel.

Kris Wessel: Thank you for having me on today.

Ferd Niemann: Thanks Kris. Appreciate you being here. Well, I know you, we worked together some in the past and know each other, but for all of our listeners and viewers out there, please just give us a quick background of how you got into MHP space and then what you do today as an MHP broker.

Kris Wessel: Okay, very good. Let’s see. So I started commercial real estate brokerage in 2006 and worked as a generalist the first year in Wichita where I lived and very early assignment was there was a buyer out there and he wanted to make the jump from being a landlord of multiple single-family properties to purchasing a mobile home community. So, I worked with him and I had a lot of time back then and I had a research background, so I made a database of 60 or so mobile home communities within a reasonable proximity to Wichita. And I just called them all one by one and asked them if they would sell. And out of that ironically, we didn’t get a transaction done with our purchaser, but there was one that he waved off and said, this is too large. You know, I could not purchase that. And so, we turned it into a listing and that was the first property of any size that I sold. And after that I was kind of hooked. And so, things were, it was kind of a trickle for a few years. And then I spent some time, you know, kind of on both sides of the fence where I was really getting serious about the mobile home communities, but I still had other business. And since about seven years ago, it’s been almost exclusively, you know, manufactured housing for me these days.

Ferd Niemann: That’s great. I’ve been in the business in some facet about six years and I tell people if I’d have done it two or three years earlier, done it full time, two or three years earlier, I’d probably be retired by now. You did a good job getting in early. There’s so many people coming in the space in today’s environment. Is that what you’re seeing is lots of new entrance. And from the buyer side, are you seeing any new entrance from lenders or brokers or what’s your kind of current view on the asset class?

Kris Wessel: You’re right. I think there’s a lot of people getting in. There’s definitely, you know, we see a new buyer show up. I would say somebody lands on my doorstep at least once a week and, you know, we gather their info and try to figure out what they’re looking for and if we can match them with the property that we have. So yeah, definitely new entrance there. We haven’t seen a lot of new attorneys come to the marketplace as specialists, so I think that’s the newest … And then the broker specialty you know, there’s some barriers to entry, but you know, I do see some people kind of getting deeper into it than they used to. And so, I think you’ll still see some growth and some variety coming into the marketplace in terms of brokers that are out there.

Ferd Niemann: As far as the new buyers. Are you seeing a mix of, you know, small, you know, buyers, I’m looking for my own part for me, or are you seeing more of, you know, I’ve got a $50 million equity fund and I’m trying to take over the whole state. What do you see more of?

Kris Wessel: I think the most common profile is somewhere in between. A lot of the ones that are coming in, they are raising investor funds and that might be, you know, friends and family or what I call country club money you know, acquaintances well, you know, or it could be something, you know, larger than that. But I would say that’s maybe the most common profile of people coming in.

Ferd Niemann: Got it. And how does a new buyer gets your attention? And I know you’ve got a lot of buyers on your list and, you know, if I’ve closed 10 deals, you’re going to be more likely to probably work with me than the guys close zero deals. The guy’s close a hundred deals even more so, I’m looking for my first project? How do I get your attention to be taken seriously?

Kris Wessel: You know, I always say that the first one is hard and not related to factors that I can control, you know, the property type, you know, the lenders do put a significant part of their underwriting on experience and you know, you got to get that first one. I think, you know, I have some people that as they came into the space for the first time, they might’ve purchased that first community with cash and maybe they purchased something smaller just to kind of get that resume, you know, check the box of experience and you know, seller financing is another way to do that. I think that pursuit can be, you know, kind of elusive, you know, there’s lots of people that want that and you have a limited number of sellers, it makes sense for. But I would say that’s something to keep in mind on that first one. And as far as like, you know, interacting and you know, other guys in my business and ladies might say something different, but I always think that you know, let’s start by email. You know, if there’s a property jsut acquire, you know, send us the confidentiality agreement, we’ll send out the property info and our goal even when we put together our marketing packages is to have 99% of the information that you would need to write an offer, you know, basically everything short of due diligence itself. And then if you get through that package and the property still of interest. And then let’s schedule a call, get on the phone and go through questions and help you kind of move from A to B. But we’ve found that just getting those packages out with email is very efficient and the information we really try to have it organized and present virtually the same way every time, so that as you get used to seeing those, you know, it shortens your lead time to underwrite as well.

Ferd Niemann: No, that makes sense. So obviously with that, a good portion of your time is working with potential prospective buyers and putting together those offering memorandums. What is your typical day-to-day look like now? As you know, you’ve got an international platform. You’ve been in the industry a long time, I assume you’re not calling the 60 cold calls the same way you were on that first one, but maybe somebody else is doing that. But how does it look like now in the industry?

Kris Wessel: That’s true. I would say there’s, and this is one thing that I could have said back in 2006, and I can still say now there is no typical day. So, but you’re right. You know, the business changes very fast. Particularly this year in 2020 I kind of joke that we changed how we do things three times since the beginning of the year. But yeah, you kind of have projects that move through different phases. I do spend quite a bit of time making sure we have our marketing channels correct. And you know, we’re backed up with a really qualified design staff, you know, we have to get them the right data to put in there, and they’re the ones that make it visually appealing. So, marketing materials you know, and then just moving properties through to sale processes as far as getting them ready for market working with that seller. And then, you know, filming inquiries, helping them negotiate offers and select a buyer and then, you know, managing this to close. And you know, I got, there is, Steven works with me now and he’s in production as another broker. And then again we have some support staff that I still kind of take that, you know, I call it kind of a boutique approach where, you know, I’m involved in the listing presentation and I’m the guy that takes you to closing. And I will know that thing from top to bottom all the way through. And you know, I’m not going to say micromanage, but it’ll be well taken care of all the way through the process.

Ferd Niemann: That is Great. Have you read the book extreme ownership?

Kris Wessel: I have not.

Ferd Niemann: I think you’re living it, I think. But I think you’d enjoy it. You’re essentially owning every part of the process. You’ve got subordinates or colleagues, but some of them would be better than you at things like graphic design, but it seems like listing presentation, you’re running it, you’re involved, you know, things like gettin it through the closing, watch and do due diligence, all this stuff. That’s crucial, you’re babysitting this thing so that it goes from soup to nuts to a successful end result. And then you’re buying dinner at the closing date. You talked a couple of minutes ago about the change in the market, as far as new buyers, lots of new buyers, what are you seeing them as a result of that, or maybe just the result of maybe some macro-economic factors. What are you seeing in the marketplace? What’s your prediction in the marketplace, for cap rates, for deal flow, you know as we wrap up 2020, go through an election and then jump into a new year, hopefully, a COVID-free environment.

Kris Wessel: Yeah. You know, the change in the pace of change has been interesting this year and maybe exciting. I wouldn’t call it frustrating because I feel like we have adapted well on our end, but I think nobody knew what was going to happen back in March and as things have moved forward, what we’re seeing is, with the interest rates dipping even lower, that’s really kind of helped preserve our low cap rate environment despite, you know, some turmoil out there economically. And so, I would say, look for that to continue, you know, we don’t see any immediate uptick in interest rates forecasted that I’ve been told about. And you know, as far as deal flow goes, there has been great deal flow to the marketplace. I think we were in a little bit of a drought or the doldrums in the summer as people were trying to figure out what to do, but for whatever reason, we’re seeing some sellers get off the couch and deals come out. And we’ve seen that in our shop, and I’ve heard from other agents out there, and other buyers out there that they’re happy with the amount of product we’re seeing coming to market or even off-market.

Ferd Niemann: Got it. No, I definitely agree that the low interest rates and the debt that’s available right now is keeping prices high, cap rates low relative to what I would have expected in an otherwise in somewhat tumultuous economic climate. But definitely a factor at all times. Well, what kind of advice do you have? I know you’ve been in the business a long time and you’ve seen lots of different deals by virtue of being a broker in numerous States and on both sides of the aisle. Do you have any good tips or stories, kinds of school of hard knocks that you can share with our listener?

Kris Wessel: I thought about that for a little bit, and I don’t know, I don’t know if I’ve gotten anything that I would call lessons from the school of hard knocks. Knock on wood, I do make mistakes, but I try to keep them as small as possible. Sometimes that works. But I would say a couple of tidbits I’ve picked up along the way. There was an investor we worked with years ago and one thing he told me was always work with a plan B and I thought that was really good insight. And I think that can mean a lot of things, you know, it might be having two different ways to get a purchase financed, you know, when you’re going into contract or, you know, it may mean different exits for the deal. You know, if it goes like I think, I’m going to resell this in five years, this will be my game. And you know, if that doesn’t work, you know, maybe you have a scenario, plan where you have a refinance and you know, that’s another possible way to get from A to B. But I always thought that was kind of good, you know, fundamental advice for anything, you know, business or real estate related. And then the other thing that I’ve picked up, I think along the way, and I kind of use this in my personal investing. I don’t buy mobile home communities just for the sake of trying to keep things clean that, you know, when we call you, we know, you know, we’re always being brokers or not you know, not trying to buy something that you want to buy. But you know, I’ve done some industrial investment and single-family, and I kind of like to look for mismatches between risk and reward. And so, myself, I’m a moderate risk-taker. And so, I look for things that might be a moderate risk, but might have a, you know, above-average return, you know, maybe the market has misjudged that asset. Maybe we can match it with very opportune financing and that sometimes lets you, you know, earn returns maybe more in the cowboy investor department without taking those risks.

Ferd Niemann: No, that’s good. Sam has a similar concept on asymmetric risk-reward balance. And that guy knows what he’s doing for sure. So, I think that’s definitely a good idea, lots of good advice there. And any other tips or strategies that you can share before we part, otherwise I’ll let you go, but this has been good.

Kris Wessel: You know, I think people just, you know, probably keep watching the market and looking for opportunities on properties. I think we’re going to continue to see stuff come up and you know, anytime there’s change, then, you know, that creates a lot of opportunities. And so, we may have people come to market that we’re not sellers that now are. And you know, I just think if you’re participating in the marketplace, it’s going to be active and you’re going to benefit from that.

Ferd Niemann: Makes sense. I forgot to ask you, what do you think is the best part of your job and the worst part of your job, and you can’t just say the closing date.

Kris Wessel: Fair enough. So, there’s a lot of things that I like about the business. I really do enjoy what I do. I enjoy the travel. I enjoy the flexibility. I kind of joked that, you know, I can work any 65 hours a week that I want to, and you know, the challenge, the risk-reward. I like the people. And it’s kind of funny. And I like to say in the manufactured housing business, even if you’re really, really great at this, it’s hard to develop, you know, too much of an unhealthy ego. And so I think that kind of means that you know, all the people we work, not all the people, but the lion’s share of people we get to work with are really good folks to deal with. And so those would be several things I enjoy about it. You know, I’d say to the, and this one’s kind of a nod to the folks out there that are on the ownership side or getting into the business to be on the ownership side. You know, I think one advantage you have there that you don’t get on the brokerage side of the business is that, you know, as you get more seasoned, you know, you get your team in place and you get your properties acquired. And, you know, if you want to take a few days off and go play for a while, you know, rent still comes in, your team is still at work. And you know, although there’s more than one of me now doing this you know, brokerage really, it’s a direct result of time invested. You know, that’s not the only factor, but you know, it’s not a deal where you get to coast at some point, you know, it’s a very active job. I would cite that as a downside, but I’m at peace with it.

Ferd Niemann: Yeah. If you get paid per transaction, you always going to get another transaction, but as long as you’ve got the funnel full and you’re doing the best stay on top of your field, then that’s legal stuff’s the same way, right? It’s like, you need a new client tomorrow if the client dies today. You always need to kind of fill that funnel. But yeah, as on the ownership side, yeah, definitely can get some of that and then they call it mailbox money, but this isn’t a triple net lease Walgreens investment deal, you know, those kinds of deals that are mailbox money. There’s a little work that goes into running an MHP, as we both know.

Kris Wessel: Yeah. Yeah. I guess you’re kind of in the same boat, you know, there’s no billable hours on the golf course.

Ferd Niemann: Exactly. So, well there actually might be, I’m not a good enough golfer to get on those tournaments, but I think a lot of deals are made on the golf course, but Kris, thanks again for coming on. How can people find you? I know how to find you, but how do you get people to reach out?

Kris Wessel: Sure. So, all of our contact information and our listings and our transaction history are available from our website and it’s www.naimartens.com/mhc. It is spelled a little different. But yeah, if you go there get the contact information and get a look at some deal quotes as well.

Ferd Niemann: All right. Sounds great. Thanks, Kris.

Kris Wessel: Alright. Thank you for having me on.





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