Turning Fear Into Freedom: The Power of Mobile Home Park Syndications with Tim Woodbridge

Transcript

[Mattias]
Welcome to the REI Agent, a holistic approach to life through real estate. I’m Mattias, an agent and investor.

[Erica]
And I’m Erica, a licensed therapist.

[Mattias]
Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing.

[Erica]
Tune in every week for interviews with real estate agents and investors.

[Mattias]
Ready to level up?

[Erica]
Let’s do it.

[Mattias]
Welcome back to the REI Agent, it’s Mattias here. If you are fortunate enough to be seeing me right now on the video screen, I decided to use a different lens. I think, I was thinking in my brain.

So I have like a, any camera people out there might appreciate this, but I typically use a 28 millimeter lens on a full frame camera. And because it’s a wider angle, and then when, you know, Erica and I are together, we fit on screen, but I have like my pretty like lens that’s like good for portraits and that kind of stuff. It’s a 55 and that’s my pride and joy or one of my favorite lenses to use.

And I was like, why don’t I, why am I using this? And I remember then it’s because, you know, I need that wider angle lens for when both of us are on, but now not to get too nerdy. Yeah, I’m using that 55 lens.

It’s a prime and it’s at 1.8 aperture. So I’ve been enjoying watching myself. But anyway, on that note, we had a good episode today recorded with Tim Woodbridge.

Tim has a partner named Mattias. And, you know, that’s not very common, but who is from Germany. And basically he spells his name as you would read Matthias.

And that’s the common way of spelling it. And my parents wanted me to be pronounced like the German or like the Spanish way of pronouncing it, Mattias. And so they left the H off.

Now I went many years without ever hearing anybody else with my name or pronounced the way I pronounce it, right? Many years, but I hear it more and more now. There seems to be more and more Mattias’s and it’s one of those things, like if you’re, you know, a Scott or a, you know, I don’t know, John, Chris, like you probably are very, very, very, very used to hearing your name all the time and don’t like react if you hear it.

It’s probably the default is if you’re in a crowded space that somebody is probably not talking to you. But for me, like when I hear my name, I’m like, you know, immediately looking. And there was a student in one of my daughter’s classes that was named Mattias.

And, you know, he was like me when I was his age and needed a lot of direction. A lot of Mattias is getting thrown out there with that tone, Mattias. So it always threw me for a loop.

I like felt like I had to like sit up straight like when I heard it, walking her into class and reverted to my like, you know, I’m in trouble. I’m a, you know, five-year-old that’s in trouble phase as opposed to that’s somebody else. I’m an adult and I’m not in trouble.

Anyway, I digress. Today was a really good episode. Great for the syndications.

We’ve had a few syndications episodes on recently. This one is in the mobile home class. It would be fun to have like a panel of syndicators that maybe would talk about why they like what they do.

They may not feel comfortable doing a full-on debate with each other. But, you know, I think it’d be interesting to kind of like break down the different asset classes that you can syndicate, what people are doing. I’ve had some interesting different ones.

So mobile home parks, apartments. We’ve had construction, like, you know, even somebody who did a whole development of like single family houses and then they kept them as rentals, which that was a really cool, interesting angle. You know, we’ve had even storage units and we’ve had parking garages.

So, I mean, it’d be fun to kind of pick apart those different asset classes and kind of think through like what angle are you looking for? And so one of the things that Tim gets into is the depreciation heavy side of a mobile home park. And that’s something that, you know, as a real estate professional, it’s nice to have that as a, you know, write off going forward.

So all to say is it’s interesting if you’re not familiar with syndications, I implore you to keep going back to, you know, go back and search through our previous episodes for different syndicators and hear us talk about it. And hopefully it will start making more and more sense so that you can really pick up on the beauty of it and why if you’re not wanting to be an active investor, you wanna just focus on your sales or whatever you do, how syndications can be a really good option for you. And then it’s also kind of a cool, fun way to diversify a little bit.

So if you have only mobile home park syndications, you know, you could look at something else that might balance out your portfolio. Like syndications might be very good in this area, whereas, you know, a different type of asset class might be better in this area and you might choose to go that way. Anyway, without further ado, we’ll let Tim talk about his journey into this space and what they’re doing and all the fun aspects of mobile home park syndication.

So here’s Tim Woodbridge. Welcome back to the REI Agent. We are here with Tim Woodbridge.

Tim, thanks so much for joining us.

[Tim Woodbridge]
Thank you so much for having me.

[Mattias]
Tim, before we get started, I wanted to thank you again for being on here and looking forward to another episode with an investor on the East Coast, Represent. And apparently you’ve got some property not too far from my neck of the woods. So always exciting to hear.

So Tim, tell us a little bit about, I guess maybe give us a bird’s eye view, a elevator pitch of what you do now and then kind of how we can get into how you got started.

[Tim Woodbridge]
Yeah, so I run WCG Investments. We are a small team that serves investors through purchase of mobile home parks. We like it because it’s a very recession resistant asset and we can get really stable returns, plus a ton of year one tax write-offs for all of our limited partner investors.

And yeah, it’s the need for affordable housing is just getting more and more every day. And we like to be at the forefront of helping to house people who really need affordable housing.

[Mattias]
Yeah, it’s really true. And yeah, you’re absolutely right. I mean, this is gonna be the most affordable type of housing you can get.

So it does feel very safe going into potentially uncertain waters. So, and I’m invested in the East Coast in the syndication, as we talked about quickly before we went live for mobile home parks. So, I mean, I will love this conversation, but tell me, I mean, like when you get into real estate investing, most people, they think long-term single family house, rental kind of thing, maybe get a duplex that’s about as maybe wild as they get at the beginning often.

And to be honest, and not to be offensive here, but like to think about renting mobile home parks, it’s not exactly the sexiest class of investment, right? On surface, but for the reasons you just talked about, it is a very, very solid investment. So what got you to mobile home parks?

Where did you start? And yeah, tell us that story.

[Tim Woodbridge]
Yeah, it’s definitely not sexy and that’s part of why I liked it. So, I am now a retired nurse. I retired four years ago, just about.

And I didn’t know anything about money or real estate or anything. I saw the HGTV shows and I was like, oh, that’s so cool. I would love to do that one day.

And I moved here to Charleston, South Carolina from Phoenix, Arizona. And I was post-breakup, right? So my youngest brother was here.

That’s what brought me out here, but I was post-breakup. So I had time on my hand. And so I started reading and reading and reading just different things.

And I picked up Rich Dad, Poor Dad, like so many people do. And it was like, oh, this is how people do it. And so from there, I just, okay, what else can I read about real estate?

Oh, there’s bigger pockets. Okay, sweet. Me looking to see what really resonated with me.

And at the time, it was just seeing what’s out there. And then Frank Rolfe came on the Bigger Pockets podcast and they talked about mobile home parks. And I was like, oh man, it totally resonated with me.

It made me excited. And he was like, you’ve got sticky tenants, you’ve got low expense ratio, you got a lot of people who own their own homes, so some kind of ownership. And the thing he didn’t say that did resonate with me is that it was a little different.

It was different than what everyone was doing. Everyone was doing single family wholesaling or buying a single family and holding it forever. And I’m just the type of person who when everyone’s doing one thing, I’m looking for other things.

Like what else is there? And that’s just my personality. And so at the end of the podcast, Frank said, he said, go check out mobilehomeparkstore.com.

And I thought that was a fake website. And I looked it up. It’s not, it’s a real website.

And I saw a listing. Someone was listing a park for sale by owner, maybe an hour 15 drive from where I lived. And so yeah, I reached out and there’s a ton of things to get it, but probably six months later, I’d say we closed on that first park and I subsequently learned how to, I know, it’s crazy, it’s crazy.

But yeah, then I learned how to run it.

[Mattias]
That’s insane. So I mean, not only did you skip, like you might say one-on-one of real estate investing, which most people will go through, get some couple doors, play it a little safer. You went and found one right away, right after a podcast and you actually closed on it.

That’s amazing. That, yeah, wow. So did you feel like you did a good job in analyzing it and everything from the onset?

Is that a deal you still would have bought now that you are experienced and know what you know now? Or how’s that? No, no, no.

[Tim Woodbridge]
But okay, so like, what I’ve learned is the more I do this, the more I realize there’s a time and place for different investments. I wouldn’t buy it now, but if I was starting out, yes, I would absolutely would have bought it. Was my, like me analyzing the deal good?

No, not at all. Was it like super high level and like me just shooting from the hip based on the little bit of knowledge I had? Absolutely.

I’m not great with numbers and details, which is why my partner Matthias, a different Mattias, does. He’s a rockstar at that, but I’m really good at taking action. What do I, like I see something that I want and I say, how can I do that?

And so, yeah, that’s really what led us to close, me and a partner closed this first mobile home park.

[Mattias]
Was that Matthias at the beginning as well?

[Tim Woodbridge]
No, no, we’ve only been working together for a year.

[Mattias]
Okay, and then do you still own that one? Is that still in your portfolio?

[Tim Woodbridge]
I do still own that one, yeah.

[Mattias]
So it’s not all bad.

[Tim Woodbridge]
No, no, no, no, no, it was great. It was a great learning experience. And again, you know, we are like working with a couple other people to take down a different deal that it doesn’t fit what works for us.

It’s a little bit too small, but it’s like perfect for someone starting out. And so, you know, we are getting them the deal. We’re helping them close it.

We’ll stick around and take a little bit of equity to ensure that they’re all like really good. You know, we wanna white glove it and help them as best as we can. But yeah, it wouldn’t make sense for us to take it down because it’s too small.

It’s not worth the team’s time anymore.

[Mattias]
No, it makes sense. And was that maybe the biggest, one of the biggest pieces of it? Was it too small?

Like that this is one of the reasons you wouldn’t do it again?

[Tim Woodbridge]
It’s too small and too vacant. So it was 10 of 36 occupied.

[Mattias]
Okay.

[Tim Woodbridge]
Yeah. Or 10 of 35 occupied. And it’s just, it was a lot of work.

It was a big, heavy lift to get it to where it is now. And I am glad it was that heavy of a lift because I know what’s needed.

[Mattias]
Right. Yeah. I mean, how, like the beauty of what you did was you did it.

Like you actually went and took action right away. And I think that’s what people often don’t do. And usually that’s fear that holds them back.

But so I mean, that’s amazing. So you’re white gloving somebody else to be able to do something, a similar size park now. And is that something you do often or is that like kind of a one-off thing?

[Tim Woodbridge]
This is, this will be the first. And if it’s successful, we would like to do it more. We as a team are very much go-givers.

We want to give back in any way we can. And again, we’re super bullish on mobile home parks. We love the asset.

We see the power of it and how sure, like we’re making a ton of money. Our investors are making a ton of money. And also we’re able to make places nicer for people who really need it, who are not being served in any other way.

So yeah, yeah. I think this one will be good. And if so, definitely looking to help others do something similar where everyone can win.

[Mattias]
Okay. And so tell me about your overall strategy. Are you looking primarily for buy and holds that would be value adds that you would refinance and then keep?

Or what’s your primary kind of target?

[Tim Woodbridge]
So now we are syndicating everything. So it is a five-year hold, and we are looking for doubling investors’ money over those five years. So, you know, our gold standard is 2X equity multiple.

Yeah. For investors and, you know, always with the caveat of if we get to year four and it’s a great park and we want to continue to run it and we can have talks, you know, one-on-one talks with all the investors and they’re good. You know, if we refi, we return all their capital plus some and then hold for another five years and they just cashflow.

If they’re cool with it, then we’ll continue to do it. But at the heart of it, it’s like five years. We’ll make it really easy.

I’m going to double your money in five years. And then we’ll go from there.

[Mattias]
Okay. Yeah, that makes sense. And, I mean, that is one of the beauties.

And, you know, I’ve had a couple of guests recently talking about syndications a little bit. I think they’ve been more apartments. But, you know, explaining how the cap rate system works, explaining kind of breaking down how this kind of deal is even possible.

Because, like, from the outside, it almost seems too good to be true. Like, how are you going to double my money? Like, in five years?

Like, it’s, what’s the game here? So, I mean, when you pick up a park, is it, what’s typically the value add that you’re doing to create that extra value?

[Tim Woodbridge]
Gotcha. Yeah. So we do some infill, you know, bring homes into vacant lots.

We, a lot of times, just operate it better than it was operated before. We, you know, slowly raise rents to market, because they’re almost always under market rents. And, yeah, you know, we just increase the income, decrease expenses, nothing really too crazy.

We don’t do heavy, heavy value adds. You know, some people are pros at infilling parks that are only, you know, 10 or 36 occupied. We don’t want to do that anymore.

It’s too risky. We love the asset because of the low risk.

[Mattias]
Okay. And so you don’t see a lot of turnover. You talked about how the tenants are sticky.

So when you’re slowly raising up the rents to market, you’re not seeing people vacate, because A, it’s harder, and B, if they do vacate, they’re just going to find what you’re trying to get it to anyway, right?

[Tim Woodbridge]
Yeah, yeah. And, you know, we treat everyone with respect. We treat everyone like we don’t go in day one and go all the way to market.

We do like 50, 75, maybe 100 year one, but after we’ve added some decent value to the park. So it’s, you know, we’re not in the business of only money, we’re in the business of how can everyone win, and everyone includes all of our tenants.

[Mattias]
Yeah, and I mean, you know, I have this conversation with tenants a good amount, and, you know, one way I explain it when I have to raise rent is that, you know, if you look at it, this relationship can never be lopsided, because it’s not going to work for somebody along the way. Like this, if I raise your rent, and it was, you know, double any other rent in the area, you would move immediately. Like that just doesn’t make sense.

And in the same regard, like if you’re like $500 under market rent, like that’s kind of a problem. And if you want to stay here like, and continue to have this good win-win relationship, I mean, you have to have some sort of balance there where it’s a good deal for everybody, because otherwise it just doesn’t really make sense. And so I mean that, yeah, there’s totally a way of doing it.

And it sounds like you guys are being very cognizant of, yeah, that it’s not always a fun conversation to have, but it’s also the reality of things, right? And it’s still the cheapest thing probably out there, right, so.

[Tim Woodbridge]
By far, absolutely.

[Mattias]
Yeah. Okay, that makes sense. So like, I mean, I guess I can hash out, if people have listened to the past couple episodes, I might have explained this earlier, but so basically with cap rates, what kind of cap rates are you looking at for the mobile home parts that you’re investing in?

[Tim Woodbridge]
So we don’t go in, I mean, okay. So my partner, Matthias, like he’ll underwrite everything and put everything in the analyzer. I’m not looking so much at the going in cap rate as I’m looking at the business plan and the exit cap rates.

So for exit cap rates, we do like a half point higher than what it is today, just to make sure that we are conservative. And then like the business plan, because so why going in cap rates doesn’t always make sense. Like we bought a park in Sumter, South Carolina and the, oh, I’d say the going in cap rate, we’ll say it was like 6%.

But I got, you know, I think it was like 15% down and 5% interest only payments, seller finance for five years. So it’s like, sure, if I’m only looking at this as a cap rate number, this is a bad deal. Because if I’m going to a bank, I got to put debt on it.

That’s seven and a half percent and blah, blah, blah. But it’s like, no, it’s, yeah, here’s how it’s going to be a good deal. Here’s the business plan.

It’s, you know, when we bought it, the rent was 220. We bought it just this year. So it was like $220 lot rent in a $450 market.

So there’s all these things that we can do to go in and make it nicer and make sure that everyone’s, you know, all of our investors are hitting that gold standard 2X equity multiple. So, yeah, that’s me saying, I don’t always look at that.

[Mattias]
No, I was meeting the exit. I was meeting the exit cap rate. So like if you were, so 220 lot rent that should be 450.

What, how many units were in that or how many lots were in that one? 40. 40?

Yeah. So let’s just say that’s an easy, like over five years, that might be, you know, $300 of rent increase, maybe if rent keeps going up for the five years over the 450, is that?

[Tim Woodbridge]
Yeah, so I’d have to say, I’d have to look at the underwriting, but probably in five years, 550, 600, just to be a little conservative.

[Mattias]
So, yeah, if I just raised the four or the 220 by $300 a month, that’s $12,000 a month times 12, that’s $144,000. So exit cap rate, is that still around the 6% or is that gonna be something different?

[Tim Woodbridge]
So, so put like, I mean, it’s really, because it’s all tenant on home. So, you know, put like a 30% expense ratio on it because it’s, it is, it’s really straightforward. And then I think we have like a seven and a half cap rate, I wanna say.

[Mattias]
Well, I’m just doing the cap, basic cap rate. This is just quick and dirty math here, just to kind of give an example for people to understand, like if it’s just $144,000, either, you know, increase of rent and decrease of expenses, added a year, add a seven and a half percent cap rate, that’s almost $2 million of, you know, equity built into the property. So like it’s, this is where I think it’s a key thing for people understand if they’re not familiar with this kind of model with commercial real estate with syndications, how like it can really make a huge difference.

So like if that was a 400 park or 400 lot park and you only raised it by 50 bucks a lot.

[Tim Woodbridge]
Yeah.

[Mattias]
That’s where like it can make a huge difference even with a small amount. So yeah, anyway, that’s just kind of a brief explanation of how like you can make investments, it can be cash flowing, you know, from day one, and then you can have it double by the end of it because of the magic of cap rates.

[Tim Woodbridge]
I love it. And so what’s funny when on that first park, you know, I bought it at 10 of 35 occupied. And then in a year, we got it up to 19 occupied.

So that was, you know, seven homes we bought, and then two homes like organic people, organic movements, people move their own home. And then when we refited then, I looked at the appraisal and it more than doubled what we paid. And I was like, this is magic.

And so yeah, like I totally get that. It’s crazy.

[Mattias]
That’s the thing that people, yeah, if they’re not, if they feel intimidated, or if this seems like, you know, like, why am I gonna bother with something like this, this is where the magic is. And that’s why, you know, getting with people like you that, you know, know what they’re doing that are really seasoned and find these good opportunities and know how to run them, make it more efficient and know how to underwrite them from the beginning can project how they’re going to get you your double X money back. And that’s just kind of all part of the game plan.

So it’s, yeah, once you kind of grasp that, it opens doors and kind of blows your mind a little bit.

[Tim Woodbridge]
Definitely.

[Mattias]
It’s, it reminds me of like the first time that I learned about the BRRRR method. I was like, wait a minute, I can just like, I can just like, you know, like get a house and then like basically get all my money out of it. And then just do it again.

And like, just keep stacking up houses without having to actually put any down payment in or whatever at all in there with it. So like that’s, I mean, it is, if you were, if you were refinancing, I mean, it’s like same thing, right, I mean, it’s just at a bigger scale. So like, it’s such an awesome model.

[Tim Woodbridge]
Yeah, you can BRRRR mobile home parks, definitely. I’ve done it. So yeah, it’s the same principle.

All the principles of everything are the same. It’s just the scale is a little different.

[Mattias]
I guess on top of that too, so if you were to refinance after you’ve completed your, you know, your value add into the mobile home park, that debt that you acquire that, you know, can be profit to people, right? That’s tax free then too, right?

[Tim Woodbridge]
So yeah, if we, you know, we were talking before, that like, so our gold standard is doubling someone’s money in five years with the caveat of if we love running it and it’s a really good asset, we’ll talk to all of our investors around year four and gauge their appetite for holding onto it. And if, you know, the majority of people want to hold onto it, then we’ll refi, get everyone their money back if we don’t, if we haven’t already refined before that. But make sure everyone’s got their money back and then just continue to hold and cash flow because it is, it’s so powerful.

And then, yeah, everyone’s got their money back. It’s tax free because it’s all debt. And then everyone’s just getting money.

Like, what’s wrong with that?

[Mattias]
Yeah, yeah, no, that’s a key thing. Like, you know, people, if you look, if you kind of do it on a small scale, think about owning a house. I think Brandon Turner talks about this, but like buy a house when your kid’s born and then like put it on a 15 year mortgage or something like that or a duplex or whatever.

And then let that thing pay off or get paid down pretty significantly by the time they’re in college. You can do a cash out refinance and so you will have, you know, not only all the debt payoff that the tenant has done for you, but you’ll have the equity growth as well through that time. And you’ll be able to get all that money out cash and it’ll be tax free as opposed to selling it, which is another option.

But if you sell it, you will then have to pay taxes on the capital gains.

[Tim Woodbridge]
Yeah, there’s so many possibilities. There’s so many.

[Mattias]
Like, you look at the commercial property, the mobile home park. I mean, like, you know, just buy your kid a mobile home park.

[Tim Woodbridge]
Yeah, yeah, and everyone’s gonna be like, whoa, that’s crazy. And it’s like, it’s not as crazy as you think it is. You just have to think, how can I do it?

[Mattias]
Yeah, yeah, yeah. So let’s go back to your first deal. Did you have the capital?

I mean, you said you had a partner at the time to do a down payment. What’d you do there?

[Tim Woodbridge]
I got creative and then my partner brought the rest of the capital. So it was a $250,000 purchase price. We got a bank loan for $175,000.

The seller did a second position that the bank was okay with for $50,000. My partner brought the $25,000 remaining and I paid closing costs, which was like 6,200 bucks.

[Mattias]
Look at that, guys. That’s amazing.

[Tim Woodbridge]
Like, looking back at it, it’s like, oh, this is way easier. You know, it’s straightforward. At the time, it was scary.

I didn’t know how to do anything and I had to figure everything out. So there’s nothing wrong with that. Like, being scared of something and figuring it out and all of that is totally normal.

You just gotta act through it. You move through the fear and the anxiety and whatnot and yeah, that has done me very, very well.

[Mattias]
So now, what was the owner’s incentive to hold a $50,000 note on that property in the second position? So if people aren’t familiar with what that means is that if he were to default, the bank would have first rights to the asset, right? So they could make sure they’re paid whole and if there’s anything left over, then the second position would be able to be paid off.

Is that how it works?

[Tim Woodbridge]
Yeah, yeah. So I think a lot of it had to do with just relationship building. You know, we had a great first phone call together and he was, I learned all about why he was getting out of this property and you know, he was a retired pharmacist.

His daughter is a physician up in Chicago. He wanted to go and see his grandbaby more and every month he had to be at this park to do work on it. And so really, I just, I asked for it.

So like, you know, we were there in person. Like, so I talked to him on the phone. He said, come up to the park.

Let me show it, show you the park. And so we went and yeah, just, you know, being kind of building that relationship a little bit. And then when I made the offer and he rejected my first offer.

And then he said, you know, I can’t sell for anything less than 250. I said, okay, can I buy it for 250? And he said, yes.

And I said, will you finance it? And I only said that because I was hanging out with a lot of people who are, you know, older Southern guys who don’t like the bank. And so like, they were, they’re, I mean, they’re still friends, they’re masters at creative financing.

And so I asked him that and he said, no, but I’ll finance 50. And so originally it was gonna be $50,000 at like 5% over five years, like a short AM. And then like, it didn’t work.

So I had to ask him if he would do interest only for the first year. And yeah, it’s just me asking and just being like, this is why, you know, this is why I’m making this offer. It’s not because I’m a jerk.

It’s not because I want to get like a great deal. I want to give you your number, but like everything here is saying that I can’t. Yeah.

[Mattias]
So. No, absolutely. That’s brilliant.

And it is very true. And it’s another thing that can be really cool in that commercial space is that there can be some more creative deals. I mean, there’s opportunities everywhere, but oftentimes people may have some more assets and they own the place outright.

If he owed $200,000 on this property that, you know, that’s like not a conversation you can have, you have to pay that off. So it is good to know. I think it’s good to just have like be versed enough in the different worlds of real estate investing and have those kind of tools in your belt so that when you come across this unique situation, it’s a puzzle and you’re just trying to fit all the pieces together.

And you’re like, okay, the seller wants this and, you know, to make it work, I need this. And then he just, yeah, you work at it. And you’re not, yeah, again, you’re not trying to take advantage of him.

And he was probably, had it been on the market for a while, was it something that he was like, obviously, I mean, if there was five offers on it and they’re all cash or something, that probably wouldn’t have worked. But I’m guessing there was also the incentive that he just, he did want to sell it.

[Tim Woodbridge]
Yeah, yeah. It was on the market for a while. Yes, if there was cash, like they would have beat me.

And that’s fine, you know. What I realized, a lot of deals today aren’t for me. You know, when I see, I don’t know how they make that work.

Oh, because they’ve got cheaper cost of capital there, you know, or they’ve got a really big 1031. Or they got something that I don’t have, and that’s okay. So yeah, it’s, but he wanted to sell it.

And yeah, I guess I was there at the right time, you know, with the right attitude and the right, like.

[Mattias]
Yeah.

[Tim Woodbridge]
Yeah, let’s figure out how to solve his problem, which was seeing his kids more, or his kid and grandbaby more.

[Mattias]
It’s a really cool example of that. And what an awesome first hit, first at bat. Yeah.

So how often are you able to get creative like that on deals now? Is it often that, you know? So a typical seller finance win for the seller is that they can not have that big hit for capital gains.

So they’re not gonna realize the entire property that in one time. They’re gonna have, you know, payments instead that they might have a down payment, that kind of stuff. But like, you can then also offset those gains if they’re smaller, more easily with things like depreciation and et cetera.

So like, is that come up a lot more, or still on the deals you’re doing on a bigger scale?

[Tim Woodbridge]
Yeah, so every offer I make has a syndicated cash at close offer, has a seller equity offer where they like gift 19% equity back to the park and they, you know, get 2% interest only payments for the life of the loan, then they get paid off. And then the third is like a peer seller finance where it’s like 10% down. And so I make a lot of offers and it’s all that same kind of format.

And I’m like, here’s some solutions. Again, always keeping that gold standard of the two X equity multiple for investors in mind. And just like, here’s what we can do based on this.

And I can defend all of the offers I make. I can show anyone the underwriting. So it’s like, yeah, like a big change in mindset for me was I’m not, it’s not me versus sellers or me versus brokers or me versus anyone.

It’s we’re all on the same page. We all want the same thing. If they didn’t want to sell it, it wouldn’t be on the market.

So they want to sell, the brokers want the deal to close. I want to buy. So let’s all work together and figure out how we can do this.

[Mattias]
Yeah. Yeah, no, totally. That’s where it’s fun.

I feel like that’s where it’s a lot of fun to get creative and to work through an issue. There’s been a couple of bigger creative deals that I’ve done that have been a lot of fun just because I just feel like it’s like a puzzle and you’re like, okay, this is a moving part that doesn’t fit my normal box, but how do I make that work in this scenario? Yeah, it can be a lot of fun.

And so are you all, how many park deals are you taking down a year roughly, give or take at this point?

[Tim Woodbridge]
Let’s see. So last year was the first year that we started syndicating things. So we did three deals and that was seven parks.

This year we’ve done three deals and that’s, what is that? That’s five parks and we have another two deals and three more parks under, or four more parks under contract right now. So I mean, I’m, like I said, very bullish on the asset and we wanna take down all of these.

We see the value and we love the asset class. So yeah, definitely, we do as much as we can and we’re scaling. Our big, big goal is to get to 250 million assets under management by 2030.

And that translates to real world providing affordable housing for 10,000 people. And so yeah, that’s what’s exciting to us now. We definitely have a lot of work to go, but we’re excited about it.

[Mattias]
Yeah, I mean, what’s so needed, the affordable housing. And like you said, you’re probably often taking over from tired landlords that are just kind of burnt out, probably have let things go a little bit. And so you’re going in there and making these places nicer places to live and yeah, providing a real service.

That’s really awesome.

[Tim Woodbridge]
Yeah, yeah, thank you.

[Mattias]
Tim, do you have any gold nuggets you’d wanna share to our listeners?

[Tim Woodbridge]
Yeah, so I feel, you know, this is a very agent heavy podcast and I feel like we’ve done a disservice by not really discussing. So for anyone, you know, making a ton of money in real estate and sick of paying taxes, put some of your money in a syndication and something that gets a ton of depreciation. So we, in the tax returns for 24, we got people anywhere from, oh, 90 cents to $1.50 of year one tax write-off depreciation for every dollar invested. So, you know, make your money work for you. Like sure, you’re amazing at doing what you do and you’re amazing at making money. Now do something to protect your wealth, to ensure that, you know, you’re not getting hit by Uncle Sam with all those taxes.

I mean, the tax code is written as it is for a reason because, you know, there’s all these people who wrote it forever ago and continue to write it who love tax, you know, tax strategies for real estate investors. So yeah, make sure that you are educating yourself on depreciation. And I know, you know, mobile home parks get some of the best depreciation of like any real estate asset.

So by all means, do yourself a favor.

[Mattias]
All right, so to underline that, so like, first of all, real estate agents are real estate professionals considered for taxes and they can offset their entire income from this kind of deal, which is unique. If you had a W-2 job, that would not necessarily be the case. So that’s one thing to definitely highlight there as well.

And I don’t think a lot of agents know that. If they’ve been listening to the show, I’ve been saying this, but it’s definitely good to know that. So again, point two is like, if you invested $100,000 and you got the $1.50, you know, that’s $150,000 off your taxable income that year. And now we have 100% bonus appreciation back. So $150,000 off, right? Which is crazy.

And that is also getting a return on that $100,000. Like you’re getting cash flow from that. So that’s, it’s not just for that benefit.

You’re also getting cash flow for it. And then on top of all that, there’s still the doubling of the money in the five years. That’s the target.

So like, if you think about your standard W-2 job and having a 401k, I mean, this is better. It’s in a, like you said, a very good recession-proof kind of vehicle. It’s real estate tied that, you know, you should be very familiar with.

You can use those dividends that you’re getting, that return on your investment now. You don’t have to wait until you’re 65. You’re getting that, you know, tax break from it as well.

And then again, if it, you know, when it doubles or whatever in five years, you’re getting that money that you can use now. So it’s, yeah, it’s a really smart thing. And if people think this all sounds way too good to be true, you know, I have a number of episodes where we talk about this over and over again.

I think I’ve had CPAs talk about this on the show as well, talk to your CPA, do a little bit of research, but it is a very viable thing. And really your job is to vet the operators, you know, like learn enough that you can make sure that the operators are doing a good job and they know what they’re doing. And then, you know, have enough knowledge to think, okay, be able to read the PPM, like be able to see if the deal makes sense, like if the whole thing’s gonna work as planned, if it makes sense that it’s not, you know, like it’s not a pie in the sky kind of thing.

And if it does, and then you invest your money and you’re just kind of done at that point. You get to file your K1 to get the tax write off and you get the quarterly payments, is that how you do it?

[Tim Woodbridge]
Yeah, yeah, quarterly. And make sure if you’re, you know, anyone’s doing an LP investment, make sure you’re reviewing like your monthly and quarterly documents. Make sure it’s in line with what you were told.

Things happen, it’s not always, but if it’s not lining up, make sure you’re having a conversation. We are very, very big on honesty, even when stuff doesn’t go according to plan, because it’s life, it happens. So make sure you’re, you know, you’re not just accepting what someone says.

[Mattias]
Yeah, yeah, so there’s some staying on top of it, that’s good. But you’re certainly not having to deal with the tenants and deal with all the headaches that are involved with it. And that, I think for a lot of real estate agents, that that might have stopped them from investing in real estate, is that they don’t wanna deal with the headaches of having property, et cetera.

But you’re not getting calls about toilets. And I guess that’s also something that’s great about mobile home parks, if they own their house, they’re not calling you about that anyway.

[Tim Woodbridge]
Generally, I mean, we do have some homes that we rent out, but we have a pretty robust in-house property management team. So, you know, I work with rock stars, it’s really nice. It’s awesome.

[Mattias]
Yeah, no, that’s a great golden nugget. Now, what about a book, a favorite book, one that you think is fundamental for everybody to read, or maybe just one that you’re currently really enjoying?

[Tim Woodbridge]
Early like Dan Martell’s Buy Back Your Time. That is, you know, I was saying earlier how there’s different like stages of my career. And like what I bought before, I might not buy now.

That’s kind of the same with like books. You know, everyone said, read traction. And for a long time, it didn’t apply to me.

And then I work with my partner, Matthias, who’s a master of operations. And he brought in, you know, all the different meetings, like cadences that are in traction. And it’s like, okay, well, I didn’t do it myself, because that’s not my strength.

But like, I am so glad that I work with him. And, you know, he’s implementing it. And like, Buy Back Your Time is kind of the same thing.

Reading it a few years ago, it wouldn’t have made sense. But now it’s like, okay, like, I need to protect my time, because if I’m doing everything, then I’m getting nothing done. So yeah, we’ve made a lot of hires, a lot of great hires based off of that book.

[Mattias]
That’s awesome. Yeah, that’s a great one. And it’s so true.

You’re right. It’s not something, you know, when you first start out, you know, I’ve interviewed people. So I interviewed an agent who, you know, he jumped in and had a full-time assistant right away with a partner, which is pretty unheard of.

And then after the first year of being an agent, he also worked, did not work any evenings anymore or weekends. He was nine to five. And like, that’s the kind of stuff that’s like, kind of hard to see from the beginning.

Usually people go through the grind phase first, where they’re kind of doing everything. But it’s a great thing to keep in mind and to think about for going forward when you feel like you can take that step. So that’s awesome.

Well, I also wanted to go back really fast and say that, you know, let’s say that you have too much depreciation in one year and you don’t need that much. You don’t need that $150,000 or whatever for a write-off. You can actually kind of, I think you can roll that over to the next year.

So just another food for thought if that was a stumbling block for somebody to consider it. But anyway.

[Tim Woodbridge]
As far as I know, I’m very negative every year in all my tax returns. It looks like I’m living off of, I don’t even know, negative money. That’s what I live off of for my tax returns.

I love real estate because of it, you know?

[Mattias]
Yeah, and that might impact your ability to get financing in certain things.

[Tim Woodbridge]
Yeah, yeah, funny story. Yeah, I’m looking for a personal single family house now and I’m having to talk to them and just be like, I found a specialized loan broker for single family homes who works with people in real estate so they can add back in the depreciation. And it’s, yeah, it’s there, you know, for everything amazing, there’s every once in a while, one or two things that I gotta navigate.

[Mattias]
No, but it’s still obviously worth it. So, well, Tim, where can people find you if they wanted to follow you on social media or wherever you’re active?

[Tim Woodbridge]
Yeah, so @tim.woodbridge on Instagram. You know, you were talking about vetting operators and stuff like that. I have a free ebook that you could get, link in my bio, all that good stuff that we put together.

I’m very obsessed with Alex Hormozi in providing value as much as possible. So, if you’re investing with us, if you’re not investing with us, we wanna help people, it doesn’t matter. We just wanna put good out into the world.

And then you could go to wcginvestments.com is our website, schedule a call with us. You can also download that same ebook there. And yeah, I’m just a normal guy who, you know, runs a company that does really cool stuff.

So, I’m always down for a conversation and if we can help anyone, we’re here for it.

[Mattias]
Awesome, I love it. Well, Tim, thanks so much for being on the show. It’s been a lot of fun.

[Tim Woodbridge]
Thank you so much for having me.

[Erica]
Thanks for listening to the REI Agent.

[Mattias]
If you enjoyed this episode, hit subscribe to catch new shows every week.

[Erica]
Visit reiagent.com for more content.

[Mattias]
Until next time, keep building the life you want.

[Erica]
All content in the show is not investment advice or mental health therapy. It is intended for entertainment purposes only.