🏡 Mobile Home Park Gold Mine: Cindy Hook Reveals How To "Rent Dirt" For Massive Returns 💰

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THE ACCIDENTAL REAL ESTATE MOGUL 🏘️
In this value-packed episode of The Real Estate Investing Club, I sit down with Cindy Hook, co-founder of Creative Real Estate University and key player at Sonos Capital. Cindy shares her fascinating journey from an "accidental landlord" during the 2008 housing crash to becoming a specialized mobile home park investor generating exceptional returns.

MOBILE HOME PARK INVESTING SECRETS REVEALED 💡
What makes this conversation so valuable is Cindy's candid breakdown of why mobile home parks deliver such impressive cash flow. As she perfectly explains, "When you end up renting dirt...when you turn all those park-owned homes into tenant-owned homes...that's what I love." This business model creates a unique situation where maintenance costs remain minimal while cash flow stays strong - a real estate investor's dream scenario!

THE SOLO K RETIREMENT HACK 💼
One of the most eye-opening segments covers how Cindy leveraged her retirement funds through a "Solo K" to fuel her real estate investments. For anyone with retirement accounts sitting in low-yield investments, this strategy offers a potential pathway to dramatically higher returns. Cindy explains how she moved money from her recruiting company's 401k into a self-directed account that allowed her to make her first mobile home park investments.

SONOS CAPITAL'S WINNING FORMULA 📊
Cindy provides a detailed look at Sonos Capital's investment criteria, revealing they target:

Parks with at least 50% current occupancy
Locations with 50,000+ population (no rural areas)
Areas with $40-50k median income and positive job growth
Properties with 50+ spaces
Value-add opportunities including bringing in new homes

Their disciplined approach focuses exclusively on mobile home parks - avoiding the "shiny object syndrome" that plagues many real estate investors. This laser focus has allowed them to excel in this profitable niche.

AVOID THIS COSTLY MISTAKE 🚨
Perhaps the most valuable warning Cindy shares comes from her experience with failing septic systems. This often-overlooked aspect of mobile home park due diligence can cost investors tens of thousands in unexpected repairs. Her advice to have "multiple people look at that septic system before you buy a park" could save listeners from making the same expensive mistake.

Connect with Cindy at cindy@sonoscap.com or visit sonoscap.com to learn more about their investment opportunities.

#MobileHomeParkInvesting #CashFlowRealEstate #RentingDirt #PassiveIncome #ValueAddRealEstate #RealEstateInvesting #RetirementInvesting #SoloK #SelfDirectedIRA #PhoenixRealEstate #MobileHomeParks #RealEstateInvestor #CashOnCashReturns #SellerFinancing

Transcript

0:08

all right welcome back to another episode of the  Real Estate Investing Club i hope you guys are  

0:13

having a great day wherever whatever day it is  for you and whatever time whatever day it is i  

0:18

don't know i screwed that one up i always do at  the same time but this time I didn't anyways it  

0:22

is a nice and sunny day here in Seattle uh so I  hope you guys are having a good day as well we are  

0:27

talking with Cindy Hook today she is from Sonos  Capital and she's also the co-founder of Creative  

0:33

Real Estate University a lot of experience here  specifically in mobile home parks which you guys  

0:38

know I love to talk about so Cindy I am excited  to jump into this thanks for hopping on yeah  

0:43

thanks for having me on this wonderful Friday  wonderful yeah we're here uh I'm here in Tacoma  

0:49

i know you're in Arizona so you got sun is not  a rarity for you but it's nice and sunny here  

0:54

so we're excited yes good yes all right i told you  before we get on here we always like starting with  

1:01

stories um we like to hear how people got to where  they are so why don't you take us to the beginning  

1:06

of your story in real estate and tell us uh how  you got here okay well back in the wonderful  

Cindy's journey from accidental landlord during the 2008 crash to mobile home park investor

1:12

crash of 2008 uh I owned some property in Boston  right couldn't sell it but I could rent it so I  

1:24

became a landlord and I was like "Wow look at the  little extra income coming in." Right um so that  

1:33

is truly how I fell into real estate investing  was when I couldn't sell my properties in Boston  

1:42

um because of the market yes you're an accidental  real estate investor which uh it's it seems to  

1:48

be a common theme on this podcast is people they  don't intend to be they don't set out to be real  

1:52

estate investors but somehow they stumbled into  it and then they're like "Wow this is actually  

1:57

pretty cool." And uh couple years later here they  are yep and then I sold those properties um and  

2:06

you know kind of got out of the real estate game  for a little bit right and then I happened to my  

2:13

um my husband's um parents passed away and they  we ended up with a house and none of the siblings  

2:21

want it but I'm like I'll take it you know like  we're going to take it you know like so we we we  

2:28

grabbed that um a couple years ago and oh my god  the cash flow on that single family is insane um  

2:34

I still I mean we still have it today um  but um and then we have a bunch of other  

2:40

single families across the country and then how I  actually got into mobile home park investing was  

2:47

um I had a 401k from my own company okay i own a  recruiting firm on the side as well and so I had  

2:56

a 401k and was sitting there and as you know  doesn't make anything in the market and um I  

3:03

joined a couple real estate mentorships and um you  know lo and behold someone said to me or I heard  

3:10

it somewhere I can't remember where um a few years  ago "Oh Cindy why don't you use that 401k?" I'm  

3:17

like "Well it's it's tied up." "Oh no no no you  can um move it over to us uh solo K." And I'm like  

3:24

"What i can make you know use that money and make  you know double digit returns." and you know like  

3:31

the lights sparked and you know like fireworks  right and so anyways long story short I moved that  

The Solo K revelation: How Cindy leveraged retirement funds for real estate investing

3:36

money over to a self-directed uh or solo pay um  I found an amazing partner he's still my partner  

3:44

that I refer tons and tons of people over to to  him um who is an absolute guru in self-directed  

3:52

and it's actually checkbook control um um  self-directed and uh solo case and I started with  

4:01

that money and invested with another gentleman who  was a who already had like 12 parks and he was my  

4:11

first dabble into mobile home parks few years ago  i just was a private money lender to him okay so  

4:20

he on the side taught me about mobile home parks  okay so then um me and uh a couple of my other  

4:29

partners we ended up buying up mobile home park  in Oklahoma we don't have that park anymore so I  

4:34

got my dabble as a um as an operator i will first  tell you and raise my hand here and tell you I do  

4:43

not like the operations i am not an operator  it can be rough if you have the wrong property  

4:49

management team in place i did not like that but  what I do like is I like being in a fund hence now  

5:01

we fast forward to Sonos's Capital because now I  have my money in the fund right now I'm an owner  

5:10

but I don't have any headaches that is the beauty  of it okay uh yeah that makes a lot of sense what  

5:18

type of fund did you set up it is well it's a  it's a 506c okay fund yep and you're using that  

5:26

to invest in other people's deals or are you still  buying your own no um actually Sonos Capital is  

5:33

the owner is Walter Johnson so I work with Walter  okay and it's his fund we're in Sonos Capital Fund  

5:41

2 sonos Capital fund one he actually did with his  own capital um and what he does is he goes out and  

Why mobile home parks offer exceptional returns when you're "renting dirt"

5:50

finds the parks from your mom and pops right and  um he does all that you know the backend stuff  

5:58

right the numbers guru the negotiations and I help  people invest their money with no headaches and no  

6:06

returns i mean no headaches and no you know what  I'm talking about no no tenant calls at night yeah  

6:12

that's always nice um so earlier you had mentioned  solo Ks and uh the self-directed I've actually  

6:19

never heard of a solo K um what is that really  well I I got out of um corporate i had a IRA in  

6:28

corporate and I liquidated it in order to get into  real estate um which luckily that worked oh solo  

6:34

okay so if you have a business okay um you could  have a so so you could you could go get an LLC and  

6:41

say this is my business now I'm not the guru so  everyone's listening there i can set you up but  

6:48

this is I I know enough to be dangerous okay so  you if you have a real estate company you have an  

6:54

LLC right you can use that LLC as a solo K okay  so if you have an old 401k what does the K stand  

7:03

for is it anything specific i don't It's like 401k  so okay fair enough all right thinking high level  

7:13

here okay yeah yeah yeah yeah okay so anyways what  you can do is you can move that money over into um  

7:21

a solo K so mine is my solo K is actually tied to  my recruiting firm because that is my own company  

7:31

of a real estate company right you run an LLC it's  you could technically have a a solo K interesting  

7:39

okay um so what what specifically about uh  mobile home parks let's go back to that topic  

7:45

what uh about mobile home parks did you did you  like once you started getting into it uh oh the  

7:51

cash flow the abs the cash flow um the cash on  cash is insane especially when your maintenance  

7:59

is low when you're when you end up renting  dirt right when you turn all those parkowned  

8:04

homes into tenant owned homes and you're renting  dirt that is what I love i mean essentially you  

8:12

know I always tell people when I'm when they're  listening to me talk I'm like think of a parking  

8:17

lot when you go into when you park your car in  a parking lot right you're renting that little  

8:21

space well that's what we're doing essentially  they own the home but we're renting the the dirt  

8:28

and if something goes wrong in their home we are  not responsible for it they are so our maintenance  

The septic system warning every mobile home park investor needs to hear

8:35

is low so that ends up being put back on you know  we get the cash flow all of all of us investing  

8:40

in it yeah yeah um you're still responsible for  the utilities which can be a big uh a big bill  

8:46

eventually um especially if you got those septics  we've had a couple septics fail and man the last  

8:51

one we had to do um because of the the county  it was in they had these crazy requirements and  

8:56

it had to be like this i can't remember the system  but it is a special system and it costs $45,000 to  

9:01

put in oh yes and so uh you got to watch out for I  mean you know just watch out for septics they they  

9:08

can definitely fail and that is uh that can be a  problem but um septic systems can So we actually  

9:14

don't buy parks anymore with septic systems but  I'll tell you my first my first park in Oklahoma  

9:19

it was a septic system so I know the pain yeah  yeah they um yeah I wouldn't say it would prevent  

9:27

me from buying a park if it had septic well I  know that because I've bought multiple parks with  

9:31

septic systems but it's just something I'm always  wary of um interesting so uh is there any What's  

9:37

your guys' criteria today what are you looking for  what What kind of parks are you buying so we're  

Sonos Capital's specific criteria for selecting profitable mobile home parks

9:43

buying um parks that are cash flowing currently  right that have at least a 50% occupancy um Okay  

9:53

so you guys are looking to do infill yeah infill  and basically value ad so we're going in there  

9:59

and doing value ad and holding it for about six  years and then and then selling off yeah and the  

10:06

value ad um is it only infill or what other  types of are you guys looking for undervalued  

10:11

rents uh like what are you guys looking for  undervalued rents we'll go in there and add  

10:17

uh like I said new homes and sell those we will do  Oh you guys bring in brand new homes yeah we bring  

10:24

in brand new You guys work with like uh um can't  remember the big like Clayton homes or something  

10:29

like that yes exactly that's who we exactly work  with and then we um we it could be dog parks it  

10:37

could be barbecues it could be gazeos it could  be just fixing the electrical you know could be  

10:42

fixing the putting flowers it it's just all value  ad yeah um so infill I love infill parks they are  

10:52

um I found that it it can definitely be a little  bit bigger of a project than you originally expect  

11:00

when you're doing infill parks uh give us a little  bit of more details what you guys look for when  

11:05

you're looking to infill um specifically around  the criteria you look about the metro maybe or  

11:11

um just what you're looking for in the park  when you're when you're buying an infill park  

11:15

so when we we want at least 50,000 50,000 people  or more in population want a rural area we won't  

11:24

buy anything in rural we want to know that there's  a medium income of you know around 40 to 50,000  

11:32

um we want to know that there's plentiful of jobs  you know positive um employment yes positive yeah  

11:41

posit Yes exactly so those are the things that we  look for we don't really tend to buy small parks  

11:47

it's usually 50 spaces or more um and um you know  we we try to I we're either buying them on seller  

11:56

financing or cash oh all cash yeah it could  be all cash too oh oh you guys find Okay yeah  

12:04

like hard money loans kind of stuff makes sense  yeah seller financing we've had a lot of luck  

12:10

um with seller financing specifically with mobile  home parks and RV parks um those owners probably  

12:16

because they're more mom and pop they tend to  be a little bit um they they are more willing  

12:22

to hear the seller financing story which is a good  story it's a benefit for both you as the buyer and  

12:27

you and them as the seller um but I found that  mobile home parks RV parks specifically they  

12:33

uh I've had we've had a lot of success there um  you guys find the same thing oh yes you because  

Why seller financing works so well with mobile home park acquisitions

12:38

twice plus years ago there wasn't there were there  really weren't any there wasn't any financing for  

12:46

mobile home so a lot of these mom and pops kind  of already have heard that like what do we do  

12:53

there's no financing so maybe they even when they  bought their park or 30 years ago they they were  

12:59

probably you know under the same kind of pressure  that they had to figure it out too with all cash  

13:04

or whatnot yeah yeah the last park we financed um  one we bought in December of last year and it was  

13:12

ridiculous getting that thing financed to you  know when I looked at the P&L I was like this  

13:17

is a slam dunk this is a killer deal nobody's  going to pass on this I took it to I literally  

13:22

called like 40 or 50 banks and just people said no  no no it was uh banks do not like parks um I don't  

13:30

know why because they they have cash flow you know  it's it's there so it's it's interesting how much  

13:35

they tend to stay away from those um how about RV  parks uh long-term stay RV parks are a thing that  

13:42

is it's becoming more popular we have a few that  run very well um is that something that you guys  

13:47

look into or are you only sticking with the mobile  home parks we will look at parks that have some RV  

13:53

spaces but our goal is just the mobile home parks  yeah yeah that makes sense are you guys looking  

14:00

at other um other types of structures to bring in  you know mobile homes are the traditional one now  

14:07

they're coming out with like 3D printed homes  and and box box or whatever storage unit homes  

14:13

and a whole bunch of different styles have you  looked into any of those uh not I don't think that  

14:19

we would be opposed to it but we are trying to  keep that mobile home park model so everything's  

The challenges of conventional financing for mobile home parks

14:25

unified yeah makes sense makes sense um we  recently looked into um the storage container  

14:31

homes because you can get you can turn them into  duplexes essentially and in specific markets  

14:36

especially in Texas where you have migrant workers  it seemed uh from one of our parks it seemed like  

14:40

it made a lot of sense but um they're still pretty  expensive i thought that they'd be cheaper but  

14:45

they're not and so I don't know it's uh it makes  more sense just to go with the traditional mobile  

14:50

home yes they're and they're nice the new ones  yeah yeah absolutely they uh they're not your  

14:56

your typical typical home when you walk into those  newer mobile home mobile homes they're they feel  

15:02

like a home yeah they feel like a home you're  absolutely right all right so what does uh what  

15:08

does the next you know two to three years look  like for you guys what are your goals what are  

15:12

you trying to do yeah so the next we're just about  to finish off this fund um two uh which is super  

15:20

exciting for us and then we're going our next  fund is going to be fund three which is already  

15:25

in the works and that is gonna have it's going to  be a bigger fund and we're gonna have more parks  

15:32

in that fund so that's what we're gearing up to  at Sonos also only mobile home parks mobile home  

15:39

parks that's what we It's your bread and butter  that's our bread and butter you know I like it  

15:44

that's what we know right that is good discipline  i did not have that discipline i started buying  

15:48

self- storage facilities too which I also like but  uh there's you know there's a a benefit to only  

15:54

buying one asset because then you get really good  at that single asset um and you know the whole  

15:59

uh shiny object syndrome is difficult in real  estate for sure damal right he just kept buying  

16:04

mobile home parks yeah yeah yeah he had uh um they  had the what was his company's name something like  

Value-add strategies: How they bring in new Clayton homes to maximize returns

16:11

Lifestyle Lifestyle why do I because my company  recruiting company's called Lifestyle too oh there  

16:17

you go easy to remember yeah all right well hey  I just took a peek at the clock it looks like we  

16:22

have run down the time so it's time to jump  into the quick question round are you ready  

16:27

oh I'm ready as ready ready as you can be all  right let's start with education um I need two  

16:32

recommendations it could be any form of education  it could be a conference you've gone to mentorship  

16:37

program you've been a part of a book you've read a  movie you've seen whatever but two recommendations  

16:41

one for general life wisdom and then one  for real estate okay well the Who Not book  

16:49

wonderful wonderful wonderful book that's what I  recommend and I you know I gotta go back to my to  

16:55

Pace Morphy sub too yeah he is uh he has a good  good channel and he gives a lot of good advice  

17:01

so good recommendation all right let's go back uh  let's go back a few years go back to your younger  

17:06

self the Cindy who was just um realizing back in  I think you said 2008 that she could not sell her  

17:12

Boston house and she needed to rent it go back  to her look her in the eye give her one piece of  

17:17

advice moving forward um it's a good thing that  you didn't uh sell that house cuz look where you  

17:26

are today there you go yeah it reminds me of that  um that that one fable it's like a Japanese fable  

17:33

or something where the the old wise man people  in town come to him with bad things and he's  

17:37

like "It could be good it could be bad you never  know you just have to wait." And that is so true  

17:42

with almost everything in life something that on  the surface seems bad um 10 years down the road  

17:46

it might not might not actually be bad it might  have a silver lining that you don't see yet you  

17:50

just got to keep trudging forward all right that  leads us to the next question this is about the US  

17:57

it is a big place there is a lot of opportunity  out there give me the single metro you're most  

18:03

excited about investing in today phoenix phoenix  all right four mobile home parks four mobile home  

18:09

parks yeah okay right on i this is my completely  naive view i've not invested in Phoenix um so this  

18:18

nobody should take this this this view take it  with a grain of salt how about that but I always  

Sonos Capital's upcoming Fund 3 and their disciplined focus on mobile home parks

18:23

see Phoenix and I'm like "Where are your guys'  water you're going to run out of water." And  

18:26

so I'm always afraid of of like looking at deals  we're never going to run out of water we got the  

18:31

Colorado River yeah there you go all right next  question is about finding deals it all starts with  

18:37

getting in contact with the seller and penning  that purchase agreement so what is your favorite  

18:41

way to generate leads and find new deals oh my god  sending chocolates sending chocolates go more into  

18:48

that or sending personalized videos oh okay my  goto yeah I have had success with videos those  

18:57

definitely work chocolates though i've never done  that so you send uh you find a seller you're like  

19:02

I want to want to be top of mind so you send them  chocolates yeah why not it's genius i like it all  

19:10

right um next question is about lessons learned  not every deal that we get into goes the way we  

19:17

expect it in fact many times things go wrong um  but we get to learn a lesson in those moments  

19:22

so what was a deal that went a little sideways  for you guys and then what was the lesson you  

19:26

pulled from it oh you want to know this is the one  with the septic ah yep the septics always bite you  

19:34

make sure you have multiple people look at that  septic system before you buy a park what happened  

19:40

to it oh it was Yeah it was it went downhill  yeah that's I mean you know you've been in  

19:48

septic you've had septics it just went downhill  when we you know about a year into it so but yeah  

19:55

that was very uh cost us an arm and a leg mhm  those septic systems man they are uh they are  

20:04

you know they work but when they don't work that's  the problem that's the biggest problem and what I  

20:10

didn't realize before I got into real estate you  know I came into buying mobile home parks without  

20:14

any experience i hadn't even bought a Well I had  bought houses i'd boughten I'd flipped houses and  

20:18

stuff but I never really had a house that had  a septic system on it and so I never really  

20:22

understood septic systems and I didn't realize  that really the leech field is a big it it can  

The septic system lesson that cost them "an arm and a leg"

20:28

go wrong like you you don't think of it as having  any components that could fail but um leech fields  

20:36

definitely fail and when you have to replace them  in a county that doesn't like you know doesn't  

20:40

really work with you it can be difficult so good  lesson learned septic systems you got to be wary  

20:44

of them um and that leads us to the last question  this is for the listeners you've given us a lot to  

20:50

think about i'm sure people want to reach out get  in contact with you uh this is a two-parter where  

20:54

can they find you and then what can they expect  when they reach out um they can find me uh well  

21:00

you can go to ww.sonoscap.com sonoscap.com  and you can reach out to me at cindy c i n d

21:06

ysonoscap.com and when they reach out you know  we have a zoom we'll just chitchat and want to  

21:14

learn a little bit about their background they  can learn a little bit about Sonos and we'll  

21:17

see if we're a match and a fit and if they  want to rent dirt like me the best the best  

21:22

asset class there is then they can dive right in  and I also given my knowledge on solo Kays and  

21:30

self-directed IAS Nice all right perfect i will  put that link in the show notes show notes yeah  

21:36

in the show notes so if you guys want to reach  out all you got to do is click that more in the  

21:40

description it'll pull down that full description  and in there you can find Cindy's links all right  

21:46

that wraps it up thank you very much for on the  show thank you so much i appreciate it absolutely  

21:52

for everybody who's with us today thank you  guys for showing up you are the reason we do  

21:56

this so if you guys have any questions reach  out to me Gabe at the realest estateclub.com  

22:01

if you guys want to support the show leave  us a review other than that I hope you guys  

22:04

have a great week keep rocking real estate and  I look forward to seeing you on the next episode