Ever wondered how to turn the acquisition of manufactured homes into lucrative profits? Join us on the latest episode of Exit Strategies Radio Show as we delve into the world of managing manufactured homes with expert Griffin Schermer, from Red Roots Capital to discuss his foray into the real estate investment space, particularly focusing on manufactured and modular homes as well as redeveloping mobile home parks.
From acquisition strategies to profit optimization, this 26-year-old real estate investor who specializes in flipping old distressed mobile home parks into brand new manufactured housing communities, shares invaluable insights and practical tips for success in the mobile homes market.
In our previous episode, guest Franco Perez provided a roadmap for breaking free from the rental rat race and thriving in the mobile home living landscape. Now, combine Franco's insights with Griffin's expertise, and you'll have the ultimate guide to mastering the entire spectrum of manufactured homes management.
Key Takeaways:
00:02: Griffin's Family Legacy: Learn how Griffin's entrepreneurial upbringing paved the way for his success in real estate.
03:09: Introduction to Griffin's Background: Explore Griffin's diverse experience in retail business and his transition into real estate investing.
09:10: Advice for Aspiring Investors: Discover Griffin's tips for getting started in real estate investing, from leveraging online resources like BiggerPockets to cultivating a passion-driven mindset.
17:21: Targeting Distressed Properties: Understand Griffin's strategy for identifying hidden gem properties and revitalizing communities for sustainable growth.
By delving into the nuances of managing manufactured homes, you’ll be equipped with practical knowledge to make informed investment decisions and achieve financial independence. At Exit Strategies Radio Show, we're not just providing information but building a legacy of empowerment and opportunity for our audience. Join us on this journey to financial literacy and real estate success!
Connect with Griffin@:
Contact Number: 8123225151
Website: https://gscourtyardhomes.com/about/
Website: https://redrootscapital.com/
Linkedin: https://www.linkedin.com/in/griffin-schermer-ab59231b4/
Connect with Corwyn@:
Contact Number: 843-619-3005
Instagram: https://www.instagram.com/exitstrategiesradioshow/
Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
Email @: corwyn@corwynmelette.com
Shoutout to our Sponsor: ROBYN COLLINS
Do you want something more? More Meaningful Moments opportunities, deeper relationships and memorable experiences? Do you want to make a difference? If you say YES, a career and real estate could be the opportunity you're looking for guiding people to one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative.
Exit Realty has a revolutionary compensation model training and technology that provides you with the tools you need to start and build your successful real estate career. Call me today ROBYN COLLINS with REDROBYN HOMES at 843-557-5003. Again that's 843-557-5003 or visit RedRobynhomes.com/join.exit and make your Exit today.
— Support this podcast: https://podcasters.spotify.com/pod/show/corwyn-j-melette/supportCheck our Previous Episode about Modular Housing
ROBYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology provide you with the tools you need to start and build your successful real estate career. Call me today, Robyn Collins, R – O – B – Y – N Collins with Red Robin Homes at 843-557-5003. Again, that’s 843-557-5003 or visit us at redrobinhomes.com/joinexit and make your exit today
CORWYN:
so good morning. Great morning to you. Hey, guys, welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I’m your host, Corwyn J Melette, broker and owner of Exit Realty Lowcountry Group in beautiful North Charleston, South Carolina. Hey, If this is your first time listening to this show, you sir or ma’am are in for a treat. Because our mission here is very simple. That is to empower our community through financial literacy and real estate education guys, we are legacy-building. That is what we do. Y’all have been on an amazing ride with us. And today we are going to continue that fantastic journey through the landscape that is real estate and financial literacy. So today, guys, we have been going to call it what it is we made this really into a road trip. Okay, so I’m gonna frame it in that context for you. We made this into a road trip. We’ve been traveling around the country meeting and talking with amazing people who are doing amazing things in the real estate and financial space. They are counseling, they’re teaching, they’re training. Most importantly, overall, they are sharing with you tips, tricks, and other things that they have learned over the years to help you catapult yourself to the next level. So I know we’re making this a habit. And I appreciate you indulging me with it. I know I’ve asked you time and time again. Hey, turn breakfast off, get your pen and paper sit next to his radio, and get this good word. Get this good information. I know that I’ve asked you that time and time again. And today I’m going to ask you yet again because we have none other than Griffin Schermer with Red Rose Capital. And he is going to blow your mind. Griffin, how’re you doing today?
GRIFFIN:
I’m fantastic. Corwyn, thanks for having me.
CORWYN:
You’re welcome. So Griffin, if you don’t mind, a high-level overview, of who you are, and what it is that you do.
GRIFFIN:
So I’m a real estate investor based out of Indianapolis, Indiana. My day job is I run a retail business. So people come in, and we build factory homes for them. We build both manufactured and modular homes. And then during the pandemic, I started to expand out a little bit. we started looking at trying to establish more long-term cash flow for us and our businesses. And that’s when we got into mobile home parks. So we also redevelop mobile home parks, we go in we buy highly distressed or abandoned communities and we in film with brand new housing. And then that’s also catapulted me into working on some technology on the side for the manufactured housing space.
CORWYN:
Wow. So if you don’t mind me asking what got you into this arena? What got you into this space?
GRIFFIN:
Well, it starts at a young age. So my dad’s an entrepreneur, my grandpa’s an entrepreneur, my grandpa, he sold manufactured housing from 1980 up until the recession that hit in ‘08, and my dad used to install and sell HVAC equipment into Manufactured Housing Communities. So growing up, I was surrounded by entrepreneurship. Then I went to college and as I was getting ready to exit, my dad was like, Hey, I’ve got this idea. I want to open a retail business so your grandpa is going to run the day-to-day for a couple of years and you’re gonna mentor under him. And eventually with you taking over the business Yeah, I catapulted into it. I graduated on a Sunday was in the office work and Monday morning, and here we are five years later and I’m now running the business and taking directions we didn’t know we’d go
CORWYN:
Griffin is on it. Well, I know this manufactured modular-style housing was designed to be or intended to be the next affordable housing several years ago, that’s where it came about. Because home prices for homes that were built on-site, were already changing, they were already increasing and going up. And to be able to manage the process to build a home, it was more efficient. It was more economical. It was better suited for some people who were a little bit more transient at the time because people back then actually had mobile homes there would move, from place to place. So that whole premise, but a whole animal is what kind of got us into that space. You said your family has been doing this. I’ve been in this arena space for how long did you say again
GRIFFIN:
Also, my grandpa, sold homes for 25 years before the ‘08 recession hit. And then my dad, he’s been in and out of the industry since the 90s. He turned to doing a lot of community work installing HFac for manufactured homes. And he did that for 25 years before he sold that business and then leveraged that sale into opening the retail store.
CORWYN:
Wow, that’s a lot of history there with your family, man. For real. So tell us how you’re leveraging this. One, you got the history, the background? How are you leveraging this now to help you grow? And how are you mentoring and helping other people do the same?
GRIFFIN:
Well, so when the pandemic hit, we shut down our retail office for a couple of weeks. And at first, it seemed Oh, well, this is a whole this is like nice, like taking a break from work. But we quickly realized, we needed money coming in. And I just didn’t want to keep chasing after that sale, you sell a house, you build it, you make some money, and move on to the next one. And that kind of led me into the mobile home park space because I realized, hey, I can buy manufactured housing at wholesale pricing. And I already have the team to build it and assemble it from the ground up. So I realized I wanted to start chasing the cash flow. So whether the markets are good or the markets are bad, we have money coming in, I then realized through purchasing our first community that, hey, I can pay myself to build this and have the cash flow on the other side. So it opened up my eyes to another revenue stream where I could leverage the business we started, build homes, manage a community, pay myself to manage it, have the cash flow on the other side, and make money while we build it. So we’re slowly pivoting into almost just building communities. Because if we can manage a few 100 home builds a year. It’s a pretty sweet deal.
CORWYN:
Well, that is awesome. Man. Did you guys work with other investors in this process? Am I correct?
GRIFFIN:
We have yes, the first deal I did. We leveraged a bank, we actually bought the community for I don’t even know how we managed we bought 10 acres. It was owned by 30 houses and had a paved road through it for $170,000. So we cleaned it out, we went to the bank and it appraised for four times more than we bought it for. So basically, we were able to leverage just the land as a downpayment to fund filling that whole first community. And then we did that on our second one, which we’re wrapping up. We’re working on the third and fourth right now. And it’s the same business model. We’ve just brought in some other investors to help us acquire it upfront.
CORWYN:
That’s awesome. So you do that like with crowdfunding? Are you using that method? Or are you just bringing in individual private investors that you’re joint venturing with?
GRIFFIN:
Yes, so my family has a deep network within Bloomington, Indiana Houma, IU, as you can see right here, gotta plug the Hoosiers in if I can, but we’ve tapped into some of our connections in the Bloomington market to help raise some of that funding. So we’re just bringing in a couple of individuals, we’re not at a spot yet where we’re trying to take on a lot of investors. So we haven’t gotten too crazy just reaching out to local individuals we know to raise money.
CORWYN:
So you’re getting started again, you have a different foundation than a lot of people that they may have. My question to you though, is for someone who doesn’t have a similar foundation, you already have all those pieces. As you grew up in the family, you grew up in it, quote-unquote, it was being done day one for you. How would you advise someone else to maybe explore this space? What advice would you give them on where to seek information and get started?
GRIFFIN:
Well, so I was raised in a family of entrepreneurs, it was pretty easy to see that my parents were working hard all the time, they would work outside of normal hours. So that was like a regular thing to me, but I didn’t understand– they didn’t teach me about the businesses that they ran. I just knew that we had a nice house. I lived in a modular home for the first 10 years of my life. And I didn’t even know it at the time. But I had to go out and seek a lot of information myself. And with the internet today, there are so many resources out there. And I got one of my buddies who is also a partner with me at Red Roots Capital, we dove into bigger pockets, it was one of the first things that I came across when I started my journey. And we spent a year just digging through the resources through bigger pockets, and oh, my goodness, with the forums and the books and the people through that, that you can network with, you can learn a lot without having to spend a lot of money. And it’s not like I was swimming in money coming out of college, I had student loans and all the things my parents built, it’s not like they were handing it off to me necessarily. It’s just spending the time I try and go through a book every month if I can, constantly educating myself, and I never liked school. I graduated from a small liberal arts school, and it was painful to the end. And it was funny because when I got to the other side, and I found what I was passionate about, it became a lot easier to educate myself being passionate about what you want to learn helps, too.
CORWYN:
So what I heard you say at all that Griffin this, just FYI, this is something that we talk about on this show very often, why often, they’re always talking about mindsets, what people are willing to do, we all have, and is this because misconception, we have opportunities, we all have opportunities. The opportunities avail themselves, though, to those who are prepared for them, or who seek them. And oftentimes, we want things to be just given. But we don’t seek out those opportunities. The people that are listening to this show, the people that watch this show that our listeners local our listeners abroad, they’re here, because they’re seeking out additional information, and trying to create opportunities, and those people will find success, more so than those who don’t do any of that, because they just want it to be done. But you also talked about something else, which is a passion. You can make money technically and by doing almost anything. But you don’t make a living and you don’t become wealthy until you find your true passion. And that’s where you are you happen to find it on the back end. It was hilarious to me though the Twitter call you hate it. funny to me, you found your passion, you found that thing that okay, this is why I get up in the morning what I want to do. So how many people now and maybe you’ve probably got to hit you probably got a count. But how many homes have you guys done so far?
GRIFFIN:
Well, so we opened in May of 2019. To date, we’ve probably built somewhere between 100 to 150 homes, and that number is going to grow over the next year because the first couple of communities we’ve done, they’re not huge deals. We’re doing a 40-pad community. And then I’m working on a 30-pad one but I’ve got two deals in the hopper right now that are both 50 pads plus. So over the next couple of years, I expect we’ll be averaging probably do 100 to 150 builds a year if we continue to scale at the rate we’re going.
CORWYN:
The majority are homes that you’re placing or they rentals are they being purchased by people? What does that look like?
GRIFFIN:
So I’ll tell you this year, the retail market has slowed down. We all know that interest rates are up right now. And it’s affecting even lower-income housing. But the communities we’re doing 100% rentals in all of our communities. And we’re structuring them much like an apartment complex, just as a Manufactured Housing Communities. We’re offering trash and mowing and general maintenance, and then we’re just renting the home like you would an apartment. And because we can build each lot at somewhere between 80 to $90 a square foot, and we’re renting them anywhere between 1000 to $1,300 per unit. It’s lucrative.
CORWYN:
Yeah, that sounds very lucrative. And so once you have the infrastructure and stuff in, then everything else becomes a lot more manageable overall. So I can completely understand that. And that does sound very lucrative that you guys focus on what kind of markets and what kind of areas are you looking at.
GRIFFIN:
So today, we’re just focused on Indiana, we don’t usually go into small markets, but if it’s the right deal, we will. Our business is not necessarily looking for 100 200, or 500 Pag communities, a lot of the larger conglomerates out there are looking to buy larger communities. But because we’re smaller, we’re focusing on smaller communities between 15 to 50 pads. So it allows us to not we don’t have to be in a giant market. I look at it as if we’re in a smaller market depending on the size of the deal. It’s can I fill 15 to 20 rentals in this community? If there are 10,000 people there, you probably can so we’re focused all over Indiana. I’m located in Indianapolis. So this is home base and there’s not anywhere in Indiana, we’re not willing to look at deals. So we’re looking at one that’s just north of Indy right now, where my office is located. We have one that’s just south of Bloomington, about 30 minutes south of there. And then I’m working on one over in Columbus, which is about 45 minutes east of Indianapolis.
CORWYN:
Okay. All right. It’s a pretty expansive footprint, but you’re targeting certain locales if that makes any sense. So you’re not looking in the, you’re looking more rural, more suburban than you are urban. As far as your placement on this property on these units, I completely get that your average path size, your actual well, your pad size, if you will, is roughly what you guys placed in singles, and doubles, and how much space are people getting with these some of these units,
GRIFFIN:
the community down south is working on its all single wides, they’re all fully dry-walled homes, and they’re ranging from roughly 700 square feet to around 1100 square feet. Two bed two bath is the smallest we’ll go and then three bed two bath is the larger ones. Then in one of our other communities, it’s 100% double wides. And we are getting some four-bedroom homes, some three-bedroom homes, and they’re ranging from 1200 square feet to just over 1600 square feet. So we’re doing a little bit of everything, it just depends on the deal. And really, we would look urban, if something came to us, but like we’re focused on just stuff that nobody wants is really what we’re looking for. It narrows down what we’re looking at. When you look at all the possible Manufactured Housing Communities in Indiana, there are probably less than 100 that are what we’re looking for.
CORWYN:
Okay, that brings me around Griffin to another question. Well, matter of fact, I’m gonna call this a statement as I may lead into a question. But you’re looking for the stuff off the beaten path, that other people may have looked over those hidden gems, so to speak, which everybody wants something along that vein, they want something they want the diamond that was looked over because it’s still like it was cold. When I completely get that. What do you make the right site? What is it that when you see it uses, okay, that’s it gotta be all over it? Or is there a particular thing?
GRIFFIN:
I love going up to a community where it’s a ghost town, where there are abandoned homes everywhere, I like to look at a P&L that’s just losing money. And we look for mom-and-pop owners. If you ask anybody, probably 50% of the manufactured housing industry in the mobile home park space is owned by a mom-and-pop who originally built it, or their parents built it and it spilled over to them. All the deals that I’ve bought to this point, I’ve heard almost the same story, which is, hey, my dad built this community in the ’60s or the ’70s. And they just passed away. And now we own this that the kids do. And they either don’t have an interest or it’s hard if you’ve never managed the community or you weren’t part of it. And there’s a lot of maintenance that goes into any type of rental or managing a property which I don’t have to tell you that I know you know that but we’re targeting the highly distressed, and this stuff that people are trying to move on because it’s costing the money, and we’re able to get it at a discount because of that. So
CORWYN:
That makes perfect sense. We’ve had several over the last several months, if not, the last couple of years, we have several guests, and we talk about management and storage units and all that stuff. And there’s a lot of difference between managing people and just managing stuff. If you’ve got toilets, I was wondering, a reference that a lot of people, like we’ve talked about when you got toilets, and you’d like to have stuff. So you got people in toilets versus just their stuff. So I completely get it I can imagine. So you guys have a full crew maintenance and all that stuff or maintenance person on the site, to make sure everything moves and takes life as opposed to I would imagine?
GRIFFIN:
yeah, that’s the perk of owning the retail business. Because we’re a home builder. From start to finish of a home, I have the team to do it. And we have the service on the other side. Plus, the perk of putting in the new manufactured housing is they’re all warranted for at least one year through the factory. So we’re working through a lot of our issues within the first year of a home. And then when you do have the team in place, it makes it a lot easier. It’s just that everything is getting more expensive. So having warranties in place where you can reimburse things to the factory. Most of the large issues we see occur within that first year. And then the people I’d argue that people management is probably harder than managing the house.
CORWYN:
Definitely. So Griffin, look man. We quickly reached quote unquote, that section of the show we’re getting close to our break, if you will, one. I’m gonna ask first of all how can people get in contact with you? How can people reach out as they explore this space? How can they follow you? What is all that look like?
GRIFFIN:
So probably the two best places to find me are in bigger pockets. You can look me up Griffin Schermer spelled just I see it here. And then on tick tock, I’ve been trying to build a TikTok page that kind of shows us infilling and building our new community. So you can follow me Griff the real estate dude, on TikTok, and then I’m on Facebook, and you can find me all over the place, but in bigger pockets and TikTok’s where I’m most popular.
CORWYN:
Awesome, awesome. Well, Griffin, I appreciate that. So look, at this question. I call this my mic drop question. Now, hindsight is always what it looked like is clear, because you don’t been through it. So you can look back at it and be like, oh, man, I did this, I could have done this or what have you. So if you would have one of those moments of what it is that if I knew this, like way back when I’d be much further along on this journey than where I am currently. Give me one of those moments.
GRIFFIN:
So obviously, I graduated. And I started in working the retail business, and I was being mentored and learning. And that I started looking at real estate at that point, thinking about buying that first deal. And it took me almost two years to pull the trigger on our first deal. And if I look back, you can read any amount of books that you want, it’s never going to be enough information for you to buy your first deal. The first one is the hardest. And the first house flip I ever did was just as good as a college education. So I would just encourage people. Looking back, I would have started sooner I read and reached out and I talked to everybody you could imagine talking to before I did something, and I think it held me back from I could be further along today if I had started sooner.
CORWYN:
Interestingly used to say that, SOI, is the speed of implementation. We also suffer oftentimes from analysis paralysis, we do just what you said, we have to refer to everything taught everybody gets everybody’s opinion, and all that stuff. But it is never right. I don’t know if you have children, Griffin, most people have never really fully prepared for having children for being a parent. And in turn, we do it. Sometimes we do it by accident. But but we are never fully prepared, if you will, no matter how much you plan, there is something that’s going to happen that’s unexpected or unplanned. That is similar to what this is. Real estate is like that. And I appreciate you sharing that because that’s something that we talked about, and have talked about more and more on occasion on this show about “Let’s go, we got to do it. Let’s go and take the first step. Let’s go let’s make it happen.” So I appreciate that. So Griffin, thank you man for being a part of the Exit Strategies Radio Show family and for being on the show with us today. I greatly appreciate it.
GRIFFIN:
Thank you, Corwyn. It was a pleasure.
CORWYN:
So for our listeners guys looking at y’all know how I feel. Y’all know how I say it. Always. I’m going to lay it down to you. And we always gonna say it this way. Y’all know what I’m– Look here, I’m gonna get you next week but I’m gonna lay it to you this way, which is I love you. I love you. I love you. We will see you guys out there in those streets.
