Podcast 86. An Epic Journey to 22 Mobile Home Parks with Charlotte Dunford

Average Joe Finances:
0:02

Hey, how's it going everybody? So today's guest is Charlotte Dunford and she's the managing partner of John's Creek capital. Charlotte brings a unique perspective to mobile home park investing as she comes from humble beginnings, being a first-generation American citizen and college grad. After leaving China with just her belongings. At the age of 16, she came a long way to now owning over 22 mobile home parks today. She shares her journey as well as her processes for finding trailer park deals, property management, and her tips for passive investors. Charlotte has great insights for anyone interested in investing in mobile home parks and Johns Creek capital is an investment management company, which focuses on mobile home park assets. They currently have over $4.2 million million worth of total investor subscriptions and currently own 22 mobile home park investments. So Charlotte, awesome background, really excited to talk with you today. Thanks for joining me.

Charlotte Dunford:
1:00

Thanks so much for having me.

Average Joe Finances:
1:03

All right on. So I want to start this off the same way I start every episode and I gave a brief description about you and your background, but if you could go into a little bit more detail and tell us your story, how did this all get started?

Charlotte Dunford:
1:15

So after I came to the United States 16 for high school, I stayed with a host family locally in Pennsylvania for a short period of time until I got into college here in Georgia. One of the top engineering schools here in the south at the Georgia tech. And then after I've always wanted to be an entrepreneur, have always been extremely interested in business. So I studied the business at Georgia tech with a, and graduated with a bachelor of science degree in business administration with a focus on technology management and after graduation, just like a lot of. In college. I started a job at a local technology company here in Alpharetta as a data analyst and business analyst. That's the first job right after college. She put my analytical skills to work. But shortly after that, I started doing a real estate deals on the side. I used my little salary right out of fresh out of college salary to finance my first single family home. I bought a single family home. In south of Atlanta, it was a lot of ways, a big learning curve. And it was, but it was well worth it. And the second one, I started doing the second deal, which was a duplex, which turned out to be a really good deal. And then the story kind of rolled on there. And after about a year and a half of working in corporate, I decided that I was I wanted to pursue my dreams. So I just. Made a jump took a pretty big risk, but it was a calculated risk and educated risk as I would. I remember I had a pretty big commute every single day to, and from work three hours in in total every single day. So that's almost. Part time job, you can calculate the five days a week, 15 hours just on the road. So during those 15 hours, I will be reading and listening to books, podcasts, and anything real estate or business related because honing my skills know real estate apart on top of that with my single family home and duplex, actual management events. Experience. So that really helped me prepare to take the job. The reason I said it was a big jump is because my husband at the time was still in college. It was a student, so he didn't have a job. He didn't have an income. I, the little money I saved and the 401k I had for my 1.5 here. So working was really nothing to live on, let alone launch a venture. But I decided that I really did. I had a confidence that I had. I do. What would it take to do this business and a certain skills and just traits that I have in negotiating making deals and perseverance, really to make this a reality. So I took the job. After I quit my job, I got my first mobile home park. In August of 2019, the reason I decided to go mobile home park, even got my attention is because I'm a firm believer in the blue ocean strategy. Meaning that escaping competition is really the only way to win because you can't have that many players in a market to share a healthy return. So I decided to do something that not everybody was pursuing mobile home park in 2019, when I started was really ignored section, everybody was into single family homes. Everybody knew how to flip a house. Everybody knew how to do, everybody was pursuing mostly family and the category, which is so compressed in those sectors to make sense. Mo much of it. So I couldn't get into multi family because the competition of it, but I found a mobile home park and that really became the Pandora's box for me. And I just, magic happened after I found this niche where not anybody who was pursued, there was really a vacuum in the market at the time for people like me to go into. So that's why I chose mobile home parks. Yeah. Within the mobile home park sector. I went with the smaller to medium size mobile home parks, because most institutionalized investors like banks and a wall street investors they want to go into mobile home parks with 100 loss, 200 loft or hundred loss and above, tens of millions of dollars. But aside is that. It can range from anywhere from five rods to 30 loss, 40 loss. So those are smaller ones and that creates a different niche. So this niche within a niche really provided me with the opportunity to make excellent beyond excellent deals because they're not extremely hit it yet, though. Right now in 2021, then 2020, those interests really grew, which brought up the prices, which means that the deals that I made in the last year or two. Really green value. So fast forward to today I, we have 22 parks under management. We acquire someone to parks and two that's closing in a couple of weeks and then much more to calm the 20, 22.

Average Joe Finances:
6:00

That, that is super awesome. What a great way to get started, you initially started off your investing journey by buying a single family home. Then you went to the duplex but you were looking to get into something even grander than that. And that's when you start looking at home park investing. So fast forward to where you were at in August of 2019 what was it, how did you find that first deal and how big was this lot for your first.

Charlotte Dunford:
6:23

So the first time that I bought was in in my home state of Georgia, where I searched for this deal through a broker located locally in south of Georgia, south Georgia is actually a pretty good opportunity because I got this deal. I got the OEM and. Did some research into it and we actually negotiate a seller financing deal with think 5% interest rate. I think it's 4%, 5% interest rate, a 30 year amortization, a 10 year balloon. So that's with, I think 30, only 30 30% down, which is a very good deal.

Average Joe Finances:
6:57

Yeah, that's fantastic numbers right there.

Charlotte Dunford:
7:01

It was next to a power plant, which give us, plenty of lease for tenants. And there is a waiting list for every single home there just because the drop opportunity is only 10 minutes away from this large employer that employees know thousands. Okay.

Average Joe Finances:
7:15

Yeah. Yeah. So was how big was this lot? This first one

Charlotte Dunford:
7:20

that was 30 lots. A lot of them. Yeah, it was actually, there's a high vacancy. The actual occupied ones was like 10. But the numbers still work. Great. So that stuff for the first one, I think it was, it turned out, oh, we still hold that one is making pretty good money for us and pretty good return. Yeah.

Average Joe Finances:
7:38

Awesome. So when you. When you went into that one, right? You had, 10 out of 30 units occupied. Now, one of the things I wanted to ask were these mobile homes rented or were they owned by the people living in them and you were renting out the Y,

Charlotte Dunford:
7:54

right? It was a myths. So the ultimate goal of a mobile home park is to transition from Parkland homes to tenant owned homes. So we don't want to own them. We're in the parking lot business, not in the park on homeless. The uniqueness about this particular park is that it does have a great migrant worker population locally to wanting to. I rent a home and there is a housing shortage extreme how to teach her to shortage locally. So that's why we decided to run them out because they're still great business there. But once this migrant worker wave, if it ends at all, we're trying to sell them on a credit program. So the ideal place. To have all tenant owned homes and speaking of vacancy, most of our parks don't have this level of vacancy. That's the first one. And to, because of opportunities to add numbers, the vacancy was made sense. The risks that we're willing to take, but for now, most of parks are 80 to 95% occupied.

Average Joe Finances:
8:51

Okay. Okay, perfect. So now going into this, you take down this first deal. How do you know, how did you go from there to scale now? Did you do this first one by yourself? Or did you go in with partners? Like how did that work?

Charlotte Dunford:
9:05

Yeah, the first one was with partners. How do you masters going into it? As far as scaling just like scaling any business, attracting new investors, new customers was key and, just like scaling anything. We just kept on doing deals, delivering good results, getting referrals and then the business pretty much bloom from there.

Average Joe Finances:
9:24

Awesome. Awesome. Okay. So now from August, 2019 to now you've acquired over 22, and you have two, hopefully closing here shortly that is that's quite a bit to do and just a two year span. So one-on-one. Fantastic job. That's awesome. To go from where you were at, when you first started to where you're at now that's just, you definitely can tell that you put in the effort and you put in the work, so what is it that you enjoy the most about going into, this asset class? And just taken down mobile home parks instead of let's say like an apartment building and what, what made you, I know you wanted to niche down into something that was less competitive, but what is it that, that you enjoy the most about it?

Charlotte Dunford:
10:08

I think what I enjoy the most about it was first of all, I was able to do deals at a good cap rate, all of our deals last year, we're acquiring nine per cap off, and many of them above 10%, which is really unheard of in the apartment. Sector and for someone, at the time when I started the business, I was young and experienced and, the seller financing. And then, I would say at the time apartment building was already saturated with many competitive and experienced investors. There was really not a possibility for me to compete with them. The only chance I had was to go into a niche. Not many people were into at the time yet. So that's pretty much the primary reason that is because I was able to do deals. And as I got more and more into the mobile home park space, I was able to understand how the sector works and understanding that there is a big housing crisis in our country currently. And this is the part of the solution that solved the price of housing prices. I think. The affordable housing for, good hardworking Americans, that really brings joy. And I think that's that gives us as a meeting to the world.

Average Joe Finances:
11:22

Yeah. So it's something bigger than yourself, right? Because you're able to provide housing for people and help people that are in unique situations right there. They're coming here. They're trying to find a place to live and there's not many places available that's affordable. So you're providing a, an affordable housing option. For many of the, like you said, many of the migrant workers that are coming over. And just trying to make a living for themselves. So that's really awesome. And when you look at it from that perspective, that, that top-down that broader range, it just gives you like a better feeling on the inside that you're doing something that's helping the community and helping other people besides, doing this to put money in your pocket, you're actually making a positive impact for others. Yeah, what a beautiful perspective to have, right. That's absolutely fantastic. Okay. Now, besides mobile home parks, we're talking about Charlotte now, is there anything else in particular or other asset classes that you personally invest?

Charlotte Dunford:
12:17

Right now, my, my trade is mobile home parks and for each single for all of our deals under John's Creek capital as the general partner, we always in our own capital. So a majority of my own investments are either in the mobile home park sector. And another interest that I have is maybe it's storage building. I think, I'm a fan of. All the ignored sector. So I think that's something that I'm interested in as well. So yeah, I, I do, because this business I do read up a lot and research a lot on, different products, different financial products in the market, why would people invest in this thing. So everything has its pros and cons. It just depends on each investors interests and their risk tolerance really.

Average Joe Finances:
13:00

Yeah. Perfect. Perfect. So you had mentioned self storage. Is that something that you're looking into to possibly get into in this.

Charlotte Dunford:
13:09

Absolutely. Yes. So we're, as the philosophy of Johns Creek capital is to have to go into spaces where it's not overly crowded because we're in the business to make money. And for our investors that we have to deliver a certain. Level of return. So that's important to us. So we have to buy cautiously I'm by, at a rate where things make sense. And when it gets to a certain point in other asset classes, it just says anymore. So any asset class really that the profit margin for us to take, then I think that we'll be interested in.

Average Joe Finances:
13:42

Yeah. Perfect. It's one thing to, to be investing in certain areas where you're helping other people out, but it's also another thing to make sure you're keeping everybody happy, AKA your investors, right? You want to make sure that they're happy and that they're going to keep coming back to, to help fund future investments. So that's definitely important. So I'm very happy to hear that you and Johns Creek capital really do your due diligence and research. On any asset before you just jump in because that's one of the things you definitely have to be careful because it's other people's money at this point. So that's a, that's definitely. Okay, definitely. All right on. So now for you, you, you migrated to here from China, right? At the age of 16 with just, the clothes on your back and and some belongings, as we talked about in your background, Now, when you came here, what was like the first steps, you got here, then you went to school and I know you said you, you went to college and then from there, while you were in college, you started you actually, your first job was as a data and business analyst. You started taking the money from that and I'm rewinding back a bit, but you started taking the money from that, like from your job, putting it to the side, to invest in by this first single family rental and then that duplex. What, what made you to decide to just jump into real estate while you were working at a job, making a decent income, right? Because that's a pretty decent income paying job, but what made you want to start investing into real estate versus going the traditional route? Like a 401k, which I know you said you had stuff in that as well. So what made you take that leap?

Charlotte Dunford:
15:16

So as you can tell from my personal experience, I am not a person to follow anything traditional, really. So a traditional person or a normal person, doesn't just pack her bags and say goodbye to mom and dad at age 16 and jump on a plane to America that doesn't happen with normal. So w when I was working as a business analyst, of course, the traditional route wouldn't really make me happy. Wouldn't really, not. I'm just not someone who would take the traditional route. So with that said, the reason why our particularly was interested in mobile sorry, real estate, because it was growing up in China, a communist regime where you as a citizen, you cannot legally owe any rose state. You lease it from the government for 70 years of your own apartment. And you have to give it back or you have to extend at least. People do not really have any private property to their name. I've always fascinated with the idea of owning your own property. And then in the United States, you can actually make that, make that a reality. You own every single piece on your property that you purchased. So that idea really always fascinated me. I've always wanted to do something like that. So that's why I think real estate is a important part of. Yeah our business. And I think another thing being Chinese we have really heavy the family values and home a property, a house apartment, whatever it is somewhere to call home is always the most important thing in a Chinese person life. People that I grew up around with anyways, my family, my parents. Truly heavy value on property and real estate, even though they don't own it, but they still are gladly living in there. So I think that those two important factors and then my you wouldn't call it rebellious, but non-traditional approach in life really know, contributed to why I'm doing what I am, what I'm doing today.

Average Joe Finances:
17:10

Fantastic. Yeah. So one of the things I wrote down as you were talking about that is you have to be a not normal person. And I don't mean that in a bad way. The way you were explaining everything is, you didn't follow the traditional route. And then when you came here to the United States, it wasn't like. Hey, I'm going to follow the traditional route that they do here in the U S and I'm gonna, go this route and work my job until 65 and then cash out my, my my IRA or my 401k and be able to retire at 65. No, you said, Hey, I packed up my bags at 16 to come here, and start this whole new job. Because I'm quote unquote, not a normal person and I'm not going to follow the traditional route. So you came here and said, Hey, there's more opportunity here. If I continue down this path of not going the traditional route. So I'm going to continue doing that. And you did right. Which is fantastic. That's one of the things that I guess the big takeaway I want to take from this is that, you can't really. Build your wealth quickly. If you're going to go the traditional or, just the normal route that everyone else goes that, Hey, everybody says, Hey, if you do it this way and you play it safe, that you're gonna, you're going to be okay at the age of 65. Not everybody wants to retire at 65. Some people want to live their life a little bit, they want to retire maybe in their forties or late thirties. And it's very possible. It just depends on how much risk you're willing to take and how much effort you're going to put in to do that. And, the amazing thing is when I listened to your story is you came here to the states and you went all in it. Wasn't just oh, I, I think I might do this. Now you came here and said I'm making moves and this is what's going to happen. So that is pretty awesome. That's the big takeaway that I get from what you're doing. So definitely want to say amazing now. Thank you. You're welcome. You're most welcome. Now, the other thing that you did that I thought was very fascinating is, when you started investing in real estate to go out to all these different places, your commute you said. Three hours and dying this three hour period, you were reading books and listening to podcasts. Now, you were taking public transportation. If you were reading right. You weren't like driving your car. And now I would say, Hey, that's dangerous. And I wouldn't recommend that if anybody. Don't try to read a book while you're driving. I've seen people on the highway doing that and it scares the crap out of me every time. I don't know why. Just get the ebook and listen to it, but anyway. Yeah. That's awesome. So you were reading books, listening to podcasts, listening to eBooks as well. And just taking on and absorbing all of this information and this knowledge, you basically turned yourself into a content sponge and just absorbing as much as you can. That's another key takeaway from this is, you don't want to just jump into real estate or jump into mobile home park investing particularly without doing some type of research and your own due diligence, because if you don't do those things and you jump in on your own, it's just like going into the stock market into a risky stock that you did no research on, or going into cryptocurrencies and, going all in on like doge coin or something, and then you lose all your money. So right then

Charlotte Dunford:
20:18

you're not you're not investing, you're speculating. Most people are not ministers they're speculators.

Average Joe Finances:
20:23

Yeah. Exactly. So the key thing to being an investor and being a good investor is actually doing your research. Now, it, that also goes with, if you're going to invest with a company as a passive investor, I know when we talked about your background, right? You talk about that you have tips for passive investors and I'd like to get into that. But before we do for passive investors, which, I'm a passive investor right now in, in a syndication. And the big thing for me, when I went into that was knowing and researching the company I was going with. I had to make sure. I was very comfortable and that, the information they were feeding me was accurate. And that the returns and everything, that's the preferred return, everything that they really did, their due diligence and they did an amazing job. And that made me comfortable as an investor to, to go. So I think that's absolutely super important. So I'd like to get into that. What are some tips that you have for a passive investor that would maybe want to go with your company or another another company, that they're just getting into it and they have some cash and they want to invest it into. A mobile home asset class. So how, what would you recommend to them?

Charlotte Dunford:
21:32

Yeah I agree with you. I think the most important thing to me is to vet the sponsors to make sure you understand what you're going into business with because at the end of the day, the dealer. If anybody can make any deal, but the importance is who you're going to business with. And if this deal is solid, are your sponsors solid? Because basketball stars can turn a bit deal bad and the sponsors can make bad deals. So you really want to make sure that you understand, it's like any investor any spot, just like any industry you want to understand the company that you're going with. Just if you're going to invest in a stock, you want to make sure that, is this company, how did I do last quarter or what are people saying about them and just do your due diligence. You have to understand what you're investing in. You're buying a product, you better know what the product is offering you and the history of it.

Average Joe Finances:
22:20

Exactly. It's the same thing. Like it w when you treat it like a product, right? Like you said, anything that you would purchase, for people that pay attention to what they eat. Especially if you're like one of those organic food people, what's the, one of the biggest things that you look at before you purchase any type of food product, the ingredients, you want to look at and make sure that there's none of this and none of that or anything,

Charlotte Dunford:
22:40

exactly. And if a food product had a series of food present in cases, you probably don't want to go there.

Average Joe Finances:
22:46

Absolutely. Absolutely. So it, and it gives you like a better, investment on your own body, right? Because you're investing in your own personal health when you're doing that. Somebody's looking at what they're putting into their body. They're going to do their research on that. So why not do the same type of research with something you're going to put your money into? Because listen, if you're going to invest your money into something with somebody you better make sure you know who and what you're getting involved with because you worked hard for that money. You don't want it. Disappear right now. Some people you could spend frivolously on things, which I know I have on, many times in the past. And sometimes you buy something because you think you want it or need it. And then it turns out it was just a waste of money. And, you could do the same thing with an investment. You can say, Hey, I really want this. Cause I want to be involved in ABC or D. And I'm going to, I'm going to dump, 25,000 or $50,000 into this because, I want to be a part of this team and a part of this deal, but you didn't research them that, that could spell bad news for you in the future. You might get lucky, but you might not. So definitely do your due diligence. Alright, fantastic. Now, besides the tips for passive investors, what do you have any tips or tricks for somebody that may want to get started in real estate? Just in general, like a brand, maybe they just got out of debt or, somebody who has similar situation to you. They moved to the United States looking for something new and fresh and they want to get started in real estate. What would you recommend to somebody coming over here right now or just getting.

Charlotte Dunford:
24:16

In my shoes, it took me I think it took me over 10 years to become American citizens. So first of all, you have to, you want to make sure you have the legal. To TJ conduct business, eating United States. You cannot just come over here and do your thing. That would be illegal. So absolutely we must respect all laws in the United States and that's what makes our country great. Make our society great. The American culture and society wars honesty, and a law abiding citizens. So that's number one. And number two, if you are brand new and you've been here and you want to start your own thing, I would say first thing is to really have an education to understand. How things work because without knowledge, you don't have any, you don't even know how to acquire deals and, you can learn as you go, but you have to have some sort of basic understanding of business now, real estate in general. And then number three, I would say is, should have confidence in yourself. Yeah. We really have a self-assessment you understand if you're really meant to do this, because this is a business where you have to have certain skills and traits to be able to become successful in this business. So those are the three things I would recommend that. Yeah,

Average Joe Finances:
25:29

I love that. I love that. Especially that last one have confidence in yourself. That's huge, right? If you go into this half fully invest or not fully invested, but like half invested instead of being fully vested in this, then, you could be setting yourself up for failure. So absolutely. Now I have another question I want to ask you because you're, you were doing this three hour commute and you will listening to, Books, reading books and listening to podcasts, you have a favorite business investing or real estate related book and or podcast.

Charlotte Dunford:
25:59

So my favorite book of all time is called from zero to one by Peter Thiel. He is a Silicon valley investor co-founder of PayPal works alongside with Elon Musk in the earlier periods of PayPal. And he has so many. Really successful businesses, one of the most successful Silicon valley investors out there. And yeah, he's philosophy of from zero to one really talks about, there's only one reason businesses fail is because they failed to escape a petition. And that really, that philosophy really resonated with me and is pretty much how I conducted my business.

Average Joe Finances:
26:40

Yeah. That's fantastic. That sounds like a great book. I have not read that, but I'm adding it to my list. Definitely sounds awesome. All right. So Charlotte, now we've had. A great conversation about your journey, what you're doing and how people can get into this right now, people might want to know a little bit more about you or find out more information about you and Johns Creek capital. So where can people do that? Where can people find more information about you and your team? Do you have a website or social media pages that they can.

Charlotte Dunford:
27:10

Yeah, absolutely. The best way to get in touch with me is to go to our website at johnscreekcapital.com and click on the contact us and fill out a form out, get in touch.

Average Joe Finances:
27:22

All right. That's easy enough. So for those of you listening right now, don't try to write that down if you're driving, but we'll make sure that link is in the show notes and that you can find any additional information that you need on. And Charlotte, I this has been an absolute, absolutely fun interview. You have an amazing journey just talking about from where you started in the beginning to where you're at now, I'm wishing you the best of luck by the time this episode airs, those other two deals would have closed. So congratulations on all that and congratulations on all of your success. It was definitely a pleasure speaking with you today.

Charlotte Dunford:
27:55

Same here. Thank you very much.

Average Joe Finances:
27:57

All right on Aloha.