Are Tiny Homes a Good Investment? How a $50,000 Home Pencils Out

Dave:
Rent is super expensive right now. Housing is at its lowest affordability point in 40 years. And one estimate showed that about half of Americans have struggled to pay their mortgage or rent at some point in the last year. And this point to a bigger issue in the housing market that you’re probably aware of if you listen to this podcast. But it’s that supply of affordable and reasonably priced housing is just not available. But today we’re talking about one potential solution to this issue that investors should absolutely take note of. Its Tiny Homes. Hey everyone, it’s Dave Meyer. Welcome to the BiggerPockets Real Estate Podcast,

Henry:
And I’m Henry Washington. And today we’re talking to Steven Harrell all about why he thinks tiny homes are a strong investment in this current market. Steven is going to break down costs and trade-offs between traditional stick-built homes versus tiny homes. We’ll also talk about some of the myths around tiny homes and living in tiny homes and what investors should know before pursuing tiny homes as an investment.

Dave:
I love the idea of tiny Homes. I think it’s such a cool way for people to get into investing at a really affordable price point and be able to provide affordable housing during a time where that is really hard for tenants to come by. So let’s jump into our conversation with Steve. Steven, welcome to the podcast. Thanks for joining us.

Steven:
Thank you for having me. I really appreciate us and honored to be here with you guys.

Dave:
Yeah, we’re super excited for the conversation. I don’t think we’ve ever had someone, or I’ve never interviewed someone on the show talking about tiny homes, but I’m super interested in ’em, so I’m glad you’re here. Tell us a little bit about why you got into Tiny Home Investing in the first place.

Steven:
Yeah, my story’s kind of funny. I was living in Denver back in oh eight.

Dave:
Me

Steven:
Too. Were you really? Okay. Yeah,

Dave:
<laugh>. Alright.

Steven:
You look familiar.

Dave:
Yeah, I saw you at that park. Yeah,

Steven:
Yeah, yeah. Um, no, but I was living there in oh eight and I was ready to come back home to my family here in North Carolina. And I had a loft there. It’s kind of a funny story and I was just ready, I was done with it. So I just left, let the thing pour close, long story short. And uh, so of course I had bad credit. Well, I came back to North Carolina wanting to own a home and at the time, like tiny houses were not even really a thing. But I came across a website called Tiny House Blog, which, uh, the owner of that Kent Griswald ended up being my mentor years later. And, um, so I would go there every day on the website and just click refresh refresh, waiting for him to feature like another tiny house. And so finally I said, look, I think this could be a thing. And I launched Tiny House listings, which is the marketplace for tiny houses. So it was kind of a bummer that I had bad credit, I had a foreclosure, but it ended up being like one of the best things ever because it led me to the whole tiny house thing. So

Dave:
Can I ask you about the foreclosure for a second? So like, what, what happened there? ’cause obviously we know what happened in oh eight, things crashed, but like had you, did you buy something with an adjustable rate mortgage or like what led to the foreclosure there?

Steven:
It was just having a tough time selling and um, I was just, had kind of washed my hands clean of it and it was actually for sale for almost a year. Mm. And I was also closing down another business at a time, so I kind of like quit paying payments, like not a good thing, but, uh mm-Hmm. <affirmative>. So it all kind of just went spiraling down at the time, so.

Dave:
Okay. Well I’m sorry to hear about that, but it sounds like it worked out. And just a good reminder for everyone who thinks that days on market going up to like 17 days now is a long time just reminder of what things were actually like, uh, during the last, the last correction. So, uh, it sounds like you, you sort of started a business around tiny homes, but did, did you actually buy a tiny home to start off with?

Steven:
I kind of built one, like out in the woods. I bought this piece of property outside of Wilmington for like $2,000 and I was just playing around and I built one out there. And at the same time I was starting to shoot a lot of content from my YouTube channel and I kind of walked people along that journey. Um, and you know, at the time it was all, you know, tiny House people were mostly DIY folks, right? There were people who were just fringe. Right. Like, I could give you a funny story real quick if I may please. Yeah. First tiny house event that I ever held was back in 2010. And we’re sitting around the fire three o’clock in the morning and this dude just appears out of the woods and he looked like Jesus. And I’m like, where did you come from? And he’s like, uh, I’ve been living in the woods for a year. And I’m like, whoa. Like what? Like what, what is this all about? Anyways, that was the type of people that were kind of involved with tiny houses in the beginning. Right. It was kind of fringe people. But then as time went on, uh, it became more and more mainstream.

Dave:
Okay. Very cool. And, and do you think it’s becoming more mainstream because of market dynamics and how affordability across the housing market has declined over recent years?

Steven:
Absolutely. Tiny houses used to be more of a conscious decision that people were making. It was more so like, I wanna go green, I wanna have less of a carbon footprint. I want to downsize my belongings. But a lot of it has to do now that you’re starting to see more and more middle class people entering the tiny house fold simply because of market conditions, like you said, they just can’t afford it. Owning a regular house is becoming more and more difficult for most people. Um, so that’s why you’re starting to see more people enter the fray.

Henry:
Yeah. It seems like with this whole tiny home movement, like five years, six years ago, there was tons of TV shows around it and it really was more about, you know, living off the land and reducing my impact on society. And, uh, costs were low, but I didn’t think that they were like substantially lower in terms of like per square foot. But now I think affordability has really played into it and a lot of companies have kind of jumped onto this like, can I produce a tiny home at an affordable price? And so, like you said, you built your first tiny home. How did that transition of like building your first one turn into you kind of becoming a spokesperson for this tiny home, you know, movement?

Steven:
I just thought that it was, I just think it’s a really cool lifestyle and, um, I really wanted to share that with other people. Um, if, if you talk to a lot of people who actually live in a tiny house, they had that aha moment. And, um, and I just kind of, and I had that same thing, like I said, when I went to Tiny House Blog and noticed that tiny houses were a thing and I just was so excited about it and I was able to actually build a tiny house for myself and I wanted to share that with other people. ’cause in the beginning I kind of saw it as a way to escape the rat race for regular folks. And, um, and I think now that’s, I’m not saying you’re gonna escape the rat race by buying and living in a tiny house in 2024, but it will absolutely help you get ahead financially, in my opinion.

Henry:
Let’s talk about that. If it, it, it can, it does seem like it’s more affordable now and it, and it can help you get ahead ’cause you’re cutting some of your costs. But can we like, talk about this or maybe compare it to like a, a single family home? So in terms of a tiny home, like how do costs compare in terms of cost to build or buy and cost to insure it taxes? Like what’s the, what’s the comparison?

Steven:
A tiny house on average represents about 14% of the selling price of the average house in the United States. Now of course, that doesn’t include the dirt that comes with it, but still if you look at that big of a difference, the sticker price is tiny versus, you know, you’re looking at about 60,500 versus about 430,000 ish. So it’s a big difference.

Dave:
Steven, before we go into more of that, ’cause I wanna follow up like how tiny are we talking here? <laugh>? Like what does tiny mean?

Steven:
It’s a relative term. It depends on the size of your family. We’ve always said 500 square feet or smaller, but I mean, like, like I said, if you have a family of 10, you know, you’re still living tiny. So,

Henry:
So the general consensus is about 500 square feet. I think that’s fair. ’cause that’s what I think once you get over 500 or you get 600, they, they start to call it micro homes between that like 600 and a thousand square feet. So, okay.

Steven:
Okay. Yeah. And you know, their vision idea also was to have your house mobile. A lot of, uh, mobile home manufacturers are calling tiny homes, tiny homes just because it’s a buzzard. Right. Or they’re, you know, they’re building micro communities of houses on foundation. They’re calling ’em tiny houses just to kind of get that, that market right. That click bait that, uh, those keywords. But, um, the original idea was to be mobile. ’cause if you think about it, most people lived in the same place generations ago and they worked the same job their whole life. That does not happen anymore. So in my opinion, mobile tiny houses are a great way to go because it matches people’s lifestyle these days. They can take their home with

Henry:
’em. So I think one of the hangups people may have with Tiny Homes is probably around like value. So let’s say I pay and buy a tiny home and, you know, maybe I’m all in for 60 70 grand. Right? One of the best benefits of, you know, stick belt real estate is the appreciation over time now that, you know, tiny homes have been a thing for more than a few years. Like, how does appreciation compare? Are people’s properties appreciating or are they kind of staying stagnant? Are they having trouble selling them if they want out? Like what are some of the, the logistics around that?

Steven:
Yeah, you guys, and, and I’m sure your audience knows as well, that like the ho an actual home doesn’t appreciate it’s the land, right? Because I mean, like it, you know, sticks and mortar, right? There’s no way that’s gonna go up in value. It’s gold. Um, and tiny homes, they tend to hold their value better than let’s say a mobile home or a, you know, a, some sort of other, like a rv, um, because they’re built so well, you know, when you, once you get above the trailer, you’re built just like a regular house, a stick built home. Um, but the whole idea is, you know, most people are moving into a tiny house, aren’t necessarily thinking about appreciation, they’re thinking about cost savings and experiences and downsizing lives for the most part. But if you can save on your monthly expenses, which you most certainly will, and you can live in the tiny house for a certain amount of time, most likely you’re gonna save money. So I, in my opinion, appreciation is a secondary.

Henry:
Yeah. I mean, time definitely heals all wounds, but I’m sure there’s also a subset of people who are like, I’m cutting costs and I’m going tiny. And then they get in one and they’re like, get me outta here. Right? <laugh>. So, so, because in theory it sounds great until you know you’re actually living it and it might not be for everybody. So I guess my question was more around if you’re in that camp, like are you able to, you know, are, is your property actually go? Can you get out? Or are you, are people losing money in those situations? But I understand what you’re saying in terms of cost,

Dave:
All right? So Tiny Homes could be an excellent option if you’re trying to cut costs. But what about if you’re an investor? What kind of ROI can you make from this strategy and what should you know, before you invest? We’ll get into all that after a quick break.

Henry:
Welcome back investors. We are here with Steven Harrell talking about why you should consider investing in Tiny Homes. Let’s jump back into it.

Dave:
Steven, can I ask you, you know, I, I totally understand some people wanna live in this. I I am curious about this sort of from an investment standpoint, like, could I buy tiny homes and lease them out? Um, and so let’s just start there. Is, is that a model you’ve seen before?

Steven:
Are you talking about like on a small scale, like in your yard? Or are you talking about like the owning a community?

Dave:
My first, my first instinct was I own a couple of properties now that allow for accessory dwelling units. Um, and I look at tiny homes, I’m like, Hey there, there’s a lot of prefab models that are pretty cool. Can I get one on a trailer? You know, meet code, put it on a pad or whatever, um, and then rent it out, uh, to someone who wants a 500 square foot house,

Steven:
Right? So the biggest challenge has always been zoning and building restrictions, right? And there’s a lot of people who just can’t figure that out. They can’t figure out how to get past all that. Um, so that’s why you’re starting to see a, a much a rise in tiny house communities. You’re starting to see, uh, investors who are coming in and handling that all for people, right? Mm-Hmm. <affirmative>. So you kind of look at the, um, kinda like a mobile home concept, right? You either have the park owned homes or the tenant owned homes. Um, either way, if you’re an investor and you wanna start a community, you can own the dirt or you can own the homes and the dirt. But yeah, the zoning and the zoning and the building restrictions have always been the biggest hurdle.

Dave:
But I think generally speaking, at least in one of the markets I invest in, they’re making it a lot easier zoning. Like a lot of municipalities, this is pretty big trend. And they call it, uh, upzoning generally where they’re increasing density and allowing a little bit more flexibility in terms of how homeowners or investors can add additional units to their property. Does that happen? Like, do people use tiny homes as an A DU?

Steven:
It depends on the zoning and restriction laws for the area. For example, Wilmington recently passed that law where you can have ADUs in basically any backyard. And the reason is there’s not enough affordable housing here. There’s not enough enough housing in general to handle all of the influx of people. But you can’t put a tiny house on wheels in the property because they’re considered RVs. Now you can do modular, which my company’s about to start getting into doing modular. Uh, but you know, it’s still, there’s so many restrictions when it comes to living on wheels because there’s so many restrictions on the books from decades past. You make a phone call to a zoning person and when it comes across their desk, they’re like, I don’t wanna deal with that. And they’ll pass the buck. And eventually maybe someone will put that on the desk of the decision maker and address that. Um, but when you look at tiny houses, the traditional version one on a wheel on wheels, it’s much more difficult to get them, like you said, as an A DU Mm-Hmm,

Henry:
<affirmative>. So ask differently. How do you see, or how have you seen investors leverage tiny homes?

Steven:
I can tell you how I do it. I look for a land that where there’s very minimal building or zoning restrictions and hopefully some sort of infrastructure already in place. Specifically you use rv, um, communities, and that way you can go ahead and bring your tiny homes in and go ahead and start making some money. And hopefully there is some opportunity to expand and, uh, increase the value of that. And by whether that’s chopping down some woods, adding more spots, increasing rents, whatever that happens to be. So in my opinion, that’s kind of where things are headed, like I said before, because the, uh, you know, as you can solve that problem before, people who wanna live in a tiny house, but just can’t connect the dots.

Henry:
Okay. So to clarify, what you’re doing is you’re looking for land that has preferably has access to utilities. So the major, so you’re looking access to electrical and I would assume hopefully sewer.

Steven:
Yeah, exactly. Yeah. Like, and you gotta think, there’s a lot of RV park owners who are baby boomers. They’re about to offload those assets. Mm-Hmm. <affirmative>. Um, and so, you know, sometimes you can get owner financing and, um, minimal down, but if there’s some sort of infrastructure in place and you can live in those parks full time, like that’s a gym, there’s a lot of people are looking for those right

Henry:
Now. So then you’ll bring in or build tiny homes and are you building them and then selling them individually to people? Or are you just leasing the land and people bringing their own tiny homes in? Or like, how are you monetizing once you get the land

Steven:
Doing a hybrid approach? Now, since I’m a person that builds tiny homes, like the one park I have going in Floyd, Virginia, now, I only allow tiny homes that my company’s built. Um, the reason that is the, one of the main things is so we can control quality, but we can also increase our bottom line. We can sell more tiny homes. Uh, but if you’re someone like the person listening in, you know, in your audience who’s thinking, how can I invest in tiny homes, but I bought, I don’t build tiny homes. You can buy that community and allow people to bring their own tiny homes in. Right? And just start renting that dirt out. And you know, the great thing about tiny house communities is you can buy land outside the city that’s more affordable. Right? Because if you look at the demographic of people moving into tiny houses, they’re retired or they have some sort of expendable income, right? Or they work online. If you look at a mobile home community, typically the demographic is, it needs to be close to industry. There needs to be people who can go to work and do their job. So you can in, you can have a higher rent for cheaper land. So it works out really well in your favor.

Henry:
Okay. And in that scenario, are you able to say, I only want people with tiny homes to come in here and, and not necessarily a mobile home?

Steven:
Absolutely. Yeah. Like for example, one community I just bought when I was Michigan in Virginia used to be a RV park. So we have people rolling up in their truck thinking that it’s still an RV park, right? Because it was for many decades. And we have to turn them away, unfortunately, because it’s only long term residents who are allowed to live there in the tiny homes that we build.

Henry:
And are these tiny homes on an actual foundation, are they permanent structures?

Steven:
No, they’re on wheels because in that area there’s no zoning or building restrictions.

Dave:
And Steven, can you give us a general sense of what it costs to, to build a tiny home? I’m sure it runs the gamut, but like what’s an average size, dimensions and cost of a tiny home?

Steven:
Well, so there’s, you know, there’s, there’s beginner mid and luxury tiny houses. We kind of focus on the mid models and, um, ours costs anywhere between 35 to 55,000 to build, depending on which model we build.

Dave:
That’s it.

Steven:
Yeah.

Dave:
What,

Steven:
Is that a good

Henry:
Deal? No, no, it’s way too expensive. So you know, it, uh, <laugh>.

Dave:
All right. So 35 to 60 grand a pop to build, which seems quite affordable in the grand scheme of things. What are these rent out for?

Steven:
Uh, so the, we are getting about 1400 a month rent now. Woo.

Dave:
Okay. $1,400 a month in rent. I’m gonna do this math pretty quickly. 1400 times 12, that’s $16,800 in revenue per year. That’s depend at, at worst it’s gonna take you four years to pay that back. Instead of it ba its two years. Is that

Steven:
Right? Well, you have to think there’s other costs. Like I had to buy the community, which

Dave:
Oh, okay, okay, okay. All right. I got too excited. Sorry, <laugh>.

Steven:
Yeah. And that, well, that also includes electricity and water and trash pickup and internet and, you know.

Henry:
Okay. So that’s all expenses included.

Steven:
It’s all expenses. So you basically, you just, when you show up to the community, ’cause I don’t have anyone there manning, uh, managing the place full time. So when you show up, you have a door lock on your tiny house and you just let yourself in basically.

Dave:
And where do I sign to buy one of these right now?

Steven:
Go to tiny house listings, build <laugh>, shameless plug <laugh>.

Dave:
That’s pretty cool, man. So I like, logistically this seems so feasible for people, right? Like we talk a lot about a lot of different strategies for people who are struggling to get into this market. You’re talking about not just buying a unit, building a brand new unit for something that’s super affordable. Can you finance these, uh, these types of deals? Like are you getting bank loans or you have to do cash for all this?

Steven:
You could get financing. Um, we use a company, I don’t know if they’d want us to mention their name, but since we build so many tiny homes, if you buy a tiny house from us and we’re certified, you can actually get financing for them. Now if you go out and say, Hey, I want the money to build my own, you might have a little, you’ll run into some difficulties, but uh, if you go through an accredited tiny house builder, you’ll be able to finance ’em for sure. They do. Um, investment tiny homes.

Henry:
And is this financing more like car financing or is it more like traditional 30 year fixed rate mortgage financing?

Steven:
23 year loan. So if you do the math on a 23 year loan for uh, 35,000, it’s pretty low cost of entry for

Dave:
Sure. And that, that’s for a purchase loan, right? Or is that a construction loan?

Steven:
That’s for a purchase loan.

Dave:
Okay. And now I have a very stupid question. Do you get car insurance or home insurance for a tiny home on wheels?

Steven:
There’s no such thing as stupid questions here. Dave <laugh> <laugh>.

Dave:
Oh, you must not listen to this show enough. Steven. There are plenty of stupid questions.

Henry:
You must be new here. <laugh>.

Steven:
Uh, so tiny houses are personal property, so you just get a personal property loan. Okay. There’s a handful of companies that are writing insurance policies, a lot of insurance policies for tiny homes.

Dave:
Yeah, I was curious about that. ’cause RV insurance is obviously pretty different than homeowners insurance and I would imagine this is getting popular enough that they’re just coming up with their own tiny homes specific policies. But I’m curious, just because insurance costs are just getting so expensive right now for regular homes, are you seeing similar inflation in insurance costs for tiny homes?

Steven:
So I have seen starting out at 300 all the way up to $900 per year, in my opinion, $900 for a $70,000. Tiny home is, I think it’s quite expensive. Me personally, you might not agree.

Dave:
Yeah, that’s high.

Steven:
But, um, the, I think 300 is, is feasible.

Dave:
Yeah, 900 is higher than I was thinking you was gonna say because like you get single family insurance for 1200 bucks in a lot of places.

Steven:
Yeah. The only thing I can think of that the insurance companies are seeing, like, Hey, what if you just someone hitched one of these things up and took off, right? So, you know,

Henry:
Someone stole my house, <laugh>.

Dave:
Yeah, you can’t really steal a single family house. You can steal a tiny home

Steven:
<laugh>. That’d be a bad day when you come home from work and your house is missing. <laugh>.

Henry:
I have one more stupid question as well. Just one of this is just, you know, asking for myself. Like, so these things, they’re on wheels, but they’re hooked up to like city sewer. So we’re not talking composting toilets here. Like it’s a legit plumbing situation.

Steven:
This is straight up. Like, so if you look at the hookups to these tiny homes, they’re basically just like an rv. So there’s a water hose, uh, there’s a huge electric 50 amp outlet or inlet I guess you could say. And then there’s, uh, septic like PVC that just goes straight into the ground.

Henry:
Okay. Alright. I just gotta make sure, you know, that’s important, important stuff there. Um, and so let’s talk a little bit about, so if you’re renting these, like what’s the, who are the typical tenants that you are renting to in these tiny home communities? Like what’s that demographic made of?

Steven:
Demographics are obviously all over the place, but the biggest single demographic we’re seeing are women 55 and old or single.

Henry:
Okay. And is the, uh, you know, I, I understand single family renter dynamics. Like I typically know how long it’s gonna take me to rent a place out when it’s vacant. Like are you having challenges renting these places? Is it easy to find the tenants? How are you finding the tenants? Like what’s that like, what’s that experience

Steven:
Like? The coolest thing you think about a single family residence, for the most part, your audience is someone usually for the most part in that area, right? Mm-Hmm. <affirmative>. Um, but we’re marketing to people nationwide. No one so far that’s lived in our community in Virginia is from Virginia. Right? It’s all people coming in. Um, so you’re casting a much wider net, right? Because, you know, people are like, Hey, I can come here and rent for a year and then take off and go somewhere else, right? So, and then just explore that area, see what it has to offer, and then I’m out of there.

Henry:
That was my next question. How long are your leases typically?

Steven:
Yeah, one year. One year lease. Um, so that’s whether you buy a tiny house from us or if you just rent the tiny house, it’s one year.

Dave:
Steven, I’m not sure if you have a frame of reference if you’ve ever like, you know, rented single families or, or multifamily houses. But do you have the same, do you have pretty good tenant retention or any data on how long people tend to stay?

Steven:
Honestly, I’m somewhat new into this as far as getting into the communities. Um, but you know, if you look at the credit history of the people and the criminal background history, which we run on all of our tenants, they tend to be excellent, you know, with the people with really low debt to income ratio. Um, so that there’s kind of indicator what kind of tenants you’re gonna have. It, it doesn’t necessarily indicate how long they’re gonna be there, but it indicates, well, it’s a different question and a different answer than you, uh, the question you gave me. But, um, you’re gonna have high quality tenants.

Dave:
Yeah, it’s great. Well, we’ll have to have you back to report back on the retention. ’cause it sounds like you’re, uh, you’re still seeing what actually happens.

Steven:
Yes. Episode 1000. <laugh>, <laugh>.

Dave:
We’re getting there. We’re almost there, man. Yeah. All right. We gotta take one last quick break, but we’ve got Steven’s advice for investors right after this.

Henry:
Welcome back to the BiggerPockets Real Estate podcast. Let’s pick up where we left off.

Dave:
So Steven, if, if people wanna get started, you know, how do you find land that is zoned in a way that is allows this kind of development, this kind of business?

Steven:
That’s a really good question. Uh, it’s just like, if you’re trying, like to acquire regular property, you gotta cast a pretty wide net, right? You gotta have multiple sources that it is no different with these. So, you know, I love, there’s a couple websites I love land, uh, watch.com, land search.com. You can kind of filter it down a little bit. Definitely want to do some searches to find counties and, uh, in particular states that don’t have building or zoning restrictions, right? And chat gpt is your best friend for that. ’cause it’ll just spit it out for you. Um, if you find areas that don’t have building or zoning restrictions, definitely put the word out there to realtors, letting them know that you’re in the, uh, there’s a lot of Facebook, RV Park, mobile Home Parks for Sale, right? A lot of groups in there. And if you get in there, you’ll notice there’s a lot of people looking for these assets. Um, because, you know, when you start running the numbers and looking at it, you realize it’s a, in my opinion, it’s hard to have a better return on your money than these once you get ’em up and running. So,

Dave:
Yeah, I know what I’m doing after this recording. It’s doing exactly what you just said, <laugh>.

Steven:
I’ve got a couple deals on my desk. I’ll send ’em y’all’s way. Oh yeah.

Dave:
Do it. Please.

Henry:
On, come on.

Dave:
Send ’em to me before Henry. Yeah. <laugh> look, I or a partner. I,

Henry:
Yes, yes. I have a mobile home park too, that I’m sitting here thinking I’ve got some vacancies. I wonder, can we slowly start converting and putting tiny homes

Steven:
In there? Where’s your mobile home park at?

Henry:
Uh, it’s in Laurel, Mississippi.

Steven:
Oh, nice. Okay.

Dave:
And Steven, do you have any other advice for people who wanna get into this? Any like, tips or maybe challenges, hurdles that they might want to keep an eye out for?

Steven:
Yeah, definitely do your research before you get involved. Before you just start buying tiny homes or whatnot, the last thing you wanna do is buy tiny homes. Put it on land that you later find out you’re not allowed to have on there, right? Mm-Hmm. <affirmative>. Then you’re stuck with that tiny home. You’re stuck with that debt or you’re stuck with that cash out of pocket. Um, you definitely wanna do your research, but once you find out that it’s a, a go, I would say pull the trigger and go for it. Start small and, you know, work your way up and add more tiny homes to your inventory or to your fleet, or whatever you wanna call

Henry:
It. I’m gonna flip that question and ask it a little more personally. Can you share maybe like a mistake or an oversight you’ve made in this investing niche that maybe people can learn from and watch out for?

Steven:
Absolutely. I bought a mobile home park myself last year in Eastern North Carolina. And, um, I went through so much work. I was told by the local zoning, uh, board that I would be able to rezone it into a tiny house park because in that mobile home community, like many, they wanna see a HUD label, they wanna see a HUD home on. But for anything that goes into that community, come to find out after all this work, after all this marketing thinking that I was gonna fill it up and turn into a successful tiny house community, the zoning board would not budge. They wouldn’t give me the go ahead. Uh, so now I’m having to sell that to a mobile home park investor and, uh, just cut my losses.

Henry:
Oh, so you actually purchased the park on, on their word that they were gonna give you what you needed and then it did not work out like that?

Steven:
That’s right. Yeah. And even had it in writing that they would work with me, but I didn’t have it in writing that they were for sure going to do it. So it ended up, you know, blowing up in my

Henry:
Face. So is the lesson learned there, you need to get the approvals before you get the purchase? Like how would you, how would you have avoided that situation in the future?

Steven:
Honestly, trying to find a piece of land that where the local powers that be their hands are tied. They can’t do anything. They can’t prevent you from doing it. Mm-Hmm. <affirmative>. Or if you see there’s some sort of history that they’re really, really, we willing to work with you and there’s a, some sort of guarantee, right? Because otherwise you have to do either a plan B or a plan C, uh, which is maybe less advantageous for you, or you’re gonna have to offload that asset and maybe lose money or definitely lose time.

Henry:
Thank you for that vulnerability. I appreciate it. Yeah,

Steven:
Man. For

Dave:
Sure. Well, Steven, thank you so much for joining us. This has been fascinating. Uh, every once in a while we hear about a strategy where Henry and I race off the recording and try and beat each other to doing this strategy <laugh>. This, this might be one of,

Steven:
I’m excited to see which one goes first.

Dave:
Oh, Henry’s gonna win. He always wins, but I like to talk a big game. He actually does stuff. Uh, but thank you so much. We really appreciate it. And for anyone who wants to connect with Steven, learn more about him, we’ll put his contact information in the show notes below. Steven, thanks again.

Steven:
Thank you so much for having me. It was a pleasure.

Henry:
Thank you brother.

Dave:
Okay. I am sold on this as an investing strategy. Those numbers were crazy, but I gotta know, Henry, would you ever live in a tiny house? <laugh>?

Henry:
No, I can’t. <laugh>

Dave:
No, no qualifications, no context. Just

Henry:
No, no. I, uh, look, I could live in like 12 to 1500 square feet. Mm-Hmm. <affirmative> with my wife and two kids. No sweat. But I, I think that’s about my limit. I, I have a rule on living in a certain space. I just, like, if someone toots on one side of the house, I can’t smell it on the other <laugh>. Like if I can, if, if I can smell a toot from anywhere in the house, the house is too small.

Dave:
You need somewhere to escape to. You can’t absolute, it can’t just be all one space.

Henry:
<laugh>. That is, that is my hard and fast rule about, about housing.

Dave:
It’s so funny. I, I went to, I was, I’ve always actually been really curious about the idea of, of tiny Homes. I went to one of these festivals in Denver where they showcase different models and they’re super cool. I’m just so messy. I don’t think I could do it. <laugh>. I’m not like an organized enough person. Like everything would just like spill on top of each other. But my wife, like, she would love it. She would be so perfect and content living in it. So it really is for someone. But I, you and I usually share, uh, preferences with these types of things. I just wanted to make sure we’re on the same page.

Henry:
Once I get under a thousand square feet, I’m automatically a hoarder. That’s just like <laugh>.

Dave:
Yes, exactly. I can’t compress my amount of stuff by that much. Right. Same. All right, wham. Well, that was a lot of fun. Great conversation with Steven. Thank you all so much for listening. We’ll see you for another episode of the BiggerPockets Real Estate podcast. Very soon.