913: Transitioning from Real Estate Agent to Investor with Ryan Murdock

Aaron Amuchastegui: Rockstar Nation, this is Aaron Amuchastegui. Hey, I am back today and we get to talk something new. We’re going to get to talk to some real estate agents stuff, but we’re also going to talk about some alternative ways to invest and maybe a way for one of you guys out there to make a bunch of money by trying to partner with some of these guys. Today, I get to talk to Ryan Murdock. Ryan is with Open Door Capital. One of the guys that he works with, Brandon Turner, he’s been on our podcast before and the host of the BiggerPockets podcast. I got to hang out with Ryan a couple of times out in Hawaii and we chat and get to hang out in social media world too, as we get to catch up. Ryan, thanks for coming out here today.

Ryan: Hey, Aaron, good to see you, man. Thanks for having me on. It’s going to be a good time.

Aaron: Everybody has been talking about shelter-in-place, Coronavirus, all the crazy stuff. I was in Maui, hanging out with Brandon when this all started. We got the news that Texas was getting placed on lockdown and so my family and I, we actually left a day early, we were supposed to be in Hawaii again last week, that got postponed. What is Hawaii like right now for all the shelter-in-place, how do people feel? What’s it doing to the market out there? Is the real estate market’s still going? Just an update on Hawaii during lockdown.

Ryan Murdock: Yes, sure thing. It’s been a crazy couple of months here as it has been everywhere from what I can see. I mean, everybody’s feeling the squeeze right now, but Hawaii, I think has been super proactive in trying to keep COVID cases from spreading. They’ve essentially shut down all tourism. They’ve shut down all short-term rentals. Anybody that arrives in Hawaii, whether you’re a resident or a tourist, you’re mandated to quarantine inside your house or your hotel for 14 days. Meaning, you can’t go to. You can’t leave. You have to have food delivered to you. All the beaches were closed. Just everything was shut down. Hotels are closed. Everything has just been completely shut down.

You can see I’m sitting out on my front porch right here, which is like, I don’t know, 8 by 20, and I’ve been confined to this area for, I don’t know, three months now. Which I guess of all places to be quarantined, I’m happy it’s Maui because it is beautiful. I can work outside and from a personal standpoint, I assume it’s going to be economically devastating for Maui and all of Hawaii, as an active resident, and I hate to sugarcoat this because I’m not happy about it, but it’s been a very unique opportunity to have Maui all to ourselves as residents.

I mean, we drive around there’s no traffic, there’s no lines. You go to the beaches that are open when they’re open and there’s no crowds. I do a lot of scuba diving, so we’re diving reef, some areas that are usually just loaded with tour boats and tourists, and we’ve got the whole place for ourselves. Obviously, I’m very anxious for the world to get back to normal, but if anything can be taken from it as a positive, for me personally, it’s this very unique opportunity that we’ve got this beautiful place all to ourselves. I think there’s going to be some long-term effects just with so many people out of work.

I mean, tourism is really the primary driver of business and income here, and with all that just completely shut down, I can’t help but think that there’s going to be some very long-term effects through businesses that just won’t reopen, or real estate prices that fall. I mean, a ton of short-term rental business here. People have bought condos and they bought property based on solely being able to do short-term rentals with no backup plan or they don’t work as long-term rentals. There’s no other plan B. They have to use them as short-term rentals and all of that has come to a grinding halt. Definitely feel for those people.

Aaron: Yes. The short-term rental business in Maui has to be impacted a lot greater than any everywhere else because what I’ve seen in Northern California is we dropped the price on our Airbnb so our clientele changed, but a lot of people wanted something fresh so they’re like driving up from San Francisco for the week to go stay because it’s a way to get out. That can’t happen in Maui because in Maui if you want a few days apart, I mean, you used to be able to hop over in a plane, but if you’ve got to quarantine for two weeks– I saw on the news a couple of people were in jail. People flew out there and they put them in jail because they didn’t quarantine.

Ryan: Yes. They are arresting people that violate it. Even if you could get here, I don’t know the exact word, they put a moratorium on short-term rentals period. I think the shortest you can rent anything right now is either 30 days or six months. I can’t remember which, but there are no more like you can’t do a two or three or even a week-long stay anywhere in Maui. They’ve shut that down.

Aaron: I think the pros and cons that you’re talking about out there are similar to where they are in other places. The con right now is economic devastation. No matter where you live, what you’re doing, there’s various levels of it and various industries affected, but the con of what’s going on right now is shelter-in-place and quarantine is economic devastation to a big part of the country and a lot of people. The pro is less traffic, is less busy places, is people finding family values again. There’s a pro and a con to less eating out.

Our family has really enjoyed some of what it’s forced us to relook in our values. Yes, I guess enjoy those beaches while you can. For you listeners out there that are into diving and Maui and fish, I’ll tell you what, Ryan posts these crazy videos on his Instagram. He dives like every day and some of the most amazing stuff he’s like, “Here’s an octopus. Here I am diving with five sharks today.” I watch him every day. I share with my kids every day. We’re always checking it out because diving in Maui is one of the fun things we get to do when we’re out there and since we can’t come visit right now, your videos that you put on there is– [crosstalk] Go check it out. We have to live vicariously through Ryan.

Aaron: Ryan, when you and I first met, you had just moved out to Hawaii. Were you still an agent at that time?

Ryan: Yes. I moved out here just over a year and a half ago. I’m from and pretty much grew up in Maine. I traveled around a lot, but most of my years were spent in Maine. I was an agent there for better part of 12 years doing everything from– Started out with just single-family residential stuff and moved up to multifamily and then got to the point where I was dealing exclusively with investors, which anybody who’s an agent knows that it’s a great place to be when you can finally hand select who you’re going to work with and who you’re not instead of just taking any business that you can. When I moved out of Hawaii, I figured I just transfer my license and continue doing that same thing out here obviously price points in Maui are significantly greater than they were in Maine so I just saw some great opportunity there. Honestly, once I got here and really started diving into some other projects with Brandon, I just really didn’t have the bandwidth to go and do what it takes to become a good agent here. I didn’t even get to transfer over my license.

We started working on Open Door Capital and we were doing some projects here on island and next thing you knew six months had gone by and I was working a ton of hours and really hadn’t even given much thought to the real estate agent thing anymore. I think it would still be a good opportunity but we’ve got so many better opportunities that I’m working on right now that I just don’t want to lose focus on Open Door Capital and what we’re building as far as that’s concern to get side tracked doing any agent business here.

Aaron: You can always use that experience you had as an agent to be able to transfer in all different formats of real estate. That’s what a lot of agents are going to be doing right now, right? The transactions are still happening but we’re telling people that you have to work harder to make them happen. There’s also going to be some offsets, people going, being an agent is very transactional business you have to do, that’s how you make money, that’s how you make income.

Doing some other things like investing and other stuff that I hope that all of you listeners get to modify into or do a little bit of that also. That was one things that we had Pat Hiban on here last week talking about is, really it was the agent, being a great agent gave the ability to make an incredible amount of money and succeed and help so many different people but also learning to invest along the way helps set themselves up for that horizontal income.

At times like this where some transactions slow down, you got those other options out there. Let’s go back to when you were an agent. You were living out in Maine when you first became a real estate agent. How did you get into real estate? What made you want to become a real estate agent?

Ryan: I was in electronics manufacturing for the better part of 10 years and traveled all around the world and really that had just ran its course and I was looking for something new. I had a little bit of money, not much but I– 2006, 2007, I just went online and was like, “What do you do if you have some money? Where do you invest it?” Real estate kept popping up and that just seemed to intrigue me.

I always like just buying stuff and fixing it up and making it better. I ended up moving back to the US and bought a and lived in one side, rented out the other. Made some improvements to it, tried to increase the value and really just got a trial by fire education on land lording 101. The tenants I inherited were pretty bad. What I took from that was just the experience that anything you do that doesn’t go well, you certainly learn from.

I took that duplex and slowly but surely kept adding to my portfolio of property. I had a duplex, I bought another one and then another one and then a three unit and a four unit and quickly got to the point where I knew I was really married to the property management business whether you have five or six units or you have a hundred, you have to be available at any time. You’ve got to have systems in place for when something explodes in the middle of the night, you have to have all that stuff.

systems and I married to my own properties, I managed to start managing for other people. I grew the property management business over the period of about 12 to 18 months. I grew to about 200 units that I was managing and I was still actively looking for my own real estate. What I was having trouble with is a lot of the stuff at that time, 2008/2009 a lot of foreclosures on the market, $30,000, $40,000 foreclosures that were great deals and if you didn’t get in and look at them and submit an offer, sometimes within a matter of hours, they were gone.

The downside was that as an agent, and I certainly saw this one since I became an agent. There aren’t a lot of agents that are super motivated to get off the couch on a Saturday afternoon and race down and show somebody a $30,000 foreclosure because even if it closes, there was no money in for the agent. I said, “Well, I’ll just get my real estate license on my own so I can do my own showings and I can stop climbing into windows.” I can actually use the to go in and write my own offers, I don’t have to bother any other agents so that I can get my offer submitted.

That’s what I did with really no ambition of helping anybody else. I just wanted to do my own deals and found out that pretty quickly, I liked being an agent and more and more quickly realized I hated my day job. I was able to– Just going in, I was spending a lot of time at the real estate office. As an agent starting out, you don’t just put the switch and you’re in business as an agent, you got to build out your network, you got to build out your client, you’ve got establish yourself and make a name for yourself.

I was having a little bit of trouble bridging that gap with the day job and then trying to be an agent and the woman that was running the agency that I was working for at the time had a need for like an admin assistant, really a book keeper because hers had just quit. I said, “Well, this–” She’s like, “Whatever you do, don’t quit your day job.” She’s just like, “Make sure you build out your clientele and you have something established before you quit your day job.”

The next day I came in I’m like, “Well, I quit my day job, I got to make this happen.” [chuckles] I was still being an agent but then she hired me “to be the admin assistant for her”. I had really no aspirations to be an admin assistant but it was a reason to get somewhat of a steady paycheck although it was very small and more importantly it kept me in the real estate office all day. I was still able to do showings and be there and be around people and just was able to accelerate my growth as an agent because I was still physically located at the office and surrounding myself with those people.

Aaron: That’s really interesting. You really became an agent at the beginning, one, because you didn’t have an agent that you wanted to use or you felt bad asking them to use so much stuff.

Ryan: Yes.

Aaron: That would have been a good opportunity for an agent at the time if they were the hustlers. Yes, I’ll go get in those houses for you, I’ll work really hard, I’ll work really fast and so it became– You didn’t know you were going to build that out and then working your way in. How many transactions did you end up getting to do as an agent?

Ryan: I think early on, I was doing 30 to 40 a year and they’re pretty low dollar transactions because what happened is I became that hustler agent for other people. Because I was hungry and I needed to make it work and needed to pay my mortgage and keep the lights on. I was the guy jumping off the couch at four o’clock on a Saturday afternoon to race out and show an interested buyer that $30,000 foreclosure just to get the experience and I wanted to be the go-to guy. For the better part of five years, man, I hustled a lot of times for very little or no money but I was able to fill the reputation and as time went on, as I mentioned, I was able to get more and more selective with my work with who I wasn’t.

Aaron: Two different questions; what advice would you give a new agent knowing everything that you know now and then knowing who you were back then, what advice would you give yourself? For now that you know everything, what would you have done different? Maybe it’s the same answer or maybe it’s two different answers.

Ryan: I think there’s a misconception with people who want to become an agent who think that, “Oh, I can just be an agent,” and pick my own schedule and work my own hours. It’s going to be easy. That at least for me, wasn’t the case because I had bills to pay. I think if you are financially stable already and you don’t really need the money and you don’t need to work that hard, then you probably can take a slightly more passive approach.

With that, you’re not going to build your clientele fast. My clientele at least they knew if they called me I was going to pick up the phone and if I didn’t pick up the phone, they knew I was going to call them back within usually 30 minutes or less. As soon as I was done doing exactly what I was doing, I would call them back. People came to trust me. So I was the go-to guy, but to do that meant answering the phone at odd hours at night, keeping your weekends free because you had to go show houses and show properties. I think if anybody sets out thinking that they’re going to make a go at this and it’s going to be their primary source of income and it’s what they’re going to do, they need to be prepared to make the commitment with the time and the energy to accommodate to everybody’s schedule in order to build your clientele and get your business off the ground.

Aaron: In your business today, maybe it’s for when you were an agent maybe it’s now, what technology are you using that you’re thinking, “Wow, I couldn’t live without this”. Either a piece of software or even your phone, what’s the most important piece of technology that you’re using?

Ryan: Right now, probably we run most of our communication at Open Door Capital out of Asana. It’s not really a CRM and there’s probably more sophisticated software out there but our current team members are spread all over so we’ve got a few of us in Hawaii, got some in Atlanta. We’ve got at least one guy in Maine, a couple of New York. Right now we live and die by Asana just keeping track of everything especially with the amount of leads we’ve got coming in, with the amount of stuff that’s under contract, then other staff is in due diligence and all the other stuff that shoots off of that.

Right now everything is entering into Asana, every comment, every email, every interaction so it’s all right there. I can see that no matter where I am on my laptop, on my phone anywhere, and I can just look back to the whole history of the deal or an issue or anything. Right now that’s the key piece.

Aaron: Asana is like a central hub to be able to keep a to-do list and things like that but it also links to your email so it’ll send you email reminders and stuff like that?

Ryan: Yes, you can set due dates and reminders and all that stuff. For a long time, I was just going out of email where you just mark stuff whatever start or leave it on red and it gets to the point where I couldn’t keep up with even that, so Asana is just light years ahead of that. It’s a good way to consolidate everything. So everybody’s on the same page, everybody knows what’s going on and there’s no miscommunication.

Aaron: How long did it take you to transition your organization from Gmail to Asana or from mail to Asana, whatever it was?

Ryan: It was pretty quick. Mike Williams our investor relations guy, he drove that and luckily, he came into the picture early enough, so it wasn’t like we had 200 employees and all of a sudden it was just a monster thing to change over. We worked on email, we tried Trello for a while. We tried a few other things and he came in and he had quite a bit of experience with Asana and I think we really went with that just because we were confident that he knew it. Again, there may be better solutions out there, but he was really well versed in it and we liked what we saw and we were still only six or eight people for our company, so it’s not a massive number of people.

The number of transactions and leads that are being generated is growing considerably but it was relatively painless to get everything from where it was, Gmail and Google folders and all this other stuff right into Asana. Maybe a couple of weeks and then a little bit of a learning curve for me, for Brandon, for the guys that hadn’t used it just kind of plonking around in there trying to figure out what’s what but it was a pretty smooth transition.

Aaron: One of the things you said there I think people should listen to is, that idea whatever CRM you’re going to use or technology you’re going to use, you need to make sure that the person that’s going to run it and be in charge, hold everybody accountable has to be something that they love. If it’s going to help it, we’ve used different systems. I used a lot of the– I mark my emails unread and I don’t mark it as read until I’ve seen it.

I’ve got three or four different email accounts depending on which company or business I’m running plus we’ve tried some different Jira for our software people and things like that which is lot like Asana but finding a hub that works but if you have a big team making sure that who’s ever in charge of getting everybody on board helps. Now as we fast forward, you went from an investor to an agent. To investor, to now. What’s your current title or your current role?

Ryan: My title today is VP of acquisitions. That’s subject to change on any given day but right now VP of acquisitions. When we had started, Brandon started Open Door Capital a little over a year ago. It was really just me and him working to try and find mobile homes, and it was stressful for a couple of reasons. We didn’t know exactly what we were doing and we didn’t know exactly what we wanted, we didn’t know quite what we were going to target. We cast a really wide net in terms of what we were going focus on for mobile home park criteria so as far as lot size and utility configuration and markets all the stuff.

We quickly found that we were just running ourselves ragged on a wild goose chase of underwriting deals that didn’t really work out for us, that we never really had any business looking at, to begin with, so it was quickly evident that we needed help. We were doing well, all things considered, but just the two of us, we needed to bring on people. We ended up creating an intern program. We had a team, actually two teams. I think there was 25 to 30 people that were helping us both on the acquisitions front. So we had people that were cold calling that were looking for deals and then another team of dedicated underwriters. It was 10 or 15 people underwriting for us.

That proved to have its own challenges just with having that many people to train and chorale and make sure everybody was on the same page and make sure everybody’s getting enough at-bats for the task that they were at so they could improve and get good at it so we learned that we needed to scale that back. We went from 30 underwriters down to just a handful. We had three or four of those and then two of those guys ended up becoming full-time employees for Open Door Capital. It was a pretty fascinating way to build out our team where we had a chance to work with pretty much everybody on the team.

We worked within a free capacity or sort of a commission-based capacity. We had a program where if they found a deal, they were unpaid positions, there was no hourly or salary, but they were excited to work with us, they were excited to work with Brandon and learn about mobile home parks, learn about underwriting, learn about deal-finding but we promoted that if we ended up purchasing a deal that either they are a part or they were part of the underwriting team on, they would get some compensation for that almost on a commission-based.

We had an opportunity to work with all these people and some of them kind of faded away quickly and there were a couple that really rose above the rest of the group which tends to happen with any group. After working at that capacity with a couple of these guys for a few months, we felt confident up to hire them in a full salary. They were able quit their day jobs, come to work for us full salary package which is really beneficial.

I think that everybody involved gave Brandon and I a chance to date before you get married, test drive the car before you buy it, and see that you like working with these people and gave the people that we hired the chance to see if they really liked the work and they liked the culture because it was a big leap for a couple of them to quit job and make significant changes.

Aaron: I remember doing an internship in college and I learned so much in those internships. Getting to go to work for companies and see in those three-month trials are such a fun way for people to get to learn. There isn’t as many internships now and there hadn’t been because the economy was so booming. Everybody had a job, unemployment was so low now as people are shifting, I bet there’ll be more opportunities for internships and building the team. When you first moved out to Maui, I think I kind of remember the story that when we were hanging out there that went out there to go help Brandon remodel something and then you never left. You weren’t really planning to move when you got out there?

Ryan: No, I definitely wasn’t. I was in Maine, I was doing some mobile home park consulting, some other stuff, and I’ve got my own small portfolio of rentals there still. He just sent me a text one afternoon, he’s like, “Hey, I just bought this house in Maui, can you come out for a week just to help me get settled and you had to get a shipping container from the port to his house and he’s got a little rental unit out back that he needed renovated and to find a tenant. So I’m like, “Sure. I’ll go to Maui for a week.” I never been at Hawaii at all, really didn’t know about it. Jumped on a plane, came out here and within five seconds, just absolutely fell in love with the place.

Over the course of the week, we had determined that there was way too much stuff for me to do in one week but stayed for a week, went home for three days and then came back here for a month and then over the course of that month, hatched a plan with Brandon to really be his executive assistant. It’s funny because there’s some similarities there for when I first got my real estate license, like just kind of filling this admin assistant role, even though it’s not really what I wanted to do. It was a great stepping stone to get out to Maui and work on some bigger things.

I stayed for month and I went home just long enough to grab the wife and dog, sell my house, sell all my stuff and I bought a one-way ticket back here to Maui. I took a role as again his kind of executive assistant I was helping him. A lot of the camera production stuff on his videos and his webinars. I do still work for BiggerPockets on a part-time basis and then, meanwhile, we were building Open Door Capital and targeting the mobile home park. I’m no longer the executive assistant, I no longer rake leaves in the yard. I do still clean the pool on occasion.

Aaron: You cut bananas out of the tree.

Ryan: Cut bananas, yes.

Aaron: I’ve seen you eating bananas out of the trees there.

Ryan: Yes, I did that a couple of days ago. That’s fun stuff but, yes, so it was really funny the way it came to get a brand, we just had a need for some help and I had a need to or a strong desire to get out of where I was which was snowy cold Maine and I absolutely love Maui so it was a good fit. We both knew it was a temporary arrangement as far as the job description but in doing that, I knew I had to take a step back financially from some of the stuff that I was doing in Maine but I could see the bigger picture. I knew that in addition to just living in a beautiful environment that the long term potential for job satisfaction and income potential, and just to further my investing career, it was just a no brainer to take that step back financially, come out here and make a goal of what we’re doing today.

Aaron: I mean for all of the listeners out there, too, as right now, there’s this crazy opportunity to reinvent yourselves, do a pivot. Maybe it’s join a different team. Maybe it’s get higher up on your team. Maybe it’s doing stuff alongside as being an agent or a broker. Taking the Ryan story and what I’m hearing a lot of is, he found somebody that he knew he wanted to be a part of the team and he didn’t quite know what he wanted to do and it maybe wasn’t going to be what he wanted but, hey, let’s just get on the team first.

Let’s get on the team first, show them that I’m great, show them that I’m a hustler, that I’m willing to work hard to do anything because just getting your foot in the door and getting to prove to somebody then you’re going to get that opportunity later and just being willing to work hard for that. Now it’s Open Door Capital, and there’s an open door that actually buys houses. It’s not that open door. It’s a different Open Door Capital. Do you guys also flip houses or buy individual houses too or is everything just trailer parks now?

Ryan: Brandon is doing some flips here on the island. I don’t have a lot to do with it but he’s done three or four flips in the past year, pretty successfully, either condos or single-family homes here in Maui. We want to do some more of that. Again, it remains to be seen what the economic climate is going to be. I expect there to be some good buying opportunities. I mean, you can flip in any economy really, as long as you buy it. We’re not sure what’s going to happen over the next few months with that.

We expect it to change but how it changes for better or worse, we’ll see. Obviously, it’s a great income that’s generated from that but that’s almost been more of just a fun hobby for him so the boss himself. He’s partnered with a local guy here on the island who has a really good network of contractors and lenders and just really established here in Maui. Between the two of them, they’ve done some pretty cool things.

Aaron: I’ve seen some of those deals. Real estate in Maui is fun. You have these different properties, and that is definitely going to change and I guess it’s funny because flipping houses in Maui is 100% different than your guys’ main business of investing in trailer parks. A lot of people are like, “Trailer parks, what do you mean, trailer parks?”

Ryan: We prefer a mobile home community.

Aaron: Yes, mobile home community. You can call him a tenant or you can call him a resident but there is a thinking that so mobile home community, so why mobile home communities? Why is that what you guys are focusing on and what are you guys doing? The elevator pitch for what is Open Door Capital?

Ryan: Sure. Open Door Capital, we decided to focus exclusively on mobile home communities. We love the niche. We love the asset class, but what it really comes down to is we had to pick something and go with it. There are a million different things that we could be involved with but shiny object syndrome is a problem for Brandon, it’s a problem for me so we just stay in our lane and pick something we had to go with that. Brandon says mobile home parks may not be the best investment but its one that he decided to take and run with and we’re trying to do the absolute best we can with it. We love it.

We think it stands out from other asset classes in a sense that our model is really, it’s different from apartments in the sense that we are targeting mobile home parks that are typically if everything’s perfect 60 to 70% occupied, which means you’ve got 30% vacant lots and our value-add strategies is to infill those vacant lots. Unlike an apartment complex, where, let’s say, you’ve got maybe rents that are well below market or you think you can go in and spend, whatever, 5 to 10, 20 grand a unit, renovate these things and crank the rents up $300 or $400 a month.

Mobile home parks can be operated as they are with just in filling the vacant lots and you can add massive value from just doing that. Even in parks that we’ve purchased or that we’re underwriting, maybe rents are well below market. That’s not our strategy, and you go in and lot rents are $200 a month and the market says it could be 400. There’s no better way to end up on the evening news and just going in and doubling the rent on a mobile home park so we’ll model that and we’ll raise them very gradually.

It may take 5 or 10 years to get them to where they need to be but the big value of that is through filling vacant lots. We’ll identify apartments, we buy them, we go in and the best way to have a lot filled is to have a tenant bring in their own home and set it up and start paying lot rent. Unfortunately, that’s not real common these days. So if you’ve got a lot of vacancy, you just wouldn’t live long enough for park to naturally fill itself. What we’ll do is we’ll go and buy homes, either new homes or used home, bring them in, set them up on a lot, get them sold as a turnkey, and then we’ll sell those off to tenants.

They’ll buy the home, and then they’re just paying us lot rent. Let’s say we have $15,000 or $20,000, into bringing home and getting it set up, even if we break even on the sale or sometimes we’re even willing to lose a few $1,000 on the sale of that home by activating lot rent on a lot that was otherwise not generating any revenue. We’ve just increased the value of the park. So we’ve increased the monthly cash flow and the NOI and as a result of the overall value.

Aaron: That’s a total interesting strategy. You’re not trying to own the homes, and so I think a lot of people have this hybrid where they’re like, “No, we own a park and we own some of the homes and other of the homes we don’t but when you own the home, you have the maintenance.” You guys are saying, “No, you’ll bring in the home.” You’ll flip the home to them, but really not for a profit. You know how to flip houses, so you bring in a house, you’ll flip it to them, but you’re only doing it so they actually pay the lot rent on it. That’s like a very unique plan.

Ryan: Yes, that’s all we’re really concerned with is the lot rent and that’s fairly standard with the bigger operators. I know it varies by region, and especially if you’ve got some mom-and-pop local operators. I know in Maine, for example, having park-owned rentals where they’re renting the homes that can be pretty lucrative but to do it at scale, and to do it remotely like we are, really we’re pushing all for lot rent. We don’t want to own any of the homes, which means that we’re not dealing with any of the repairs and maintenance of the actual home so there are some cost savings there.

It’s easier to budget. When you just own the land, I mean, you can forecast your budget for the next five years because all you’re concerned with is just the roads, mowing the common area, the infrastructure. We’re still on the hook for the water and sewer lines but any of the home sales, anything to do with those, the tenants are responsible for that. We found that when that’s the case, it’s a different tenant than you see in an apartment. They have pride of ownership because they own the home. I mean, they’ve got money, they’ve got time, they’ve got emotion, they’ve got memories there.

It’s their home, so you tend to see much greater pride of ownership in mobile home tenants than you do in apartment tenants. In our communities, we do try to improve the community, so we don’t just go in and just– I don’t want to make it sound like we’re not involved because we are. We’re beautifying the common areas, we’re improving, if it’s playgrounds, or pools. We want the place to be a nice community. We want people to be happy living there.

We want people to tell their friends that they’re happy living there so they should come there. We strive to make the place better but the ultimate goal is even in that better community, we want to be out of the park on home business, we just want to own the lots and rent those lots.

Aaron: Got it. That seems pretty, Brandon. It’s like you’re creating homeowners at the lowest level of expense but then by creating that homeowner then you’re getting that utility of now they’re a monthly resident, and now they’re paying to be a resident. It’s like I think seller financing is the same concept. It’s closest related to it except for, again, you’re not trying to get the mobile home back. Now as an Open Door, you guys are buying houses all over the place.

Now one of the most fun things that I’ve seen and the thing that I wanted to ask you on the show to come talk about, I thought was so fun, is you guys have been pushing it on social media. It’s been bringbrandonadeal.com. I think that’s the thing and so you guys have said, “Hey, find us a deal. Find us an off-market mobile home community and if we buy it, we’ll pay you guys a giant commission.” It’s that same deal, so you guys have such a reach on social media. You said, “Hey, we’ve got this already, let’s stretch this out.” Tell me about that and I think you have people that are right there.

Ryan: We rolled that out, I don’t know, two months ago, and we’ve been promoting it pretty heavily and we’ve had a tremendous response from that. It’s bringbrandonadeal.com and what we’re promoting is that if anyone brings us an off-market, it’s got to be off-market mobile home park and gives us a warm introduction to the seller. That could just be an email to the seller like they have some direct relationship with the seller, they give us a warm introduction, and we’ll take it from there.

They’re not brokering the deal. They’re not involved with it. They can be included in some of the transactions if they’re curious, but we take the wheel and drive. If we close on that part, we’ll write that person a check for $50,000. It’s really been a great incentive and what we’re looking for is we have and we put a tremendous effort into broker relationships. I’m on the phone with brokers all the time. We’ve got great wholesale relationships, guys that are just professional wholesalers but here we were targeting neither of those two groups.

We were hoping to catch somebody that listens to the BiggerPockets podcast or one of Brandon’s followers or just any word of mouth person that isn’t a real estate professional but maybe they heard at the last Thanksgiving that their uncle has a park that they’re looking to sell, and we just want that introduction. We’ve been able to really tap into these people, who are not set on real estate as their primary source of income, but they know a park that’s for sale.

They know we’re looking, and because of that, a lot of times, very small amount of work and just the introduction, they’re going to get a check for 50,000. We haven’t actually paid anybody out yet, but we have two parks under contract right now that came as a result of those. Remember, we just rolled that out a couple months ago so we’re–

Aaron: I can’t wait to see somebody–

[crosstalk]

Ryan: I can’t wait for the day that– I want to send Brandon out with a giant four-foot check, publisher’s clearing house style checks to give us which won’t happen, but I thought it’d be great. We will be the happiest to write them a check. It’s going to happen.

Aaron: You’ll have to send Brandon out there with the publisher.

[laughter]

Remind me again, the criteria. Somebody says, “Hey, here’s the park.” How big is it? What are you looking for?

Ryan: Our criteria right now is we’re looking for a minimum of 100 lots. We want public water, public sewer. Those are the really strict criteria. Then from there, they get a little squishy, but ideally, it’s 100,000. We want a stable population, say, of 100,000 or more within 10 miles. Ideally, it would be minimal park-owned homes. Although usually, parks come with a fair amount of park-owned homes. We have to work through that and that’s really– Oh, and no RVs. We don’t want RV parks. A lot of people think that RV parks are the same as mobile home parks, which is two completely separate businesses.

Aaron: Especially your business plan. You want people to stay there forever, so you need to find the version unless it can be transferred. As we’re finishing up here, right now you’ve seen a lot of different stuff. As an agent, as an investor, you’ve been a part of rises and falls in real estate. What do you think the biggest opportunities for real estate agents are going to be over the next year, over the next six months? What are the things people should be thinking about in this up and down? I know this is time to grab your crystal ball and just go, hey, of all the stuff you’ve been thinking about, what do you think people should be keeping their eye on?

Ryan: I hate speculating and it seems like everybody that has an opinion on the future, you’re just guessing. But what I’ve always found amazing is, and maybe the listeners of your show are a little different, but how many agents are out there that are not real estate investors? They just run around, they’re showing other people good deals, but they just, for whatever reason think that they can’t do it, they don’t want to do it? I’ve seen just great deal after a great deal, getting brokered by an agent that owns no real estate. It’s like, why don’t you just grab that for yourself? I wish more agents would take the opportunity, take the initiative, and start investing in their own deals.

Even if you don’t want to manage your own property, if you’re out shaking the trees hard enough as an agent looking for other buyers, you’re going to find deals that work as full third-party management. You can be totally hands-off and fly stuff, and increase your own portfolio. I think over the next, whatever, year, two years, three years, there’s bound to be some good opportunities popping up there for all the reasons that the economy is going to be taking a hit. I think there’s going to be some great buying opportunities either for flips or for long-term buy and hold. I wish agents, in general, and I know I’m generalizing, but would just open their field of vision and grab some of these opportunities for themselves.

Aaron: That’s awesome, man. Ryan, tell people how to get ahold of you. How can they go find you on Instagram? How can they find you at Opendoor?

Ryan: Instagram, I’m @ryan.murdock21. You can find our website, which is odcfund.com. You can shoot me an email at R-Y-A-N, ryan@odcfund.com.

Aaron: Man, this is awesome. I can’t wait until we get to come hang out again and get to go see some of those new dive spots that you’re–

Ryan: It’s a diver, man.

[crosstalk]

Aaron: I’m even wanting to go look for some mobile home communities right now, just to try to see if I can be the first one to get that giant publisher–

Ryan: [crosstalk] -waiting for you right here.

Aaron: I know. I’ll come get it in person. All right, man. Hey, keep hanging on out there. Hopefully, enjoy Maui quiet while you can because as soon as they open it up, I’ll be out there. Great to chat with you again.

Ryan: All right, man. Thanks so much for having me.

Aaron: Thanks.