Andrew divulges how he's leveraged partnerships and innovative investment strategies to build a thriving portfolio of mobile home communities and self-storage units. His experience isn't just a series of transactions; it's a blueprint for generating passive income and the profound impact mentorship can have on reaching entrepreneurial heights.
Andrew divulges how he's leveraged partnerships and innovative investment strategies to build a thriving portfolio of mobile home communities and self-storage units. His experience isn't just a series of transactions; it's a blueprint for generating passive income and the profound impact mentorship can have on reaching entrepreneurial heights.
Welcome to Heather Ewing, the CRE rundown. I am your host, heather Ewing, founder and CEO of Abstract Commercial Real Estate in downtown Madison, wisconsin, and today I have a real treat for you. We are bringing Andrew Keele from beautiful Orlando Florida to the show today, Andrew, welcome.
Speaker 2:Yeah, thank you so much for having me, Heather.
Speaker 1:Definitely so. Since our audience doesn't know you necessarily maybe they've come across you or worked with you in different states please share with us a little bit more about yourself and how you got into commercial real estate.
Speaker 2:Yeah, happy to. I started out flipping residential properties down in Orlando, florida. This was back in 2014, 2015. And it was in. My income was inconsistent, right. I had probably did four or five deals flips per year and I wanted more recurring income. You know I was interested in rentals and I basically got a.
Speaker 2:I was wholesaling and trying to find off market deals, mailing letters and putting up bandit signs and through one of my yellow letters I got a lead on two manufactured homes mobile homes about an hour and a half away from my house here in Orlando and I went up and I bought them. It was very motivated seller. He just wanted $1,100 a piece for two mobile homes. So I bought these two mobile homes, didn't know what I was doing, got the titles, came home and got on YouTube and typed in how to make money with mobile homes and there was a guy named Lonnie Scruggs who had a whole YouTube channel teaching people how to create mailbox money by selling mobile homes in other people's parks on contract to an end, you know, buyer. So I did that with these two homes, was very successful with them, ended up doing 19 more of these Lonnie deals to create that mailbox money.
Speaker 2:You know, while I was flipping a couple of houses here and there and through that process I met a mobile home park owner who started giving me the homes in his community that would go vacant, that that people would abandon, and I said how does this makes money, how does this make sense for you? You know, the right owner took him out to lunch one day and and he was very nice and elderly gentlemen decided to just kind of Pour into me and teach me the model and he said you don't have to have all the money for the down payment or the improvements, you can actually raise that. You can pull together investor money and, you know, be the operator that operates the asset, be the sweat equity partner. So once I heard that, I had this aha moment and I went all in.
Speaker 2:I literally went to all the boot camps, read all the books on syndication, went to you know, syndicating events and at one of the events I was fortunate enough to sit next to a guy that worked at Goldman Sachs and was interested in investing into the mobile home communities and it was like a God thing. I mean, we just clicked right away. He had the money, but not the time. I had the time and the willpower. So he basically wrote me a check for $5 million to buy our first five mobile home parks and we did really well on those. It helped me build a track record. So since then we've bought 43 mobile home communities and 11 self storage facilities and you know we have a full, full syndication platform that we pull together investor money and buy commercial assets and manage them to, you know, hopefully get great returns.
Speaker 1:Right and that's great. And one of the fun things too is that I have not interviewed anyone yet that is into the mobile homes and self storage. So thank you for expanding us in that sense. And I think it's one of those frequently people don't think about it until, kind of like in your example, where you come across someone and then one of the signs of a sure entrepreneur really is is you have the idea and then you create a plan and you go for it and I think what kills a lot of people or prevents them from ever getting to that space is that they want to know every little detail, have every I dotted T cross, and it just doesn't work that way. And to your point, andrew, youtube has such a wealth of information and that's where I say, this day and age, with technology, the different mentors, resources, you're really able to find some of that if you do some digging. And I think, to your point, really making a firm decision really differentiates and separates the pack 100%.
Speaker 2:Yeah, when you find a niche and you find that opportunity in the marketplace, you know that's the hard part. You don't really realize it when it hits you but you're like, wow, this is a really good opportunity. But I know so many investors that just get that analysis, paralysis, that fear, they let it take over and instead of just following the 80 20 principle, you know they need to know 100% of everything and then they never get there, so they never get to take that next step. But yeah, it's, mobile home parks is an amazing, interesting business model. We love that we're able to provide affordable housing for people that need it. You know, in these secondary, tertiary markets where it doesn't make sense to develop, you know, affordable housing, subdivisions, you know it, just it doesn't. So when we're able to add, you know, buy from mom and pops and add housing, it's really rewarding. And then it also, you know, is rewarding from an investment standpoint.
Speaker 1:Definitely and I think your story also exemplifies of getting creative and with financing different things of that nature that you don't have to have all the money and sometimes you are the sweat equity. It's really creating the relationship that works. And just as the equity is important, so is the knowledge you have to have both to be able to do deals. So it's creatively putting those pieces of the puzzle together that allows you to grow your, your count and also your net worth. So what would you say is something that has surprised you, maybe in the last few years. So you got into it around 2015, 2014, correct?
Speaker 2:That's when I got into the Lonnie deals, didn't you know? I was studied for probably a year and a half before I was able to put that first deal together, which we closed in 2017. And you know, since then I got, obviously we've expanded. But yeah, I think something that has surprised me is, you know we we've gotten at the right time. Right Like 70% of the mobile home parks in the US are owned by mom and pop, baby boomers and that only own one or two properties.
Speaker 2:So you know they're not running these things as efficient property managers would. You know their cell phoneers? They live in the park or near it and there's just so much meat on the bone from an NOI standpoint by. You know filling vacant lots, sub metering and billing back for water sewer. You know fixing up and deferred maintenance and you know fixing up empty homes. You know some homes just need $4,000 in rehab and then you can fill them, but the mom and pop was doing all that work themselves. And then they, you know, they got older and now they just let them sit vacant. So when we're able to buy a property like that, it just we sleep really good at night knowing that we're going to maximize these properties where the previous owner wasn't.
Speaker 1:Well, and I think also it's the value add which is what you're seeing, and whether it's in retail restaurant leasing sales, whether it's a mobile home storage, all these different avenues, is it's common to come across these people and I think it's through effective prospecting right, whether it's cold calling, door knocking, getting out, going to different networking events, learning, upgrading and I think kind of a common promise for so many of us is just genuinely wanting to help.
Speaker 1:And when you see someone that's older, especially, you want to make sure that they receive a great deal right, I mean, we're all going to be older someday. It happens quickly and it's it's the golden rule, and you want to take care of people and at the same time, you don't know what you don't know. So that's where you're able to come in and and really increase the value.
Speaker 2:You're exactly right, and 95% of our deals come from cold calling. And I spoke with an elderly woman earlier today. Her husband passed away a couple years ago and now she's managing the mobile home community and you know she she enjoys it. It gives her something to do, you know, but as she's getting older, it's getting harder, right. And I said, hey, how many years of cash flow would you get if you sold this thing, you know, in a couple of months? And that was like an aha for her. She was like, wow, this is like 15 years of cash flow. What, you're right, I think I do need to entertain and offer, you know, you know, instead of you know, every month in and month out, having to go door to door to chase people down for rent. So, yeah, it's just getting in front of people and offering that solution.
Speaker 1:Asking the right questions and I think frequently, since they're not in real estate, it's not natural, it's not second nature for them to ask themselves those questions. So those are the pivotal questions which help people decide and to move forward on the right path for them.
Speaker 2:Agreed, agreed.
Speaker 1:So with real estate, no matter which states you're in in our nation, things are busy. Timing is such a big deal, as this location rents inflation. How do you find that mindset helps you to separate from the pack?
Speaker 2:Yeah, mindset is so, so important. I've found that your mind often tries to trick you and the best way is to trick it back. So I'm a big affirmations guy, I'm a big just working out, and healthy education through podcasts and meditation is really important. So, yeah, I think that confidence is the key. You could get a good deal and not even know it.
Speaker 2:And you know, someone asked me the other day like, hey, you know I, how do I raise money for deals? You know, I said you know you got to have that conviction. You know you got to be able to pick up the phone and call everyone in your Rolodex because you wholeheartedly believe that this is a really solid deal, that you're going to be able to get these people, these returns. And when you're talking to investors and you have that type of conviction because you know that deal, like the back of your hand, the money flows, the money is the easiest part. It's just finding another deal that that is that good and you have that much conviction. And so mindset is everything. That's a great question, a great point.
Speaker 1:I agree completely. So tying into that then the fitness realm. I'm a big marathoner, so that's my fitness. Yeah, how do you see that fitness ties in so well? Right, because frequently you hear people that are too busy. A lot of people are stressed out. Real estate is not for the faint of heart. How do you find time to create it within your day, right, it's, it's a schedule thing. You're married, have a little one, a busy life as well. How do you find and make time for that?
Speaker 2:Oh, it's the priority. You know my health comes above everything else, so it's the first thing I do every day in the morning. I love running marathons. My wife's a big run Disney fan. We live in Orlando so we go and do some of the Disney races.
Speaker 2:I'm a big Iron man 70.3 competitor. I'll do probably two a year and I just love it. It's it's me time, it's it's, you know, right first thing in the morning that I'm able to knock out after I get the kids off to school and it just sets my mindset for the rest of the day. I've already accomplished so much. And the Iron man slow slogan, like their, their whole mantra is anything is possible. And when I first started training for an Iron man, it was like this big, daunting task I mean I had a coach and I was training for like a year to do my first one and it was like, wow, like I don't know if I'm going to be able to do this, but I'm going to, you know, go all out. And I put that plan in place and I was able to accomplish that. And that carries over now into my business life where it's like, hey, anything is possible. You just have to, you know, set a plan and follow it, and the execution will follow.
Speaker 1:That is true. It all starts with the plan and in whether there's no plan that is completely perfect and you're going to have to deviate and adjust, whether you're sick or different things happen throughout the day family things of that nature and so I agree with you completely it's creating the plan and knowing you're going to have to adjust. There's days you don't want to do it and days where you could do it forever, and I also see it as an integral part of people's lives, their health, their business, and the positive thoughts, the mindset, really do transcend from that time of physical exertion throughout the day. And that's where my, you know, I would implore to anyone, even if it's walking just get outdoors, get some type of movement, because it makes such a difference in your life and career.
Speaker 2:Totally yeah, and what you're passionate about is not random. You know I'm a believer. You know God puts these ideas and these passions in our minds for a reason, and I think that that's also really important to follow and to pursue those passions, put that plan together and execute upon them, because you're giving him glory when you do so.
Speaker 1:Well, and I think that's the neat thing too right, it provides a greater essence. I think it allows you to really see the full realm of what you're doing is not just doing deals right or buying and selling, and I think it really helps you to help your clients on the fullest level, and it just gives it more meaning. So I think that's a very important point. And then, when you transfer over all the different forecasts for the year, what do you anticipate happening? What's an area, maybe, that you're focusing on?
Speaker 2:Yeah, I don't have a crystal ball and who knows what the Fed will do with interest rates. I don't try to predict that kind of stuff. I try to work on what I can control. And what I can control is our operations, our property management and ultimately driving NOI, like within our properties that we own now and when we're looking at new acquisitions, it's not hey, what does this look off of the current income. It's always hey, what income, what forced appreciation can we create here by increasing the income? How can we do that? And I won't buy a deal unless it's like an obvious value add. That is, it's going to take some elbow grease. Not a lot of operators will buy the same deals because it's a lot of work, but those are the deals that I feel safest in because I know that with our operational efficiencies we can drive NOI and I think that is where I'll continue to play.
Speaker 1:That's great. So you've been established now for several years, right, just about a decade. What advice would you give to someone that's new to the commercial real estate, right? What's maybe one or two things that, in looking back, you're like, oh, that would have been really helpful to know, whether it's a book or resource or maybe one of those powerful, pivotal questions.
Speaker 2:Yeah, I think a lot of people get hung up on the money, like how am I going to raise the money for this deal? And I would say that it's important to note that acquisitions and sales and finding deals is the lifeblood of the business. So you need to start there and master that, and if you do so, the money will come. Everything else will fit into place, for it can. But I think when I talk to new operators out there today, they're so concerned with hey, how am I going to find the money to this deal?
Speaker 2:I don't come from a rich family, I don't come from money, and it's amazing, when you get a problem in front of you that you haven't come across before, how amazing the human mind is to find solutions that you never would have even dreamed of. Right that, you'll find the money. It's just you got to find a deal good enough that you're willing to state your reputation your reputation on it and have that type of conviction that I'm going to make this thing a success, like there's no, there's no, I'm burning the boats. And when you have that kind of conviction, right it, the money will flood.
Speaker 1:Napoleon Hill, that's right Definitely. Yeah. So last but not least, what would you say living fully means for you, Andrew?
Speaker 2:Living fully. Wow, that's such a such an awesome statement. I would say being true to yourself, right, and I would say being balanced, you know, and identifying your values, right. Like my values are written on my, my refrigerator and my bathroom like mirror, so like I see them every day, I consider them and I look at, I have like some daily meditation.
Speaker 2:You know mantras that I look at and again, some people think they're tacky. My brother for one. He's like what are you doing? Like you know you have these weird things. You're you're repeating to yourself that you know your. You know different, different things to motivate myself. But again, your mind will trick you. Your mind, if you let it once, it will trick you into thinking you're not good enough, you're not capable. You know you don't know what you're doing, but if you consistently feed it you know good food and good thoughts it will you know you can trick it and you can accomplish amazing things. So I think living fully is such an all encompassing thing. That has to do with faith, it has to do with wellness, it has to do with the people and community that you're around. And yeah, thank you for asking that. Just talking about it gives me excited.
Speaker 1:Yes, definitely. Well, and that's the thing too is it's a unique question, right, especially in commercial real estate and the real estate realm throughout the nation, and to me, you know, it's such an important point because it is foundational in all of our actions come as a result of some type of goal or intention, and that's why, when you've talked about affirmations, you're a good company along with meditation and things too, because I think without that base, we don't have anything to leap from. Exactly, yeah, definitely so, andrew, I want to thank you so much for joining me today and please do share with our audience. How can they reach you if they have questions? Maybe they want to invest with you or want to learn more.
Speaker 2:Yeah, thank you so much again for having me, heather. The best way to get ahold of me would be through my website, which is keelteamcom it's just my last name and then team, like a basketballteamcom. You can find we have a free ebook that talks about the top 10 mistakes people make when investing passively into mobile home parks, which is a great way for people to just kind of get educated on this unique but interesting asset class that has a social stewardship component. So thanks again, heather, for bringing me on.
Speaker 1:My pleasure. Have a great rest of your week.
Speaker 2:You too.
Speaker 1:Bye-bye.