#34 Mobile Home Park and Parking Lot Investing with Brian Spear
Sep 21, 2021
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Founder of Sunrise Capital Investors, Brian Spear, shares insights on mobile home park investments, off-market transactions, and leveraging brokers for deal flow. He discusses the appeal of investing in mobile home communities, strategic approaches to acquiring properties, and navigating regulatory compliance. The podcast also covers syndication structuring, investor acquisition strategies, and compares return profiles of mobile home parks and parking lots.
Acquiring off-market deals through local brokers enhances deal flow in real estate investing.
Focus on cash flow from day one and long-term cash flow over stabilized cap rates in acquisitions.
Importance of understanding market demand and supply dynamics for sustainable investment decisions.
Deep dives
Brian Spear's Background and Mobile Home Park Investment Journey
Brian Spear shares his upbringing in a mobile home park, highlighting his journey from playing baseball in college to partnering with Kevin Bob and transitioning into real estate investing. Starting from building cash reserves in his mid-20s, Spear strategically entered commercial real estate, partnering with experienced professionals and gradually scaling Sunrise Capital Investors.
Broker Initiative for Off-Market Deals in Mobile Home Parks
Sunrise Capital Investors' approach to acquiring off-market deals through a broker initiative involves building rapport with asset owners via local brokers in secondary and tertiary markets. By delegating relationship building to brokers, they enhance deal flow and focus primarily on off-market direct-to-owner transactions. Spear emphasizes the importance of ensuring cash flow from day one in acquisitions and prioritizing long-term cash flow over stabilized cap rates.
Location Strategy for Mobile Home Parks and Parking Assets
The investment focus for mobile home parks includes smile states in the Southeast and Midwest, targeting areas with demographic growth and strong collections. In contrast, the parking asset strategy centers on fragmented markets, leveraging mom-and-pop operators in income-producing assets. The emphasis lies on acquiring assets with existing revenue streams, optimizing operational efficiency, and considering underlying land value and demand for parking spaces.
Unlocking Value Through Strategic Asset Acquisition
The podcast episode delves into the process of unlocking value through strategic asset acquisition. An example is provided where the podcast host discusses acquiring a parking lot with inefficiencies initially valued at $800,000. By engaging with operators in the vicinity, they secured a lease deal generating $72,000 annually with a 3% rent escalator. This strategy showcased the importance of astute market analysis and operational optimization in enhancing asset value.
Rigorous Due Diligence and Market Demand Analysis
The episode emphasizes the significance of rigorous due diligence and market demand analysis, particularly in the mobile home park sector. By gauging demand through test ads, the speaker highlights the strong demand for affordable housing. In contrast, the discussion on parking assets underlines the essentiality of understanding supply and demand dynamics for sustainable investment. The insights reveal the necessity of continuous market assessment to ensure sound investment decisions in real estate.
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Brian Spear is a Founder of Sunrise Capital Investors. His company specializes in acquiring deals in off-market, direct-to-owner transactions in the unique niche of mobile home parks.
Over the past decade, Brian has raised tens of millions of dollars and has helped hundreds of accredited investors diversify into mobile home parks. As co-host of the Mobile Home Park Investing podcast, Brian also educates investors on how to locate, negotiate, and acquire properties that generate cash flow and build legacy wealth for their families.
He has been featured in numerous media outlets and is an official member of the Forbes real estate council.
Brian attended the University of Kentucky on a baseball scholarship and was voted captain of a team that ultimately had six MLB alums. He was also named CoSlDA ESPN the Magazine Academic All-District.
Episode Highlights:
- Many institutional investors are forced to sell properties because of maturing debt or because they’re in the process of winding down a fund. Mom and pop operators on the other hand, usually have no motivation to sell within a clear timeline since the main motivator is to retire someday.
- Leveraging brokers that have been plugged into a community for many years and that is not an industry specialist can be a very valuable asset to leverage in finding deals. Brokers also save you a lot of the leg work required to find deals yourself.
- Although Sunrise Capital relies on brokers to bring in many deals, about 85% of their total deals are sourced using direct-to-owner marketing.
- The natural progression of a real estate investor to reach capital fundraising status is to start with your own capital, raise money from friends and family, grow your investor network through word of mouth referrals, and eventually raise capital through SEC regulated syndications such as Reg D 506(c) offerings. It took Sunrise Capital at least 4 years to reach this point.
- Sunrise Capital differs from other real estate investment firms in that they usually return capital to their investors through refinancings instead of asset sales, which mitigates investors’ reinvestment risk and maximizes the longevity of each investment.
Helpful Links: www.sunrisecapitalinvestors.com
Best Way to Contact Brian: sunrisecapitalinvestors.com/freereport Investwithsunrise.com
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