Mobile Home and RV Park Investing: Leo Young on 600 Pads in 4 Years

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0:00 Hello and welcome back to the owner media podcast. I'm Christian, your channel host. Today joined with Leo
0:06 Young. We're talking about one of my favorite categories of multif family, which is mobile homes and RV. And yes,
0:12 it's a type of multif family. However, it plays adjacent to the traditional
0:17 multif family space. There's a few little caveats, but what I love about it so much is that it's perfect for entry-
0:24 level housing. It's flexible in how you run them. So you have both multif family or hospitality application depending on
0:31 the model. I'm really excited to hear how Leo's model plays out. And uh Leo,
0:36 welcome to the channel. Thanks for having me on. Absolutely. Absolutely. Tell us tell us a little bit about you today and then
0:42 I'm going to get into your backstory here. But uh tell me about your business today. Yeah, so I'm the founder of Cornell
0:48 Communities. We're an owner operator of mobile home parks and RV parks. So,
0:53 we're in a few different markets, mostly in the Southeast and the Midwest. Awesome. Awesome. So, Southeast,
0:59 Midwest, traditionally higher cash flow markets, which typically plays pretty heavily into these models. How did you
1:06 settle on RVs and mobile homes specifically? So, it was kind of just pure luck. Um,
1:12 so I was working at another real estate fund at the time and u I had a friend approach me. He was trying to start this
1:18 um this investment firm and he wanted to look for a co-founder. So, um, he kind of walked me through the investment
1:23 thesis of mobile home parks specifically, um, of how it's a great time in this market cycle. You know,
1:28 there's a lot of volatility and there's always a need for affordable housing and I thought it was a really great concept
1:34 and also you get to actually provide affordable housing and kind of dictate how that's provided. So, um, that's
1:40 that's something that meant a lot to me. I and that's always been something that I really enjoy too. Even in the multif
1:46 family space, I typically do entry- level housing. It's something the community needs. It's much more
1:52 recession resistant. So, you get some market proofing built in. You don't typically move down from an RV
2:00 or a mobile. It's very hard. Yeah. Very hard. There's not there's not
2:05 like a next level, but you can still have really nice RV parks and really nice mobiles. uh you don't have to
2:11 sacrifice quality but there isn't a cheaper option for people to move to which means you really have optimized
2:18 for stability when you go this route what have you found are the key differences just for people who who
2:23 might be you know channel's called multif family strategy my main YouTube channel a lot of people following this
2:28 podcast are multif family people as opposed to your traditional stickuilt multif family what are you finding are
2:35 the main differences in how you would operate an RV or mobile. So, between uh
2:41 an RV park and a mobile home park, I think they're similar in the sense that you are managing multiple units. And for
2:48 us, we like the long-term RV model instead of the campground or seasonal model. So, they're very similar in that
2:54 regard. Um what's different is, you know, the actual homes on top of it. You know, some are RV vehicles that you can
3:01 actually drive on and off and then the other ones are are mobile homes, which it sounds like it should be mobile, but
3:07 it's not, right? because once you set it down, it's very hard to actually move. It costs like 7 or 8,000 to actually
3:14 move it. Um, so the the main difference between them, it's just the level of
3:19 service that you're providing these people. You know, sometimes the RV folks care more about amenities. They want a pool, they want a common area versus
3:26 like a mobile home park. They're like, "Just leave me alone. Just give me, you know, good, clean landscaping, you know,
3:31 utilities and I'm good." Yes. Well, and that's the thing that I really love about the RV and mobile space is typically your tenants want
3:38 minimal involvement. They typically actually require less management. Now, they don't require any management. I've
3:44 seen mismanaged RV parks. They they get rough quick, but they typically require less
3:50 management. At least that's been my experience. Is that Have you seen that throughout your portfolio? So, I I I can't uh compare it to other asset
3:56 classes. I mean, I'm mostly experienced with this. So is my team. Yeah. Um, but you know, compared to just from a
4:03 theoretical standpoint, it sounds like a less complex business. Like for example, if you're like industrial, there's like
4:09 a lot of the, uh, ins and outs that you have to dig into, like, you know, what what the door size is or, you know, um,
4:16 what the credit of the tenant is, uh, etc. Where like multif family, it's like, okay, you have to manage a leasing
4:22 staff, a maintenance staff, like a a live-in super on site, um, roofs, elevators, stuff like that. was like for
4:29 us it's like okay we maintain the infrastructure maintain the grounds and that's that's about it. So it's
4:35 operationally more simple you know uh the operating expenses are also lower because of that
4:41 when you are looking at deals speaking of uh operations operations in these look different and this is this is
4:47 unique to to the uh the mobiles and RVs tenant owned versus parkowned
4:53 um how do you how do you buy them? Do you do you try to convert uh one into the other? I would love to just hear
4:59 your your take on them and the management differences between the two if it if it plays into your business.
5:04 Oh, absolutely. Um so for us, we prefer the residents to own their own homes um
5:10 for a number of reasons. Uh one, you know, from the business perspective, it makes a lot more sense. It's less
5:16 maintenance hassle. Um less overhead for us to manage like we don't have to repair these things all the time. um
5:23 also reduces our insurance cost and you know for commercial real estate it's like the higher your net operating
5:29 income the the higher the subsequent valuation of the property. So you know it helps us in an order of magnitude
5:35 there and for the residents the benefit for them is that it's their own home. They could do whatever they want with it
5:40 right they can make it their own and they can actually build equity over time. So you know it's a very lowcost
5:46 way to own their own home. you know, these are typically like less than 100,000 as opposed to, you know,
5:53 450,000. That's like the average home in the US. So, they they get to make payments and like get into a home they
5:59 wouldn't otherwise qualify for and build that equity as we kind of put in the capex dollars to improve the community,
6:06 make it a more desirable place to live. That's a fantastic way to go about it. And so, so you're buying these, you're
6:12 getting them. when you pick them up, are they often starting out parkowned and you're
6:18 shifting them to tenant owned? Are you only buying things that are already all tenant owned? H how do you end up with a
6:23 portfolio of tenant owned parks? Yeah, so we we prefer to have most of it
6:28 as as tenant owned homes. Um because actually a lot of the banks, they don't
6:34 prefer to lend on the parkown home or or the park own home income. That's a mistake a lot of people make. you know,
6:40 I'll see like deals being out there pitched as like, you know, x amount of cap rate, but it's like, well, you're
6:45 factoring in park own home income. That's that's not like financable. So, for us, like we like to convert them
6:51 wherever we can, you know, through um selling it off. There's like third party lenders that can, you know, cash you out
6:57 or, you know, you can do a rent to own kind of like a seller finance um with these uh folks.
7:02 And that's that's the preferred model. When I first started in multif family, the first uh one of the first books that
7:08 me and my friend read was a Deals on Wheels by Ronnie Scruggs, which is now out of uh it's now out of print, so it's
7:14 now like a super expensive book. Uh when I started it was a book you could pick up at like a normal price.
7:19 Now it's if you're looking for it today, it's like 500 bucks. Um but you could find an e version of it
7:25 somewhere, I'm sure. Uh but the entire premise uh when I got into creative finance started with the concept of
7:30 mobiles. It's you purchase them, you have the option to sell or finance them back to tenants. If you have to take them back,
7:37 you sell them again. You hope you don't have to do that. Uh but it's a really simple way to introduce a lot of
7:44 creative finance speed. When you when you find these deals, how often are you seeing creative finance as an option in
7:50 the mobile and RV space? It used to be a lot more. Um, you know,
7:55 I would say in the past 10 years, there's been a lot of, call it institutionalization in the industry.
8:00 It's just become a lot more financable of an asset. Banks are taking much more interest into it. Before it was
8:06 exclusively seller finance, creative finance deals because like banks didn't want to touch it. Yeah. As opposed to now they're they're like
8:12 warming up to the idea. Um, and I I would say that number is kind of dwindling. Um, there's certainly like
8:20 the right people with the right kind of goals. Um, I mean that that's sort of creative financing. It's like, okay,
8:25 you're getting together with the other party and trying to figure out how do we make the pie bigger? How do we solve your problem in a in a better way,
8:32 right? Because like the bank can hand you, you know, money, but like paying taxes on it. You have to like redeploy
8:37 it, you know, all that stuff. So, well, the last few I've seen, and I agree with that assessment. It's it used
8:43 to be very popular. Like I would say most of them went seller financed. The last few that I've seen, uh, they've all
8:50 had a small bit of creative attached to them. I've seen a lot of them trade with like
8:56 60% bank financing and 20% seller. Like small creative pieces to get deals
9:02 across the finish line. I'm not seeing a lot of deals that are coming in like you used to see back in the day, 80, 90, 95% seller financed.
9:10 I'm not seeing a lot of those. Maybe a few every year within my group.
9:16 a KT. They're they're not it's not a main strategy. If you're looking at them and you're looking at them creatively,
9:23 assume that you're probably going to blend in a majority of bank debt if you use creative.
9:29 Yeah. And I I will say too, if if the seller is open to being creative, um
9:34 that might be a flag to look deeper, too, because typically when a bank when a when a seller knows that his deal is
9:41 not financable, he's like, "All right, fine. Let's let's do it." And you have to kind of figure out what the skeletons
9:47 in the closet are. I did a RV park in uh it's a it's on the Hood Canal in Washington. So it's
9:53 foothills of the Olympic Mountains on the Saltwater Canal. So really cool location but really low population are
9:58 area. It's it's like a remote beautiful area of Washington state. I grabbed this thing as 25 units. Um we picked it up
10:05 for 300,000 and the septic didn't work and there was a huge question mark on like uh how much surgery do we need to
10:11 do to fix this thing? So, that was one where we picked it up, the sellers w
10:16 couldn't finance it, but we picked it up with like a hard money loan for 300,000. We picked it up for nothing knowing that
10:23 we had like a 400 like 100 to $400,000. It's going to cost somewhere between
10:28 here and we won't know until we get into the ground and find out. Uh, and it ended up costing like 350. So, it was the high end of that. Uh, ultimately,
10:35 it's one of the only deals I've sold. We sold it for a million one. So, like a great deal to be in and out of.
10:42 But again, like that that was when you see these like, hey, you can get a crazy price or you can get crazy
10:47 terms. That's the first thing you look at is like, okay, what's what's wrong with it? And in this case,
10:52 yeah, laundry machines didn't work. Septic didn't work. A lot there's a lot of things where you're like, well, you're renting pads. Uh, septic is a large part
10:59 of what you're renting. Yeah. Yeah. And and when it comes to infrastructure, like it it's no fun. I
11:05 mean, you know it to like switch these these things. there's like compliance things to to jump through and it's always like more expensive, takes
11:11 longer, etc. So, um yeah, I mean I I get it and congrats on the sale.
11:16 Oh, yeah. Thank you. Thank you. That's I would have held it forever, but I moved from Washington to Texas. I'm like, you know what, a remote
11:23 remote RV park of 25 units does not make sense to someone who lives in Dallas. It is not the most sensible holding.
11:30 It's harder to manage. Yeah. Now, you mentioned uh you had Midwest and it was south southeast geography.
11:35 Southeast. Yep. How many I guess you'd call them pads, not units, uh, but how
11:41 many pads do you have in this portfolio today roughly? Right around um 5 to 600.
11:47 Oh, that's awesome. Awesome scale. Yeah. How long did it take you from when you started to where you're at today?
11:54 Um, so within this niche, I believe this is uh around four years into just
12:00 focusing on on mobile home parks and RV parks. That's fantastic. the the the speed is really fantastic. So, roughly four years
12:08 ago, what did the first deal look like? First deal it was um it was a distressed
12:14 property. Um it was like 70 75 units
12:19 more or less. 75 80 units. It was like part public. It was like public water, private uh septic. Wow. Um, you know, it
12:28 it was just a great basis, you know, like like you said, it was like um I think it was like a third occupied and
12:35 um you know that the seller was just wanting out. You know, there's like some you know issue with the previous owners.
12:40 There's like disagreements and stuff so they they just wanted out. Um we we took it over uh turned out to not be that
12:48 much work that that we um underwrote to because like when you underwrite initially like you're you're
12:53 underwriting doomsday. you're you're like, "Okay, you want to be padding everything and like sandbagging your
12:58 underwriting." But, you know, it turned out to be great. You know, we infilled the the property. You know, we um
13:04 brought in eight units. Um sold off like a handyman special. So, that that's great. Oh, nice. You know, gone up the
13:09 occupancy a lot more. Nice. So, you do the first deal. How long was it between deal one and deals
13:17 2, three, four, etc.? Was the lag between, hey, we did this once and we discovered we can do it multiple times?
13:23 Yeah. You know, I think a lot of it was building the foundation cuz, you know, I think it was close to two years for for
13:30 me starting to like learn about the industry and all the ins and outs before the first deal. And then like that first
13:36 year, I think we did six deals. So, it was like, "All right, it's about time." Like, you learn all the the processes,
13:42 you learn how to underwrite things, you make all the connections. Like, boom, boom, boom, boom, boom. And that's so true. I think for so many
13:48 people, like there's a lot of people get really frustrated. They're like, "I can't do the first deal." And it's so true. The first deal really is the
13:55 hardest. You have the least connections. You have the least credit. Just the credibility that goes up when you can call and talk to a broker or an owner
14:02 and tell them a story from the park you already own or the building you already own. It ju it orders of magnitude
14:09 different working with someone who wants to be an investor or someone who has invested. And just that one step, it gets so much
14:16 easier. That that's such a common story. I bought one and then magically I had six. I remember
14:22 I closed a a 38 unit when I was 29 and two weeks later closed on three
14:28 sidebyside duplexes. Two weeks later closed on a 7plex. By the end of the year and I I closed the
14:33 first one in October. By the end of the year I'd also closed on a 12plex. It it took me eight years of studying
14:41 the industry to buy that deal and then once you get the momentum it's amazing how fast it scales.
14:47 Yeah. I I will say two things, Christian, is um one, an analogy is like, you know, when when you're a seed,
14:53 right? You don't really see the progress of a seed until it sprouts and it just like
14:59 pokes out of nowhere and it just like goes straight up, right? But when you're at that seed level, it takes a long
15:04 time. And like when when you're going through that yourself, it's painful, man. Like you you question like, "Oh, am
15:10 I doing the right thing? What's going wrong?" and like all the questions come but you know as long as you push through
15:16 like you will eventually succeed. Um and and the second thing is yeah I mean like
15:22 when you talk to to people like and you actually know what it takes to operate then
15:27 you become a better kind of investor because you know what you're walking into. These numbers are no longer just
15:34 numbers on a screen. You're like ah we got to replace that septic uh I don't
15:39 know do do I have enough bandwidth for that? Do I do I want that brain damage? Okay, fine. Here's a price that makes sense.
15:44 Yeah. What was the um what was the what was the turning point for you between
15:50 the like th those two years and then hey, this first deal is the first deal?
15:55 Like how how I feel like that's a sticking point for most people getting into the game is pulling the trigger on
16:01 the first deal. How did you know that deal was the deal? You know, it was it wasn't like, okay, this was it. It was more so like the
16:08 whole time like we were submitting LOIs and like we were underwriting and like just throwing out stupid numbers. Like
16:13 looking back we're like wow like we we totally should have been more aggressive on our numbers because like there is
16:18 more more stret. But uh you know we we got that one just super luckily you know um through like
16:26 some real motivation from from the seller and you know we're able to give them a solution close quickly you know
16:31 pay cash and stuff. So that that was great. Um, but yeah, I mean you you just
16:36 have to get the reps in, you know. I I think people when they Well, when you first go to the gym, like I remember I
16:43 started when I was a high school and I thought like after working out for a year, I'd be like Arnold Schwarzenegger
16:49 and I'm like that's not the case. I mean, look, I'm I'm nowhere near that and I've been
16:54 working out for like 15 plus years now. Yeah. No, it is it's funny how you how
17:00 things de develop and evolve and it is really similar to I mean those are great analogies bodybuilding or or sprouting
17:07 from a seed like there's there's a certain amount of growth and then there's there's also you're building a business to where you actually want to
17:13 be and I think a lot of people uh Schwarzenegger example is fantastic especially when I work with younger
17:18 investors you you'd ask them hey where do you want to go with your portfolio I want to I want to do a hundred million dollars I
17:25 want to uh I want to my least favorite goal that people have, especially young people. I just want to be the best in
17:32 the space. I'm like, that is you're not going to hit whatever that is. I you don't even know what best means.
17:38 Uh but you end up with a portfolio that ends up looking like what your business model looks like and where you want your
17:44 life to be. And so for you, a 600 year portfolio in four years is awesome.
17:49 Do do you look like Sam Zel today? No. Do you need to also No. You don't need
17:55 to be this fortune real estate. 600 units, you're doing fantastic, assuming that you're buying based on cash flow.
18:01 You're doing fantastic. Yeah. Yeah. I mean, they're cash flowing from day one. That that's like kind of how we like it.
18:06 Um but but yeah, you know, I think with the setting goals, too. I mean, I was there at one point in time. I was like,
18:11 okay, hey, like this is the the nice, you know, big hairy audacious goal and stuff, but you you know, you kind of
18:17 learn more about the industry, more about like, okay, what kind of deals make sense? like okay maybe what is my
18:24 true goal if I want to hit 100 million is it like a certain cash flow a certain net worth to me personally then okay in
18:31 that case you know maybe you don't need to hit that amount maybe you can just do more better deals higher quality deals
18:38 move your financial needle forward more so then you know you become more selective on the deals that you take on
18:44 you're like I only have so many hours in the day and like yeah I got to train people build out processes so that like
18:50 they're running with it And you know, your your perspective changes as you go
18:55 through this path. What was your original goal like when you got started? And I'm guessing at 600
19:01 years, you probably surpassed it. Um, probably probably multiple times, but did you have a specific target when you
19:08 started? I know a lot of people will set, at least the most successful people tend to have a specific goal that
19:15 they've quantified and set a specific timeline to, and all of a sudden it becomes attainable. Uh
19:20 yeah. Did was that true for you or did you just kind of go like hey I I want to do this and it just kept happening.
19:27 Well you know I think I was one of those guys that was like hey look we we want 100 million. I mean that that is still
19:32 the goal and like you know we are still building towards it but um I think for for me I was one of those people that I
19:39 mean I I learned how to dream. I mean before like my first job out of college was at Tesla. Tesla taught me how to
19:45 dream and be audacious and like do things that haven't been done before and kind of like helped me in my entrepreneurial journey and like it for
19:53 me just like I learned that okay the goal setting is one thing but doing the
20:00 action and being persistent enough so that you actually achieve results that's
20:06 another so um now I'm better at setting goals and like now I know like okay
20:12 inputs matter more than outputs So, it's like a number stays a number until you have a plan. So, um just changing your
20:19 approaches there. Goal it still stays the same. That's awesome. That's awesome. I know
20:24 for the thing that changed for me is my wife got injured at work and so I I I had this the reason it took me eight
20:29 years to buy like two duplexes and it took me a year to get to like 100 units. The difference for me was she injured
20:36 her back. I'm like, I need to retire from teaching now. I was planning on doing this in like 10 years. So, a 10- year plan became a one-year plan and
20:42 then suddenly you do it. It's amazing when you have actually quantified. I'm like like I need to get to like $15,000 a
20:49 month as efficiently as possible. Also, one duplex at a time is not going to do
20:54 this. So, I need to buy bigger. I need to close more often and I need deals that cash flow day one because I need to
21:00 have cash flow now. That's right. And I my favorite thing that you said there. I I think that the biggest
21:06 mistake that people make in our industry, and I I I blame almost
21:11 exclusively the old school 2015 through 2020 online gurus for this. They pitched
21:19 everyone on appreciation. Just buy anything. It can even be a little bit negative. Just buy it and hold it. And
21:24 if you hold it long enough, you'll be rich. And a lot of people couldn't hold it long enough because it loses money.
21:31 If you buy a deal that loses money and you keep buying them, you just have less income to support the it's a losing
21:37 strategy. So you said cash flow, which is my favorite word in all real estate. What does
21:42 high level the buy box look like for you looking at a mobile or RV park?
21:47 So I will say um it depends on who is involved. So, you know, we have some
21:54 deals that we we syndicate, you know, we get together a group of investors. You know, they're they're passive and uh we
22:00 basically make their money grow for them. Those, you know, it would have to be bigger versus like if it's just like
22:06 me and a couple partners, then like we could take on smaller deals. So, you know, there's almost like
22:11 a bifurcation like two kind of buy boxes that merge into one. So, you know,
22:17 really like anything between 200 uh 20 and 200 units are kind of our sweet spot
22:23 in terms of the the unit count because any any smaller it's like you don't have enough of a payroll kind of to to run
22:32 your your processes because like we have employees, staff members, like subscription system, all that stuff. And
22:37 then if it's too big, then like you know larger players, they have cheaper cost of debt. Um and or like cost of capital
22:43 I should say because like their investors don't even want more. Like if you look at some of the larger investment firms like their returns are
22:49 like much lower and because of that they can be more aggressive with their their bidding. So it's just a matter of like
22:57 being smart with your time knowing what you and your team can operationally handle as well.
23:03 I I think that is huge. Biggest mistake I made in my career and I will ask you yours in a bit here but biggest mistake
23:09 I made is we bought a resort. It's actually right next to that RV park. I bought it with a full team that had no
23:16 experience running resorts. We had collectively no experience. It was
23:21 seller financed. I had done almost all of my deals seller finance. I've done a ton of creative finance. And so we made
23:26 the mistake of identifying ourselves as creative real estate people. Does not translate one to one from multif family
23:33 to hospitality at all. I actually had to buy out every single partner over three years. It cost me like a million dollars
23:38 to uh to to survive that. when you first make a million dollars giving it to other people to get rid of that
23:45 partnership not how you want to start your business. Uh so I I really like that uh defining
23:52 that. Now you mentioned um so 20 to 200 which is awesome
23:57 and different partnership structures. Are you using joint venture syndication
24:03 a blend of the two? I'm just kind of curious which models most frequently are used. You know, I I think at this point,
24:10 um, default is syndication. Um, because, you know, a lot of folks just kind of learn about our investment thesis.
24:17 They're like, "Okay, we we like your track record. Like, you guys have been exceeding your business plan for a long time. Like, we want in. Like, let me
24:22 know when I could put my money to work." And like, we just have to tell like, "Hey, sorry. Like, we don't have anything for you." Which is unfortunate.
24:28 Like, you know, like right now it's almost May. Like, we don't have a deal for our investor group yet, which like
24:34 kind of sucks. But, you know, we're not willing to bend on our underwriting. You know, we we want to we're the ones
24:40 operating it. So, like we kind of pay the piper if we like buy into a bad bad deal just to buy it. So, you know, we we
24:46 just keep on like sending out deals. But yeah, most often syndication sometimes we we'll do JVs.
24:52 Okay. Awesome. Awesome. I I I think the discipline of knowing when to use which
24:57 model. I think all deals can be broken down into you have the actual deal which is where you thrive. You don't you don't
25:04 bend on your underwriting. You know when a deal is a deal, most important thing. You find the debt product that is
25:09 appropriate for the property. And so that that will go into your underwriting. And now you just pick which equity model closes this deal. If
25:16 you can close it with a few friends, with very few people, I love that model. I love a great simple JV. I I I still
25:23 think to this day, I look at my syndicated deals. I look at my JVS. I'm like, why don't I just do more of the
25:30 JV? They're they're so simple. They're they're so simple. They're so easy. If you have if you can close it with less
25:35 than five people in your crew, I'm all I'm all for the JV. Uh what happens when you're an experienced operator though, when you
25:41 have a surplus like you do of people who want to invest with you, the syndication becomes such a simple way to do
25:47 everything in volume. I so I I like the way that you're doing it. Uh what today would you just do
25:54 everything in a syndication or is there a deal structure like hey I would rather JB if the deal looked like X or Y? you
26:01 know, it would really depend and you know, part of which is um how much cash cash to close is is required um and what
26:08 kind of property it is. So, if it's like super super hands-on and it's a heavy
26:14 value ad, you know, that kind of deal, we're like, well, you know, if we syndicate it, like these are probably
26:19 the terms that the investors would would accept. And it's like, okay, does that
26:25 is that not worth us to chase? And you know, just like truthfully speaking, like we we know how hard it is to
26:31 operate properties and sometimes it's no. And like sometimes we want to find out ways to take it down in a different
26:36 way. You know, maybe they're they're coming in as like private investors making like a great percentage uh for
26:42 their interest. Um but you know, we we would own the the pie ourselves because like hey, like some just require
26:49 overtime of work versus others. like, okay, we can run our model, we could put our team on it, he does this, who does
26:55 that, and you know, it just makes sense that way. Yeah, that's I I I love the discipline
27:00 behind this, which which leads me perfectly to the next question. Uh because the dumbest that we're ever going to be is when we start and we
27:06 learn a lot along the way. The point of this podcast, the main podcast, is for other people to listen and to learn from
27:14 people who are doing the things that they want to do. What is the most expensive lesson you learned? your stupid tax of not knowing what you
27:21 didn't know when you started the business between then and now. And granted, most of it's been a four-year
27:27 period for you. So, you may not have made your biggest mistake yet. We don't know. We'll find out. But what is the biggest one you've made so far?
27:33 Okay. So, I I will stretch this to how long I've been in real estate, which is, you know, closing on to a decade now.
27:38 So, um, you know, back when I was working at Tesla, I I started investing
27:43 as a limited partner because I was just getting burnt out. You know, I also had kind of a moment of realization when um
27:50 a colleague's father suddenly died. I was like, "Oh, man." Like, "All right, I I need to build some cash flow that
27:55 doesn't depend on me clocking in and out." So, you know, that that's how I got into investing, real estate, etc. Yeah.
28:00 And like I I went like feet first because I I I just fell in love with real estate and like I felt really
28:07 passionate. So, you know, I I quit my job and went all in on real estate in in brokerage. And like I think going back
28:14 and like now various iterations is like keep your daytime job as long as you can
28:20 cuz like people don't like people gloss over the kind of feeling of financial
28:26 scarcity like when when you're paying bills and like you're like okay you're an entrepreneur congratulations you made
28:32 that post on LinkedIn it's great you know you have your little website and stuff but like hey you got to find a deal you got to make it work and like
28:39 okay if you syndicate it guess what like you're not getting paid. paid, you're barely getting paid because like if you
28:44 if you have investors that kind of know what's going on, like they want them to get paid first before you, that's how
28:49 you align your interest. So, it's like when do you get paid? So, I think having that job for as long
28:55 as you can, that was something that I would do differently. And also like just working with more experienced people,
29:00 maybe like going under the wing of like more experienced operators, like helping them, you know, operate the asset and
29:07 then going off on my own. But, you know, that would just make the timeline to me
29:13 being here longer. Um, but less painful. So, you you make that choice.
29:19 I I I agree. I I did the hard mode where my wife got injured and this was right.
29:25 This is like right in that like 2020 2021 zone. And so, at the time I'm in
29:31 Seattle, everything is still shut down because it stayed shut down there forever. And I'm
29:36 an outside sales rep for the co-star group. So it's like loot metap apartments.com and outside sales in a
29:42 state where you're not allowed to go outside for two years was pretty awful. So I just screw it. I'm just going to
29:48 buy real estate. Uh it it was difficult and there were many times where I'm like wow I am really close to my last dollar
29:54 and then a large liquidity event would happen. I'm like okay good. I'm good for another year. The most stable way to do
30:00 it is just have a job and build the portfolio and keep that active income
30:07 going. I'm such a huge fan of that. And to supplement the uh to supplement the real estate, I ended up starting a
30:12 property management company and I actually scaled that and eventually sold out of that. But like I built jobs within my company to stabilize while
30:20 buying in your first I don't I want to call it three to five years very rarely. Like one in a
30:27 thousand people have the money to be like oh yeah I can just leave my job in less than three years. It it does happen
30:32 and I' I've seen it happen a few times but almost everyone that first three
30:39 years you don't have enough stable consistent recurring cash flow to leave it almost never happens.
30:45 Yeah. Yeah. And and I I think people should not underestimate that when you
30:51 act from a position of abundance of like okay your your financial being is not a
30:56 going concern. It's just different like the quality of your decisions are different and like you know in the world
31:02 of entrepreneurship um broadly like you are paid for your judgment and the
31:07 quality of decisions that you make how well of a leader that you show up for your team. So um now you know I kind of
31:13 realize that more and more. Yeah I love the takeaways there. If someone someone wants to learn from you, someone has
31:20 additional questions, someone wants to invest in that next deal that you haven't found yet but are about to um
31:26 how do they reach out to you and how do they find the uh Cornell Communities? Yeah, so there there's two ways, you
31:31 know. One, if you want to learn more about our team, our asset class, join our ambassador weight list. You can reach us at cornell communities.com.
31:38 That's c o r n l c o mm mm u ni t i s.com. Or you can reach out to me on
31:45 LinkedIn or Instagram. LinkedIn is Leo Young, L E O Yo U N G or Instagram, it's
31:50 Leo Young Real Estate. Perfect. Leo, thank you so much for joining us. This was awesome having you
31:56 on the podcast. I love the strategy. I love the discipline. I love the cash flow. Uh this gets a A+ rating. If I was
32:03 giving ratings for business, this you said everything that I would want to hear. Uh as an investor, I'm like,
32:08 "Yeah, that would be that would be the group I'd want to invest in." So, dude, awesome having you on the podcast. If
32:13 you guys have questions, again, I linked those uh in the description below, or if you're on YouTube, it's uh wherever
32:19 you're listening to, it's it's all over the place. Uh if you don't yet follow the channel, please do so. Like,
32:24 subscribe, and we'll see you on the next episode.