2022 Market Update with Frank Rolfe

April 8, 2022 by Vinay



00:01 Frank Rolfe
Welcome back the 2022 affordable housing Summit. Our next guest is Max Baker. You may already know Max, Max has been brokering mobile home parks now for about a decade and a half and is with The MHP Broker. Lots of listings, lots of activity Max, real glad to have you. And can you hear us? Okay.

00:20 Maxwell Baker
Hey, Frank, I can hear you. Thanks for having me.

00:23 Frank Rolfe
Great. Well, you bet. Thanks for being here, Max. So let’s jump right into it. Then let’s talk for a minute about markets. What are some of the hot markets right now out there for mobile home parks, in your opinion?

00:35 Maxwell Baker
Ah, so I specialize here in the southeast and we cover about 15 states, but mostly here in the southeast right now. The biggest market that we’re seeing a lot of velocity in is North Carolina. I think in my data, we saw 100, close to 140 trades last year by itself.

01:00 Frank Rolfe
And why is that? Why would North Carolina be hot right now, in your opinion?

01:04 Maxwell Baker
There’s just more MSA’s in that market that have a lot of growth. Whereas like, you go to Alabama, there’s still some MSA there, but Alabama may have four whereas North Carolina will have I don’t know, seven or eight. So, there’s just more activity economically in that state in some of the other areas in the country.

01:30 Frank Rolfe
What about as far as areas that seemingly are cooling? Are there any areas that you that were hot once which are now cooling down? In investor excitement? Or How’s that looking?

01:39 Maxwell Baker
You know, right now, there’s not Frank, there’s really not much cooling going down at all across the board. I would say that there’s just hasn’t been any cooling man. I mean, it just, we put out stuff now in a second because we specialize in secondary tertiary markets and small medium, occasionally will dip into the larger communities. But in the past, it was very tough to sell those types of communities. But now since all the primary markets that have larger communities have been gobbled up by people like yourself, there’s just not too much going on. With you know, the big deals trade, they still trade but they just don’t trade as much as the secondary and tertiary markets and the smaller ones, because here in the southeast 80% of the community population is going to be less than 50 units. So on that side of the coin, that area of the size of communities is actually getting really, really hot. So as far as cooling, I’m just not seeing it.

02:57 Frank Rolfe
Right and then what about the state of Mississippi? Is there any activity in Mississippi coming up or it’s missed? Like, what’s going on with

03:06 Maxwell Baker
Mississippi is an interesting area. I mean, there’s really just three MSA’s, maybe four MSA’s that we are seeing. The poultry plants are pushing the envelope for occupancy. I know we have a park right now for sale in Carthage, Mississippi and it’s full of day laborers. The day laborers are a great tenant source and they all a lot of them work at the chicken plants. So those types of tenant profiles are going to be very, very attractive. I see a lot of just movement around that type of product versus before it’s just, Mississippi is just one of the poorest states in the entire country. Let’s just be real. Um, the lot rents over there. There are some areas there that are sub $100 lot rents. So just it’s just it’s not like North Carolina that has some of the highest lot rents really the highest lot rent in the southeast. They’re touching I think up in Raleigh, probably closer to like $70 – $100 lot rents at this point.

04:17 Frank Rolfe
Right. What do you see the other states as far as lot rents like what is it typical Alabama, kind of lot rent right now?

04:25 Maxwell Baker
Um, you know, if you get down to fully based off our research, we’re seeing the price per pad trade closer to the mid 30s, 30,000 per pad and typically what I see that I’m kind of following like $300 – $325 lot rents down near the coast. The further north you go, seeing like $250 You know, some of the areas like Huntsville, Alabama, we’re talking about Alabama, right. That’s what we’re saying. Yeah.

05:00 Frank Rolfe
Hmm, yeah.

05:02 Maxwell Baker
So some of the areas like Huntsville is like an up and coming area where you’re starting to see some massive rent growth because Huntsville is kind of like the tech hub for the state of Alabama and a lot of new jobs, a lot of new tech stuff coming in. There’s a lot of fresh blood from outside of the state that’s moving to that area for technology stuff and we’re starting to see a pretty massive jump there as far as lot rents, but you get in the middle of the state, they’re kind of hovering around $225 ish, give or take.

05:33 Frank Rolfe
And what would keep the rents of Alabama $225 from going up? At least double in the near future, right? Because why? Why wouldn’t North Carolina be a seven to eight? And Alabama down in the twos? So I mean, to me, it was no real for rent increases there, right?

05:53 Maxwell Baker
Yeah, there’s a lot of there’s a lot of rent increases just the population growth is not like it is in North Carolina, that’s one. Second is, there’s just not as many, it’s not a melting pot of jobs, like you would see in North Carolina. North Carolina has four different types of industry, whereas North Carolina and Alabama, you’re like, you’ve got car manufacturer, you got farming, you’ve got tourism down near the coast and then you have a little bit of a tech hub. But North Carolina just has that times five, with a lot of different industries. And I mean, the highway system is running through up and I see a lot more growth going around highway 95. That goes up and down the eastern seaboard versus Alabama, there’s just not as much traffic going through there. So you know, movement breeds wealth and North Carolina just has way more movement.

06:53 Frank Rolfe
Right? What about what about institutional ownership? Are you seeing for the longest time there was very little institutional ownership as far as REITs, or private REITs or larger players in the southeast? You’ve seen that changing? And if so, what states are you seeing them buying into?

07:10 Maxwell Baker
I’m seeing a change dramatically. You’ve got a lot of people that have your level of expertise, Frank, buying into the secondary tertiary markets now, and pushing up the values of these communities and lowering the cap rates. Stuff that I was selling at a 9-10 cap, when I first started in these markets, I mean, is trading at like seven and a half now. So it’s just, you know, it’s crazy, because it’s just, whenever there’s more, just a higher level of education chasing this product, people are willing to, I think people are willing to pay a little bit more, and are willing to bear the risk a little bit more. So that’s just going to I think, it’s going to push down cap rates continually. As people see like, well, this is an all lot rent deal and it’s you know, dedicated roads and it’s got, you know, direct build city, water and sewer.

08:12 Maxwell Baker
When people see that in secondary tertiary markets, they’re typically going to pay a little bit more than, you know, Bob that lives in the same town whereas 10 years ago, that was the only guy buying that stuff whereas now it’s like, you see that? It’s like, that’s the trophy deal that people want to buy. So our cap rates are going to go down because of the ease of that. But answer your question, a lot more institutional quality type buyers are coming in. Money’s a lot easier to use, or to get, I should say, and people are able to raise money, because people understand I mean, you’ve done a great job, Frank, educating the entire industry. So there’s a lot, there’s a lot of smarter people, a lot more educated people that are buying these assets, and people are willing to invest in these assets. So organically, people are able to get money now more easier than they did in the past.

09:02 Frank Rolfe
What do you see, as far as financing if you’re in the secondary tertiary markets? Where does most of the lending on these deals that are closing coming from as a bank or?

09:13 Maxwell Baker
Yeah, it’s all community stuff, you know. And, you know, as us as a company, we’ve actually had to go out and cold call every single lender in each state that we’re working in, so we can identify who is financing parks, because that’s the only way we’re able to sell the deals that we’re involved in is because we have a lot of relationships with local community lenders that we use to finance the deals that we are exclusively listing, or occasionally we’ll slam a deal together off market, but typically it’s from these community lenders and you’ve got some guys that are just raising 100% of the money where they don’t even need to. I know a couple of guys that do that. They just come in all cash takes a little longer for them to close. But typically, they’ll just come in all cash and like said just, they’re able to raise the money because a lot of people in the industry because a lot more people are educated because of again, like what you’ve been doing over the last decade of educating the masses on mobile home park investing.

10:17 Frank Rolfe
What do you see on those letters as far as hot buttons? What kinds of things will they not underwrite? Are there any …?

10:25 Maxwell Baker
Yeah, so these community lenders typically do not like that you do not live in the same, if you live outside the state that they’re financing in? That’s a hot button for about 80% of them so that’s one. That’s the, that’s like the primary thing. Second is, how much experience do you have, have you been involved in multifamily before? If you own a bunch of single family houses, they’ll consider that, but they want to see that you have the ability to manage multiple people because if you come in there, you live out of state, you don’t have a minimum 630 credit score 640 credit score, and you don’t own or have any experience in multifamily management, you’re probably not going to get the debt. So those are the the three hot buttons that I’m seeing.

11:19 Frank Rolfe
What do you, what’s your average deal size, like this past year? And what would you say your average number of lots, your average price point was.

11:25 Maxwell Baker
So our bread and butter is deals anywhere between 25 units up to 75, up to 80. That’s our real meat and bread and butter. I mean, like I said, here in the southeast 80% of the communities are 50 units and below. That’s why we chase that because it’s the majority of the market. Most brokers are chasing the big shiny things. But you know, we’ve kind of carved a niche out to be like, “Look, this is 80% of the market, we should probably try and chase that”. So that’s what we’ve chosen to do is to chase that, pool of communities, and typically our you know, anything that’s south of $5 million is typically what we play in. Don’t get me wrong, like we’ve done we’ve done a big transaction North Carolina, the biggest one in the state’s history, I think it was like 34 million, like pay 800 lots, we did that a couple of years ago. And then we just brokered $8 million asset here in Atlanta, we’ve got something that’s 14 million. I mean, we do some big stuff, but I would say it’s the big stuff is like 10% of what we do and 90% is what I just described.

12:45 Frank Rolfe
And as far as someone looking to buy in the southeast and since the southeast is kind of unique one attribute. You have a lot of private utilities, is that correct?

12:55 Maxwell Baker
Yeah, so um, you get near the coast. It’s well and septic all day. Outside of that secondary tertiary markets, surprisingly you get up to Fayetteville, North Carolina, you see a lot of direct billed city water and sewer. Also West Virginia. I don’t know what it is. They’re kind of a little backwards up there like you get up there. The government’s are super slow like some governments in West Virginia that don’t have a tax assessor and GIS website, but they all invested their money into communities and there’s like, I would say it’s probably 20 upwards to 30% of the communities in West Virginia have direct billed city water and sewer. It seems it’s a little weird, but it just depends on the area. Here in Georgia we’re seeing a lot of well and septic and sit mass metered city water and septic in these secondary tertiary markets. It just depends on the area frame to be quite frank with you.

13:56 Frank Rolfe
Are there septic systems working out in diligence? Are you seeing everything AOK or any hot buttons? I know there’s weather pattern changes in se anything that’s disturbing the septic ecosphere.

14:08 Maxwell Baker
Um, the biggest issue because I own a park that has septics the biggest issue is grandma and grandpa installed these tanks when there was no permitting process. So the lifespan is not what you will see based off of a brand new tank being installed today. I’d say installing tanks that were too small for how many people live in the home or they don’t have clean out valves or you know stuff like that is the biggest issue that I’m seeing that they just kind of throw them in the ground and in some of these guys, you know, they just throw them in the ground and don’t even tell the Environmental Health. They’re like “Oh I don’t know this tank was here when I bought it”, and environmental health is kind of just chasing their tail. So as far as septics those are the biggest issues that I’ve seen, you get out to like the coastal, you know, the, the soils a little sandier or so the couple of coastal septic tanks don’t have as much issues as you get up here where it’s real muddy. They’ll have a little more issues and you kind of have to pump them because of tree roots, that’s probably the biggest variable here in the south. There’s a lot of tree roots that you’re seeing, like creep into the tanks and in you know, that’s probably the biggest variable. Not sure if that answers your question or not?

15:39 Frank Rolfe
Yeah, no, it does. No, there’s a guy. Oh, God knows His name. Now I can’t remember, Charles Becker at Duke University.

15:49 Maxwell Baker
Yeah. Yeah. We interviewed him.

15:51 Frank Rolfe
And, you know, he remarked on how odd it was in the southeast as far as the rents were such an anomaly based on housing prices and even when I look at housing prices now in states like Alabama, the home prices are no different than in most of America today. They’ve gone up substantially where lot rents are still woefully behind. Right? I mean, if you even look at Mississippi with its $95 rent, in that same market, where even $95 rent, you may have a median home price of $110,000 and an apartment at $700. What the heck happened in the southeast? Why are the rents so unbelievably stupidly low in those places. It can’t just be population because the home prices are equivalent to most of the nation, but the lot rents are the saddest, most pathetically low level, that you can’t even make any sense of them. Is that because so little institutional purchasing until now that moms and pops you just flying out of control? Why is that do you think?

16:52 Maxwell Baker
Yeah, I mean, you kind of answered it right there, Frank, I mean, these mom and pops, it’s not uncommon when we take a deal out that they haven’t raised lot rents in five years. So in the last five years, I think values across America have dramatically increased, because of the amount of printing we’re doing, you know, as a country. So, you know, grandma and grandpa just are not really in tune with what values are doing until we get in you know, when you start talking to him, you’re like, look, here’s where your parks worth today based off your lot rent. But if you do XYZ that’s where we have this whole Community Price Maximizer program, because we get people to come in, we give them a free analysis and say, “Look, you got to move the needle on your lot rents”. And then this this is what’s going to happen to your value dramatically. In a lot of them, they’re like, when we tell him what the market lot rent is for the area, we do the survey. Their eyes are so massive that they’re just like, oh my god, I can’t raise a lot is $100 on these people, I know them. I’ve known them for years. So that’s been probably the biggest variable is just a lot of these mom and pops are very attached to their communities and the people in there and there’s just, there’s not much movement going on because of that variable.

18:18 Frank Rolfe
Let’s talk about someone wanting to work with Max Baker, any broker of how, what’s their best etiquette as far as staying on your radar and getting your attention without becoming a pest or bugging you? How often should they contact you, for example.

18:37 Maxwell Baker
Um, so me personally, I’m not in deal flow too much anymore. But my agents that work with me, we have four agents that work with us. You need to be in front of them once a month. If you’re not talking to a broker, at minimum once a month, you’re not gonna see deal flow, because deal flow changes daily. Like we literally got eight leads in the last 48 hours. That people just called us saying, “Hey, I want to sell my park”. And sometimes they don’t go to listing and we broker it off market. So it just depends, like, if you really want to, like you know, get in front of like, the guys that see deals, girls and guys that see deals from us, give us a call.

19:25 Maxwell Baker
I actually had a guy fly in from New York to sit down with me and Eric and say, “Hey, this is what I’m doing. This is the money I’ve got”. And you know, we went out to lunch we talked about you know, the Federal Reserve, what’s happening with printing and bla bla bla bla bla looked us each other in the eye. That guy gets more deal flow now than anybody else because he’s constantly, he came in, he made an impression, we went and met face to face and now he now he’s talking to Eric like consistently and Eric will say, “Hey, I got this deal here in Atlanta and you want to take a look at it, it’s really aggressive but it’s in Atlanta, it’s a mobile home park”. He’s going to do that.

20:13 Maxwell Baker
Secondly, the people that see these types of deals, close the deals that we’ve already done that we’ve listed. So organically, they’re going to start going into our speed dial to get on our radar to sell deals. But at minimum, you really need to like, contact a broker once a month, via phone call, emails, like y’all, we get hundreds of emails by people every day, like literally, I get a call five times a week. “Hey, Max, I want to talk to you about my investment criteria”, don’t make it I don’t, you can go to our website, you can fill it out. And we’ll have the investment criteria. Like if you really want to see deal flow, like give us a call set a meeting, like let’s meet face to face in complete leave an impression because we just get so many calls from people that want to kick tires and just want to do that it’s just, it’s just not very efficient. So if you want to get on the radar, do exactly what I just said and you will you start seeing way more deal flow.

21:17 Frank Rolfe
What are some of the top things when someone talks to a broker that they should do for the broker to know that they are, you know, serious buyers? Not tire kickers, what are some of the sound bites that Max Baker want to hear from a potential buyer?

21:35 Maxwell Baker
So if you want to get me to stand up straight as a broker, proof of funds, buying criteria, and history of deals you’ve bought, those are three things. And if you have banking relationships, I’ve got my financing in line, this is this guy’s already pre approved me. That’s kind of hit or miss because every deal is going to be a little different. But it’s really those top three and that last one.

22:06 Frank Rolfe
Okay, so basically, if someone can distill that narrative, go to you talk to you, again, not everyone can meet you in person, maybe you can meet on zoom, I don’t know, but maybe hard physically to get to where you are. But they need to give you the feeling that they’re obviously a legitimate player who can actually buy something, and not just wasting your time. Talking about buying parchment seriously engaged in doing so correct?

22:34 Maxwell Baker
Yeah. I mean, you gotta think of the three mediums like, you know, text, emails, are the lowest medium to get a response. Text is I can see highs and then a phone call is the third is the best.

22:50 Frank Rolfe
Okay, you got four different people working in the broker capacity. They’re Correct. Should they? Should they reach out to all four? Should they just stick with one? Or how does that work?

23:04 Maxwell Baker
Reach out to all four. I want to build relationships? Yeah, we’re probably gonna bring out another two here in the next 12 months. So six, but you want to reach out to him for if you can meet them face to face. That’s the best. That’s the best way to do it. I know you might have to travel. But the guy in New York that did that. I mean, he’s seeing something that a lot of people don’t see.

23:28 Frank Rolfe
Right. And when you say the southeast, I always think of the southeast as being defined as Louisiana, Mississippi, Alabama, Georgia, and Florida. And you can add in North or South Carolina, but you were talking earlier 15 states. So it’s a broader region, right? Like when people say Midwest to a Midwesterner? You know, I live in Missouri, it’s a fairly finite number of probably six to eight states. Yet, if you look at Midwest magazine, it’s half of the United States. So how, how north from your south? Do you go and out west from your East do you go, I guess is question.

24:05 Maxwell Baker
Yeah. So we’ll go as far east as Texas. We’re working on something in Arkansas. Now, we’re starting to creep up there. And then we’re going as far north as is New York, and Pennsylvania. Our goal is to hit Texas all the way north up to whatever the state is up there East. We’re licensed over there and we’re databasing and sending out mailers to all the states.

24:33 Frank Rolfe
So you’ll end up being roughly 20 something states between Texas up to Canada and everything to the East. So if someone’s talking to you, they’re not necessarily just talking to you about five southeastern states. It’s a larger footprint than that correct?

24:51 Maxwell Baker
That’s correct.

24:53 Frank Rolfe
Okay. Very good. Well Max, what do you see right now as far as when you say deal flow and you say you’ve got eight new ones coming in what is influencing for example, just the last 24 hours to be a moment in which a lot of sellers want to sell. Are you seeing? Is the current administration having an impact? Tax laws, life in general, biological clock, Max Baker’s charm? I mean, what is it that makes mom and pop, suddenly want to sell now more than a week ago?

25:23 Maxwell Baker
You know, it’s funny, in the last 30 days, we’ve had an uptick in response to our marketing. And I think a lot of people are, that are sellers are starting to realize we’re kind of at the end of our rope here, the economy is probably about to crash. So there’s a mass rush of people, like let me get it in while the getting’s good. And we’re starting to see a lot of people reach out because of that, because just with the Biden administration, and, you know, the majority of the park owners, a lot of them are conservative. So, at least in my mind, especially here in the south, and a lot of them are nervous about how much money has been printed. A lot of them are worried about the midterm elections, and what’s about to happen. So that’s why I feel like there’s kind of been, for us at least last 30 days, a mad rush of people just calling us saying, “Hey, what’s my park worth? Can you put it on market? Can you bring me an offer?”, and that’s what we’re seeing.

26:32 Frank Rolfe
Got it. And if someone wanted to reach out to Max Baker to talk to you to try get on the radar screen, look at the listings how’s the best way to get a hold of you, or your firm?

26:42 Maxwell Baker
Yeah, sure, Frank, thanks for that. The phone number is (678) 932-0200. You can also go to our email, which is And if you’re a buyer, we do have a new platform that you can build your profile and tell us a little bit about you on our profile. Give us you know what you’re looking for what state you’re looking for and then you can fill that out. And then once we find a deal that fits your profile, we’ll send it to you, as well as we do have a buyer’s guide that you will get that talks about all the fun stuff that you should probably consider when buying a mobile home park with conservation easements, opportunity zones, bonus depreciation, cost segs and stuff like that. That’s very important. If you’re buying a mobile home community that you will get a free copy of once you sign up on our website to be a buyer.

27:42 Frank Rolfe
Very good. Well, Max again, we appreciate you, you know helping be the matchmaker between people wanting to buy and good communities to buy and appreciate the fact you always have a bountiful supply of new listings, you may probably have more new listings than anyone I know. So we also appreciate you participating frequently with us on pitches and hit shows and other items. So you know, thanks for being a good person who is really helping people out and getting their financial dreams in order. And so we’re gonna take a quick break everyone that wouldn’t be back with our next segment. But again, Max, thanks for being here. And we’ll talk to you again soon.

28:23 Maxwell Baker
Thanks, Frank for providing a platform for us. Appreciate it.

28:27 Frank Rolfe
Thank you, Max.


Frank Rolfe

Frank Rolfe is the co-owner of the 6th largest mobile home parks business in the United States. He is also co-owner of Mobile Home University. His business model and the business model he teaches have been criticized as being unethical. Others praise him for fixing up mobile home parks.