Kevin Bupp is a lifelong entrepreneur whose journey began at 12 with a paper route and soon evolved into buying and selling automobile electronics at 14. By 20, he entered real estate investing, and over the past two decades, he has completed over $250 million in real estate transactions. In addition to real estate, Kevin has owned various businesses, including an events company, a custom sports apparel brand, a mortgage company, and a property management firm. A passionate marathon runner, triathlete, and craft beer enthusiast, Kevin also shares his insights through two top-rated podcasts, aiming to inspire and mentor young entrepreneurs.
Here’s some of the topics we covered:
- Being a Bartender & Discovering Real Estate
- Ninja Trick To Get Better Deals From Sellers
- Finding Deals Through A Real Estate Broker
- Finding A Deal With Little Or No Information & Getting Excited
- Getting a Bridge Loan and What That Means
- Having A Backup Plan If Your Property Is Private Utilities
- Doing Proper Due Diligence So You Don’t Lose Money
- The Power Of Giving Back To The Community
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
Full Transcript Below
00;00;00;01 – 00;00;17;15
Rod
Welcome back to life lifetime cash flow through real estate investing. I’m Rod Khleif, and I am thrilled that you’re here and you do not want to miss this episode. Okay, I’m interviewing one of my best friends, Kevin bup and Kevin and I, if you don’t know who he is, have so much history together. In fact, he’s the reason I have this freaking podcast.
00;00;17;17 – 00;00;22;13
Rod
I remember he reached out to me. I don’t know, what, eight, nine, how long.
00;00;22;16 – 00;00;23;22
Kevin
I would do my podcast for ten years.
00;00;23;22 – 00;00;38;07
Rod
Ten years ago and said, hey, he reached out to me ten years ago and said, do you want to do a podcast? I’m like, at that time it wasn’t video. It was like on a phone. I’m like, hell no, I can’t sit there on a phone and talking to do a podcast. Now of course it’s video. And but he’s the reason I did this one.
00;00;38;09 – 00;00;41;07
Rod
And, so, anyway, it’s great to have you.
00;00;41;07 – 00;00;43;26
Kevin
Here, my friend. Thanks for having me, brother. Yeah. As always.
00;00;43;26 – 00;00;45;09
Rod
Yeah, it’s been way too long.
00;00;45;14 – 00;00;51;19
Kevin
In fact, you say ten years. I would say ten years. I mean, like, I don’t think. Have you probably listening, right. I knew what a podcast was ten years, right?
00;00;51;21 – 00;00;58;17
Rod
Right, right, right. Oh, God. I, you know. So. So, what’s the name of your. You’ve still 2 or 1.
00;00;58;19 – 00;01;02;22
Kevin
They’re both out there. One that I do on a regular basis. Real estate investing for cash flow real.
00;01;02;22 – 00;01;06;02
Rod
Estate investing for cash flow. You guys you were like number 1 or 2 for a long.
00;01;06;02 – 00;01;19;29
Kevin
Time was and there’s an apple blip, you know, years back. And I never found my way back to the two by two. Yeah. It was something. And then we have the mobile home park investing show I did, I ended up I ran that show for about three years, recorded 140 or so episodes, and it was too much.
00;01;19;29 – 00;01;21;02
Kevin
Yeah. So it’s out there.
00;01;21;02 – 00;01;23;15
Rod
It’s out there. It’s great. Elevation, great and relevant.
00;01;23;15 – 00;01;33;27
Kevin
It still gets down to a lot of downloads, a regular basis. I mean, it’s got, you know, thousand plus five star reviews. I mean it’s still it’s information. It could be used, but we’re just not we’re not producing new content. Gotcha gotcha.
00;01;33;29 – 00;01;38;21
Rod
Gotcha. Well, check out his podcast because you do all asset classes on that pod.
00;01;38;22 – 00;01;39;19
Kevin
That’s right. Right. Yep.
00;01;39;19 – 00;01;59;19
Rod
Where this one. I’m starting to do more of that and bring in other stuff just to change things up a little bit. But you guys obviously know that I’m my focus is multifamily, so let’s just pretend we’ve never interviewed. And why don’t you give, the listeners just a little background on, you know, who you are and what you do because you’ve done a lot of different things.
00;01;59;19 – 00;02;16;08
Rod
And so let’s let’s start there. I mean, we’ve got so much history. I was there when you met your wife. Remember that? Yeah, I was it. Yeah, yeah. So Kevin or I actually worked together like 18, 19 years ago, 20 years ago when we were doing, single family houses. Kevin and I worked together back then. Yeah, it’s how long.
00;02;16;11 – 00;02;28;00
Kevin
I moved here. In 2002. I met you and your brother sometime within that first year span. And so 2003 range. And, fast forward. I mean, that’s a long time ago. Holy cow. I know, I know, it’s 2020.
00;02;28;00 – 00;02;29;11
Rod
You’ve done some amazing stuff.
00;02;29;11 – 00;02;33;09
Kevin
20 years. I think it’s a little different. I mean, we both have little more gray hair, a little bit more than me, but I.
00;02;33;09 – 00;02;44;00
Rod
Have a lot more than you. Yeah, a lot more gray hair than you, but, Well, so. So, you know, guys, he’s a guru in the mobile home park space. But just tell your tell your tell your story a little bit.
00;02;44;00 – 00;03;05;10
Kevin
Yeah. No, I mean, so I, I think similar to you, I mean real estate has been most of my life. I, I always joke and say that real estate found me. I didn’t find it back when I was, I was 19 years old, and, I lived in Pennsylvania, grew up in Pennsylvania. So of all my family up there and, was tending bar, going to community college, having fun, not really knowing what I wanted to do with my life.
00;03;05;10 – 00;03;24;00
Kevin
I was taking classes because I didn’t know what else to do with my free time. And, again, I didn’t know where to really harness the energy and excitement I had in life because I didn’t know what I want to do when I grew up. And, but I was having fun. I was making good money there. And, you know, during that time, I met a girl starting a girl, and, that girl, her name is Jessica.
00;03;24;02 – 00;03;39;13
Kevin
Her mother had recently gone through a divorce, and she started dating a guy by the name of David. And David happened to be a local real estate investor. And so, just going to visit her, you know, at her, at her mom’s home. She was she was going to school as well and lived at home. And I became friends with David over a period of a couple months.
00;03;39;13 – 00;03;57;00
Kevin
Got to know him. And, you know, one of the things that really stuck out with, with, with David was that, you know, I grew up in, my mom and dad were wonderful, but very, you know, blue collar family. Both parents worked. My mom worked like a third shift because we couldn’t really afford a babysitter. So they kind of they kind of, you know, switched up their shifts.
00;03;57;00 – 00;04;16;28
Kevin
And my mom didn’t teach other that much during the week. And, but we never went out, you know, we had Christmas happened, one vacation a year, but didn’t have a lot of excesses. You know, we didn’t have a lot of extra, you know, there’s always money struggles. There was always car payments. And, you know, just if there was any tension in our household, it was always about money.
00;04;16;28 – 00;04;36;00
Kevin
And, that’s just how I knew. I didn’t know any business owners. My, my, you know, my family weren’t friends with any business owners. But I met David then. And what I recognize very quickly is, number one, how we dressed was a little different type of car he drove was very different. And he seemingly was at my girlfriend’s house or her mother’s house during the day when most old people were supposed to be working like that.
00;04;36;02 – 00;04;51;06
Kevin
That’s what really stuck out to me. And, it just that caught my attention. So I got to have really good conversations with him. And spend quality time with him when others weren’t around just because he seemingly was there. Just odd times of the day. And so anyway, long story short, I didn’t know much about real estate at all.
00;04;51;06 – 00;05;09;21
Kevin
Actually, I knew nothing. I had a basic understanding what his business was. He bought rental property, he bought properties, turned them into rentals, and he owned about 35 of them at that point in time, up until, up in Pennsylvania. You’ve been doing it for 20 years. And, I mean, he had a lot of flexibility, his lifestyle and, the seemingly lived a good life.
00;05;09;21 – 00;05;17;22
Kevin
And so fast forward, a couple months, he invited me to a conference down in Philadelphia. Ron, the Grand.
00;05;17;22 – 00;05;18;22
Rod
Ronde, le grand.
00;05;18;22 – 00;05;38;04
Kevin
On the ground. So David bought, bought a, you know, whatever, $3,000 conference for him and his business partner. His business partner couldn’t go. He said, hey, I you want to come with me? This thing, you know, lots of information over three days. Lots of people are doing big things. And again, I didn’t understand what I was, you know, getting myself into what I was raising my hand for.
00;05;38;04 – 00;05;48;12
Kevin
But I was like, well, shit, you spent three grand, right? I got to pay for it. It’s a two hour drive to Philadelphia and a hotel room. I’m like, I’m in, let’s go. Let’s do this thing. And so you remember around the grand. I mean, you guys.
00;05;48;15 – 00;05;53;25
Rod
Guys, if you don’t know who run the grand is, he’s been around forever. He’s funny because very crusty.
00;05;54;01 – 00;05;54;22
Kevin
He is crusty.
00;05;54;22 – 00;06;19;19
Rod
He’s a crusty old guy. And, in fact, you know, one of the things that I. That I teach that that I got from him was a negotiation tactic. Let me share the negotiation tactic with you. So, you know, when someone gives you what you want to do when you’re talking to a seller or buying anything, for that matter, is you say, you know, if I could close right away, what’s the least you take?
00;06;19;21 – 00;06;36;10
Rod
And regardless of the answer, even if you want to do backflips because the price is so good, you go, is that the best you can do? Now I will tell you that phrase has made me millions okay myself. And that came from Ron the Grand. But, kudos to Ron again.
00;06;36;10 – 00;06;46;03
Kevin
It’s uncomfortable. Yeah, that scenario is uncomfortable. But yeah, I agree. It gets you some great deals. You know, it’s it’s you know, what’s the best what’s the logic you’d say if I paid cash and close quickly.
00;06;46;03 – 00;06;49;03
Rod
Oh that’s what it was. That’s if I pay cash and close quickly okay.
00;06;49;03 – 00;06;57;29
Kevin
So you’ll fast forward. I went to the seminar and I met a lot of people that were doing, in my mind, just huge things, you know, it was basically wholesaling or learning to fix and flip homes. That was what the conference was about.
00;06;57;29 – 00;06;59;24
Rod
Sure, I forgot what he calls what he teaches.
00;06;59;24 – 00;07;17;18
Kevin
Yeah, yeah, yeah. And he had a pretty house boot camp as well. But like this was the basically wholesaling fixing flip. And I just I made a ton of people that I didn’t feel were any smarter than I, they just knew that more than one I did, and they were doing seemingly big things, talking about wholesale checks of five and ten KPIs or making 30, 40, 50 grand on flipping houses.
00;07;17;20 – 00;07;35;03
Kevin
And I was overwhelmingly excited and, spent the three days there, came back home and knew that if I didn’t put that excitement to use and do something with it, that it would just fizzle out, and I’d go back to tending bar, meet girls and, you know, having fun. Right? But, so I basically went to David.
00;07;35;03 – 00;07;50;04
Kevin
He was he was about 25 years old, and I and, I just made him an offer. I, I basically went to him and asked if I could, you know, help him in his business, like, literally come up in between class like, classes three days a week. I was only taking 12 credit. So I had a lot of free time and I didn’t tend bar until 7:00 at night right when I went in.
00;07;50;04 – 00;08;09;14
Kevin
So I basically went and worked for him for free for about 14 months. Wow. And just whatever he needed, whether it was pick up coffee, you know, go to Home Depot, get some supplies for my contractor, forgot a couple, two by fours, drop off leases, pick up leases, anything, return a couple calls. It didn’t matter. I basically I went work for him just so I could be around them and hear how he did what.
00;08;09;14 – 00;08;13;01
Rod
Guys, this is what we call a clue. Okay? All right. Keep going.
00;08;13;01 – 00;08;29;04
Kevin
Yeah. So I mean, that was sort of it. So I got to be around his network. So again, you know, there’s power in proximity as you like to say, right? Like, so like his network was already there. He had established it over 20 years. So I got to you got to get introduced to private lenders that he had established relationships with.
00;08;29;06 – 00;09;01;08
Kevin
Realtors that were, you know, back then, you know, investor realtors and understood the investment world were few and far between. Right. So he had a few that, like you could make multiple offers. They would actually submit them for, you know, lowball I think things so he just he introduced me all these people in his network that were critical and and so fast forward, I had seven grand of bartender my I’d saved up and found a property in a really rough neighborhood into Harrisburg, Pennsylvania, and bought that first investment property, used all $7,000, plus the private lender that he had hooked me up with to help fund the, the purchase and renovation.
00;09;01;08 – 00;09;14;20
Kevin
And and that was it. However, I would say that there was, there was a small wrinkle, you know, I didn’t want to reinvent the wheel. His wheel was basically buying hold. Right, right. I know that’s what you’ve always preaches. Well, buy and hold. Buy and hold. And I.
00;09;14;20 – 00;09;17;00
Rod
Hate most properties I’ve ever sold, but.
00;09;17;02 – 00;09;35;10
Kevin
I. I agree with you. I agree with you. However, one wrinkle in that plan was that I used all the money I had and that $300 a month of cash flow that I was going to receive was going to take quite a bit of time before I could save up enough money to go do another deal. And and I just didn’t have a deep enough relationships yet to, you know, truly use up, you know, OPM or other people’s money.
00;09;35;10 – 00;09;46;12
Kevin
And so, I morphed it to, you know, wholesaling a few homes, keeping one. And I did that up there for about two years. And then I moved down to Florida, and that’s when I met. Yeah. You know, luckily met you and your brother.
00;09;46;16 – 00;09;49;16
Rod
Yeah. It’s all downhill since then, but,
00;09;49;18 – 00;10;00;11
Kevin
Yeah. So, you know, fast forward to where we’re at today. Start buying mobile home parks in 2011. I know you and I looked at him. Oh, yeah. You know, we were going to work back in there one time.
00;10;00;11 – 00;10;09;10
Rod
You were teaching mobile home park investing. The people went to one of your seminars, and I remember doing a bus tour with you two in Florida. That’s right. In Orlando.
00;10;09;10 – 00;10;10;20
Kevin
Yep. Yeah, that’s one of our parks.
00;10;10;20 – 00;10;31;12
Rod
And I use the example of that park there in orange something. It was an orange city. Orange city. And I use that example because it’s a great example for a ninja trick, for finding deals, because you found that deal through a residential bridge, right. And that that because, you know, guys, you know, here’s a here’s an old trick for finding deals.
00;10;31;14 – 00;10;51;24
Rod
You know, if a, if, if a person that owns a, well, in this case a mobile home park, but even like a multifamily ten, 20, 30, 40 unit, you know, they’ll if they worked with a realtor when they bought their home, they very often will go to that realtor to sell their multifamily property or in Kevin’s case, a mobile home park, whoever, and they’ll take the listing but never got a clue what to do with it.
00;10;51;24 – 00;11;15;08
Rod
So they’ll throw it in the residential MLS where nobody’s looking for mobile home parks or multifamily. That’s right. And and and you can get great deals that way if you develop a relationship in the market that you’re interested in with a residential broker or agent, say, hey, if a multifamily deal shows up and Kevin’s case, a mobile home park or whatever other asset class you’re looking for and it shows up, let me know right away you’ll get the commission.
00;11;15;08 – 00;11;29;16
Rod
Maybe I’ll bonus you as well, and you’ll find deals I tell you that you won’t find otherwise. In fact, this happened to my brother up in Georgia. He bought a farm that was listed in the wrong place and got a screaming deal on it. Yeah, because it was listed in the residential MLS.
00;11;29;16 – 00;11;50;15
Kevin
So why me? And so, so most of the residential MLS, whatever, you know, their regional, you know, organization that kind of oversees it, most of them have a commercial division that people don’t know. I mean, and you can sometimes you can access it through if you go to like century 21 website in that local region like Tampa Bay, you might be able to find like an actual portal to the commercial side.
00;11;50;15 – 00;12;08;11
Kevin
So they have their own commercial division. Most of them do. It’s not it’s not, it’s not tied to Loop Net or Craxi or any of the other, you know, popular sites where commercial gets listed. So, you know, so to your point, that was one day we found out way the very first park I ever bought was in a similar manner.
00;12;08;11 – 00;12;23;25
Kevin
It was on Loop net. However, it was listed by a, residential agent. He didn’t. He was two hours away. Didn’t know a thing. He had never listed a commercial property before. The listing was horrific. It had missing information left and right. No financials whatsoever. Right. But it was a screaming deal. Was an.
00;12;23;25 – 00;12;42;20
Rod
Absolute home. Hey, guys. When you find a listing like that that’s got little or no information, get excited because everyone else gives up at that point, okay? And if you dig deeper, you can find screaming deals. So, so just, so my listeners know how successful you’ve been. How many pads have you owned so far? I mean, you’ve probably sold some.
00;12;42;20 – 00;12;44;08
Rod
Bought some. Yeah. So we’ve actually we’ve.
00;12;44;08 – 00;12;58;14
Kevin
Sold quite a bit over the, over the last three years. But I mean, at present time we’ve got about 3300 lots. Okay. And, and so outside of Mobile Home Park, we also own parking open. So we have, I think just over 2000, I guess you could say parking stalls or however you want to categorize that, but.
00;12;58;14 – 00;13;01;08
Rod
Okay. So, you know, mobile home parks and and parking.
00;13;01;09 – 00;13;01;22
Kevin
And parking.
00;13;01;22 – 00;13;03;05
Rod
Parking lots, correct.
00;13;03;07 – 00;13;04;23
Kevin
Parking garages and parking lots, parking.
00;13;04;23 – 00;13;05;20
Rod
Garages and lots of.
00;13;05;21 – 00;13;11;01
Kevin
Yeah, yeah. But, I think we’ve gone full cycle at this point in time on 16 mobile home parks.
00;13;11;01 – 00;13;16;11
Rod
So you’ve bought and sold by the way, full cycle guys means bought and sold. So you’ve bought and sold 16 mobile home.
00;13;16;11 – 00;13;18;21
Kevin
Park regret probably 12 of those 16.
00;13;18;24 – 00;13;19;19
Rod
Selling 12 of them.
00;13;19;23 – 00;13;34;10
Kevin
Regret it. I mean, as you know, you know. Right. Your brother al, him and I own, you know, a number of parks together, and, we no longer. We sold our last couple just a couple of years ago. And, probably the last ones that we sold were the biggest regrets. Really? Should have absolutely kept them phenomenal markets.
00;13;34;10 – 00;13;44;27
Kevin
Wow. Do the cash out refinance forever right now. And just they’re not making new mobile home parks, especially in phenomenal markets that that was in the Raleigh Durham market I mean wow irreplaceable.
00;13;44;28 – 00;13;54;22
Rod
Yeah. Nobody nobody wants mobile home parks in their backyard. So you just really can’t build them anymore. My brother Albert worked with Kevin for a long time and and still owns some parks, I think, maybe he’s kidding.
00;13;54;24 – 00;13;56;06
Kevin
No, he just sold. We sold the last.
00;13;56;06 – 00;14;07;16
Rod
Couple, so he’s out. We his out? I didn’t know that. Wow. That’s crazy. So. Wow. So are you. What are you actively. Do you still buying parks? You just bought a really big one. I was asking you. We did?
00;14;07;16 – 00;14;25;28
Kevin
Yeah. At the end of last year, we bought the largest single asset we’ve ever purchased. As far as, I guess, sheer size, 738 lots. So it was a beast. Basically a city. Wow. Bought at the end of last year. And you know, last year at Fort Wayne, Indiana. Okay. Okay. Yeah. So market last year was a great year for us.
00;14;25;28 – 00;14;40;29
Kevin
We actually did just shy of $100 million of acquisitions last year. And I and in a time when a lot of others weren’t buying, and I think that was the opportunity for us like that particular deal, it’s owned in a market where all of our biggest competitors, some communities. Yes, communities.
00;14;41;06 – 00;14;42;25
Rod
These are big mobile public park competitors.
00;14;42;25 – 00;14;50;11
Kevin
Publicly traded companies. They all own the large assets in that marketplace. But they were pencils down last year. The stock prices were down.
00;14;50;14 – 00;14;52;00
Rod
Pencils down means they’re not buying.
00;14;52;00 – 00;15;07;24
Kevin
And so like we you know, the vacuum in the marketplace was there. And, you know, we took advantage of it. So the seller that owned it was a larger institutional seller. They had some liquidity issues on other projects, and we’re exiting out a few of the projects. And, we’re there to, you know, accept the opportunity.
00;15;07;25 – 00;15;29;03
Rod
Hello. Hello. Thank you very much. We’re going to take a break from this great episode for word from our sponsor, which is the multifamily bootcamp. Now, financial success is what you’re after. We are rapidly approaching one of the greatest opportunities I think we’re going to see in our lifetimes to capitalize financially. So if you know real estate is the vehicle for you, you’re crazy not to spend a couple days with me at one of my bootcamps.
00;15;29;03 – 00;15;44;14
Rod
I’ve always got one right around the corner. Thousands and thousands of people have taken action on their journeys to creating generational cash flow for themselves and their families. From attending my events, I don’t sell anything at this event, so it’s basically 16 to 18 hours of training with nothing being sold. Kind of a no brainer if you’re serious about this.
00;15;44;14 – 00;15;57;18
Rod
To check it out, text the word links to 72345 or go to Rod’s links.com. Again. Text links to 72345 or go to Rod’s links.com. I promise you’ll be glad you came. Let’s get back to it.
00;15;57;22 – 00;16;00;08
Kevin
Yeah, yeah. So I mean you know anyway, so.
00;16;00;08 – 00;16;17;06
Rod
So on that note, let’s, let’s shift to a minute and guys don’t leave. We’re going to talk about some amazing stuff here. So don’t leave. On that note economically are you seeing you know, you’re in mobile home parks. I’m in multifamily. We are seeing a hit in the multifamily space right now. First of all, there’s a lot of operators.
00;16;17;06 – 00;16;29;18
Rod
I got bridge debt. My partner ex-partner got me a new couple as well. I’m struggling with with some of those as well, you know, doing loan mods and everything else. But there’s a lot of guys in serious trouble. Yeah. Are you seeing that with parks? Probably not.
00;16;29;22 – 00;16;45;19
Kevin
Not so much. And I don’t think I don’t think bridge debt, like, you know, your formal bridge debt was as prevalent in our sector, right? I mean, when I say that we we got a bridge loan in place, typically what that means to me and a lot of other operator spaces, we’re going to get a bank loan. It’s a five year loan, right.
00;16;45;19 – 00;17;03;05
Kevin
You know, with a probably 25 year I am no balloon. You know, you’re a five year. It’s going to either reset or or it might balloon more likely. But like that’s how we that’s typically what we use as bridge that like we’re closing alone next week. It’s a local bank right now. The property’s not exactly there for agency.
00;17;03;07 – 00;17;08;02
Kevin
Like we’ll be able to get it there in about three years pretty safely. Right. And so we’re on a bank loan.
00;17;08;03 – 00;17;26;18
Rod
So just, you know, agency debt is Freddie Mac and Fannie Mae, and, they’re the largest. And I don’t even know if they actually do the lending, but they it’s a little complicated, but they’re government related. And and with that, debt is typically non-recourse, meaning if they foreclose, they can’t come after you personally. They just take the property.
00;17;26;18 – 00;17;30;17
Rod
But so, you know, primarily it’s bank debt with mobile home parks. Yes.
00;17;30;20 – 00;17;47;03
Kevin
No. I mean, 90% of what we, what we typically buy his agency. Oh, no kidding. Yeah. Unless it’s not there today. Like it? Maybe it doesn’t have the right occupancy or, you know, agency lenders don’t like park owned homes. You know, when, when the park actually owns the homes, right? So if it has more, then they’ve got a couple different thresholds.
00;17;47;03 – 00;18;06;18
Kevin
But normally if it’s got more than 25% of the units in there that are park owned homes, they won’t do the deal. And so in this instance, that is the case. There’s about it’s about 40% park on home right now. And I know that we can sell off at least 15% over the next three years very comfortably and get it to the threshold that will make them happy.
00;18;06;23 – 00;18;16;10
Kevin
And by far agency loans. It’s the best terms that exist. Insurance rates. Yeah. Best, amortization terms. It’s fixed for ten years, sometimes up to 12 years.
00;18;16;11 – 00;18;17;03
Rod
Oh, really? Wow.
00;18;17;04 – 00;18;19;03
Kevin
Yeah, yeah. So it’s hands down if you.
00;18;19;03 – 00;18;19;27
Rod
Ever get any interest.
00;18;19;27 – 00;18;31;09
Kevin
Only in the interest only. So if you do a ten year term, I think now they’re starting to loosen up a little bit. But the quotes that we’ve seen recently, we’re look we’re only doing five year loans right now. Even on agency, we’re only doing five year.
00;18;31;09 – 00;18;34;10
Rod
Maybe just because you want to be able to get out. And with the.
00;18;34;10 – 00;18;44;25
Kevin
Prepayment, I don’t have a crystal ball, but I feel as though rates are coming down that rates will come down at some point in the next five years. Right. And so I don’t want to lock in for ten years and be stuck with that and have, you know, a major pre-pandemic.
00;18;44;25 – 00;19;02;23
Rod
Yeah. So yeah, guys, when you do the longer terms, you’ll have what’s called step down prepayment. It’s really what’s called yield maintenance and difference. But but it’s a prepayment penalty bottom line. And and sometimes it’s like 554433221 over a period of time. That’s the percentage of the loan that you’re going to pay. And it is it’s big money.
00;19;02;25 – 00;19;05;07
Rod
Yeah. Big money. And so no that’s really prudent.
00;19;05;09 – 00;19;19;19
Kevin
Yes a lot of times it would probably wreck the economics of the deal if you had to get out of it early. Right. You know, more than likely if you model that in and say, hey, you know, I might have to get out year seven, more than likely it’s going to be a very hefty fee that’s going to really crush the other returns on the property.
00;19;19;19 – 00;19;37;26
Kevin
So anyway, so now we’re just we’re just mostly doing five year, mostly agency. But again, bank loans, if it doesn’t qualify for agency and then look to recap it, at the end of that five year mark and and then if it’s a property you want to keep long term, if it’s going as, as expected at that point, what to put ten year debt on it if the rates make sense.
00;19;37;26 – 00;19;55;25
Rod
Just out for my own edification. Sorry guys. This question’s a little technical for for conforming debt. Don’t they have to have like sidewalks and paved roads because a lot of mobile home parks don’t. And what about the utility component do. That’s right. Because, you know, a lot of these parks have antiquated utilities. Some even have like sewage ponds.
00;19;55;25 – 00;19;56;22
Rod
What do they call them? Lagoons.
00;19;56;24 – 00;19;57;06
Kevin
Lagoons?
00;19;57;06 – 00;19;58;05
Rod
Yeah. Goons. Yeah.
00;19;58;06 – 00;19;59;07
Kevin
That’s like a big cesspool.
00;19;59;07 – 00;20;08;05
Rod
Yeah. Big cesspool. Exactly. I mean, we’ve seen it all, but but what are their requirements in that regard as it relates to the to the roads, the streets, the paving and the services.
00;20;08;05 – 00;20;27;24
Kevin
So the industry has changed quite a bit. So when you and I were looking at the stuff back in like 2009 and ten, agency age lenders would only lend on the primo I mean, literally sidewalks, curbs, you know, double all double wides and have certain setbacks. I mean, they had to have, you know, beautiful like, pole lights throughout the community.
00;20;27;24 – 00;20;51;20
Kevin
It’s just a clubhouse. They only wanted the primo assets because that’s all they really understood. They didn’t really understand the rest of the asset class relaxed. So it’s relaxed quite a bit, to where they’ll, you know, they’ll even land on, I mean, they’re not as loosey goosey as, like, maybe like a CMBS lender or a local bank might be, so long as it’s majority ten owned homes and they don’t really care about the utilities, whether they’re private or public.
00;20;51;24 – 00;20;53;16
Kevin
They don’t they don’t care about that.
00;20;53;19 – 00;21;03;28
Rod
By the way, guys, that’s a red flag that you want to be really careful of. If you’re going to think about investing in mobile home parks is if the utilities are private. I remember you always told me you always had an alternative plan.
00;21;04;02 – 00;21;05;09
Kevin
B connection, your.
00;21;05;12 – 00;21;21;29
Rod
Connection nearby in case the sewage went out in case a well went out. Because if if one of those things happens, you’re based, everybody has to move because they’re, you know, they don’t have utilities. You better have a freaking backup plan if it’s private utilities like, well, and septic. Yeah. Or even a sewage plant maybe, I don’t know.
00;21;22;01 – 00;21;47;24
Kevin
In even we go more granular than that. Because even if they’re, you can quickly look up and see what the closest like sewer line might be. You know, sewer line. But like, you got to go a lot deeper than that because it doesn’t mean that you can actually connect into it. While you might be able to there might be fees, but there also might be other restrictions, like there is an instance in Maryland where, where we’re right near the, the city, we’re in the county, but we’re literally we’re across the street from the city, okay.
00;21;47;27 – 00;21;49;13
Kevin
And that’s where the sewer line is.
00;21;49;18 – 00;21;50;06
Rod
Okay.
00;21;50;08 – 00;21;54;12
Kevin
But they want us to, what’s the terminology?
00;21;54;14 – 00;21;55;02
Rod
Impact fees.
00;21;55;02 – 00;22;02;11
Kevin
Or not pay impact fees, but they basically want to absorb the, the community into the, into the, into the city, which basically panics and exits. Sorry.
00;22;02;13 – 00;22;04;00
Rod
They want to annex. They want to tax.
00;22;04;04 – 00;22;19;18
Kevin
Therefore they will force us to annex in. Oh, wow. In order to get in our tax, lower taxes will triple. Wow. And so it doesn’t work. Yeah. It doesn’t I mean, maybe it works sometime down the road, but it doesn’t work for us and so. Right. And so we actually have we have skeptics in that community. When we bought it we knew that was a problem.
00;22;19;23 – 00;22;36;06
Kevin
And we actually underwrote is though we might not ever be able get connected. And these skeptics are all we even underwrote to where if we lose a septic a year for the next 20 years, does a deal still make sense? And so like we went pretty deep in the event we can’t get connected in in Maryland to pretty strict about skeptics.
00;22;36;10 – 00;22;52;28
Kevin
You literally cannot put new skeptics in. Oh, you can’t know because of the, you know, Chesapeake watershed like there is. Yeah, there’s there’s all these restrictions throughout the entire state. And so they’re trying to eradicate skeptics across the board. Oh, wow. So anyway, just wow, you got to go pretty deep with, due diligence. That’s the infrastructure is the killer, right?
00;22;52;29 – 00;22;55;29
Rod
Infrastructure is a that’s a for my own edification.
00;22;55;29 – 00;23;20;03
Kevin
So we just killed a three part portfolio, about two months ago, and we went really deep. And on the outside, looking in there in great markets, Kalamazoo, Michigan. So lots of growth happening there. Immediate area from the outside looking in there, a little rough around the edges but easily fixable. Right. Just esthetic improvements. We got engineers involved with sewer scoped all through all the sewer lines, three, three communities, about 400 sites in total.
00;23;20;05 – 00;23;48;07
Kevin
Didn’t, you know, full blown inspections on all the well, well systems and it’s the worst condition I’ve ever seen. We actually killed the deal. It was so the infrastructure was so bad, and all three communities, a sewer lines were there was, you know, gaps and joints missing and in multiple locations throughout all of the communities. Just to the extent of it would have been multi million dollars of additional capital that we hadn’t budgeted for, even if they would have given us the deal for that much of a reduction, it would’ve been worth the brain dead.
00;23;48;08 – 00;23;53;20
Kevin
No. A long story short, we spent about 100 grand on due diligence. On due diligence, guys. And we’re you. The cost?
00;23;53;20 – 00;24;03;16
Rod
Yeah. You get that. I mean, guys, the reason you do due diligence is sometimes the best deal is the one you don’t do. It’s right. Sells in or 3 million. Exactly. And brain damage and.
00;24;03;16 – 00;24;10;08
Kevin
Brain two years. It would it would have drained all the resources for the operational team. Yeah. I mean it just it wasn’t it wasn’t worth the energy.
00;24;10;08 – 00;24;32;09
Rod
Right, right, right. Wow. So what’s next? I know you’re yet another mobile home park under contract, which is awesome. You’re raising money for one of those, and your, But but I do want to shift gears to to another reason we wanted to get together. So, guys, you don’t know this, but, I, I, founded a 501 C3 charity, so.
00;24;32;11 – 00;24;49;28
Rod
And I don’t really talk about it on the show that much. So I’m going to give you a little background real quick before we talk about why I wanted to talk to Kevin today. So, you know, when I was, you know, hell bent on making a lot of money, hell bent on proving to the world I was good enough.
00;24;49;29 – 00;25;12;02
Rod
You know, I got picked on in school. You know, everybody’s gone through this stuff. I had to prove to the world I was good enough. And, you know, I built this literally. What’s now a $25 million house on the beach? It’s literally right behind me across the bay here. It’s kind of funny. And I worked for it for 20 years, and I, I moved in, so I worked for this for 20 years.
00;25;12;02 – 00;25;29;04
Rod
I moved in two months after I moved in, and this house is magnificent. Let me describe it. Okay. It’s a Gulf to bay. I own the beach on one side. Had my boats on the backside. It’s like a slice through an island. And. And again, I worked for it for 20 years. It. Yeah. The big waterfall from the second floor balcony to the pool.
00;25;29;04 – 00;25;49;17
Rod
You had to walk through the waterfall to get to the pool. You know, big spiral staircase up through the middle of the house, wine cellar, elevator on the second floor. I had aquariums that that I built that cost me almost 200 grand to go around the staircase. So this gives you an idea. The house. Anyway, two months after I moved in, I’m floating in the pool at night and and I got depressed.
00;25;49;22 – 00;26;04;08
Rod
And I don’t mean a little depressed. I mean, like, holy shit, depressed. And, you know, I talk about this when I talk about goals. You know, how you should never achieve a big goal without having other goals lined up behind it? Well, that was one of the pieces of this. Okay. The other thing is, it’s never about the frickin goals.
00;26;04;09 – 00;26;17;16
Rod
Happiness comes from progress and growth, and I didn’t know what I was going to do next. And but, you know, and that’s the year I went saw Tony Robbins because I’m like, you know, I got to figure this out. I went and bought some books and one of them was Tony’s book. So I went, and this is 25 years ago, okay.
00;26;17;19 – 00;26;36;19
Rod
And I, I went to see Tony, and Fort Lauderdale was blown away. I spent another 20 years following him around just because I was so impressed with his methodologies, teaching and coaching. And he was a big mentor of mine. But I found that he fed families for the holidays and and that really resonated with me. And I, you know, I’d never done anything for anybody else.
00;26;36;19 – 00;26;52;25
Rod
I’m embarrassed to admit that I was 40 at the time. And so I went home and I called my brother Ed, who lived in Denver, because I thought I was already here in Florida and I was going back for Thanksgiving. I said, Ed, let’s feed five families. Let’s just have some fun, feed five families. And so he called his church, found five families that really needed help.
00;26;52;28 – 00;27;11;05
Rod
And we went and had a lot of fun buying the food frozen turkey, roasting pan, toys for the kids if they had them. And the third family changed my life. You know, we go up to this, this, this like a row house where it’s like a like four units, like a four plex. But they were straight shots through to the back.
00;27;11;05 – 00;27;24;15
Rod
So it was like a one bedroom. It was a shitty one bedroom, cause you had to walk through the bedroom to get to the kitchen, which had the bathroom off of it. And there was a Hispanic woman in there with five kids, and she comes out and she sees all this food and stuff on the porch, and she starts crying.
00;27;24;17 – 00;27;42;21
Rod
Her kids come out to the older ones, start crying. I start crying, and I was freaking hooked. And so the next year I fed 50 families. Next year after that, I fit 100 families. So this was always for Christmas or Thanksgiving. So I doubled it every year 50, then 100, then I did 200, then I did 400, then I did 800, and then I did 1600.
00;27;42;28 – 00;28;08;22
Rod
I did 1600 in 2008. And you all know what happened to me in 2008, right? I lost $50 million, but I paid for it all the way up to that point. And then I formed a foundation called the Tiny Hands Foundation. And now I’m I’m humbled and proud to say that I think we fed definitely well over 150,000 children for the last over the last 25 years, we’ve done tens of thousands of backpacks filled with school supplies.
00;28;08;22 – 00;28;29;28
Rod
We just did 2006 weeks ago, done thousands and thousands of teddy bears to the local police departments for their officers to keep in their vehicles if they encounter a child, you know, that’s been in a traumatic situation, they can comfort the child and bridge the gap. And, and the reason I bring all this up in front of Kevin is Kevin has raised hundreds of thousands of dollars for this tiny Hans foundation.
00;28;29;28 – 00;28;47;00
Rod
That’s the name of my foundation, the tiny Hans Foundation. So Kevin does this annual fundraising fund event to raise money for for my foundation as well as another 1 or 2 of my request one year. Yeah. So so can you talk about the event?
00;28;47;03 – 00;29;04;26
Kevin
Yeah. No. Absolutely not. Just backing up a little bit, buddy. I mean, seriously, I mean, just this what you put together with the tiny hands is truly a testament to your heart and just your your willingness to give and help others. I mean, like it that when I met you, I started volunteering, helping with the food drive every year.
00;29;04;29 – 00;29;24;02
Kevin
I had one of those moments myself weeks ago, delivered when we used to deliver the baskets in person. Right? Yeah, yeah, yeah. You go load up the back of the truck, you know, like, leave the center when we were putting it all together and go deliver these things. And, I had my I had a similar encounter with a family where they were just, I mean, just in tears, you know, crying and just so thankful and grateful that we had brought this to their door.
00;29;24;02 – 00;29;39;20
Kevin
And, you know, they ultimately weren’t going to have a I think that year was Thanksgiving. They weren’t going to have a they didn’t have money for Thanksgiving meal or, you know, and so it was just hugely impactful. And so, you know, you know, to your point, you used to fund this all yourself. You never took donations, didn’t accept any outside money.
00;29;39;20 – 00;29;57;06
Kevin
And so when the crash happened, I remember it went from you know, the numbers weren’t I do you went for feeding, you know, thousands of families to. I don’t know what that next year was. No. 8 or 9. But it was, it was, it was a much smaller amount. Yes. Yeah. And so I’m like, shit. But I was in bad financial situation as well.
00;29;57;06 – 00;29;58;03
Rod
Sure. We were all yeah.
00;29;58;03 – 00;30;28;24
Kevin
I was like, I wish, I wish I could help. I mean, it was painful for me to watch it go from because folks need that more then they, you know, like more at that point in the economy than in any other time. Right? Like everyone was having a hard time economically. And and so 2010 tens when I got married, I got married in March of 2010 and I was still trying to find my bearings, trying to find my way and what I was going to do in this next, in this next phase of life, like this journey.
00;30;28;24 – 00;30;49;00
Kevin
I just got married, didn’t have kids yet, but didn’t didn’t feel fulfilled. I didn’t know what I was, you know, real estate was just not on the radar at that point. I’d started a couple other businesses to pay, you know, for the roof over my head. And, and I need, like, a big, hairy, audacious goal. And so I decided to hop on my bike, told Joanna that I was going to hop on my bike and ride to Washington, DC.
00;30;49;00 – 00;30;50;07
Rod
That’s right. I forgot about.
00;30;50;07 – 00;31;07;00
Kevin
That. And so that’s really been married for a couple months. Yeah. And you know, when I proposed the idea to, I’d never ridden my bike more than 40 miles. And that was a fairly new bike rider. And, and when she didn’t respond back with, no, you’re crazy. You’re absolutely not doing that. She’s like, are you serious?
00;31;07;00 – 00;31;33;12
Kevin
I knew that there was a there was a chance that I might be able to convince her and allow me to do this. So fast forward, I about, four months later, not that much time at all. From that moment, I rode my bike over 11 days, 144 miles from Florida to Washington, DC. Wow. Made it felt somewhat fulfilled for a personal goal, but felt even more empty than ever because I felt I attracted this large following in the audience on Facebook.
00;31;33;12 – 00;31;45;22
Kevin
I was just documenting what I was doing. I wasn’t doing it for I remember now, but I was just just more so of my family and friends who’d like, kind of keep in the loop of where the hell I was. At that point in time. I didn’t have much of an agenda. I literally had a paper map and I was just riding wow.
00;31;45;24 – 00;32;00;18
Kevin
And I was just riding. And so, and I got to the end and realized I had all these folks, like, all these eyeballs that were watching, and I did it for no other good than myself. And so I felt very empty because of that. And so came back from that was in really the best shape of my life.
00;32;00;21 – 00;32;16;23
Kevin
And I figured, well, shit, I don’t have any money to help run the Tiny Hands Foundation, but I got legs. And so I remember, I remember the day I came, your office said, hey, I got this idea. I don’t know if it’s going to amount to anything, but I’m going to put together a bike ride. I’m going to go ride it next week with a friend and see if it’s actually a manageable route.
00;32;16;23 – 00;32;18;01
Rod
Oh, so you did it in advance.
00;32;18;01 – 00;32;22;05
Kevin
In July of the summer, when you buddy literally wrote it over two days?
00;32;22;05 – 00;32;23;22
Rod
Well, just kind of describe where.
00;32;23;25 – 00;32;39;00
Kevin
Yes, we start at Fort Myers Beach, which is on the west coast of Florida here. And then we basically ride south and then get to the bottom, and then cross over the Everglades, right across the Everglades to the other side of Florida, and then head south again all the way to Key West. It’s about 285 miles. And, we do it over three days.
00;32;39;00 – 00;32;43;29
Kevin
Now, when I first rode it, I did over two days in July, which is horrific.
00;32;44;02 – 00;32;48;12
Rod
So all the way to Fort Myers, which is just south of me to Key West.
00;32;48;12 – 00;33;06;01
Kevin
Yeah. Wow. Yeah. So anyway, we put the van on that first year, I think I donated maybe 300 bucks to Tiny Hands after I said it done. And, the next year we ended up, you know, I think had a real check of maybe 10,000. And then every year thereafter that the third year, you know, from the third year on, now we’re on our 14th year,
00;33;06;04 – 00;33;06;21
Rod
14.
00;33;06;21 – 00;33;23;29
Kevin
Years, 14 years, two hurricanes canceled, two of them. So we did have two times where we couldn’t do it due to hurricanes. So I guess would be our 12th active year of actually doing that. I’ve, 14 years of doing I’ve been that man. So it’s been a lot of fun. I mean, it’s again, it was one of those things where, like, I don’t have money to help, but I got legs and like, I’ve got my health.
00;33;23;29 – 00;33;27;18
Kevin
And so I got other people rallied about the idea and, how.
00;33;27;23 – 00;33;29;27
Rod
How large group do you typically have.
00;33;29;27 – 00;33;35;16
Kevin
So we limit it to 75 riders, 75. And I do it because of logistics. Right. You know, we’re literally all rolling. You know there’s.
00;33;35;16 – 00;33;58;15
Rod
Cars following you. Trucks. You got the food. You got the hotel guys if you ride a road bike is called a road bike a road bike if you ride a road bike go to 72 the number 72, 72 hours to Key west.com seven to the numbers, two hours to Key west.com and sign up for this thing. First of all, it’s a kick in the ass.
00;33;58;15 – 00;34;04;14
Rod
Okay. Second of all you’re raising money to help, my foundation and something else.
00;34;04;17 – 00;34;09;14
Kevin
Yeah. Starting right now, it’s, it’s an organization out of, Pinellas County. And basically they’re.
00;34;09;14 – 00;34;10;11
Rod
Just Saint Petersburg.
00;34;10;12 – 00;34;28;22
Kevin
Florida unaccompanied youth. So basically, like homeless youth that, they kind of fall in the cracks of, of of of having funding and support from, you know, government, localities and things like that. So it’s a phenomenal it’s all self-funded as well. They don’t take any government money, any funding. And so just, every dollar that goes to that organization, just like tiny Hands.
00;34;28;22 – 00;34;32;10
Kevin
Yeah, goes directly to, you know, to the end user, to the end folks that are really, really.
00;34;32;11 – 00;34;32;28
Rod
Right. Yeah.
00;34;32;29 – 00;34;36;14
Kevin
Like which is another impressive thing about Tiny Hands. I mean, like, there’s, there’s no overhead. I mean, no.
00;34;36;14 – 00;34;37;09
Rod
I cover everything.
00;34;37;09 – 00;34;41;05
Kevin
That’s it. Yeah, I cover staffing is the over I mean like in in volunteers as well.
00;34;41;05 – 00;34;42;04
Rod
But exactly.
00;34;42;04 – 00;34;47;03
Kevin
You know, whereas if you’re doing to the Red cross or, or, you know, whatever it might be like.
00;34;47;06 – 00;34;47;26
Rod
Oh, they take maybe.
00;34;47;26 – 00;34;51;20
Kevin
One $0.20 of every dollar might be, going to where it really is. That’s right.
00;34;51;20 – 00;35;02;13
Rod
So yeah. No, I cover all the operating expenses and then some, still but but guys, so if you ride a road bike, for God’s sakes, check this out. Okay.
00;35;02;20 – 00;35;16;21
Kevin
It’s this November. So. Yeah, we we have a couple spots and I’ll make a spot for if you, if you reach out through the website. If even if registration is close, if you have an interest, I will make a spot for any of the warriors that are, that are listening in here. Have an interest. I will make a spot for you.
00;35;16;23 – 00;35;34;12
Rod
Okay, so not just my 1700 plus warriors, but any of you if you. Yes, if you are interested in riding with Kevin. Wow. I can’t believe you’ve done it 12 times. I, you know, you get tired. I I’m just my brain. I just can’t believe I.
00;35;34;12 – 00;35;37;17
Kevin
Went rode 50 miles this morning for, Did you really dress the. Come here.
00;35;37;17 – 00;35;38;10
Rod
Oh good job.
00;35;38;10 – 00;35;39;27
Kevin
Ma’am, I try to get my butt back in gear.
00;35;39;27 – 00;35;56;23
Rod
Yeah, so? So, if you want to know more about Kevin, his website is invest with sunrise.com. I hope that you’ll consider riding. If you’re a road biker. Because. What an awesome ride to to go down the seven mile. It’s beautiful. Seven mile bridge.
00;35;56;24 – 00;36;10;06
Kevin
Go across a mile bridge. There’s I think there’s 42 or 43 actual bridges that you cross going through the keys. You don’t realize when you drive it somewhere. We’re pretty short, right? But there’s, there’s, you know, 40 plus bridges that you cross over. The Seven Mile Bridge is pretty amazing.
00;36;10;06 – 00;36;11;24
Rod
So there’s there’s more than. Yeah.
00;36;11;27 – 00;36;24;05
Kevin
Well you’ve got you got the Seven Mile Bridge which is crosses marathon. Okay. And it’s seven miles long and it’s a really long bridge. But then there’s, you know, roughly 40 others that of different lengths. And so it’s, I mean, you’ve been to the keys many times.
00;36;24;05 – 00;36;24;26
Rod
Oh, yeah. Yeah, yeah.
00;36;24;26 – 00;36;26;28
Kevin
But I don’t know, tropical Paradise.
00;36;26;28 – 00;36;44;11
Rod
It’s so there’s. Yeah. And the view, I mean, you’re riding and you’ve got water on both sides. Spectacular. So, but, you’ve raised a lot of money to help out a lot of kids, and, and and I love you for it, brother. I that means a lot. And, you know, I and like I said, Kevin and I have known each other forever.
00;36;44;11 – 00;36;54;10
Rod
I’ve seen his kids grow up and and, just a beautiful thing, but, but listen, I, I appreciate you coming on, man. And, it’s great to see you.
00;36;54;10 – 00;36;55;09
Kevin
It’s been the same, brother.
00;36;55;10 – 00;36;56;09
Rod
All right. Thank you.
