Speaker 1 (Dalton Elliott)
Welcome to The Real Estate of things podcast. I’m your host Dalton Elliot. I’m joined today by Sam Wilson of Bricken Investment Group A firm based in Memphis, Tennessee. Sam is an active investor in everything under the sun Self Storage parking multifamily complexes, RV parks single family homes and as if he didn’t have enough time in the day also the host of a daily podcast how to scale commercial real estate Sam thank you so much for carving out some time to join
Speaker 2 (Sam Wilson)
Hey man the pleasures all mine thanks for having me on Dalton
Speaker 1
for sure. So when I was learning a little bit about you know real estate is what I live and breathe on my side of the fence. But before we dive into that, I have to ask you about parking All right, what does an investment in that space look like? How do you value the asset what are the financing options I’m incredibly curious because I know absolutely nothing about it.
Speaker 2
Yeah, most people don’t to be honest with you it’s a niche asset class I mean it’s something pre pandemic that was it was becoming even a very challenging asset class to buy on a numbers that made sense you know, you could buy you could buy parking lots and central business districts from of course everybody’s gonna say this from 2010 to 2017 18 you know, where the parking as a parking investment made a lot of sense you know, because you could buy it you’d have operators that operate your locks of course they’re valued based upon that operating income and that’s what you bought you were buying you’re buying a business with land attached to it but that model really was starting to go out the window as these you know as developers and development started happening back in these in you know, major urban centers so you know, parking lot started getting sold on square foot basis it became very challenging to find a parking lot that can be underwritten and purchased at a price that made sense so you know, even as a covered land play it became challenging so you know stuck with selling you know, the prices won’t even cover taxes so became a very difficult and then the pandemic just really was a stab in the heart for parking investments it’s coming back I mean there’s still great opportunity you know, parking garages I think are still you know in the right in the right places. Man I’d love to own more parking garages but for us you know, I’ll just give you the full color of the you know what we did we really just bowed out March 2020 came we were we were fighting like cats and dogs to get a deal across the finish line it was like you know what this is this is too hard so just took a real step back from that we may we may dive into that again How is it valued? I think I answered that but maybe it didn’t net operating income just like everything else. You know if it’s making 100 grand a year and you’re buying on a 10 cap or you can use easy numbers because I’m not using a calculator it’d be worth a million bucks so and that’s how you paid for it or that’s what you would pay for it but you know it’s a simple very simple business clean it was very hands off once the asset was purchased financing you know, you’d have to have the right banks that understood what you were doing. A lot of times you’d have guaranteed leases where you would just know exactly what the exactly to the penny what you’re gonna get paid that year you know you you’d basically sub it out to an operator that say I’m gonna pay you X number of dollars for the rights to operate this law. You go to your bank and say hey guys, we’ve got a lease for three to five years this is what it is you know, they’re underwriting the lease that you’ve been given from that operator and we’d always work with national operators because those were the big boys that you know they were they were publicly traded and you know had that had the balance sheet to backup the lease they were guaranteed so that that made financing a lot simpler
Speaker 1
sure what’s the normal leverage
Speaker 2
yeah 80% I mean again, yeah if you’re if you’ve got it and we have the right with the right relationships to get that but yeah, I mean it was it just made sense. Again, it’s like it was kind of like buying a better cap rates on the on the buy side but it was kind of like buying triple net leases or things like that actually a lot more triple net leases. So it’s Yeah, it was a very it was a very easy once acquired and easy hands off business to own or you know, hands off asset to own but again, we’ve stepped back from that may go back into it here shortly, but we’ll just kind of see how things shake out. It’s also something where you know, we’ve got to switch gears and really dive into some other asset classes. So you know, it we got to get back in and we want to do but right now it’s kind of the, you know, on the back burner,
Speaker 1
for sure. The real estate market on fire, right, we’re on an absolute tear. Right now so what are you focusing on what asset classes have your attention and to toss one more question in how have you had to change your real estate strategy pre pandemic to today?
Speaker 2
Yeah it’s a good it’s a good question focused on self-storage and multifamily which I mean will be do everybody’s focused on that right but James’s strategy on that I mean the thing is that there’s still opportunity out there it’s hard to find it’s every everything’s tough to find so it’s not just parking assets that makes sense it’s tough in all asset classes but there’s still deals out there so focused on those two primarily you know on the forget your next question was so I’m just gonna keep talking and you tell me to shut up whenever whatever I’ve gone off script here but those are the two you know that we’re focused on you know, the launch of the podcast rebranding you know it’s been a big part of that had to completely rebrand you know, we were parking your investments before which was just kind of a play on Park because that’s all we were doing. So a complete rebranding you know, and just shifting gears but that’s part of that’s part of part of business is just being flexible and seeing when the when the when the run shift go Okay, all right, change gears regional pack anything up. We’re gonna we’re gonna sit here and think about this for a minute and then we’re going to change directions and that’s exactly what, what, what we did.
Speaker 1
Yeah, so multifamily is the focus now I assume you did not get your start in real estate in multifamily. Is that right? Were you on the SFR side first?
Speaker 2
I was Yeah, I was single family for far too long. never quite figured it out, which is it’s 60 some odd flips owned a bunch of rental property. And it was Yeah, so I bought it auctions. We did everything man. I mean, it was iteration after iteration in the single-family side in in 2018 bowed out of that I said, Look, you know, since 2013, to 2018 was all single family. And for me, it was not scalable in a capacity in which I liked it to be scalable. It was in again, it goes back to everything from the people you’re buying from to it’s also the easiest point of entry for really anybody getting into real estate where you know, 95% I think I’m just making statistics up, which they’re all made up on spot anyway. You know, be blessed when you start right, like, oh, single family, I’ll just, you know, that’s an easy one, I can buy a house, most people can buy a house. And so I realized that I was competing with the least skilled people in the industry. And that’s frustrating where you’re like, Alright, you’re an idiot, you paid you know, $100,000 too much for this house because it’s your first purchase, I can’t compete with that. And so just duking it out, we’re kind of seeing that in the multifamily side of things right now too, or big money’s just chasing they’re just chasing any yield It doesn’t matter if it’s you know, 10 basis points above zero, they’re chasing yield in any capacity because everybody else is getting negative yield overseas so why not dump in the US market? They can get any sort of positive yield So again, we’re duking it out on that front too. It’s just there’s just more zeros attached to it. But you know, I digress, we yeah 2018 I just I’d had enough, and I said, Man, I’m going to switch gears into another asset class and that’s what I that’s when I moved into parking. And then in March 2020, shifted gears from parking into multifamily and self-storage.
Speaker 1
Yeah, so the multifamily side whenever you went from SFR to multifamily what were the biggest most notable differences when you’re valuing the asset did anything pop up surprising that you know you’re like I’m a real estate investor I’ve been invested in real estate for years gonna do multifamily, it’s the same thing it’s real estate, what surprises lessons learned what was in you know, call it that first round of deals you did?
Speaker 2
Yeah, and I think the notable thing there is that it’s almost easier to get financing done which is crazy. I’ve heard that 1000 times like the same amount of paperwork is just bigger dollars is not easier because you’re underwriting an income producing asset as opposed to underwriting a single-family home what it could be what it might be. And then and then monkeying around this the hoops you have to jump through I think is probably one of the most notable things where you’re dealing with again professional industry players on the financing side that you just go Okay, this is this is a lot easier. I mean, yeah, you still got a lot of a lot of stuff to do and there’s still you know, yeah, there’s still there’s, there’s still hang ups in it, but it’s just, I don’t know when you when anytime you can institutionalize and we’ll make up a word here, but professionalize things I think it becomes easier, easier, just from a from a you feasibility side of things.
Speaker 1
Yeah, yeah, it’s definitely a different animal. You know, I got in on the multifamily financing side, and it’s probably three or four years ago. And I thought, how much different can it be then, you know, the asset bar side and from a dollars and cents standpoint? Yeah, just bigger money. But it is a much more standardized process and nationwide on the multifamily side. And I think that’s because the large institutional money has just been played around in that space for a longer period of time. And you mentioned kind of the big players, bigger institutions want to touch on that a little bit. So conferences are back live, we’re traveling or sitting in rooms listening, the folks talk prognosticate. And one topic that keeps coming up, the last couple ones I went to one was a multifamily specific conference. But one topic is kind of the David and Goliath fight between, you know, call it run of the mill ambassadors and institutions, right, should we as we as real estate investors, be scared of these institutions who are sweeping up, you know, 500,000 property portfolios, left and right. Shifting gears, really to the SFR side of the fence for talk? Is that something that you’re seeing you’re in Memphis, you’re in a super-hot market, you invest outside of Memphis and we’re gonna pick your brain about some secondary and tertiary markets where I think the massive opportunities are the financial opportunities are at this time. But what’s your take on that battle? If we can call it that? On the single-family side? Yeah, single family kind of mom and pop investors versus institutional investors. And that’s one of the things we saw
Speaker 2
here in Memphis you know, it’s a great I mean, well known for its for its exceptional cash flow. You know, you can buy real estate here that it then that’s going away, obviously, with the prices of everything driving up and part of the institution, the institutional money coming in, has really changed that. But even at auctions, which is where we really spent the bulk of our time was at foreclosure auctions, and it became apparent that you would have these rates or these hedge funds that would come in and we’d be at an auction and they may have $5 million in their pocket to spend right. And they may be paying 95 cents on the dollar or 98 cents on the dollar for a property they’ve never seen the insight of I couldn’t compete with that. Like I’m a small fish you know, we had we had a few 100,000 bucks plus some hard mind to spend, it’s like Alright, so I can buy one or two houses at a time. You know, a I just can’t i can’t duke it out with you on that front, the risk is way too high. So you know, I don’t know if my answer your question or not, but what that’s the only reason we stepped out yeah, it squeezes people out. But it also that’s on the buy side, but also you got to look at it the other way too, on the sell side, you can get paid. So it just depends on which side of the which side of the fence you’re sitting on you go Gosh, this sucks. I mean, this is beautiful, because it’s driving prices up for everything. And so I’ve unloaded some stuff this year on the single family side, just trying to get rid of some legacy. You know, I’m all about commercial and that’s where I want to be more of a focus to be so I’ve been divesting of assets and it’s like, I mean, asking price plus no contingencies no inspections like This is madness. Madness for rental property that you go this hard with cash flows, you know, sure sign the contract.
Speaker 1
We have money we won’t property. simple equation here.
Speaker 2
Equation there’s a buyer and a seller Thank you Have a good day.
Speaker 1
The yeah no shortage of folks, especially during the pandemic talking with who have aggregated even as little as 50 or 100 properties in a portfolio that are getting attention from institutional groups like sure we’ll take a look at it we’ll see if it fits our box and it’s a simple yes or no formula right? Yes, this fits our box No it doesn’t. If yes, then money goes out the door to you so there’s you know, there’s a double edged sword as with everything right and like you said, depends on which side of the transaction you’re on which market how you’re competing, it’s, not as simple as I think some people would like. Some people feel the answer is
Speaker 2
right, right. For sure. Yeah. There’s this There’s definitely pros and cons to it.
Speaker 1
Yeah. So let’s talk a little bit about you know, we have primary, secondary and tertiary markets. And that’s how markets are broken up. Sure. Primary markets. Absolutely blazing fire Austin is my favorite one to pick on, isn’t it for everyone right now, like may love last year to May of this year, upwards of 40% year over year appreciation, which is absolute craziness. So, you know, you look at, they’re probably not gonna find a lot of good deals and steals in the Austin market or other primary markets. So looking at secondary and tertiary markets, I know you just closed on a deal. I’m in Greenville, South Carolina, you’re in Memphis, not too far away. You closed on a multifamily apartment complex in Columbia, South Carolina, which is an hour and a half east of me. Talk to me a little bit about why you’re getting into that market. What’s the draw for you for secondary and tertiary markets? And do you have to change your approach when you’re investing in you know, a larger market like Memphis compared to smaller market like Colombia? Yeah, that’s
Speaker 2
a great question. Yes Is the answer I mean, you can get burned if you go back to 2008 the number of investors that I mean there’s what I call that recency bias where people just forget that the crap actually hit the fan in practically everything and a lot of a lot of multifamily investors lost their shirt and why did they lose their shirt? You know I think again I’m just kind of I don’t have empirical evidence to substantiate these claims but it just kind of from observation you go why they lose their shirt on because they went to you know markets outside of major markets they went to like you know small towns almost say 30 or 45 minutes from maybe the downtown right a little too far out for most people maybe those markets were based upon a certain industry where you know you had only one or two major players that were supporting the people living there I mean, I’ve talked to a number of people who are like they said that parking lots full of moving trucks Okay, like half the tenants are moving out in a week and you’ve got 200 unit property I mean this was these are real life stories and I just got through my jaw on the desk going with like the religion or the management company literally getting a call and they were crying going My gosh, what do we do they’re not even like hey, we’re breaking the lease they’re just packing up and leaving like it’s gone to town right up so I think it’s one of the mistakes that people made is they got too far out but that does not mean that you can’t go to secondary markets or tertiary markets you just have to really know the metrics that go into those and you know see how they’re valued. Like why is Columbia and again I’m not all you know, I can give you a dozen reasons why I love Colombia but there’s a lot of good anchor stuff going on in Colombia so I don’t view Colombia is that one that that one employer town or that one you don’t maybe you want to be somewhere else maybe you’re gonna want to play your town 3045 minutes from downtown but it’s just too far out so Colombia is not that so looking at the Colombia’s the green bills places like that have you know incredible metrics to them and still you know promise the potential for return so I think looking at those looking at the looking at the job growth looking at you know, developments looking at what you know what what’s going on at the city county level what are those you know, they’re just looking at all those things and saying hey, look, this paints this paints a good picture. And also the other thing you can do is go smaller, right? Like if you don’t want to compete with the big boys buying you know, 300 plus a you know, Class A maybe you can go Class B minus and maybe it’s 100 units or maybe it’s 75 units maybe you go underneath that ceiling where everybody else is flying you go Okay, we’re gonna we’re gonna stay low. And you know, you can pick up stuff that way that still makes sense. So there’s things you can do, but again, I’m notorious for wandering all over the place you’re going so I have no idea actually what your question was.
Speaker 1
No, you nailed it. Just going through the really secondary and tertiary market analysis approach. Yeah,
Speaker 2
I look at looking at stuff like you know you get too far out there. I don’t know anything about Wichita, Kansas, right? I don’t know anything about it, but that’s one that comes to mind where I just go Wichita. Hmm, that seems like a place that can dry up in a hot second. I could be dead wrong. I have no idea. I’ve never so much is done even a, you know, population growth study on Wichita, Kansas City is another tertiary market that people are interested in. But one of the one of the dynamics there. I don’t know. I’d be more I’d be more prop betting on Kansas City than in Wichita. So those are things also I look out and just go Okay, you know, keep the keeping you’re keeping your criteria refined, I think is super important. So, and again, you know, I don’t want to rehash everything I just said, but that’s, those are some of the thoughts surrounding that.
Speaker 1
Yeah, really, really just seems like it boils down to risk reward, your primary markets are always going to be your most stable because they’re the most population dense with the most employers and the most action going on. And then the further you get away from those major metros, the risk reward just increases, right, you’re not gonna have to compete and pay as high of a price. But there’s reason for that. And, sure, the, you know, we’re seeing this in the Greenville area, it’s just growth outward. Same thing with Lana, just a clean growth outward. But that’s not the case everywhere. So to presume that a displace is 30 minutes outside of the action, but five years from now, surely it will have expanded. Maybe not. That’s where you talked about, you know, population growth, population density, and really analyzing what are the growth patterns look like? What are the draws? Are there new employers coming into the town that are going to throttle that up? That’s definitely something on the multifamily side that I know we were talking about the differences between SFR and multifamily SFR versus multi on the multi side. So much more that comes into play whenever you’re looking at a project. Right, right. What does the employer activity look like? Is it near? If it’s near a military base? That’s applause if it’s near, you know, if it’s a college town, like all different types of factors come into play, where on the SFR side, there’s a little more simplicity. What’s the value of this house? Right? Yeah, let’s hit play there.
Speaker 2
100% 100%. You know, it’s interesting, I was talking to a guy yesterday that when he he’s a big data analyst, like we talked data on stuff that he can’t even just like, do it up, bring it from a firehose, one of the things he was talking about was he called his affordability deviations where he would he would take like, you know, 1000 properties in the market. And then he would take the average incomes and he would he would compare that to the markets with the greatest or the he would compare the incomes to the rent price, or the sales price of homes, right? And in economies affordability, deviation to call them up is one of the downside predictors, right? And so then you would say, Okay, so we’ve got, we’ve got this data, and you go back and compare it to like, 2007. And he would say, the greater the spread between the price to rents, or excuse me, the income, the rents were the greatest spread from income to housing prices, the sharper the correction, right? And so it was he would, so he picked out a bunch of markets, and you’d say, all right, so look, here’s the ones that really took it on the chin. And then he would say, but look, there’s also some markets in the same timeframe that were undervalued, where the income growth relative to rent price, or income growth relative to the average home price was, you know, much smaller and or, you know, income was increasing at a rate greater than the price of the properties, which was just a really fascinating, I mean, hit over 1000s and 1000s. of properties. It’s like, that’s a really unique way of looking at so you know, doing things like that against the Charlotte market. Right? say, okay, you know, what’s that look like? is Charlotte overpriced? Or is it just right in line? I don’t know. It’s one of those things.
Speaker 1
I think that is an incredibly important piece of advice that gets lost. I think that too often, you know, investors and folks in the real estate industry, as a whole tend to get caught up in trying to boil down the entire United States real estate market to a couple of headlines. It’s doing great, it’s booming, or it’s going down. It’s terrible. Just because it’s on a downslope doesn’t mean that it’s not investable right there, they’re going to be no your market. Right? Right. That’s the big piece of advice there that regardless of what’s going on, and you know, if I’m in Greenville, South Carolina, and New York and San Francisco and Austin are, you know, going up or down or whichever way that, you know, it may happen that Greenville is having similar effects, or it may be the complete opposite. So even whatever headlines may read one way or the other, if you know a market and you feel good about it, or bad about it, you know, you got to do your own homework. You cannot just feel like if I buy it, they will come if I buy it, it will continue producing guys a little bit of eyesight out in front of your skis. Yep. Yeah, for sure. For sure. Yeah, that’s well said.
Speaker 1
Yeah. So one More kind of pointed question, right? You have you have massive experience across all these different asset classes. From an answer this however you want from Simplicity’s say from just dollars and cents sake. What’s your favorite? What’s your least favorite asset class?
Speaker 2
That’s a good question. I you know, geez, favorite asset class. My favorite one is the one that makes money, right? Yeah, I don’t, I don’t really care if it I mean, we could be selling dog kennels. And if it’s if it’s making money, man, like, great. I’m, uh, I’m, uh, yeah, I don’t know, I’m an opportunist. So, you know, if there’s opportunity, I want to participate in it. Yeah, that’s, that’s, that’s unfortunately the wrong answer. But, you know, I like multifamily. I think it’s fun, I think it’s unique in its ability, it’s, you know, to take the cash flow and leverage that into an equity game, you know, I think that’s, that’s amazing, where you can raise rents, you know, if you if you can produce 25 bucks a unit across X number of units, and suddenly you’ve just created several $100,000 in equity. Like that’s, that’s brilliant. You know, it’s harder to do in self storage, but not impossible, they’re still that they’re just not going to get quite I don’t think the equity multiple that maybe you do in multifamily. So and any of those things can change, too. So that’s, that’s something to keep in mind. But I mean, those two are great. The one asset class that we are actively pursuing his boat and RV storage. anybody’s paid attention to that. But boating RV deliveries are up like 30% year over year in 2020 to 2019. And they’ve done it over again, in 2021. I mean, that’s madness. That is madness, like 30% growth in new deliveries, which has come fields, it’s stemming from two things, one, you know, incredible amounts of money being flushed into the system. And then secondly, obviously, the lack of travel outside of the United States and more restricted travel has said, you know, it’s worth it to go Okay, we’re going to kind of retool the way the family vacations. So with that, I mean, where are these people at the store that stuff right? Yeah, they’re gonna they’re gonna have to find your neighborhood your HOA is aren’t gonna allow you to park that 35 foot RV in that brand new boat and your driveway. So you know, the I think that’s a that’s an asset that’s an asset class that is only going to or a niche inside of the storage asset class, it’s only going to, you know, get stronger. When you go out to these places. In Colorado, we’ve toured up two or more storage facilities like this, not even not even like buildings, just open lat six foot fences controlled gating, and there’s marked out spaces, but that’s it. I mean, just at hundreds deep, and it’s like, oh, my gosh, this is and they don’t use them that often when they use them. I have an RV. And luckily, I live in a place where I can park my own driveway. Yeah, it might get driven once a month, maybe a once every six weeks. So you got to I mean, you know, I live in an older neighborhood. We don’t have to pay HOA fees. But
Speaker 1
yeah, I sue when I was in the very end of high school and college summers I would spend at a campground I grew up in Murrells Inlet, just south of Myrtle Beach area. And did landscaping at a campground and one of the most constant. No, it’s gonna happen. drives for revenue was storage. Right? Especially because some people would make their last trip of the year, you know, bring the kids down for Labor Day, right? Yeah, just before school starts. last trip, leave the RV or camper and then take the car back home. And then the first trip when everything warmed back up, was back down there. To the same campground, pick your camper up, they would, they would winterize it charge you a fee, they would do the winterize it charge you a fee. And yeah, it’s just this gated open space with RVs and trailers like sick back then six inches apart from each other. We had two guys at the campground and that was their job. They would move those things in and out when people were checking in and the whole summer. That’s all they did eight hours a day, 40 hours a week. So no surprise I, my wife and I chatted about getting an Airstream early on in the pandemic. And it was not early enough that we had the conversation because we were in Dallas visiting my sister and we swung by the massive Airstream dealer out there. And the place looked like it had been robbed. They had one tiny air stream and one big demo air stream. They’re like Yeah, get in line north of a year for delivery times. And we’re like well, guess this just isn’t MIT. They will pandemic might be over by then. But already said you know, something that pre pandemic you can get easily 1520 maybe 25% off. Now it’s full boat and get in line, and then we’ll get it to you when we get it to you. So the storage piece sounds pretty, pretty enticing. Yeah,
Speaker 2
you’re not you’re 100% correct 100% correct. And Lord help us if there’s a downturn because then that’s when your opportunity to buy all these is going to come you take all that knowledge you have in, you know, in lease options in buying things, you know, subject to leaving debt in place, things like that. I mean, essentially, you know, buying out the note or leaving a note in place mean, I think, I think you’re gonna have your opportunity. That’s another prediction a while a wild prediction, but I think here, here, when we, when we see a correction, you’re gonna have loads of opportunity to buy as many of these Arby’s and things that you want, where people four years later, like Oh, crap, I can’t afford that anymore. What am I gonna do? And we got 100% financing on it. Uh, anyhow. So
Speaker 1
yeah, I think we came to the same conclusion like this. Certainly, you know, that that type of vacationing may have normalized uptake because of it but it’s not going to be anywhere near the uptick and the actual units themselves right so i think wait on the sidelines a year to maybe pick one up at a sweet discount yeah seems to be the play and then stored over one of your beautiful storage spaces. That’s a play.
Speaker 2
That’s right. That’s it man. That’s it and that’s the other thing and that’s in that in that space like people are going to pay their rent right? Like if you’re paying 100 bucks a month or 150 bucks a month to park your facility or park your unit like okay that’s $100,000 plus it’s true yeah
Speaker 2
yeah when we have when we have a sheriff sale he you’re just not gonna mean most people at least aren’t gonna let that happen. So you know, unlike traditional storage where it’s like oh crap I got some old raggedy furniture and you know boxes of you know, moth eaten clothes in a bed I don’t even like because it squeaks like I’ll just leave it in love sell it because it’s only 1000 bucks and stuff like well now this is $100,000 Rv we’re not gonna just let you know pawn this off set it and pay $150 a month to store it
Speaker 1
now you’re getting me excited thinking about the value of the collateral there versus the exponentially lower you know annual costs but the psychology there and just the common sense of you’re gonna pay that bill every single month on time sounds like one of the more secure investments I think right so
Speaker 2
I’m sorry my camera’s all foggy there I don’t know what it’s doing. Yeah, you’re absolutely right I mean it’s it it’s the collateral the cost of the collateral that makes that makes it more likely to pay and again people are people do the dumbest things I mean, the dumbest things I saw I saw people do stuff that would just blow your mind in the foreclosure business we’re buying foreclosures you know a just like you didn’t even take the time to put this on the market and just close out your position like you could have sold it as is and picked up another 20 or 30 grand and walked away with that in your pocket but instead you just got hung up in your situation and panic and did absolutely nothing Did you ever call the bank No, I don’t think you did. Did you ever respond to the letter that they sent to you? No, I don’t think you did. Like you’re an idiot and so I think you’re going to see that I mean you’re bound to see it even in the boat and RV storage space so not I’m not predicting there’ll be no Sheriff sales of those items. I’m just saying I bet it’s gonna be less yeah one would imagine that seems like solid prediction. I like it so what have we missed? What have we missed?
Speaker 2
Oh man, I don’t know I mean, you know what? You could take this anywhere you want we’ve talked parking we’ve talked multifamily. We’ve talked regular storage to talk self-storage you know, of course, you know bourbon RV storage. You know RV parks is another fascinating one I’m a passive investor in RV parks and that’s fun. That’s fun to watch. That’s not an asset class I understand. So I’ve not launched into being an active investor in that I look at deals all the time but it’s a retooling and they’re trading I don’t know they’re trading at cap rates now that are again everything’s getting compressed but you know, traded at 10 caps which is fine but it’s also a much more hands on business. You know, if you’re if you got overnight stays if you’ve got, you know, just people coming in for one night, you know, in an RV park, things like that. It’s not a not some more ongoing but that’s it’s an intriguing asset class to watch because I mean, Again going back to the boat and RV stores now people need to go have somewhere to stay when they go on vacation and you can you can you can do you know call it off grid using your RV you’ve certainly done it plenty you’ve got generators on board you’ve got hot water heaters on we got everything on board for a little self-contained unit for a while but if you’re going if you’re going somewhere and staying and want to actually like stay in it and then go out and do things from a base camp, you’re typically going to want an RV park so those are those are fun things also to look at I kind of look at it more as a just if you know free entertainment and go Hmm, what’s this stuff training for that’s curious. But you know that’s probably just me being distracted, you know, upon the actual goal at hand. But yeah,
Speaker 1
definitely something that I realized when I was doing landscaping at one so the one that I worked at was right on the ocean, right had about 1200 transit sites 800 permanent sites. waterpark, full waterpark, they had a full amphitheater, they did a show every Sunday that had been going on for decades it’s family in the same family for I think at this point 60 plus years. Wow. And you had a contingent of folks who would come in like there was this one particular group that would come in and fill out the campground in the winter you know food every day you didn’t have to leave the place it was over resort type environment and throughout summer really down in that neck of the woods. Myrtle Beach area from Memorial Day to Labor Day packed out right the bottom right as a grown up as a local you never went into Myrtle Beach proper during the summer it was just not worth it. There’s headache you would I was in Murrells Inlet just a little South so you would stay there or go further south and like Pawleys where it was just not overrun by tourists and tourists are the lifeblood of that economy. Everything is built up around it whenever Labor Day hits the place empties out now more and more people have been moving down to that area especially retirees from the northeast you can you know I can sell my place for 850 or 1.2 and I can go down and buy something that’s similar for half the price in the Myrtle Beach area and golf for the rest of my life plenty of golf down there but just you know being at one point I’ve kind of worked in the front office a bit during one summer and you know just seeing some of the numbers you if you if you do it right you can have quite an attractive business going on and cash flow like crazy and yeah you have to you have to have a maintenance crew on staff because you know sewage pipe boss you can’t just let that sit you have water you’re providing yeah trash truck that ran through so a normal city a trash truck that would go through the whole campground every single day seven days a week. Wow so it is it is its own city right? Yes. That is a bit of a kind of crazy example but all that said like you have it’s quite a diverse asset class. Right
Speaker 2
yeah and I think one of the things that you pointed out there was that you know previously a lot of these campgrounds were seasonal you know they’d MTL in labor day but even more what we’re seeing is that they’re going year round which is another indication of I mean even in your even in your mountain states you know these campgrounds used to be or these RV parks were you know open like you said memorial to labor day the people come in and people leave but a lot of them are going year round now which just further increases the demand not increased demand but further is an example of the increase in demand
Speaker 2
Hey, I’m enjoying it yeah certainly thanks for having me on hope I was able to provide some value
Speaker 1
Yeah, we covered a bunch of topics I love when I asked you the favorite least favorite I was like that I know this is gonna be because your pattern doesn’t exist right? It’s such a diverse background of asset classes that you’re just like where am I gonna make money if I can make money here I’m gonna go there and I will make money and whenever there’s something else that there’s you know, an opportunity costs to way I’m gonna go over there. Right so I love it is a some multifamily. Do you have any other markets outside of the southeast Are you playing mostly in the southeast.
Speaker 2
It’s mostly in the southeast. It’s Yeah I don’t I just don’t have the bandwidth I don’t want the bandwidth to you know to go outside but there’s plenty of opportunity so staying there is I’ve looked at other markets spend some time you know working with some other operators this year betting their markets traveling looking at deals they’re working on and in the end it just became like you know this is spreading myself too thin This doesn’t make sense I don’t know what that well you know stick to what you know stick to what you know and if it’s working you know, if it isn’t broke don’t fix it. So
Speaker 1
yeah, I think Yeah, the simple advice that’s been around forever has been around forever for a reason. So anytime we get distracted, try to get a little too creative. high chance is going to bite you in the tail and the thing you think of is going to be simple like I should just stuck with what I knew. Yep, here I am now.
That’s exactly right. That’s exactly right.
Speaker 1
Right on a Sam, thank you so much for joining me talking about everything from RV park, self-storage, parking multifamily real estate, everything under the sun. I love it. Thanks so much for joining.
Speaker 2
Hey man. Thanks for having me on Dalton, do appreciate it. Take care
*Transcript is automatically generated from interview.
Recent Comments