Thinking about going into commercial real estate? Tune in and discover why you should consider investing in self-storage and mobile home/RV parks.
In this episode, we welcome Gabriel “Gabe” Petersen. He joins us today to break down his experiences as an owner and operator in the space. Gabe is a commercial real estate investor who found his niche in self-storage and mobile home parks. He is also the founder of Great Northwest Home Buyers and Kaizen Properties and, most importantly, the host of The Real Estate Investing Club.
[00:01] – [02:41] From Corporate Employee to Commercial Real Estate Investor
- Gabe talks about how he got into real estate
- What he likes about self-storage
[02:42] – [07:31] Breaking Into Self Storage
- Their first self-storage build
- Lead generation strategies: what worked for them?
[07:32] – [13:00] The Pros and Cons of RV Parks
- The differences between RV parks vs. mobile home parks
- Navigating local ordinances with regard to long-term stays
- There is a lot of interest in RV parks
- How Gabe has financed his deals so far
- Bringing outside capital for the first time
[13:01] – [14:30] Closing Segment
- Gabe shares words of advice
- Reach out to Gabe!
- Links Below
- Final Words
Tweetable Quotes
“Any deal can work. You just gotta make it work.” – Gabe Petersen
“Things always take longer, and things always go wrong. If you take those as facts that are going to happen, then everything else is okay.” – Gabe Petersen
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Connect with Gabe! Go to The Real Estate Investing Club website or email him at gabe@therealestateinvestingclub.com. Check out his Linktr.ee page, too!
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Want to read the full show notes of the episode? Check it out below:
[00:00:00] Gabriel Petersen: We get a ton of inquiries for the long-term RV and, you know, in our Google listing and everything we say, this is long-term only, you have to stay a minimum of three months. And we get a ton of interest. People are like, I want to stay there. I want to stay there for a year. I want to stay there for whatever. I don’t know. It’s interesting.
[00:00:28] Sam Wilson: Gabe Peterson is a commercial real estate investor with a focus on self-storage and mobile home and RV parks. And he’s also the host of The Real Estate Investing Club podcast. Gabe, welcome to the show. Thank you very much. I’m excited to be here.
[00:00:41] Sam Wilson: Hey man, pleasure’s mine. Three questions. I ask every guest who comes to the show, in 90 seconds or less: can you tell me, where did you start? Where are you now? And how did you get there?
[00:00:49] Gabriel Petersen: Nice. 90 seconds or less. Where do I start? I started in corporate, didn’t like it, decided to jump out. And then I started in wholesales and flipping What was the second one? Where am I now? I’m doing self-storage facilities, mobile home park, RV parks.
[00:01:02] Gabriel Petersen: And how did I get there? It was a very up and down road. It was I mean, you know, it’s never linear. And so I started with the wholesales flips. Then I did more flips and then I, man, how did they get from here to there? I think after that, I just jumped in mobile home parks. I had a partner, I met a partner who was really interested in it.
[00:01:19] Gabriel Petersen: I was thinking about going down the apartment route and you know, decided to go mobile home parks with him, bought one, and loved it. And I wanted to stick in commercial. And so here I am now.
[00:01:29] Sam Wilson: Man, that’s cool. That is very cool. It’s a lot of moving, a lot of moving pieces. At some point, it sounds like you focused. You said, Hey, I’m going straight to mobile home parks, or are you still buying those other asset classes such as self-storage and RV parks? I mean.
[00:01:44] Gabriel Petersen: Yeah, so I bought two mobile home parks mobile home RV parks. I like them, but I really wanted to do self-storage. Before getting into mobile home parks, I knew I wanted to get into commercial. I didn’t know exactly what asset class. Mobile home kind of worked out because I had met that partner. But once I did those two, I wanted to look into different asset classes and figure out what really fit. I really liked self-storage. It’s more of a business than it is, you know, people live in mobile home parks, RV parks and self-storage is more of a business. And I liked that. It’s very easy to manage. Very, very, you know, hands-off kind of management style there.
[00:02:16] Gabriel Petersen: Build costs, I mean, they’re going up now, but it’s not as much as, you know, apartment buildings, stuff like that. And so I’ve done a lot in self-storage. And I’m focusing also on RV parks now ’cause I do like the business aspect of RV and I know we have that in common. And yeah, that’s where we are.
[00:02:31] Sam Wilson: That is that’s really cool. So you own mobile home parks, you have been building self-storage, and also looking at RV parks and RV resorts. What was it like? And are you still building self-storage?
[00:02:44] Gabriel Petersen: We’ve bought up to this point. This is the first build. We’re just closing on it now. It’s out in Indiana. It’s got 150 units that exist, and then there’s an additional acreage that we’re planning to double the footprint. So we’re really excited about that first time going through a build and I’m learning a lot.
[00:03:01] Sam Wilson: Yeah, I’m sure. Well, let’s talk about that project a little bit. What type of self-storage is it?
[00:03:06] Gabriel Petersen: The current footprint is all outdoor. Just, well, it’s concrete frame with, it’s kind of an older self-storage. So it has a wooden, you know, a standard like house wooden roof, which is different. We want to put in steel frame, but what’s there right now is concrete cinder blocks with a, you know, a wood roof, like, you know, regular shingles. But they’re all outdoor, you know, we want to do a little bit of climate control when we add in right now, nothing’s climate-controlled. Does have an office on-site, which is good. It’s got fully fenced, including the acreage that we want to expand to, so that’s. And yeah, the acreage that’s there right now, we had thought originally that we just jump in, throw some gravel down ’cause right now that additional acreage is just grass. We’d planned, you know, we’d want it to jump in, throw gravel down and start having people park there, do lease out parking until we can get permits and everything for the build. But the city, for some reason, does not want people to park on lots. It’s just a thing, Indianapolis. They’re just not down. And so that’s not going to be a part of our plan now we’re just going to have to build it’s not, you know, it’s not a problem, but just a thing that we kind of just recently popped up.
[00:04:12] Sam Wilson: How did you identify this opportunity living, ’cause you live in Washington state, right? How did you identify an opportunity and then know that it made sense all the way to Indianapolis?
[00:04:22] Gabriel Petersen: I mean the identification was just off-market marketing. We do a ton of, you know, lead generation, mostly, we used to do a lot of RVMs.
[00:04:31] Gabriel Petersen: But recently it’s been mostly letters and text marketing. Text marketing has been working well and letters always work well. So it came through there, got in contact with the seller, and how did we identify that it was a good deal? Obviously, numbers worked out and this one actually was not a good deal on paper.
[00:04:48] Gabriel Petersen: It was a six and a half cap. Going into it, it’s not a good deal. You don’t want to buy, or at least I don’t want to buy a six and a half cap right now. So it wasn’t great, but the seller gave us, you know, we negotiated I said the price is too high. He said, let’s figure this out.
[00:05:01] Gabriel Petersen: He gave us great terms, seller financing, interest-only so that, you know, kind of allows us to cashflow while we’re doing the build. Once we finished the build, it will be a good deal. It’ll be, you know, 12 cap plus you know, So we’re hoping those numbers work out, but, you know, we use a TractIQ to kind of come up with the net rentable square feet per capita, to make sure that there was enough demand there and kind of understand what we could expect to lease them out at in the future and put it all together and our spreadsheet and decided it was a thumbs up.
[00:05:29] Sam Wilson: Right. I’m not familiar with TractIQ. Can you tell me about that?
[00:05:33] Gabriel Petersen: It’s specific to self-storage. It’s like a software program that does, you know, you could use it and due diligence. You know, you can put in an address and it’ll pop back. You know, what’s the per capital net rentable square feet? You know, how many self-storage facilities are within X number of miles, blah, blah, blah, blah, all the data that you want to figure out, whether this particular area is a good place to invest or not.
[00:05:54] Sam Wilson: Right. Oh, that’s cool. That’s very, very cool. You mentioned a word earlier. I wasn’t familiar with, or an acronym. You said something to the effect of RVMs on the marketing?
[00:06:03] Gabriel Petersen: Oh, yeah. Ringless voicemails.
[00:06:04] Sam Wilson: Ah, right. That’s been catching a lot of, a lot of flack in the industry, I think.
[00:06:08] Gabriel Petersen: Understandably so. And that’s kind of the reason why I stopped is because I didn’t really feel good about it. Ringless voicemail, you’re not actually calling the person, so that’s good.
[00:06:15] Gabriel Petersen: I feel like it’s not, you know, it’s not that annoying. But it is kind of annoying to see you missed a call and then see a voicemail. So that’s kind of the reason we stop there.
[00:06:23] Sam Wilson: Got it. Yeah. So I’m familiar with ringless voicemail, just maybe a little slow on the a, because it’s something I don’t use every day or use it all. That was why I wanted some definition. Really on that. Cool. All right. So you’ve got this climate-controlled, or you’ve got this storage facility you’re building currently. What does opportunity look like for you right now? Again, you know, assuming, you know, you’ve got a mobile home park, you’re building a self-storage.
[00:06:45] Sam Wilson: You’ve got your hands, I think, in the RV resort space. So what’s an opportunity for you to say, Hey, that looks good for me.
[00:06:51] Gabriel Petersen: I mean, right now, it’s just, I’m trying to hire more, an acquisitions specialists to help out with the, I’ve got a ton of leads coming in.
[00:06:58] Gabriel Petersen: And so it’s just going through, what’s currently there and identifying the ones that are actual good deals. Right now I’m focusing on self-storage and RV parks. I’ve got, you know, an absurd amount of data for both sides. And I just need to, it’s just a matter of like getting through it. So I mean, opportunity always comes down to the deal.
[00:07:15] Gabriel Petersen: You know this, I’m sure everybody listening knows this. Any deal can work, you just gotta make it work. So it’ll just come down to whether the seller will give us a good price or terms whether the area makes sense and all that stuff. So right now, opportunity is just getting through that lead, the pile of leads we got and finding the gems.
[00:07:30] Sam Wilson: Right, right. Absolutely. Tell us about the RV park and RV resort side for you guys. You currently own in that space?
[00:07:37] Gabriel Petersen: So we have an RV park, but it’s a long-term stay RV park. It doesn’t operate as an, as a resort. The average tenant stay there I think is like a year and a half, something like that.
[00:07:47] Gabriel Petersen: So it’s really long. But it’s still, you know, the rental prices are higher than you would see in a mobile home park. The, our mobile home side is, you know, we have a mobile home park that’s within a half-hour of that RV park. The mobile home, they rent for 350 and the RV rents for 450, that’s market for each side.
[00:08:07] Gabriel Petersen: And so RV, long-term stay RV, for some reason, rents higher. And so that, you know, that’s the only RV we have right now. I have more interest in the actual RV resort side than long-term stays. It’s good. They cashflow well. But the resort side seems more, more interesting to me.
[00:08:23] Sam Wilson: Right. Yeah. Talk to us a little bit about that long-term component. Is this outside of city limits where it’s like a county only, and there’s no restrictions on people living in their RVs year-round?
[00:08:34] Gabriel Petersen: If it’s outside city limits, it’s like right on the cusp. I don’t remember to be honest.
[00:08:39] Sam Wilson: These people are there 12 months out of the year?
[00:08:41] Gabriel Petersen: Yeah. Yep, they’re there.
[00:08:43] Sam Wilson: Got it. Okay. Yeah, a lot of, a lot of what we’ve encountered in the RV space is that if it’s inside city limits, there’s usually an ordinance that prevents them from living there. Like, Hey, you know what? They can’t, they can’t live there 30 days in a row. They have to go somewhere else. They need to be there.
[00:08:58] Sam Wilson: They can stay for a couple of weeks and they got to leave. There’s some, each city and each municipality’s going to have their own kind of criteria.
[00:09:04] Gabriel Petersen: The city called us on that because then you have an additional tax. I can’t remember what the tax is called, but it’s like a short-term state tax.
[00:09:10] Gabriel Petersen: And so we just let them know that, Hey, these people stay there for longer than 30 days. And they didn’t tax us on it. So, but I think we are outside of the city limits, we must be county.
[00:09:19] Sam Wilson: Yeah. Well, and again, maybe the city allows it. It’s again, this is on a, there’s a very hyperlocal ordinance sort of thing. I just was really curious what that RV, long-term RV park is like. Why is it an RV park and is there a potential to convert it to a mobile home park? I guess if the cash flow is higher, why would you?
[00:09:40] Gabriel Petersen: There is not a potential to convert it to a mobile home park ’cause the lot size is smaller for RV versus mobile home. And so it fits RVs, does not fit a mobile home. It used to originally it was a KOA, Kampgrounds of America site. So it has at the front of the property, there’s this huge structure. It used to be like, must’ve been like a rec room, kind of common room with an apartment on top.
[00:10:04] Gabriel Petersen: And then public bathrooms. And so it looks, and it also has campsites with electrical which are, you know, are way small, but you can’t put any, we don’t have any use for those there. But yeah, it looks just like a KOA, but now there’s just, long-term stay RVs. The structure is actually really nice.
[00:10:18] Gabriel Petersen: We’re glad we got that because the top unit the apartment on top, that’s where our property manager lives. And then she has the full bottom to do events. She has her office down there, all that sort of stuff. We also have laundry, laundry units in the facility. It works out pretty well.
[00:10:33] Sam Wilson: So if I’m hearing you right, just to talk about the metrics of the RV long-term park, the spaces are smaller. And they rent for more dollars per month. So, yeah, I mean, again, both of those are compelling metrics as to why maybe a longer-term RV park would be, maybe be something to look at versus even a mobile home park.
[00:10:51] Gabriel Petersen: Yeah. And we get a ton of inquiries for the long-term RV and, you know, in our Google listing and everything we say, this is long-term only, you have to stay a minimum of three months. And we get a ton of interest. People are like, I want to stay there. I want to stay there for a year. I want to stay there for whatever.
[00:11:07] Gabriel Petersen: I dunno, it’s interesting. It could be due to the price of housing out here in Washington state but yeah.
[00:11:13] Sam Wilson: That’s really, really cool. Are you actively looking for more RV parks?
[00:11:16] Gabriel Petersen: So I have a national database. Long-term, short-term, doesn’t matter to me.
[00:11:22] Gabriel Petersen: I’m just, you know, I just kinda jump on opportunities as they, as they present themselves. I would prefer, I’d like to go into the actual, you know, resort side. I think that would be fun. If, you know, if the long-term stay RV part popped up, I’m not going to, I’m not going to turn my nose to it.
[00:11:35] Sam Wilson: Right. Deals and money. I say it over and over on this show. Those are the two things that we need for this business go around. Sound like you’re solving the deal side of it. You’re an excellent marketer and you sell, like you said, you’ve got more leads coming in and really, you know, really how to filter through and figure out which ones are the ones you want to chase. Talk to us about the financing side of these opportunities though. What does that look like for you?
[00:11:56] Gabriel Petersen: Yeah. So, I’m actually just doing the first one, all the properties that are bought so far, I’ve done it with my own money, money from wholesales that I’ve done or money from, you know, very close family members.
[00:12:07] Gabriel Petersen: Like my parents, my sister, you know, close friends, stuff like that. But just recently, this, deal that I’m doing in Indianapolis, I’m actually it’s going to be partnering with a guest that I had on my podcast. So this is the first one that I will be bringing outside capital for. And I’m pretty excited that, you know, it’s it kind of capital can be kind of the barrier that a lot of investors run into, and I know I did at, at many points in my career.
[00:12:28] Gabriel Petersen: And it’s kind of seeing the potential of just, you know, if you can find a deal and you can run the deal, there’s capital out there. There’s plenty of people who are willing to, you know, support you in the, in the capital side.
[00:12:38] Sam Wilson: Yeah, no, that’s, that’s, that’s very cool. I love the idea that some people ask me all the time. They’re like, why do you podcast? Why do you run a daily show? I was like, well, it’s because I meet amazing other investors in the space and the number of deals that we’ve put together just from running the show, it’s pretty astounding.
[00:12:54] Sam Wilson: So I love, I love that you’re partnering with one of your previous guests on this opportunity in Indianapolis. Before we’d go into the last question of how our investors can get in touch with you and learn more about you. Tell me, I mean, is there anything else that you’d love to share with our guests, lessons you’ve learned on the way things you feel like people should be paying attention to or doing right now that would directly impact the real estate investing career?
[00:13:16] Gabriel Petersen: I mean, one lesson that I kind of take from my own experience is that it always takes longer than you think it’s going to take. Even today, I need to, I always try to remember those two facts, that things always take longer and things always go wrong.
[00:13:29] Gabriel Petersen: And if you take those as facts that are going to happen, then everything else is okay. And so if you’re out there and you’re just getting started or you’ve got maybe one or two properties under your belt and you’re feeling the pressure, just know that you, if you just keep going it’ll it’ll work out.
[00:13:43] Sam Wilson: Absolutely. That’s sound advice. Gabe, certainly appreciate that. If our listeners want to get in touch with you or learn more about you, what is the best way to do that?
[00:13:50] Gabriel Petersen: Best way is through the podcast website. That is therealestateinvestingclub.com. And that’s it. therealestateinvestingclub.com. My email is gabe@therealestateinvestingclub.com as well.
[00:14:01] Sam Wilson: Awesome, Gabe, thanks for your time today. I do appreciate it.
[00:14:04] Gabriel Petersen: Sam. Thanks a bunch.
