42) Buying RV Parks & AI Uses in Real Estate

Real Estate Investing with House Money

House Money Weekly

In this week’s House Money Weekly segment, Lauren and Alan get together with their special guest Jojo. They discuss blog 140, 3 Red Flags You Need a Sewer Scope ASAP. Sewer Scope is like a little snake with a camera on it that if you put it down, you can tell if there's cracks or leaks. Red flag #1 is foundation issues. When you see cracks, it's tilting, or it's wobbly could be caused by water. Alan always tells everyone that water is the number 1 enemy of any home, it can be rainwater or plumbing related. Lauren suggests getting gutters and downspouts to keep water away from your building. Red flag #2 is evidence of mold. Everyone is afraid of mold, and they think that is the silent killer of a home. Here's a thing, mold can only survive with a source of water so if you take away the moisture, it goes away and it dies. Having mold means you have a water source that needs to be taken care of so you’ll be needing a sewer scope. Red flag #3 is if you see sinkholes in your yard. Sinkholes are also caused by water and it is typically seen in the front yard. It occurs if there's a leak and that area is soft. That's why there's a little bit of a sinkhole but if you’re inspecting no homeowners will let you dig a hole to figure out what's going on. That is why you have to put the sewer scope down. Lauren won’t buy a house if there’s a sinkhole because sinkholes in Florida are intense. Then, the hosts get into some deeper plumbing discussion.

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Real Estate Is Easy Interview

Lauren interviews Matt Whittermore. He is based in Syracuse, NY, and has been in real estate for 12 years now. He worked as an employee doing commercial mortgages and financial analysis and he went on to build a portfolio of 40 apartment units. He has since transitioned for the last 3 years to 3 campground/RV parks. Matt went from having apartments to owning RV parks because he didn't really love the dynamic of being a landlord in New York on the apartment side. He is always looking for something more interesting and something that will add more cash flow. Matt first looked at mobile home parks because he has been a fan of that model and when looking for deals there, he had (accidentally) reached out to a number of campground owners because a portion of the database was actually miscategorized. Matt's RV Parks are in the northeast which is outdoorsy, close to nature, wildlife and bugs and It's truly a hospitality property. Some RV parks around the country are more like transient housing or affordable housing while he is in hospitality campgrounds. Matt sees RV parks as a people business in which you have to constantly welcome them back, you should have a really good staff that treat people really well and give them a reason to return and keep returning. Lauren sees short-term rentals and RV parks as similar when it comes to hospitality, except Matt has full time employees that are living there during season. Matt's future plans include teaming up and joining forces with someone who develops interesting technology and has a growing portfolio of campgrounds. Lauren asks Matt if new investors should try RV parks and Matt think it's not a bad niche. And lastly, Matt makes real estate easy by going big because all deals take a similar amount of work. Alan agrees that $100k and $1 million properties are evaluated the same way. In many cases, the million-dollar loan could actually be easier to get. Also, imagine rent increases across a larger portfolio. And you have one pest control bill, landscaping bill, etc. Jojo is a fan of starting smaller by getting base hits.

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Guest Host Jojo discusses how artificial intelligence will impact big data and real estate investing. Jojo always has the thought "how can I make my processes and my systems work better?" and he thinks artificial intelligence is going to be the answer. Lauren brings up when Zillow was doing their home buying and they were running their analysis with AI and it did not work out. The computer was like data in, purchase price out and the purchase price is way too high. Alan thinks that AI underwriting works if you’re in a townhome community where every building is the exact same size and square footage and in the same location. Less tangible things, like power lines, are difficult for AI to consider. Jojo points out that AI is getting much better very quickly. Lauren agrees that AI will be good, but it isn’t there yet. Alan thinks it will take a human to parse out the numbers. Jojo thinks AI will eventually help with communication for landlords as well.

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