Episode Transcript
[00:00:03] Intro: Welcome to the Passive Mobile Home Park Investing podcast with your host, Andrew Keel. This is the podcast where you can get the education you need to invest 100% passively in the highly profitable niche of mobile home parks.
[00:00:19] Andrew Keel: Welcome to the Passive Mobile Home Park Investing podcast. I'm your host, Andrew Keel and today I'm excited to welcome Jeff Anzalone, founder of Perdido Capital and CEO of the Debt Free Doctor. Jeff helps doctors and high income professionals build passive income through his debt free Dr. Platform and he owns 18 mobile home parks with around 1200 lots himself all across the Gulf south. Jeff, welcome to the show.
[00:00:48] Jeff Anzalone: I appreciate it. Thanks for having me on. Looking forward to it.
[00:00:52] Andrew Keel: Fantastic. Man. I'd love for you to start by walking us through the ski trip moment. You know, what did that reveal about, you know, single income risk and other stuff that most high earners like never really think about?
[00:01:04] Jeff Anzalone: Yeah, I guess you never think about like if you're an athlete. I'm not. Not that I'm a professional athlete or anything, but, you know, I played some sports and, you know, you never really think about getting hurt or anything like that until what you get hurt. So I've been practicing dentistry for 10 years. You know, big Dave Ramsey fan at that time.
Had gotten to the point where we were debt free. Thought that was, thought that was the end goal, you know, and, and live happily thereafter.
We took our kids skiing Colorado. They were like 9 and 7 at the time. I got off that first lift, kid like cut in front of me. I swerved and I fell. And when I fell, you know how you instinctively put your hands down. Yeah, like that. On snow and hurt my wrist.
Luckily it wasn't anything major.
But that got me thinking, like, okay, if, if I can't use my hands, I'm screwed because I, you know, I can't provide for my family.
And I started because I was just on the, you know, on the path that most of us go, you know, are on. We go to school, we get out, we get a job and then we max out the 401ks and then we like, okay, I'm going to go till I'm 60 or 65. I was on that path.
And I realized quickly, even though I was debt free, I wasn't financially free.
And once I started, you know, I used to play golf. I don't know if you play golf, but I used to play golf. I don't anymore. It's just too frustrating.
But for the people that play golf, you know that everything that you are supposed to do it's the opposite of what you really want to do. So if you want to, okay, I want to drive the ball far.
What do you do? You. You like, grip the club and you rare back and you try to kill it.
And that's just, you know, that's just instinctively how it is. But it's like when you learn about how to do it, it's like, okay, you barely grip the club. You're like a. Your arms are like a wet noodle. You're so relaxed. I'm like, that. That doesn't make sense. So my point is, when I started going back and learning about money and wealth and investing, it was the complete opposite of everything that we were taught in dental school.
And that is, we're all taught to be earners.
You get out, you earn. And that makes sense because earners pay more tax, and that's what keeps the company going. But if you ask anybody that has wealth, they don't say, I am a.
I am a doctor. I'm a dentist. They say, I own whatever businesses, real estate.
And I was like, Holy crap, I'm 40 years old. I'm like, was listening to this guy that just said, pay off all your stuff. Which is fine, but it's like, okay, what happens if you're. If you can't work?
And long story short, years and years of going down the rabbit hole and trying different things got. Eventually got into real estate, and that's why you and I are talking today.
[00:04:11] Andrew Keel: Wow, that's such a cool story.
And then you have like over $300,000 in student home. Student loans that you paid off with the Dave Ramsey model. Trying to get that debt free. That's pretty cool. Tell me about your passive investments then. Right? So you figured this out. You decide, hey, I'm going to start investing. I'm going to start owning things.
What was the hardest, maybe most expensive lesson as a passive investor that you learned?
[00:04:38] Jeff Anzalone: That's a good question. I started off now back in 2017, 2018, when I started, that was when the crowdfunding sites started up.
Today it's like Realty Mogul or.
I mean, there's a bunch of big ones. I don't even know what the big ones are now. But back then, one of the biggest ones was Realty shares.
Realty shares,.com and patch of land. Patchofland.com. so I started to invest as a limited partner on those sites. 500 bucks. I mean, thousand bucks. I mean, you could just do really small things.
5,000 bucks. And you know, it was.
It was Working pretty well. So I said, okay, I'm going to step it up and I'm going to invest $50,000 in this apartment complex in Oklahoma, Tulsa, with this operator. You know, he had all these.
When I tell you I had no idea what I was looking at. It was just looking at the pictures of the properties and then looking at the numbers. It was like some sort of return. I don't even know. I was just like, oh, this is going to pay me 7% or 10% or whatever. I don't even remember what it was. Long story short, put the 50 grand in, started getting a little bit of communication from them. And then after, I kind of forgot about it. Then after like a year, I'm like, you know what? I haven't even really got any communication. So I logged in and lo and behold, everything was going under.
All of the investors lost all their money.
And it was something about.
And, and we weren't disclosed this, but it was a really bad area in Tulsa. Really bad. Rundown gangs, crime.
There was apartment building that these people went in and they go, okay, well, we're going to fix it up. Thinking we could get people to. If I'd have known all that, I wouldn't invest it. But, but long story short, I realized that I never wanted to invest. Well, let me back up.
If I didn't have a strong enough, why, like, why am I doing this? I would, I would have never invested again.
But if you have a strong enough, why. And something like there I had to figure this out for. Because if, again, if I got injured, I couldn't, couldn't work. So I had to, you know, figure this out.
But on those platforms, you know, like, if somebody wanted to invest in a mobile home park with you, they could probably schedule a zoom call or a phone call like this.
You can't do that on those, on those big crowdfunding sites, you know, I couldn't contact who the operator was, ask some questions, and had I known that, I would have never invested in it. So when all the, you know, all the crime and they couldn't get people to come back in, so the guy just left and, you know, left us. So that was, that was a big deal for me, knowing that I'm never going to invest in something again where I couldn't talk to somebody. Now, that doesn't mean I'm still not going to lose money, which I have. And I just did two weeks ago from a deal that was again, an apartment that had gone through two 1031 exchanges. And then I Just got an email saying I just lost more money and which is why I'm never going to go in apartments again. But anyway, it's just a hard lesson to learn. If you do real estate, I really think just like if you do stocks, you're probably eventually going to lose money. You just have to know that going in and real estate isn't for everybody and, but for me, I mean the reason I'm here at, you know, 50 years old and work is optional to me, without real estate, I would have had to work till well into my 60s.
But I did get a lot of bangs and cuts and bruises along the way.
[00:08:34] Andrew Keel: And I appreciate your honesty there because that's tough. I myself had a similar situation with an ATM fund and that's no fun to, you know, to have to, you know, declare a loss. But the wins have, have more than outweighed that, which is nice. Tell me about this. You've invested across multifamily RV parks and other asset classes. You know, where do mobile home parks rank for you today and why?
[00:09:01] Jeff Anzalone: Good question. A couple of reasons. Hall CPA, their website is therealestatecpa.com to my knowledge they're the largest real estate accounting group in the country, maybe the world, I don't know.
And Brandon hall is a good friend of mine and he was telling me that across all the asset classes with mobile home parks, you get by far the highest year one depreciation.
So to give you an example, apartment self storage, that sort of thing, you get about anywhere from 10 to 20% of the purchase price, year one of depreciation.
So you buy a million dollar apartment building, you're getting, you know, 100, $200,000, which is, which is good.
Year one depreciation, mobile home parks is 80% or more.
So in that same situation, $800,000 or more year one depreciation.
And for passive investors, people think, well you know, that's not that big of a deal. It has nothing to do with my W2.
But you're, you have to realize you're building streams of passive income outside your active income that's you're not going to pay taxes on or you shouldn't if you have all this depreciation. So you have to kind of look at it like that. It's, it's, it's like a, more like a passive, you know, kind of like the Dave Ramsey, his snowball that he teaches, you know, how to, how to pay off things, you know, smallest to largest the debt snowball. Well, this is more like a Passive income snowball. You start small and then it gets little bit bigger, bigger, bigger.
You know, you don't, you know, and I talk to, to, to dentists and doctors that are in their 50s and all they have is their clinical income.
And because they have never managed other income, if they sell their practice to private equity or they sell their, or they sell their practice outright and they've got this big chunk of money sitting in their checking account, they don't know how to handle that to live on.
So what do they keep doing? They keep working. And I hate to see that because they're, they're just, they've never managed that. So I really think, you know, if you go through your career and you're constantly getting different types of, whether it's, you're buying a dividend stock or you're getting a mobile home park or you're, or you're buying a business or whatever, and you're constantly learning how to manage and looking at the taxes. When you, when you are ready to exit your W2 or whatever, you, you're a lot more confident, you know, in, in doing that.
[00:11:41] Andrew Keel: I love that. I love that. It's like the rich dad, poor dad model. On my stairway, going up to my kids bedrooms, there's a, a sign that I had Chachi BT create and it's, it says, what's the secret to money? It says don't spend the principal. Right. Use the income from your assets to pay your bills.
And I just hope that they grip onto that and remember that when they're older. So valuable. Let me ask you this. When a doctor in your passive investor circle asks, aren't trailer parks risky, you know, slash sketchy? How do you answer a good question?
[00:12:16] Jeff Anzalone: And I would have, you know, I'm from Louisiana, I live in Louisiana. I've driven by a trailer park, you know, all my life and I've never thought about when I rode by, hey, I want to invest in one of those. You just don't. Which as you know, which is great because it keeps, it keeps competition really low.
[00:12:34] Andrew Keel: Right.
[00:12:35] Jeff Anzalone: And can they be sketchy?
Yeah, they can be sketchy. The very first one I bought with my partner was very, very sketchy. And I mean we had convicted murderers and all kinds of people that were, that were in there. Yeah. And I've done videos and articles on them and it's. But to answer your question, I, I think, and you know this as an operator, it's all about who you invest with.
And they can take anything, you know, kind of like the bad News Bears. You know, the coach took a really bad, poor team and built a winning team.
You know, look what Nick Saban did at LSU and then in Alabama, he took a, a bad, slash, mediocre team and, you know, built it up. So I think, I really don't think it matters. Asset class. You have a good operator.
That's the key.
[00:13:23] Andrew Keel: Yeah, yeah, that's good feedback there.
What are the red flags in a pitch deck that most passive investors miss? You know, talking mobile home park specific?
[00:13:33] Jeff Anzalone: That's a good question. You know, unfortunately, the more that I find on, on social media, like people that I know, like, know personally, I know what they've done and then I look at what they're posting and it's just, I hate to say this, but it's, it's very hard to believe anything, any, any on social media.
It really is. And I had an incident. I'm not going to, to, to give the details because the person would probably know, you know, that I'm talking about them. But something very, very recently with the transaction that we had and, and, and I look at what they post and it's just, I'm, it's mindboggling that people can sleep at night saying these things just to get investors or customers to invest.
So it's, I mean, really, for me, I mean, it really comes down to not so much what's in the pitch deck. It's really knowing who you're investing with and if that's not really possible, really reaching out to other people that have invested with that person. I mean, like, not just one person, like multiple people.
But, you know, best thing to do is you can meet them face to face. But if not, because, you know, for instance, you know, if I wanted a medical procedure done on me or one of my families, I'm going to ask people, who do you use?
And then of course I'm going to meet with that person and I'm going to talk to other people that they have, you know, done surgery on or procedure before I do that. That's just the kind of person I am.
[00:15:11] Andrew Keel: No, that's smart. Is there any tip, you know, that you've picked up? Obviously meeting people is good, but like you said, just like on social media, you know, people can kind of put on a facade.
But I, I do think talking to the references is important. But any other tips you have around vetting operators that has, have worked for you, like maybe checking out their track record or anything like that?
[00:15:35] Jeff Anzalone: Yeah, I mean, I definitely think that's important. A track Record how long they've been in business, if they have any exits, what that, what that's look like. I remember a story one time where a guy, he was a syndicator and he was talking to a family office to get them to invest.
And he said, okay, let me see your track record. I thought this was pretty good. He said, okay, let me see your track record. And he looked at the track record, Let me see some deals that you went full cycle. Okay, let me see what the projections were before they went full cycle. And then let me compare them to what, what they, you know, exited. Said, okay. He said, what, what are your, what are your deals right now that are open? He took him, he said, okay, I'll talk to you in three years.
So now he's able to take all that information and then take what's open, and then he's going to see what happens in three years. So, I mean, I know some people don't have three years to wait, but never, never being in a rush, if somebody's like pressuring you, like, hey, you have to do this now, that's kind of a red flag. But I think, you know, track record, talking to other investors, looking at what their exits look like, you know, those are kind of the standard things that, you know, that I can think of.
[00:16:51] Andrew Keel: Yeah, those are great.
[00:16:52] Jeff Anzalone: Yeah.
[00:16:52] Andrew Keel: For a listener right now, sitting with $100,000 idle, who's never done a syndication, what are the three steps? And you know, the biggest mistakes to avoid?
[00:17:06] Jeff Anzalone: Probably the biggest one is what, what do you want? What are you trying to accomplish with that hundred thousand dollars?
So I'll, you know, I'll talk to younger doctors and dentists who will call me and tell me, you know, I've got 50,000 or, you know, whatever, a hundred thousand, 200,000 sitting in the checking account. I want to invest. And then I start talking to them. I remember there was a guy from Nebraska, he was like a young dentist. He had like, he owed like a million dollars between his practice, student loans and all that. I'm like, you have no business, in my opinion.
Pay off your debt, you know, focus on paying off your debts. So I think that's probably the first thing to do is look at, do you have a financial plan? Do you have goals?
What, what are you trying to accomplish with this? A hundred thousand dollars? And then, you know, because your, your goal should, should, you know, basically direct what, what you want to do with it.
If everything works out well, and, and you do, you know, everything is, is kind of, you know, because I like to, you know, max out retirement accounts. You know, when we were doing 529 plans, which are not anymore, kids are in college, but there was like, when money came in, it was like you went here, then it went here, then it went here. Anything extra went to passive investing.
So if, if you have a goal and you get down that line, okay, a hundred thousand passive investing, then that's when you can start saying, okay, do you need the money now or not? Are you looking for higher depreciation or not?
So, and if, and if a lot of these questions or things I'm saying right now you don't have the answer to, you should educate yourself.
[00:18:43] Andrew Keel: Yeah.
[00:18:44] Jeff Anzalone: Because a hundred thousand dollars, that's a lot of money. And you know, and I hate to say this, but you probably should go into these types of investments knowing that you may lose it all.
You know, that's, that's just it, that's a higher risk.
Look what happened during the pandemic. And all the apartments from 2020 to probably 2022, they're all failing or they're not paying. That's just, that's just reality. And, but again, the reason why I'm sitting here and able to tell you that work is optional for me is because of mobile home parks. So I'm not saying everything is bad, I'm just saying that find the good operator, find the good asset class. Both you and I are biased with mobile home parks, but it definitely can be life changing, that's for sure.
[00:19:31] Andrew Keel: That's fantastic. Tell us about your portfolio. How do you guys manage it? You know, what does the, the day to day look like there? And, and ultimately. Yeah, how'd you get educated and, and find a partner that you felt comfortable, you know, going in on this with?
[00:19:47] Jeff Anzalone: Yeah, that's a great question. And, and my, I was telling you before we started recording, one of my sons is at Arkansas university and there's over 30, 000 kids there. And the, the, the networking opportunities that I didn't have at my smaller college that he has and I'm always telling him, network, network, network.
And I was networking in a mastermind and met my business partner who was funny because there's people, this online mastermind, people from all over the country.
So you would introduce yourself, hey, Andrew from North Carolina, Tom from Texas, whatever.
He, you know, when he introduced himself, he lived like five miles away from you. So I called him up and yeah, insane called him up. He came to my house, we talked for two hours. I think he owned four or five mobile Home parks. But he was buying them with his own money and was doing great, but he was cash strapped. So I was like, okay, I've never done this before. So we started going in 50, 50 and we bought five and I was like, holy cow. Compared to apartments, self storage, all the other things that I was in at the time, this is blowing them out of the water with cash flow. So then I started opening up to invest to our investors and then, you know, life goes on. It's just. But, but my point being is if, if I would have always gone, never gotten outside of dental meetings because you go to dental meetings or medical meetings or probably any type of meeting where you have to be there for CE hours, people just want there to go there for their hours and they leave.
So if you're around that all the time, it's like you're not stretching yourself, you're not learning anything. You're not really networking to make yourself grow. And once I got out of that environment into another environment where people really wanted to grow, like, like the mastermind I was in, I mean I can, I can sit here and honestly say that if I would have never met him then I wouldn't be sitting here right now. And then now we've grown this to about 20 parks now I think around 1200 lots.
He does a majority of the, the day to day. But our, our philosophy is a little bit different. We don't want to do any maintenance.
So everything that we have are tenant owned homes. If we buy a park, which we recently closed on two that have any rentals, park owned homes, we convert them to rent to own.
We're able to do everything remotely with an app. People pay with an app, sign the releases with an app.
We communicate them, you know, with an app like hey, you have, you need to mow your yard or you have a straight off not supposed to be out.
So we're able to, to, to do that remotely. There's four parks about within probably 7 to 10 miles of my house. So I'm, I'm more kind of overseeing those. And, and as, as I'm going to be exiting my practice, I'm getting more and more involved in that. But it's, you know, when you, when you don't have, think about this. You know, most people, if they're in real estate, they probably have a single family home. Yeah, right. So if a dishwasher goes out or the, or the roofs leaking or hot water heater bus, you the, the land, the tenant, I mean you, the landlord, you have to Fix it.
So imagine if you have that, that single family home and you don't have to deal with that. The only thing that they're doing is paying you for the land that, that home sitting on.
So that's, that's our, that's our model of mobile home parks. Except there's more than one home. You know, there's 50 to 100 or more. So it's, it's really not a whole lot of management, which is really, really nice.
[00:23:39] Andrew Keel: Tell me about your portfolio. Is it all in Louisiana? Is it in the, the Gulf south, you know, region?
And you know, how, like, how did, what, what size are they, you know, buy stuff with private utilities? Public utilities, yeah.
[00:23:55] Jeff Anzalone: Our buy box has definitely changed. I live in north Louisiana and he lives in south Louisiana.
Initially we had everything in north Louisiana because we were both here. And now that he's moved south Louisiana, we have them in both. He recently bought another home in the Florida panhandle.
So we're, we're looking at moving in the Pensacola, Florida panhandle region, which is, it's really growing just because he, you know, doesn't have his network of contractors and that sort of thing set up. We're, we're not moving there now. We, we really lucked up. In Louisiana.
There's so many data centers being built. I mean, Meta's largest data center in the country is 20 miles from our house. It's being built and I play pickleball with several of the contractors and they're going to be here for 10 years.
[00:24:49] Andrew Keel: Wow.
[00:24:50] Jeff Anzalone: Under roof, Andrew. Under roof. It's going to be bigger than Manhattan.
Think about that.
[00:24:58] Andrew Keel: Yeah, that's insane. How huge?
[00:25:00] Jeff Anzalone: It's insane.
So, so what does that have to do with mobile home parks? Well, we were thinking that, hey, all these workers are going to come in and rent from us and we can raise rents. But that's happened a little bit. But here's what happened that we'd even think about. And this is north Louisiana. We have some in south Louisiana. Again, they're building these data centers. So let's say you own a single family home in this area.
You're charging a thousand bucks.
Meta comes in, Amazon comes in, they pay their guys per diem.
What are you going to do? What's happening? Okay, you tell your, you tell your tenant, I'm sorry, but it's not a thousand anymore. A month, it's 2000. They're like, I can't afford that.
They're looking for other single family homes.
Everybody's doing it. Everybody's Done it.
So we have gotten more people that have gotten pushed out.
So from that and plus we're able to raise a little bit. Nothing like the single family homes, but we're able to continue raise to keep up with inflation, that sort of thing.
And we're 97% occupied across our entire portfolio because of that. So we really just lucked out in Louisiana. I just.
Sometimes you get lucky, you know.
[00:26:20] Andrew Keel: That's fantastic, man. Hey, let's move into a lightning round real quick. I got around 10 questions I want to ask you and I just want you to splurt out, you know, just the first thing that comes to your head.
[00:26:31] Jeff Anzalone: Okay?
Okay.
[00:26:32] Andrew Keel: All right, here we go. If you could own every mobile home park in one state, which state would it be?
[00:26:39] Jeff Anzalone: Louisiana.
[00:26:40] Andrew Keel: Okay, one state you'd avoid investing in California.
The biggest lie new operators tell themselves
[00:26:49] Jeff Anzalone: this is going to be a piece of cake.
[00:26:54] Andrew Keel: One thing mobile home park gurus teach that doesn't actually work in real life,
[00:26:59] Jeff Anzalone: that it's really easy to manage tenants.
[00:27:03] Andrew Keel: The most common reason new mobile home park owners fail, they they don't understand
[00:27:09] Jeff Anzalone: how the debt structure works.
[00:27:12] Andrew Keel: That's good. That's really good. Class C mobile home park in a good market or class A mobile home park in an okay one C all day long, Evict fast or work with tenants.
[00:27:25] Jeff Anzalone: Evict as fast as you can.
[00:27:28] Andrew Keel: Month to month leases or longer term structure.
[00:27:30] Jeff Anzalone: Month to month.
[00:27:32] Andrew Keel: And then best predictor that a tenant will become a problem.
[00:27:36] Jeff Anzalone: When you buy a park and a tenant comes over and they said, hey, that person that lives right there, they're going to give you problems. Then you know, if other people are complaining, they're going to give you problems,
[00:27:47] Andrew Keel: you know right away.
[00:27:48] Jeff Anzalone: Yes.
[00:27:50] Andrew Keel: The bet who's the better operator? The one who buys right or the one who manages best.
[00:27:55] Jeff Anzalone: Ooh, that's, that's a good one. I'm going to say probably looking at long term, I'm probably going to say the manager is the best.
But that's close. It's close.
[00:28:06] Andrew Keel: If rent control became widespread tomorrow, how would you pivot your strategy?
[00:28:14] Jeff Anzalone: Probably, probably looking at maybe changing our buy box or pausing where we are purchasing in statewide or whatever and maybe looking at going somewhere else. Buying somewhere else.
[00:28:28] Andrew Keel: Yeah, that's good. And then the last one, if you were going to passively invest in a mobile home park deal with your own capital, what are the top three to five things you would look at to ensure it's a good deal?
[00:28:41] Jeff Anzalone: I'm going to look at again, the number one thing is operator who you're investing with. Talk to some of their investors, look at some of their exits, look at their track record, look at where they're buying. I want to see how they're improving their communities. Are they, are they making them better? Are they making them cleaner, safer, better place to live? You know, that's, that is important because you know, the, the tenants are the customers and getting to know them before I invest with them.
[00:29:14] Andrew Keel: That's good. That's really good.
Awesome, Jeff. Well, I really appreciate all the value you brought today. Thank you so much for, for coming on the show and sharing your insights.
If any of our listeners would like to get a hold of you or learn more about what you're doing at Perdido Capital, what's the best place for them to do that?
[00:29:32] Jeff Anzalone: Yeah, they could go to Perdido Capital or debtfreedoctor.com I focus more on my YouTube channel. You can just search for debt free doctor or my name, Jeff Anzalone on YouTube. I've got I think like over 500 videos on there. So happy to you just message me or reach out to me. Happy to, to have a conversation.
[00:29:53] Andrew Keel: Awesome. Well, woo, pigs! Cheering on those razorbacks. Like I said, my wife's a razorback. So hope your son enjoys Arkansas. But that's it for today, folks. If you got value out of this episode, please consider leaving us a review. It really helps more listeners find the show. But thank you so much for tuning in and we'll catch you next time on the Passive Mobile Home Park Investing podcast.
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