RV Parks, 55+, and LIHTC: 3 Overlooked Deals I Target First

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0:00 On today's episode, we are talking about
0:02 the fringe strategies. And they're
0:04 actually not that fringe, but they're
0:06 the overlooked asset classes within
0:08 multif family. Now, all of these I've
0:09 made money on. Some of these I've made a
0:11 ton of money on. And I'm going to talk
0:13 about how you can get outsiz returns
0:15 buying relatively traditional assets.
0:18 We're going to talk about RV parks.
0:20 We're going to talk about multif family,
0:21 but 55 plus. We're going to talk about
0:23 LITC and how that works. If you've heard
0:25 of that, awesome. section 42 of the tax
0:28 code instead of section 8 even though
0:29 they work together. I'm going to talk
0:31 about how that works and how you can
0:32 make outsized returns on the strategies
0:35 that more investors shy away from.
0:40 [music]
0:47 [music]
0:53 [music] All right, let's start with RV
0:55 parks. By the way, welcome to the
0:56 channel. If you're wondering why the
0:57 heck am I listening to this guy, I
0:58 currently own a little over 600 units. I
1:00 bought in Washington, Texas. Blue
1:02 states, red states, big cities, small
1:04 towns. I've done resorts. I've done RVs.
1:07 I have done a lot of a lot in a
1:08 relatively short period of time. I have
1:11 experienced a ton of different type of
1:13 deals from heavy value ad to traditional
1:16 turnkey real estate. And the most I've
1:19 made on deals have been the deals that
1:21 are slightly unconventional. Let me
1:24 start with RV parks. So, I bought the
1:26 Robin Hood Village Resort a little while
1:28 back. It does have a few RV spots, but
1:30 it's not an RV park. It's very much a
1:32 resort. 20 minutes down the road, an RV
1:34 park goes for sale. They want, at the
1:36 time, it was half a million dollars.
1:38 That's a great price for 28 RV pads on
1:41 the water. Excellent deal. We go under
1:44 contract. What we find is their septic
1:46 tank is totally shot. It's going to cost
1:48 somewhere between 50 to $150,000 to fix.
1:53 it wasn't worth doing even at that
1:56 price. So, we just told them, "Hey, it's
1:58 going to have to be $300,000. We're
1:59 going to have to walk." They said, "Yes,
2:01 absolutely. We don't have the money to
2:02 fix this. We're we're hosed." So, this
2:04 is one where we absolutely want on
2:05 price, but I've seen this happen a lot
2:07 with RV parks where you have less
2:08 experienced owners. They got it, you
2:10 know, maybe it's passed down from a
2:12 relative or they have some problem they
2:14 can't afford to fix. You can come in,
2:16 some of these things trade at crazy low
2:18 prices. I just see more price wins here.
2:20 A lot of investors focus on mobile home
2:23 parks or on traditional multif family.
2:26 They're missing a huge opportunity here.
2:29 We came in, we bought the park. Uh first
2:31 thing we did is it was about half park
2:33 owned, half tenant owned. In RV parks,
2:35 you want them to be tenant owned because
2:37 now you're not responsible for the
2:38 maintenance. You actually lower your
2:39 expenses. So what we did is we
2:42 essentially gifted or seller financed
2:44 the RVs to the existing tenants. If it
2:47 was a nice RV, we seller financed it. if
2:48 it was a little bit more beat up. Some
2:50 of them we just signed them right over
2:51 saying, "Hey, you can own this or we can
2:53 keep it. Your choice." Uh what we did on
2:56 the 28 units is we removed three of
2:58 them. We built a new septic system. It
3:00 ended up costing $130,000. So we almost
3:03 maxed the budget for that, but we bought
3:05 for 300. So we're all in at this point
3:08 for $450,000. We spent another 50,000 on
3:11 the clubhouse, redoing the bathroom, the
3:13 laundry machines, the mail room, and now
3:16 we have this beautiful campus, new
3:17 signage. It's all clean. We regraveled
3:20 less than $600,000 all in.
3:24 We sold it for $1.1 million. I rarely
3:26 ever sell real estate, but this is
3:28 around the time I moved to Texas. I had
3:30 my first kid, a now 25 unit RV park,
3:33 even performing beautifully in
3:35 Washington state. Didn't quite move the
3:37 needle for me, and it was a little bit
3:38 more remote than I wanted to manage. So,
3:41 I sold it to someone who lived very
3:42 nearby who could take it to the next
3:44 level. Today, it's probably worth about
3:45 1.6 million. So, while I made half a
3:48 million dollars on this deal in the
3:49 course of about 13 months, in about the
3:52 same amount of time, maybe a little
3:53 less, they're also going to make half a
3:55 million. Fantastic deal. Tons of upside.
3:58 And a perfect example, there is so much
4:00 room to make money on this deal that two
4:02 groups can come in and make half a
4:04 million dollars in the course of very
4:06 little time. Very easy to operate. The
4:09 tenants tend to need less and they're
4:12 technically in most cases renting pad
4:14 space. So, you need to have some basic
4:15 amenities, but your big underwriting
4:17 things are the utilities, the electric,
4:20 the water, the septic, if you're on
4:23 septic or the sewer. You just want to
4:24 make sure the utilities since it's the
4:25 main thing you're renting are all in
4:27 great condition. And if they are, they
4:29 tend to make an outsized cash flow
4:31 return. Now, it's worth mentioning they
4:33 don't usually appreciate as fast as
4:36 conventional real estate. So, you either
4:38 need to dominate on price like we did or
4:41 you need to buy them as a long-term cash
4:42 flow play, which was the design of this
4:44 one. It would have worked fantastically.
4:46 Okay, let's go on to my all-time
4:48 favorite 55 plus. I hunt for these
4:52 specifically. I will buy this over all
4:54 other multif family, period. Bar none.
4:56 It is better. Here is why. You have two
4:59 main avenues of people over 55. Now,
5:01 there's of course tons of exceptions for
5:03 this. So, in the comments, please don't
5:04 blow me up with like, well, my grandma
5:06 did this differently. I understand this
5:08 isn't everyone, but this is a majority
5:10 of people over 55. In the 55 plus
5:13 communities, majority of your tenants
5:15 are actually north of 65 years old. At
5:18 this point in life, they either usually
5:22 have saved up, bought a house, had their
5:24 traditional American dream, and they're
5:25 doing their own thing in their own
5:27 property, or they're people who have
5:29 been lifetime renters, which is totally
5:30 fine, and they're allowed to do.
5:32 However, they know how to be tenants.
5:35 And many of them in their 60s,7s, 80s
5:38 are on fixed income, which means you
5:40 know exactly what they're going to make.
5:41 They may be lower income, but they know
5:44 how to budget. They know how to be
5:45 tenants. Now, this does not mean that
5:47 you never get bad tenants, but the
5:49 amount of bad tenants you get is way
5:51 lower. They're typically clean. They're
5:53 typically tidy. They complain typically
5:55 a lot less. The things that they expect
5:58 are a few little community features. my
6:01 44 unit, 55 plus community, big
6:04 clubhouse. They do bingo nights. They do
6:06 Bible studies. We provide food. Uh I
6:09 think it's twice a month. I'll double
6:11 check that, but I know we do events. We
6:13 keep the fridge stocked for them. We
6:14 keep coffee in there, stocked at all
6:16 times, so you can get coffee, water,
6:18 food at times. There's a computer lab.
6:21 And that's it. It's pretty simple, but
6:23 you create a great place where they
6:24 don't need to leave all the time. They
6:26 have a nice little quiet community. It's
6:28 tucked away. You basically keep the
6:30 tenants all the time. We have virtually
6:32 no turnover. Uh right now we're at 100%
6:34 occupancy and we've maintained that
6:36 month over month over month over month
6:37 over month. They're so easy to run.
6:40 They're so easy to find tenants for. And
6:42 your actual tenants, even if it's a
6:44 low-inccome property, which this is,
6:46 they tend to be a much higher quality
6:47 than standard rentals.
6:50 We did this again in Abene, Texas. 81
6:53 units. Similar layout, big clubhouse,
6:56 big open space, fantastic property. It's
6:59 basically the same layout as the 44
7:00 unit, just twice as big. Same thing,
7:03 100% occupied, great condition,
7:05 excellent tenants, people pay on time.
7:07 We're not dealing with a lot of
7:08 delinquencies with evictions,
7:10 smooth, easy, high cash flow,
7:13 ludicrously high demand. At least in all
7:16 the markets I've invested in these in
7:17 Texas, we've done the Steamville, Waco,
7:20 Abene, tons of demand. they don't build
7:22 enough of these. If you find these and
7:24 you can pick them up and they cash flow,
7:26 these are the easiest properties to run.
7:29 It is actually
7:31 unusually easy money. This has been uh
7:33 three of three times. This has been the
7:35 go for me. Highly recommend. If I find
7:38 something in any of my markets, 55 plus,
7:40 I'm buying that before anything else.
7:42 And lastly, I want to talk about litech.
7:44 Now, I've done one, two, three, I've
7:45 done four litec deals. Um, and it
7:48 equates to hundreds of units. In fact,
7:49 one of them was 144 units by itself. Uh
7:52 the 81 unit also LITC. I bought a 76. So
7:54 I've done significant volume of this.
7:56 Now, if you don't know, LITC has rental
7:58 caps. So it's section 42 of the tax code
8:01 instead of section 8, which is very
8:03 common. Government subsidized rent.
8:06 Section 42 limits how much we can charge
8:08 for rent. Because of these restrictions,
8:10 there's other things we have to do. We
8:11 have to provide some afterchool
8:12 programs. We have to do uh I actually
8:14 have to teach financial classes to the
8:17 tenants at some of these properties. we
8:19 have to provide computer labs in one of
8:21 the properties, uh, buses to a local
8:23 food shelter if they need it. And
8:25 someone on site to help take their
8:27 groceries back. You have different
8:29 restrictions and what's called a land
8:30 use restriction because it is
8:32 regulationheavy. A ton of people don't
8:34 touch these. Like, hey, I've heard of
8:36 it. Don't touch it. I don't want to I
8:38 don't want to make a mistake. What we've
8:40 learned, it's not really that hard to
8:43 run. You have to be on top of the
8:45 compliance. There is more steps, but you
8:48 can buy these today where they cash flow
8:50 beautifully. You hold them long-term
8:53 till the LITC expires or you exit early
8:56 via something called a qualified
8:58 contract. Either way, you can buy these
9:00 at much lower prices than the income.
9:03 So, you can find these right now in tons
9:05 of markets. You can buy these at high
9:07 cash flow. We're talking 12, 15, 16% per
9:10 month out of the shotgun. If you pick
9:14 these up, you hold them, you run them
9:15 well because they're lower income and
9:17 you have to rent to people who make a
9:18 little bit less than the median income,
9:21 you actually have a huge inflow of
9:23 tenants because it's nicer quality real
9:25 estate at a lower price to your tenants.
9:28 There's also in many states tax benefits
9:29 and other things that you get from this,
9:31 but it's often overlooked. If you see a
9:33 LITC property, it stands for lowincome
9:35 housing tax credit. It's on that
9:37 program. Read the restrictions as part
9:40 of your due diligence. but absolutely
9:43 worth taking a look at. I have made a
9:45 lot of money and the performance of
9:47 these properties, they tend to stay
9:49 right around 100% occupancy for me in
9:51 all of my markets. As long as the
9:53 market's good, you know, population
9:55 growth, job diversity,
9:57 I actually like to target these. They're
9:59 fantastic in a portfolio. They're
10:01 typically very, very stable on a cash
10:04 flow basis. These are my favorite three.
10:06 There's a lot of other fringe types of
10:07 real estate are things like multif
10:09 family. I have friends who've done
10:10 really well in self- storage, but I
10:12 found at the core of everything, housing
10:14 for humans is the core need. It's very
10:16 market resistant. Everything I just
10:19 listed there is highly, highly market
10:22 resistant. In a downturn, you don't
10:23 typically leave your 55 plus community.
10:26 If you live in an RV park and you love
10:28 that lifestyle, you don't really move
10:30 down from an RV park. Like, what do you
10:33 do from there? Move to a camp spot. like
10:35 there there's there's not a less
10:37 expensive place to go if you have an RV.
10:41 Uh same thing with LITC. If you're
10:42 already undermarket rent and your rents
10:44 are capped,
10:46 you're probably not going to leave for a
10:48 lesser place at higher rent. So these
10:51 are all highly highly highly resistant,
10:53 hyper stable real estate. But the beauty
10:56 of this is all of these have less
10:57 competition than your conventional real
10:59 estate. So, when you're looking for
11:01 these, uh, don't pass up the RVs, the 55
11:04 plus, the LITC deals. Underwrite them.
11:06 See if you can make them work. But, I'll
11:07 actually target these before anything
11:09 else in every market I'm in. Hope this
11:11 helps. Happy hunting out there. And,
11:13 let's make 2026 a fantastic year for
11:15 acquisition. See you guys on the next
11:17 episode. And if you want to find more
11:19 deals, get plugged into a community, get
11:20 a free calculator, and a whole bunch of
11:22 other epic tools completely for free, go
11:24 to schools skol.com,
11:26 join the multif family strategy
11:28 community, or just click the link below
11:30 in the description. We'll see you there.