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William Morales | The Peer 2 Peer Real Estate Show

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Hosted by
Mike Ayala

In today’s episode of “Investing for Freedom” Mike shares a podcast, he was interviewed on, The Peer2Peer Podcast. Mike speaks about Four Peaks Capital, his experience in contracting, and how he got into real estate. Enjoy!

“If two partners have the same strength then one of them is not needed.”

HIGHLIGHTS: 

[00:00] Intro to the podcast
[02:38] How Mike got into real estate.
[04:40] What would your life look like?
[07:50] Education is the first thing.
[11:15] Mike’s commercial property, no money down deal.
[16:40] Challenges to overcome.
[21:00] The argument for affordable housing.
[25:07] Due Diligence
[30:01] Working with a partner.
[34:2o] Mike’s new company.
[36:00] Investing for Freedom

RESOURCES:

Mike Ayala Website | www.michaelayala.com
Four Peaks Website | www.fourpeakspartners.com
Mike Linkedin
 | https://www.linkedin.com/in/themikeay…
Peer2Peer Website | https://peer2peerrealestate.com/
Peer2Peer Facebook | www.facebook.com/peer2peerrealestate

Peer2Peer Youtube |
https://www.mint.com/brokerages/

FULL TRANSCRIPTION:

William [00:00:19] Hello and welcome to peer to peer real estate summit host William Morales. And on today’s show, I got Mike Ayala. He’s a managing member of Four Peaks Capital Partners and he oversees operations management teams, construction, and human resources. Mike, thank you so much for being on today’s great Appear real estate show. How were you?

Mike [00:00:36] William, I’m great. I’m so happy to be here. Thanks for having me on.

William [00:00:39] No, it’s my pleasure.

William [00:00:40] So, Mike, getting on like I always ex all types of entrepreneurs.

William [00:00:45] Was real estate in your blood as a youngster? Well, you’re always entrepreneurial. What? Oh, you just fell into real estate as you were getting a little older, you know?

Mike [00:00:56] So I was always entrepreneurial. From the time I was little, I was figuring out how to make money. You know, I made suckers and in junior high from Scratch Witsell sectors. Well, so I’ve always been entrepreneurial. But right. To answer your question on real estate, I got into real estate, my first rental, when I was probably 25 or 26. I just you know, I was running a successful business and realized that you know, I didn’t want to be sixty-five years old, 70 years old, not have passive income. So that’s kind of how I journeyed into real estate investing. It’s a whole other story. But we could talk about it if you like, you know, please do.

Mike [00:01:26] Because like I said, you know, people always want to get into real estate, but guys like yourself and anybody else that start you fit.

William [00:01:35] You seem like you’ve finished a project that’s that you wanted to do that. That was your goal when you bought your first deal. Was it a single-family?

Mike [00:01:46] Yeah, it was a single-family. Let me back up just a little bit. So I run it. I was 20. I was 24 years old when I started my first business and I was a plumber by trade, so a partner and I left the company that we were working for and we started our own company. And then we quickly realized what we didn’t know, which I think a lot of people do, whether you’re in real estate or business or anything else. You know, I think I think the people that are extremely successful, they surround themselves with people that are smarter than one of my mentors, Russ Grealy, says if you’re in the room, you need to find a bigger room. So to get back to your question. I was working with a consulting company for our plumbing and H fact business and we did some annual planning and they actually asked the question the whole first day. They gave us a series of questions and the whole first day was gonna be around what you really wanted out of life because the coaching company made this comment. They said if you if your business is not helping you get to your personal goals and dreams and desires and you really just own a job. And so they made us really start thinking about what we really wanted. And they asked the question that I ask a lot. Now, you know, what do you really want? Why do you want it? What are you gonna do to get it measured results and adjust that? So I talk about investing for freedom all the time. But anyway, they asked that question, and my wife and I, you know, we’re twenty five years old at this point in time, probably. And the question was, if money and time wasn’t an issue, what would your life look like? And so we started thinking about it and there was these little things that we would have. But then I also realized, you know, I did. I didn’t know a lot then. I just really thought that looking forward, when I was sixty five years old, I was still going to be running this company. Right. And so when it came to real it the reason why we got into real estate was kind of like a retirement plan. So our plan was to income producing properties a year for 10 years. That was the big goal that we set coming out of that. Right. That planning meeting. And so to answer your question on the first property, we came back after that after setting a goal of two income producing properties a year, our first deal was a single a single wide three bedroom, two bath mobile home on two and a half acres. And, you know, one of my buddies actually lived there. The house was too small. They couldn’t buy another house without selling that one. And I said, well, here, I’ll give you five thousand dollars and I’ll assume your I’ll assume your mortgage. And this was back where you could do that. And he said, great. So he called the bank up. They transferred it over to me and I got my first rental for five thousand down.

William [00:03:57] Nice. So that’s always the thing to make. And I appreciate you hear this. When you meet new investors, they always take the toughest part of getting into real estate is not having the money. So, you know, just backtrack a little bit. How would you suggest someone get into that type of of investing, especially if they have no money or they have a little bit of money and they want to get into real estate? The main thing I always hear is wholesaling.

William [00:04:25] And I and I think that some of these people don’t know how hard it could be wholesaling, you know, because you’ve got to negotiate with the seller, try to get it done at 60 or 70 cents on the dollar, maybe even lower, and then and try to get that 10 percent profit or whatever you guys you want to do. So how would you go about talking to a new investor and making a suggestion on, you know, on their path to investing?

Mike [00:04:48] Yeah. So I actually talk about this. I’m doing a series right now on my podcast called Investing for Freedom, where I take everybody through like my first 10 deals. And I, you know, back in the day, we syndicate properties now and we’ve got traditional financing and all that stuff back in the day. I mean, it was bootstrapped, right? I didn’t have we had a successful business. We we spent an awful lot of cash, but I didn’t have a lot of money. I had to do private money, loans, all that stuff. And so my this is what I constantly talk about. The first thing that you’ve got, if you don’t have any money and you want to get into real estate investing or better yourself financially in any arena, the first place that I would say to invest in is yourself, your education. Find a mentor. Start going to a local REIT. And I know I know these get bad raps, but. The reason why I was able to find a lot of no money or low money down deals was because I was in places where I could meet business owners. I could meet real estate investors. I could meet people that were wanting to get rid of properties. And so it is possible to do little money down or no money down deals still. When my mentor says you got to find somebody that has falls into one of the three d the death, they’ve got death, there’s a divorce or they don’t want it for some reason. Right. If I can find somebody that’s in that realm like, you know, maybe trust attorneys, figure out where the trust attorneys hang out because maybe mom and dad had a mobile home park and they died and they just the kids don’t want it anymore. And so education is the first thing. When I first set that goal of two income producing properties a year for 10 years. I immediately found one of my mentors, Dan Sullivan, always says the eyes only see in the ears, only hear what the brain is looking for. And so when you start thinking back to that new real estate investor and they’re like, wow, I don’t have any money. I don’t know where to find deals. It’s always the same questions. How do you get the money for the deals? Where do you find the deals? You know, how go to places where people that have deals are going to be. So go to REIT meet ups, go to the Chamber of Commerce meetings, you know, where business owners congregating. How can you find these deals? Because the eyes only see and ears only hear what the brain is looking for. So step one is deciding, I’m gonna get into real estate, then you’ve got to start educating yourself. So I found and I still recommend this, I found a 16 C.D. series on a sale table at Barnes& Noble in two thousand five in Reno, Nevada. And I just like jumped off the table at me like it was like screaming my name. Right. I hadn’t done any real estate investing. And so, you know, and it was it’s still a seedy series. In fact, you can find it on the Internet still, but it’s like 250 bucks if you can find a used copy. But it is so good. So I was driving.

William [00:07:17] What’s the what’s the name of it.

Mike [00:07:18] A few domain Real Estate Investors College by Dolph Druce.

William [00:07:23] Oh, I heard of Dolph Druce. OK. Yeah I heard of it. OK. Wow.

Mike [00:07:27] Yeah. And he’s just it was just a scrappy like one day weekend training that he did on how to bring value, you know, add a washing machine, add a car port, just all these little things. It wasn’t like a silver bullet on how to get rich in real estate investing. It’s more changing the way you think about things. Right. And so I would just tell your listeners, if they’re just getting started, they can do no money down deals still. Money’s not the problem. Knowledge is the problem. Education’s the problem and commitment.

William [00:07:51] Right. No, I love that. I think that’s the key to make is always the commitment, because if you’re going to start something, finish it. And, you know, in my course and I’ve talked about it, I you know, I wanted to get into a whole then fix and flip, then tax leads. I mean, it was I was all over the place.

Mike [00:08:09] It wasn’t until 2016, 2017, where I decided I wanted to do owner financing, which is for show. But it’s it’s like you said, I you know, I educated myself, looked at tons of YouTube videos, listen to podcast. The education is out there now.

William [00:08:25] It’s readily available compared to 20 years ago. Fifteen years ago. You mean ten years ago? Yeah.

William [00:08:31] So getting back to you and your wife. So you guys put the portfolio every year to projects a year.

William [00:08:38] That was to go. Did did that go change within a couple of years after you started that?

William [00:08:44] Did you say, wait a minute, this might not work as as planned? We could find something better?

Mike [00:08:49] Well, usually when you set your goals and you focus on him, you end up you know, there’s that old saying and I’ve heard I don’t know who originally said it, but I’ve heard Gary Keller say it, that we tend to we tend to overestimate what we can do in one year, but underestimate what we can do in ten. So my goal was two income producing properties a year for ten years. So I was looking down the road and I thought I’d have 20 single family properties. Right. So we got that first deal done. Then I found a second deal, which was seller financing is it had some problems, by the way, usually the death, divorce and don’t want them. There’s problems that exist in there. And so if you can find a seller that wants to get rid of that property as bad as you want to buy it, it could be a win win. And that’s where the seller financing usually comes and all that. You talked about that on another show because it sounds like that you’re. Yes. But I literally did a commercial property, no money down that included kitchen and bathroom modeling business, one point one million dollar deal, no money down. I still have that property today. And a cash was one hundred grand a year. No money out of my pocket. That’s amazing. So back to the question I got to single family’s done and then all of a sudden, out of nowhere, this mobile home park deal falls in my lap. Seventy two space mobile home park deal. I don’t know if you want to hear the story. No, no, please. Please. OK, so I had the plumbing and heating company and by this time we had gone gotten into some can, you know, some construction and we’re getting a general contractor’s license. And so we were doing a bunch of work for the guy that managed this property. Seventy two space mobile home park in Nevada. Doing a bunch of work on the houses, they had a bunch of plumbing problems, HGC problems, well, he calls me up one day. This park was listed. You know, it was one of those deals where the owner didn’t really want to sell it, but they had it listed for one point two million, which was too much for the park back then. This was, let’s call it two thousand seven, I think, by now. So he calls me up one day and he’s like, hey, I know you guys have already always been interested in this property. It was actually his mom that owned it. She was an investor out of Vegas and she had a deal going south in Vegas and needed cash. So he said to me, he’s like, she’s got an investor that’s going to buy this deal from her. I’d rather, you know, have you guys have somebody local? So I’m like, well, what’s the deal? And he said. So this thing had been for sale for one point two million. But there was a first position. No. Seven and a quarter percent interest. It was a hard money loan, OK. An investor out of Phenix, Arizona, had the first position note for three hundred ninety thousand dollars and she needed eighty thousand dollars cash down. And you’d basically just take her out of the way and the guy would assume the note. So now you’re talking this park that had been for sale for one point two million is now three hundred ninety thousand plus eighty. So we’re 400 and seventy thousand dollars. It made a lot of sense at that number. So I went to one of my mentors. His name’s Barry Liberally. And, you know, he’s been in real estate for years. He was a mentor of mine. I’ve done a at a lot of money from them over the years. And this is a thing for your listeners, too. There’s people out there like Barry that, you know, they were done doing real estate deals. Twenty five years ago. But they still have a bunch of money that they want to loan out. And they love real estate because they know that if the deal goes south, they’ve got real estate. So for your listener, you know, don’t don’t discount that. There’s a lot of guys out there that they’re tired. They don’t want to do the deals, but they want to do the deal with you. So I went to Barry and I said, hey, I don’t know anything about mobile home parks. It seems like a good deal. He looks at me and he says he’s getting you and I are friends because I’d steal this deal from you. And I was like, OK, I’m onto some. So we’re talking through it. And I’m like, well, here’s the problem. I don’t have a thousand dollars cash right now for the downpayment. My business was successful, but it was a construction business. So we had a lot of receivables, had to buy a lot of trucks, and so we don’t have a lot of cash sitting around. So he said, well, listen, this is such a good deal. All loan you the eighty thousand dollars in second position behind the hard money guy. And if anything goes wrong, I’ll, I’ll just take I’ll just buy him out. He’s like, this is such a good deal because I was scared about getting going from, you know, I had to single family rentals and now I’m going to a seventy to space mobile home park. But Barry told me, said, don’t worry about it, I’ll help you through it, you know, and this is this is the this is the value of mentors. I’ve never paid Barry a penny for mentoring, although he’s made a lot of interest off of me over the years, you know. But that’s the value of mentors, right? He said all the help you along the way. He’s in second position. He’s like, if you get stuck or in trouble or the deal doesn’t go up, I’ll just buy you out. I’m like, how how can you lose?

William [00:13:09] That is a great story because I you are absolutely right.

William [00:13:16] You go to your Meetup Chamber of Commerce online, there’s tons up online forms on Facebook, bigger pockets, your show, my show.

William [00:13:25] You know, the education and the people are out there. You just got to present yourself in a way that you got. I’m pretty sure you heard as you are all full value. What can I do for Mike Ayala? What is it that I could do? So Mike can help me. You may be a bird dog. Do you want me to write things down? Do I need to be a go for whatever it is? Yeah, it’s it’s out there, you know. I mean, listen, at my age, I have a mentor and he’s been in real and he’s like twenty, twelve to fifteen years younger than me. The ego is thrown out the door. Yeah, totally. I said to myself, you know what? This guy could show me a thing or two, you know, that I might not know. Especially he’s in New York. My properties are in Orlando and in Pittsburgh, but I’m learning from this guy right here in my backyard.

Mike [00:14:08] So.

William [00:14:09] Currently, what’s happening in the world today, especially here in the United States with the pandemic. Has it affected business in any way for you guys?

Mike [00:14:17] Yeah, it’s definitely affected our business. Just fast forwarding a little bit about where we’re at today. You know? I sold my business in 2014, and then I joined the real estate guys mastermind group because I kind of was thinking I wanted to go kind of I kind of want to go full time into real estate, investing in syndicating. So I did that.

Mike [00:14:37] I teamed up with my current partner, Andrew Lanoie, at Four Peaks, and we started, you know, really syndicating properties. He had started Park Place communities before I teamed up with him. So he started it in 2015. I joined on early twenty eighteen. We started working together in twenty seventeen, but really became a partner in twenty eighteen. So to answer your question, we’ve got 35 manufactured home communities now in 13 states. And so it’s been a challenge because, you know, every state has their own regulations are being hit at different times. Unemployment laws are different everywhere. And, you know, rust gray from the real estate guys. And Robert Helms, they always say in you live where you want to live and invest where the numbers make sense. I said, yeah, yeah. And so, you know, I’m I’m still happy that we’re diversified and we’re in in different markets. But at the same time, we have a construction company. So that was part of our you know, when we buy a manufactured home community, we would send our construction guys. We had four crews that would just travel around the country and they’d go into a new community when we buy it. And they’d just remodel a bunch of homes.

William [00:15:40] I’m sorry. I mean, I want to talk about your construction company. Is it still active today as of July of 2020?

Mike [00:15:49] So we have that on hold because that was the first thing we did when covid. It happened because our guys what they would do is they go into a community, they remodel two homes and they stay in hotels while they’re remodeling those. And then they move into home. The crews would move into those homes and then they would live in the community for three months, four months, six months until they got all the jobs done. And so when Crovitz first started, you know, really hitting the scenes, I think it was. We made the call on, I think it was March 5th. To to send all of our construction guys home. So it was pretty early, right, because we didn’t want them getting you know, we were seeing the writing on the wall and we didn’t want our guys being stuck in communities. Fifteen hundred miles away from their families and no food and and being away from their families and not being able to get back home for, you know, what we thought then was going to be three or four weeks. Right. So I’m glad we made that decision. But to answer your question, we have not fired our construction company back up yet because we’re just not comfortable having our guys travel and be out there. So, you know, most of them are you know, a lot of them have gone on and found other jobs, which I can appreciate.

Mike [00:16:55] And then some of them are just, you know, they’re on unemployment, waiting, waiting to fire back up, you know, and you to and you touch on something that that about the construction crew going from city to city. Now, how did the licensing works? Because I’m not sure whether you could explain that. So if I have a contractor and I want to find a property in Orlando, can I send my contract to travel and to do the repair work or does he need to be licensed there? Like, how do you work that would, let’s say with the with the city or the state or municipality?

William [00:17:35] How did that how does that work?

Mike [00:17:36] Yeah, so it depends on what state you’re in, obviously. Right. But when it comes to manufactured home communities, we weren’t. So like we still almost always have to hire an electrician. The AJC guys, you know, there are certain trades in every almost every state where they’ve got to have a license. But when it comes to like remodeling, doing flooring, cabinets, that kind of stuff. Most of the states and most of the municipalities, our guys can do that work painting the outside of the houses, changing out windows, that kind of stuff. And so then every state, our supervisor would just figure out what what like what we can do there and what we have to license out. And a lot of the states, a lot of the states, when it comes to manufactured housing and mobile home park communities are regulated under a different entity than the normal contractors board. So like a mobile home unit will fall under the DMV a lot of times or else like in the state of Nevada, there’s a manufactured housing. Department at the state. So you deal with the licenses and the inspections and everything through them. So that’s really a state specific question. But usually if you’re doing anything structural when it comes to single family houses, it’s completely different. I mean, you know as well as I do, you can go in and do certain things, but you can’t do everything. So, yeah, you’ve got to just be really careful state by state. And then what type of product? That’s the nice thing about manufactured housing is a lot of the stuff when it comes to manufactured homes your maintenance guys can do in-house.

William [00:19:02] OK. So right now, is that your your main core business, the manufacturing mobile home type of that type of industry? Is that right now the core?

Mike [00:19:13] That is our core. That is our core asset and has been for four or five years. I still have a single family portfolio. I stopped some commercial buildings on my own. But yeah, we’ve been focused pretty heavy on the affordable housing side and specifically manufactured housing. That being said, this is interesting. We had made tied for our largest sales and leasing month ever tied. So, yeah, the argument for affordable housing is as strong as it’s ever been manufactured home communities are faring pretty well. The collections have been pretty good across the board.

Mike [00:19:46] OK. So it’s been kind of interesting to watch. You know, that was our thesis with affordable housing was that it was recession resistant, if you will. It’s not recession proof, but but it it’s fared pretty well so far. I mean, I think our collections are maybe one and a half percent off of normal.

William [00:20:02] Wow. That’s amazing. So these things that you picked up, like if you don’t mind, given your at least a little bit of history secret.

William [00:20:10] How did you find these these towns, cities, states? What was it what was your process for doing the research?

William [00:20:17] Because, you know, again, some of the people I’ve dealt with and even myself, you know, we look at certain criteria that we want. You know, we don’t want to in one industry town like, you know, in Michigan, where it was just the auto industry, you know, God forbid that goes, oh, man, look what happens. So, like, is there a criteria checklist that you go through to pick a certain city? Do you look at income of the people you want to, you know, let’s say, rent these affordable homes to?

Mike [00:20:47] Yeah, there’s some there’s some baseline demographics out there. And if anybody’s interested in manufactured housing, Frank, Ralf did a really good job of putting a course together, you know, and you can buy you can buy a lot of his criteria and even do a two day course. And so he did a really good job early on, a building that out.

Mike [00:21:08] But to answer your question for us specifically, you know, we try to target at least one hundred thousand people. We look at. We do look at. There’s little things for us like Home Depot within five miles, just for maintenance purposes alone, that kind of stuff. You know, we paid a lot of attention to the Walmart’s and just making sure that there’s, you know, at least a level of grocery store shopping and all of that. We are in some markets that are less than a hundred thousand. We actually are. And there’s a couple markets that do very well, and they’re forty five to fifty thousand people. But there is a specific like type of industry there that some people would avoid. For instance, I, I have a lot of property in a gold mining area. And a lot of people are scared of it because it’s you know, they. Well, what happens to, you know, if gold goes down and, you know, they run out of gold? Well, there’s there we did so much research there. There’s there’s years of gold supply there. And I don’t think gold’s going anywhere. Does it have ups and downs like anything else, Sherred or. But for the most part, what we’re looking at now, we’re not really looking at new markets as much as we’re trying to consolidate around existing markets. When a broker brings us a specific deal that’s in a new market. We’ll look at it. But we won’t buy a property. We we don’t like to buy properties that are less than 70 spaces. If it’s in a new market, if I’ve got a if I’ve got a mobile home park community that’s 10 or 15 miles from a park we’re looking at and it’s 45 or 50 spaces, we’ll take a look at it because we can share resources. But generally speaking, we want at least 70 pads in order to go into a new market. And yeah, to answer your question, it’s you know, we’re looking at the same stuff that a lot of people probably are what’s the job growth? And honestly, like when it comes to affordable housing and I know this is gonna sound crazy, but I don’t need huge year over year job growth as long as I can see some constant consistency and and steadiness in the market. The argument for affordable housing is strong.

William [00:23:07] OK, well, you know it. And it’s funny because, Mike, I’ve I’ve done this and a couple of my friends have done things that we look at every statistic. And and then, you know, what happens is analysis paralysis. And then you’re like, well, I don’t know, maybe just market might not be enough for us.

William [00:23:24] How do you combat that? Because that’s always an issue. That’s been an issue for me and for some of my friends that I know Will analyzed the death of a market and then, you know, you don’t pull the trigger.

Mike [00:23:37] So there there’s two sides to due diligence in my mind. You know, we have a analytical team and they’re very good at being analytical. And, you know, their job is their job is to basically. Poke holes in all the reasons why we shouldn’t buy this property. Look, you know, and obviously if the dirt there point out all the negatives and the positives, this is gonna sound crazy. But to me, getting on the ground early is extremely important for us because you can tell a lot about a market just by being there. You can tell a lot about the communities just by being there. And there’s all these boxes we have like a three hundred ninety seven point checklist that we go through as we’re doing due diligence. And some of those are multiple, you know, checkpoints and audits and different things. But to me, getting on the ground early is and just, you know, figuring out what’s going on in the community. That’s just as important as the analytical numbers, because we’d like like you talked about the analysis paralysis can really I’m not saying you shouldn’t do your due diligence. I’m not saying that we shouldn’t be number driven. But sometimes, you know, when we run numbers for three months and then the last thing we do is go and look at the community. We flip that on its head. We want to get in there early and just see how the communities are doing. Talk to people in the markets, you know, how are they feeling about everything?

Mike [00:25:00] This is gonna sound crazy, but you talk to people at the grocery stores, restaurants, all that and like, hey, how’s the community do? These people are so opposed to growth, they don’t want anybody coming in like there is unemployment. Nobody has jobs like you can you can tell a lie. And I’m not I’m not saying that you should believe everything that every single person on the street says, but there’s there’s usually an error in the environment. I’ll tell you a story that’s the opposite, though. We went out and did ground checks on a community we were gonna buy outside of St. Louis and everything was kind of pointing toward, this is good. This is good. This is good. But the opposite happened as we got through due diligence. The numbers told us something completely different. So I think it takes both of those.

William [00:25:40] Yeah, no. And that’s and that’s the thing. I think having a checklist and just basically running the numbers and and like you said, talking to the community, because like I said, you might not believe everything what everybody says, but you do good.

William [00:25:52] You get a good gauge of what’s happening, depending on who you talk to of what’s happening in the community. Obviously, you know, you have tons of Web sites, but Web sites, I always look a little bit leery, Mike, because the information could be back tracked three, six, nine months, and it may not give you the real time info on it. Yeah. You know, so I say to myself. OK, so. What’s the next best thing? And I always try to look for somebody that I personally know in the area. You know, for me, like, as they say, boots on the ground. Yes. Do you subscribe to that?

William [00:26:30] They read, like, trying to have boots on the ground.

Mike [00:26:33] Yeah. No, absolutely. But, you know, and even that this this same the same park that I was talking about, our national director of sales and marketing, she had a friend in this community and her friend was talking about how great the community was and everything else. And so that was another, you know, confirmation bias that we still when we got through the numbers, you know, we were seeing there were some major employers there that were really struggling. Right. There was some demographic stuff that was showing us that it was going backwards. St. Louis itself had been struggling for a while. So, yeah, I think all those, like you say, boots on the ground. I think all that stuff matters. You just got to make sure we remain unemotional about it. I’m just thinking of Dalton. He said never, ever, ever fallen on with the property. Fall in love with the deal. Right. So that’s hard. That’s the hardest thing is a real estate investor. And as deals get tighter and tighter and harder and harder to find. You know, we want to come up with all these reasons why we should get that deal done. Right. So we got to be really careful.

William [00:27:31] Yeah. Oh, definitely. But like I said, you got something to keep emotion out of it.

Mike [00:27:35] But I think at the end of the day, it’s how the numbers work for you, if anybody. Everybody got a different criteria. So how did you and Andrew form Four Peaks? What was it that got you guys together? Because I’m always for me person. I’m always amazed at how partnerships work and how, you know, let’s say Angle handles just part of the business and you handle, you know, part B of the business. How did you guys formed the team yet?

Mike [00:28:00] So I think it’s kind of a lot just like, you know. I was just having this conversation at dinner with some friends the other night, and he has had a couple of bad partnerships and was like, I you know, I never want to be partners. And and, you know, I’ve had challenges in every partnership I’ve ever had. And I’ve had a couple partnerships that didn’t go great. But for the most part, it went well. One of my mentors always says if two partners have the same strength, then one of them’s not needed. Right. And so I think this comes back to the same thing we’re talking about, just like with due diligence or anything else, unless you’re really, really, really honest and aware of who you are and what your strengths are. Number one, but also your weaknesses. You won’t know what kind of partner to align around you. Right. And I think a lot of people you were talking about ego earlier in the in the interview. You’re being mentored by somebody that’s way young. The egos out the window, and that’s such a great quality because the only way to really get what you need out of life is to be really honest with yourself and let that just set that ego down. And so back to the partnership conversation. When you get really clear on what you’re really good at or what you’re really bad at, that that makes that partnership or the need for that certain partner when they come along a lot easier and a lot more clearer. And so Andrew is really good at sales and marketing being on phone calls.

Mike [00:29:21] Andrew is the CEO of Four Peaks. I was the CEO of Park Place Communities. I’ve hired a guy about a year ago that just replaced me, were kind of going into a new we’re launching a new fund in a new direction, which we can touch on briefly if you want to. Sure, of course. But Andrew’s really good at sales and marketing. He’s really good at raising capital. I’m really good at the operations side. Organizing teams, getting teams built out. And then the guy that just took over for me as CEO of Park Place. So we have a property management company and a construction company. So he runs the whole entire operations team.

William [00:29:53] So you basically keep and which I love. You keep everything in-house. Yes. So you get the conviction. Property management sales, I’m assuming. Acquisitions or. Yeah. I mean, I think that’s a smart.

William [00:30:06] Instead of outsourcing so much that you’ve got to try to keep track. So please go on. I’ll interrupt.

Mike [00:30:13] No, I think it’s a great point. And on that note, too, for anybody that’s, you know, wanting to scale and get to that, because, you know, we don’t want to just go out one day and just say, OK, well, we’re gonna be property management construction and just hire a bunch of people either. I’ve made that mistake. So, like, even on a due diligence side, there’s a company called Due Diligence Partners that does all of our due diligence for us when we’re when we’re understaffed. So you can still you can still be thinking about your long term growth trajectory and doing everything in-house, but leveraging outside resources at the same time until you get to a point where you can bring somebody in in full time. So finding the partner, that’s really what it is. I know what I’m not good at.

Mike [00:30:52] And Andrew needed the same thing. He had had a partner that was supposed to be on the operation side and they had some issues. They’re still friends and everything’s good. We bought him out, but he’s just had some. There was there were some reasons why they needed to to separate ways, some health reasons and some family issues. And so Andrew ended up buying him out. That left a hole in the operation side. And that’s when Andrew and I met and that’s how we teamed up. So, again, like Dan Sullivan says, the eyes only see in the ears only hear what the brain is looking for. If you get really clear on, you know, what you need in a partner or for that matter, even an employee or a contractor, if you get really clear on what you need, the eyes only see the ears, only hear what the brain is looking for. That partner will find itself just like Napoleon Hill talks about. Think and grow rich at the beginning. You know, he says when dealt when one desires the thing, the thing presents itself. The bad part about that is if you’re desiring the wrong thing, that is going to present to you. Right.

William [00:31:43] Yeah, definitely. I agree there. Yeah. If you talk about. Oh, my God. That well, it’s going gonna happen. You’re going to get more debt. You know, it seems like the bills are piling up every every other day.

William [00:31:54] So what, you’re with your business. Not you. You’re setting up a fund, too. Is it to lend money out to investors? Or how? How is that project working out?

William [00:32:08] Wow. So what was your structure? Yeah.

Mike [00:32:11] Yeah. I have four peaks on the mobile home park side. We’ve got specific deals where investors invest directly in a mobile home park.

Mike [00:32:19] We’ve got funds where they can invest in a fund that just goes out and buys parks. We also have a lending fund where investors invest in what we call fund six. And then we we we fund six loans, finances, homes for for the residents. And so then the investors get a return off of that. But we’re launching a new company. So here’s the thing that we’re seeing happening. And I’m sure you’re seeing it across the board, William. It’s been really hard to find deals. We took our we took our projections from about 15 parks a year down to three this year. We did nine deals last year, which was a little bit less than what we had hoped for and wanted to get done. And so it’s just getting harder and harder to find deals. And so we’re back in our projections off to three this year and hopefully next year we get to, you know, five or six communities. Now, granted, these are 70 space communities, you know, so we’re talking one hundred five hundred lots per year. But here’s where I think the opportunity is at this point in time. And I know this is a real estate show, but in the two thousand seven and eight crash, real estate shined on the other side of that because it was a real estate problem. Right. So there was really great deals after that because it was primarily a real estate financing issue. I don’t know. Not here to get too far into the weeds on this, but I’m not sure that there’s going gonna be great deals anytime soon. So we’re fortifying on the park place community side and for peaks, but we’re bringing. Back our acquisition projections quite a bit. And we’re refocusing, we’re going to launch a fund. We’re launching a new company called Velocity Venture Partners, and we’re going to buy plumbing and heating companies. Oh, OK. So we’re kind of shifting back to my roots. And I think it’s a great time to buy businesses. And so, you know, for your listeners, even buying out portfolios of rentals, I think there’s going to be people that are tired. You know, they’ve been through a couple of downturns. We might have a hard time picking up one or two deals here and there. But I think if we can go buy an operator that has five or 10 communities already. Sure. And just by their entire business. I think that’s a strategy that people might want to start thinking about.

William [00:34:28] No, that’s that’s something to think about. So, Mike, talk about more about your podcast and what’s it about. Do you do.

William [00:34:35] Is it a solo show, an interview type of series? Talk more about it.

Mike [00:34:39] Yes. So the podcast is called Investing for Freedom. I launched it just because, you know, I love talking to people like you. I believe that at the end of the day. And again, it’s a simple formula, what you really want. Why do you want it? Yeah, you can get that figured out. And then and then we can figure out exactly what we’re gonna do to get it. There’s nothing special about William. There’s nothing special about Mike. We just had somebody inspire us. You know, we read books. We got inspired. And so that’s the point of the podcast. And so to answer your question, on Mondays, I do a little short form. It’s just me talking about whatever I’m thinking about. And then Thursdays, I do an interview with somebody that really I try to focus not so much on the how to as much as the. Why did you what did you do? When was the moment you realized you didn’t have freedom? You know, what is it that you’re working for? Because it’s different for all of us. I mean, for me, it’s always been about just I never wanted to miss football games. I never wanted to miss baseball games. My mom was working two jobs and going to college. My dad left me when I was little. I said I wasn’t going to be that parent and I wasn’t going to be owned by my job or my business that matter. And so that’s kind of that’s kind of the pulse on investing for freedom. I’m just bringing in people that have done the thing, different levels, you know, and it’s and you make sense.

William [00:35:50] And it is to me a principle. It’s why you want to get into it. You just can’t get into it just. Well, I want to make more money. Why? What is it? As you know, future for retirement? Is it you want to, you know, change your destiny, your family’s destiny. So it’s always what is it about that goal or that endeavor you want to get into? Why? And I think that’s a great point. So, Mike, if somebody again. Listen, thank you so much. You gave us so many great nuggets. If so, we want to get in contact with you.

Mike [00:36:20] What’s the best way so they can find me, you know, on the podcast, it’s investing for freedom. So anywhere, you know, you listen, I teams or whatever, but then the website is w w w dot investing for freedom, dot seo. And then on Instagram I’m at the Mike Iola.

William [00:36:37] It sounds good. Well Mike, again, thank you so much for taking time out of your busy schedule to talk to us.

Mike [00:36:41] Really, really appreciate it. Thanks for having me, brother. No, definitely take care of my show.

William [00:36:50] Well, everyone, that was Michael Yallah, who is a managing member of Four Peaks Capital Partners, you could find Mike get make a yallah dot com and you could find Amet Investing for freedom dot CEO O. Mike, thank you so much for being on today’s Peer-to-peer real estate show. Really appreciate it. You can find me at peer to peer real estate dot com. That’s pierde. Number two, peer real estate dot com. Check out our past shows, a blog and a resource page. Also, we’re going to be upgrading the Web site, hopefully eat in July or early August to please look out for that. And just a couple more things, guys. Please go to Apple PodCast. Please describe your review to us how we can make the show better. And do not give up on your dreams. Fight for a guy to protect it. Don’t let anyone talk you out of it. And I really believe if you keep the momentum going, good things will happen anyway. We have a peer to peer real estate and only Moralez until next time. Thanks, everybody. And please stay safe.

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