Episode #28 Scaling with partnerships with Ryan Murdock

 

Show Notes:

Episode #28 Scaling with Partnerships with Ryan Murdock                                                                                                                              In this episode of Real Estate Investing Made Simple, Ryan Murdock shares his experience with scaling with partnerships.

Ryan Murdock spent 10 years in the electronics manufacturing industry before transitioning to real estate investing and property management in 2007. He has extensive management experience in many facets of real estate including retail, office, multi-family, HOA, and especially mobile home parks – including nationwide consulting and turn-around projects. Ryan was a licensed real estate broker for over a decade and owns and operates a portfolio of residential rental properties outside of his interest in Open Door Capital.

 

Contact Ryan Murdock:

www.odcfund.com


Podcast Transcription: 

Introduction 0:02 

Welcome to The Real Estate Investing Made Simple Podcast, the show empowering and educating people on how they can grow, manage and protect their wealth through real estate investing. Now, here’s your host, Bailey Kramer.

 

Bailey Kramer 0:22 

Hello and welcome back to The Real Estate Investing Made Simple Podcast. I’m your host, Bailey Kramer, and today we are joined by our very special guest, Ryan Murdock to talk about scaling with partnerships. Ryan spent 10 years in the electronics manufacturing industry before transitioning to real estate investing in property management in 2007. He has extensive management experience and many facets of real estate, including retail office, multifamily HOA, and mobile home parks, including nationwide consulting and turnaround projects. Ryan was a licensed real estate broker for over a decade and owns and operates a portfolio of residential rental properties outside of his interest in Open Door Capital. Welcome to the show, Ryan.

 

Ryan Murdock 1:05 

Hey, good morning, Bailey. Thanks for having me on.

 

Bailey Kramer 1:07 

Yeah, absolutely. And it’s good morning for you because you’re located in Sunny Hawaii,

 

Ryan Murdock 1:11 

Sunny Maui, Hawaii. Yes, did an early start?

 

Bailey Kramer 1:16 

Yeah, that’s awesome, that’s great. So, you know, just from reading the Bio, you’ve been involved in so many different aspects of real estate. And I’m sure you’ve learned so many different aspects of so many different asset classes. But today, today, we’re going to kind of dive into, you know, your success with scaling with partnerships, and how you’ve done that throughout the various asset classes. But we’re going to hone in on mobile home parks in particular, and all the great things you have been doing with Open Door Capital. So why don’t you give the listeners a little bit of a background about how Open Door Capital came to be and the story right before that?

 

Ryan Murdock 1:54 

Sure. Yeah, I guess I’ll go back and just have a quick story of just how I got my start. I started in real estate after a decade or so in electronics manufacturing. I bought my first duplex in 2007 and a house hack that within one side rented out the other and kind of went from there and scaling my own multifamily portfolio. So I built out a portfolio of about 50 or so doors in a small multifamily up in Bangor, Maine. Around the same time I got my start purchasing real estate, I also got my real estate license and did some brokering for 10 years or so and then also around the same time started and operated a property management company. So I got to the point where I was able to really just scale back on all of that when I achieved a certain level of doors and income from my own rental portfolio, which then allowed me to really start doing some other things. So after 10 years down in the trenches of building out my business building up my portfolio, I was able to step back and start exploring different options and different things that I wanted to do and one of those opportunities that came my way was moving out here to Maui two years ago to help Brandon Turner focus on his Open Door Capital company, which is a mobile home acquisition and operation company. So we’re going on almost two years now, where it started out with just him and then he brought me in and it was just me and him for a while and since that time, we’ve built out a team of there’s eight or nine of us now on the Open Door Capital team there, the team we have right now is just they’re all absolute rock stars they’re very, very good at what they do and they’re a lot of fun to hang out with which would which certainly helps. So because of the team we’ve been able to assemble we’ve really been able to scale at a rate that is I’m certain quicker than any of us individually as talented as all these people are we together we’ve been able to scale and acquire property at a rate that none of us would have been able to do on our own so we’ve closed on just over 14 million in mobile home parks in the past year. We’ve got another 30 or so million under contract right now and we’re on target for on track for 50 million in acquisitions but by year end

 

Bailey Kramer 3:54 

Well that’s awesome in such fast acceleration from just a year ago and I know you guys have big goals with Open Door Capital and like you said, you know, if you guys tried to do it by yourself, it would be a lot slower and a lot tougher. But you know forming those partnerships coming together is what really accelerated to grow so congratulations on everything that you know all the success from Open Door Capital so far.

 

 

Ryan Murdock 4:20 

Yeah, appreciate it. It’s been a tonne of fun so far. I mean, it’s just really been crazy, especially when I look back at my history and for so long. I just really insisted and I think I don’t know if it was a limiting belief or just didn’t know any better, but just trying to do everything myself and that’s not always that’s rarely the most effective way to especially to scale in the real estate business. If I had to do things all over again, I definitely would have partnered with good people earlier in my career instead of just trying to figure out everything myself. The first time I mean, no matter what challenges any real estate investor encounters, those challenges have been overcome by somebody before them, so you’re not doing anything that somebody else doesn’t already have an answer to. So when I look back, and I see that I just had so often just struggled through trying to figure out answers. If I had just aligned myself with people that had already been there, done that, and had experience, I’m sure I could have offered value to them in some way, shape or form. And they certainly could have helped me navigate some of the challenges and I could have gotten a lot further and a lot shorter period of time.

 

Bailey Kramer 5:25 

Absolutely. So let’s kind of dive into your, you know, all the partnerships from Open Door Capital and, and how that kind of started, how did you and Brandon connected and then start building that?

 

Ryan Murdock 5:38 

Yeah, originally, even before I officially came to work for Open Door Capital, it was in 2017- 2018, Brandon Turner was really searching hard for a mobile home park, he had some 1031 money that he had to park and he decided he wanted to go into the mobile home park space. So he was putting a shout on his podcast and everywhere else that he popped up that he wanted a 50 lot Park public water, public sewer, he had this money that he had to deploy, the clock was ticking. And I happen to find a deal that fit his criteria perfectly, right in my backyard, next town over from me in Maine and it was one of those stories where it’s like, oh, there’s no way that you know, Brandon’s gonna want to buy a mobile home park in rural Maine, but I gotta send it to him, right, I gotta take the chance and sent the numbers to him. And he ended up coming out, we did due diligence on the park. And a couple weeks later, we closed on it. So of all the parks that he reviewed that one fit his criteria, the best and I think what was especially important to him, and this is this is not me patting myself on the back because anybody could have done this, but he had me as kind of as really the boots on the ground somebody to oversee the park, it was a pretty heavy lift that needed a lot of renovations to existing, vacant Park owned homes. And there were a lot of vacant lots that we needed to buy homes and fill them. So you know, anytime that somebody is investing out of state, and this is especially true for brand new, he had the money, he could put the deal together, but he didn’t have the bandwidth or really the desire to spend any amount of time in the park. I mean, obviously he’s got much better things that he can do at this time. But he knew that he had me there as the boots on the ground. So it was a perfect example of any partnership that anybody could do, where I didn’t have the money to take that deal down on my own, I just wouldn’t have been able to do it. But I found the deal and I had the hustle and the knowledge and the experience to operate and oversee what needed to be done within the park. Brandon, on the other hand, had the money he had the ability to build them. But he didn’t have any of the other stuff that was needed, which was which is what I had. So that was that that’s just a classic example of a great, great partnership where, you know, you want to align yourself with people that have whatever traits and resources that you don’t have. I mean, if everybody’s partnerships are all the same, they’re all good at the same thing and all bad at the same time. It’s never a good partnership you need. You all need to get along and work well together. But you need you need to have complementing traits and resources and that that’s what that was.

 

Bailey Kramer 7:54 

Absolutely, yeah. And it sounds like Brandon had more of the capital, maybe a little bit more knowledge. But he still needed somebody else who had to hustle to find the deal to be the boots on the ground. And that’s just a perfect classic example of, you know, complimentary skills.

 

Ryan Murdock 8:11 

Yeah, we’re two and a half years in on that deal. And we’ve completely turned the park around. And we’ve just boosted the NOI on that thing to a ridiculous level compared to what it was. But you know, I couldn’t have done that. Without him, he couldn’t have done it without me. So either way, we would have been dead in the water, but with the combined efforts. It’s been a great project.

 

Bailey Kramer 8:28 

Yeah. And did you do any mobile, mobile home parks before that? Or is that your first project?

 

Ryan Murdock 8:34 

That’s the first one that I had an ownership stake in and I had managed mobile home parks for four years, I manage all kinds of real estate, small multifamily, retail, some a little bit of commercial, but a fair number of mobile home park projects. So I manage them for other people. So I had hands-on experience. I mean, I’ve spent a lot of time down on the trenches of dirty nasty mobile home park turnarounds, and, and seeing what can be done if they’re managed correctly. So I had that part of it. But that initial project with Brandon was the first one that I actually had an ownership stake in.

 

Bailey Kramer 9:06 

Gotcha. And that’s awesome that you kind of heard from different platforms that he was looking for parks, and I’m sure there’s a lot of people who kind of just shrug their shoulders and said, there’s no way I’m gonna invest with him or he’s not gonna like this deal. But yeah, you know, it’s, it’s not even a risk by present there’s nothing to lose by, you know, just presenting a deal.

 

Ryan Murdock 9:28 

Like and that was, that was really my, my main goal of sending that deal to him. This is something I preach all the time, especially for newer investors or investors that are maybe experienced, but they want to get into some other asset classes to stay engaged like stay in tune and in touch with the community and the people that are doing things that that you want to do. So go to meet ups and participate in forums and Facebook groups and now Zoom calls on these you know these mastermind things but stay engaged in your group. And I knew obviously Brandon was looking for this park. And I’m like, Well, you know, Brandon Turner is a good figure to have on your radar for some for me to know who he is in the known lamp. So I said, let me see if I can at least add value instead of just Hey, Brandon, no big, big fan of yours. Let me see if I can add value and I’ll and I’ll send him this deal. And I didn’t try to sugarcoat the deal. It was a rough turnaround in Park, I said, Look, you know, this thing’s rough, but seems to meet your criteria. You know, totally get it. You don’t want it, but I at least wanted to put it in front of you. And all I really was expecting was just a response. And I got one like, you know four or five hours later, he responded, say, hey, man, yeah, thanks for saying this. I’m like, Alright, that’s a victory, like I’m staying engaged. And then you know, little did I know that he was kind of like it as much as he did; we’d end up buying it. So you know, it’s anytime that you can put yourself out in front of people or around people that are doing what you want to do. And I think it’s very important to not be annoying, and just try to like, just suck value from people without giving anything back. But like, stay in front of them. And you know, especially Listen, and listen to what it is that other people are looking for. And if you find that you can fill that gap and you can add value or bring it, bring whatever it is that they’re lacking. Like that’s how you form your partnership right there.

 

Bailey Kramer 11:09 

Wow, wow, that’s incredible. So that was you said you were living in Maine at the time. And now you’re in Hawaii. So there had to be something you know, a lot of things happen in the middle. What was the next step after you kind of locked down that park?

 

 

 

Ryan Murdock 11:24 

Yeah, so we had the park in Maine for about a year and Brandon and I would communicate frequently either on the phone or mostly via email just about all the things going on in the park. And as you know, we formed a pretty good relationship there. Friendship and business relationship and it was about a year after that he ended up buying a house out in Maui. And the house had been a nice house, but had been vacant for a few years. And, you know, he was moving all the stuff out here and moving his family and, and the house needed some work, just you know, some minor stuff. So you just sent me a text and said, hey, can you come up for a week? Just to like, help me get my house in order and just give me a hand? I said, yeah, sure. That week turned into a month and then the month turned into me flying back to Maine just long enough to like sell all my stuff, grab the wife and dogs list the house for sale, and then come back on one way ticket back to Maui, which is where I’ve been ever since. So it really happened fast. And it’s funny because I had spent you known, so much time in Maine, like hands on real estate investors do it. Like, all the properties I bought, were stuff that I looked at, that I’d offered on that I either renovated myself or been there, you know, every day overseeing the crews really just very, very hands on and just finally got to the point where in a extremely short amount of time, which is unlike me, like I was just like, yep, given all that up, and I’m moving out here in Maui, because I love this place. So it was just and it was very uncharacteristic of me. But I knew that it was a great decision, not only for just overall quality of life is a beautiful place to live, but that the potential for business growth was going to be exponential compared to anything that I would do on my own. So being able to partner with Brandon and, and since all the other people that have been brought into the team. I mean, it’s just been, I haven’t looked back,

 

 

Bailey Kramer 13:10 

That’s for sure. That’s great. And obviously, the weather, the weather difference is great in itself, but also for besides having a partner or a friend, that you’re that you’re closer with, and really starting to grow. I will point to you and Brandon, discuss Open Door Capital or was that? Was that prior to you guys meeting? Or is that when you move to Hawaii?

 

Ryan Murdock 13:37 

It was really yeah, once I moved, once I moved to Hawaii, I was doing a few different things. And it was , we had to get pretty creative in terms of compensation. I was making pretty good money in Maine, you know, I was self managing, I was doing brokerage, I, you know, I had all these different income streams that I was going to give up a fair amount of them to move out here. So I was taking a step back, I guess financially, but I knew still that it was just a great decision. One step back was going to put me light-years ahead. So when we, when I moved out here I kind of had an I was running a lot of different hats. So I was like, you know, Brandon’s personal assistant, and then I was working for bigger pockets a part time helping him with his media content, and doing some stuff around the property. You know, he had these projects that were doing some renovation and like, I remember raking leaves and cleaning the pool, to which I still do sometimes just to keep my skills tuned. But one of the things so I you know, we kind of cobbled together all these different roles that I could be constant in certain ways to, you know, to at least get me started. But one of the things that we you know, that we really had our sights on was this Open Door Capital and he had been wanting to do a large scale mobile home park project for a while just didn’t have the bandwidth, just you know, again, it’s just so much going on but he just didn’t have time to focus on it. But I think I was one of the critical pieces at least getting that started. So when we both started doing that it was just me and him. You know, really just, again, a little bit of school of hard knocks, trying to figure out what the best way to go about it was what our criteria were for acquisitions, how we were going to go About underwriting and just getting these, these projects across the finish line. And then slowly but surely, we started adding additional team members and every team member that we have added that I have now been able to delegate things that I was once doing now I delegate out to another team member, which most of all these guys do these tasks way better than I ever did, right. So like, not only am I able to get it off my plate, I’m able to give it to them. And the final product coming from them is way better than I would do. So, again, going back to that just, you know, picking the right team members, and you want to be careful, I mean, I’m around partnerships, like they’re, you know, the greatest thing ever, and they are, but you’ve got to be careful. And if you partner with the wrong people, you can just do some colossal damage, you know, two years just to your business, that yourself, your mental, like, if you’ve got to be very careful who you pick for a partner. And, you know, like I mentioned, we all work very well together. But we also get along very well and play together. I mean, like everybody, the whole team is out here a few months ago, pre COVID. And just for, you know, three or four day meeting, we, you know, certainly talked about a lot of business stuff, we also did some fun things, you know, mountain biking down the volcano, Maui, and you know, doing some beach stuff. And so it’s just a great core group where we get along on all these different levels.

 

Bailey Kramer 16:15 

Oh, that’s fantastic. And with the partnership, have you had any? Are there any negative signs or signs that you don’t want to partner with someone? Have you experienced that? Either an open door or just in your past real estate career or, you know, just a professional career some signs that maybe shouldn’t partner with somebody?

 

Ryan Murdock 16:36 

Yeah, I think, yeah, and I was involved in a partnership early on, we’re real early in my career, just a small multifamily partnership that didn’t go well. And like, it wasn’t a personal slight against that person, we just didn’t we had very misaligned goals, or it ended up like the partnership was very lopsided in terms of, you know, I felt that I was doing a lot more work and putting in a lot more than the other person. And I don’t know, he might say the same thing about me. But either way you want, you want to make sure that everybody’s interests are aligned, that everybody roughly has the same goals and that nobody feels resentful of what they’re doing versus what somebody else is doing. So you’ve got to make sure it’s equitable, you got to make sure it’s a win. And whatever that is, whether it’s physical workload responsibility, or you know, somebody putting in money in exchange for some work, and you’ve got to maintain, and always seem to check and make sure that that’s not getting lopsided one way or the other. Because it can mean, there’s certainly been times where we’ve hammered out a plan, looked great on paper, and then execution was like, No, this isn’t quite working on See, especially with partners, you’ve always got to be willing to make adjustments and spell things out. You know, I always encourage you if you’re willing and able to put stuff in writing, even if it’s if it’s a one page just like spell out everybody’s in this to people just spell out the roles, responsibilities. So there’s some level of expectation that like this, this is where you’re starting, doesn’t mean we can’t adjust this, but this is where we’re starting. So yeah, if there’s and we had a personal and Open Door Capital team early on, good guy. Hard work, it just didn’t fit. Like what we want to do, just to just you always seemed to be going in two different directions we had different goals, it wasn’t a good cultural fit. So we quickly had to part ways with that person, again, nothing personal against that individual. It just wasn’t it was not a good business partnership.

 

 

Bailey Kramer 18:28 

Gotcha. And when you’re, when you’re hiring someone, or bringing someone on the team, what do you look for in particular, is there something you have to do like personality tests? How do you know or at least that so you’re pretty sure they’re going to be a good fit?

 

Ryan Murdock 18:43 

Yeah, it’s, that’s the tough one. And it’s funny because Brandon and I have gone back on back and forth on this a lot, where we’ll do a disc profile, and we’re looking at resumes and all this stuff. So he was always a big proponent of like, his personality over there, their actual function and skill set. And I was always like, now skill sets are important, more important than personality. I’m going to shift over his way a little bit, because I know that like personalities are way more of a factor than I initially wanted to admit that it was. But yeah, we’re doing all of that. So we use this profile and a lot of the ways that we will hire people I know like Mike Williams, who’s our Investor Relations guy and Walker Meadows, absolute rockstar, he’s our Director of Finance and does all of our underwriting; they both came in through intern programmes. So we had hired a group of interns and as is often the case of anything when you have a group of people there’s always one or two that seem to rise above the rest of the group, either personality wise or they were just doing things for us that that hadn’t been asked like you know, stuff that we didn’t even know was a problem they’re like hey, yeah, you should be doing this way instead of that way. And you know, time and time again, these two just kind of rose above, above the group. So with the intern programmes, we have the interns typically find value with us because they’re getting to work with us and learn from us and, and learning our business which then oftentimes helps them In their own business if they’re trying to acquire a real estate portfolio, but for us the upside is that we get to work side by side with these guys and girls and then get to know them and see that hey, do we really like this person where you know with Mike and Walker, I think they intern with us for between six and 12 months, before we actually before they were able to accept the job offer from us leave their day job and come to work. So it’s really kind of like, you know, dating before marriage or test driving the car before you buy it, you get to work with these people. And if it’s not a good fit, then it’s just way easier to go your separate ways when they’re in.

 

Bailey Kramer 20:36 

Right? And I think there’s what mottos are saying, hire slow fire fast is that? Yes. Yeah,

 

 

Ryan Murdock 20:42 

Absolutely. Yeah. When you don’t have the right person, you got to get them out of there quick. And it you know, in any industry that I’ve been in, and there’s been a lot of them over the years, I’ve always had to hire, and fire people and man, interviewing people is just the toughest thing, because I don’t care how much you’ve bet somebody, you never really know. You never really know. I mean, I’ve hired people before that I thought were absolute rock stars a great resume that you know, the skill set that we’re looking for great references, and then they just fell flat, like they just sucked and you got to get rid of them. Whereas I’ve hired other people that I’m like, yeah, that’s probably guys probably not gonna work out or, you know, hired him for one role. And all of a sudden, he excelled in a role. He didn’t even think that he was going to be a good fit for so there are good surprises with that, too. But yeah, you’re exactly right. If somebody is not a good fit, you know, give them a fair chance, and make sure that you don’t set them up to fail, but if they’re not working out, get them out of there. Same with a tenant, right? And if you rent to a tenant, and you know, seems good, great references, but he’s not paying his rent, he’s not behaving, get them out of there. Get somebody else in place,

 

Bailey Kramer 21:42 

For sure, and so, two questions: is your team, all your different team members located in Hawaii?

 

Ryan Murdock 21:50 

I know we’re all over the place. So it originally started out. Let’s see, Brandon and I obviously are in Maui. And then Mike and Walker were in Atlanta. Mike just six months ago moved out to Maui. Just it’s cool having him here and we work better together. And then he you know, he loved Maui as well. So he jumped at the opportunity. And then Brian Murray and his wife, Tricia, Brian’s our asset manager on a few you know, Brian, he wrote crushing it departments and commercial real estate, fantastic book, if anybody’s looking to get into commercial real estate, that’s a great read. So he’s a partner and then Brian and Tricia run the property management company that oversees our properties. And they were in New York and have just recently relocated to Atlanta so that they’re more centrally located to our portfolio parks. So we’re Yeah, we’re spread out all over the place. But hey, you know, the power of zoom and email and electronic communication like yeah, we meet regularly face to face like you and I are doing now. And you know, it definitely works.

 

 

Bailey Kramer 22:46 

So you guys have been doing this pre COVID you guys are zoom and

 

Ryan Murdock 22:49 

Online, we’re dialed in, man. Yeah, well, yeah. When you live in Hawaii, you gotta be ready to adapt to distance variables, for sure.

 

Bailey Kramer 22:59 

So what, you know, where are these mobile home parks that you’re looking for? I’m guessing they’re not in Hawaii?

 

Ryan Murdock 23:06 

Or no, actually, Hawaii is the only state in the nation with no mobile home parks, which I figured because ironic. Yeah.

 

Bailey Kramer 23:13 

Okay. Yeah, that.

 

Ryan Murdock 23:14 

Makes sense. Yeah, we’re buying all over the US. So I just did a whirlwind due diligence tour throughout the mainland last month, and I was in 1010 different states doing due diligence on three different parks that we have under contract, and then scoped out another 30 plus potential candidates, but one of those parks was in Alaska, so we’re buying in Alaska, then I had to go down to Florida, to do due diligence on a park down there that we’re buying. So Alaska to Florida, everywhere in between, you know, we’ll go anywhere. I mean, we’re looking for certain demographic criteria, I mean, want a stable population, typically stable, or better, yet increasing population of 100,000 people in a 10 mile radius, and we’re looking for diversification and employers, and you know, we don’t we don’t want to we’re not gonna buy anything that’s out in the middle of the woods with nobody around. No, no jobs. No, no, nothing going on. So when I say, well, we’ll go anywhere, we will, but we were looking for certain, you know, certain demographic criteria.

 

Bailey Kramer 24:07 

Gotcha. And I’m, I’m personally, I’m a multi family guy. And I know, you know, you’ve done a bunch of different things. But what’s the attraction to mobile home parks?

 

Ryan Murdock 24:18 

There are a couple things that we really like about it, and I love multifamily three, and that’s where I got my start. And like, if we weren’t doing mobile home parks, I’d be doing multifamily. So I’m not knocking multifamily when I talk about the highlights of mobile home parks, but we really like to see, the two things are number one that we feel are very recession resistant in terms of their typically low income and workforce housing. So good economy, bad economy, there’s always a demand for that kind of stuff. So we feel we’re safe there. The other issue, the other reason we’d like them is the ability to add value to mobile home parks is different than what you typically see in any other asset class, especially apartments and I’ll compare it to an apartment complex where if you buy an apartment complex and you’re going to add value, generally Short of just raising the rents everywhere if you’re going to go in and renovate the units you’re waiting for you’re either evicting a tenant or waiting for them to move out and you’re going in you’re spending whatever 10- 15-20 grand per unit to renovate them, then you’re raising the rent, and hoping that the three to $400 a month rent increase offsets that right, that’s great. It works. But with mobile home parks, Will our target Park is typically 80% occupied. So we’re buying say 100 lot Park and 80 of those spaces are occupied. So we’re buying the parks on their, their net, their value based on their NOI today, so they were buying it, you know that they’re cash flowing, that they’re sustainable, that if we never did anything to them, we could operate these parks, no problem at the 80% occupancy but where the beauty of it is, is with those 20 lots, we will go and fill those lots, either by enticing tenants to bring their own homes and set them up and start paying us a lot rent or what’s more common is what go out and buy homes, either new ones or used ones, bring them into the park, set them up on the lot and then sell them off to a tenant buyer. And our goal is not really to make money on the sale of those individual homes. Sometimes we do but that’s not our goal. Even if we break even on the sale of that home, say we’ve got 20,000 into bringing home and setting up renovating it even if we sell a home for 20,000 and breakeven or even if we lose a couple grand, we’re still happy because by doing that we’re placing in service a $300 a month lot rent that otherwise was generating no income. So we went from no income on that lot to $300 a month, whatever it is $300- $400 a month lot rent, and most of that lot rent goes right to the bottom line, because there’s very little expense associated with just a lot of rent. So for really like a net zero cost where every one of those lots that we fill adds, you know, between 30 and 50, maybe $60,000 of value to your park. So yeah, so it’s just a different component of value. And anyone we’re also beautifying the park and then we will go in if the roads are shot, we’ll repave the roads, improve the landscaping and the signage and try to beautify the park. And there’s usually some element of like, you know, any multifamily property where there’s usually a few tenants that you need to make go away, you know, they’re not paying the rent, they’re just dragging down the community. So you evict those people and replace them with the people that want to be there and enjoy the community and improve the overall field of play. So yeah, those two things, especially the recession resistant, and the component for value add is something we absolutely love.

 

Bailey Kramer 27:25 

Cool. That’s, that’s pretty unique, and so many different asset classes in real estate. So, right now, I can’t. I can’t learn them all. But that’s definitely, you know, and I think that’s kind of what you did as well, you had one, you got it down a little bit, then you kind of started to explore because you can you can really go a lifetime with not even knowing everything about every single asset class, there’s so there’s so many different strategies.

 

Ryan Murdock 27:47 

Yeah, sure. And Brandon says this all the time, you know, it’s not so much what you decide is that you decide so he you know, he said he could have gone into anything we could have gone into, you know, apartments or self storage or parking lots or whatever. And he just chose mobile home parks and like this be good at this one thing, focus all our effort build out an absolutely rockstar team, I think we have the best team in the world right now, for mobile home park acquisitions. And that’s what we do. And I think we’re just scratching the surface on what we’re going to be able to accomplish in the years ahead. But we’re all aware of, you know, if something changes, you know, the mobile park space gets too competitive, or we’re not able to find deals or deals that meet our investor return requirements. So we can pivot, we can go and do something else. And they’ll be a learning curve for that. But we’re confident we can figure it out. But right now it’s full speed ahead on mobile Park.

 

Bailey Kramer 28:34 

Right. So what’s kind of the future for Open Door Capital? Do you guys have any kind of vision going forward?

 

 

Ryan Murdock 28:40 

Yeah, the original vision was 50 million and acquisitions by the end of 2021. And we’re going to hit that a year early. So we’re going to be there this year, I think, if not, we’ll be damn close to it. So moving forward, I don’t see any reason we’re going to let off the gas at all, something that we might change and we go back and forth on this is, you know, changing our Buying Criteria a little bit. Obviously, we’d rather do one big deal than a bunch of small deals, because it’s pretty much the same effort, you know, in terms of getting the bank loans done, and the due diligence and you know, whether it’s a million dollars or $10 million, the process is the same. So we tend to find ourselves and I, you know, I did this a lot, and I’m sure a lot of people do this even when I was buying a small multifamily. So my criteria would change based on kind of my desperation level, you know, if I hadn’t, if I hadn’t bought anything and a few months, I might go out on a limb and buy something that I would normally pass over if I had three or four other good deals under contract. So it’s the same struggle in the mobile home park space, and you know, you can’t, we have pretty clearly defined criteria, but some of the other kind of secondary criteria is a little squishy, and we’ll depending on our appetite for a deal in any given time, we’ll bend on those a little bit. But I think given the amount of deals we’ve been able to find and successfully bring to closing one of the things that we are considering is, you know, like when we started out, we were we’re looking at parks 50 lots and above and we’re looking at private water and private sewer and there’s just too many things to digest. So we increase that to 100 lots only public utilities which weeded out a bunch of stuff and resulted in us just buying higher quality parks, we may increase that. I don’t know. But you know, something that’s up for discussion, we increase that to 150 lots or 200. Lots just try to narrow out and get bigger and better deals.

 

Bailey Kramer 30:19 

Gotcha. Kind of always shifting your target a little bit.

 

Ryan Murdock 30:23 

Yeah. Or at least always paying attention. You know, like, yeah, I think I think people have a tendency, and I was certainly guilty of this. Like, I think some people, especially small multifamily investors, just work so hard, they just put their head down work so hard to get deals on a contract that they forget, every once in a while, they’ll pop their head off and look around and see, okay, that’s what I’m doing. Still absolutely the best thing and don’t get shiny object syndrome would be jumping all over the place. But you have to make minor adjustments to what you’re doing, whether it’s your Buying Criteria, or I mean, I went for a number of years, like just grinding away buying small multifamily that I never really stopped and took a breath until like, four or five years later, I look back and realize that, hey, wait a minute, these properties that I barely was able to buy five years ago now have a pretty decent amount of equity, I can look at like refinancing these things either for a lower rate or pulling out some cash, which is what I did, I was able to buy more properties, but like, I was just so focused on like, I gotta buy these, I gotta operate them. I gotta like, keep the wheels on the buggy. But I never stopped to take a breath. Like I said, Hey, wait a minute that I can circle back to what I already have in my portfolio and extract value from that, and go do something else with it. And you know, in talking to other investors, I don’t think I’m alone there where you just, you have your blinders on doing what you’re doing. But you don’t stop to look at what other opportunity you’ve got. Right, right in front of your face.

 

Bailey Kramer 31:36 

Awesome. Definitely, definitely a balancing act between keeping focus but not, you know, huge shiny object syndrome. Yes.

 

Ryan Murdock 31:43 

Yes. Just always be aware of what else is going on?

 

Bailey Kramer 31:46 

Yeah. So are there any last things you want to mention about partnerships? Open Door Capital, you know, your story, before we move on, move on to the next section of our show?

 

Ryan Murdock 31:55 

No, I think we’ve done pretty good cover in a minute. Since this keeps on going.

 

Bailey Kramer 31:58 

Cool, cool. All right. So now we’re going to move on to the next section of our show, which is the big four, or we ask all of our guests the same four questions. So number one, Ryan, what’s your number one habit for success?

 

Ryan Murdock 32:09 

Mine has been persistence and that offsets like poor decision making and stupidity, where if I just keep going, like, I’ll finally get through it, I don’t recommend that that’s everybody’s path to success. But I don’t know how many times I’ve just felt overwhelmed in some situation, whether it was a tenant issue or alone that was falling apart, or, you know, something, that property inspection that I think I was going to be able to overcome. But every single one of those times I’ve been able to get through it. And it’s just by persistence. And it’s just taking a big problem and breaking it down into small steps and just taking it one step at a time and getting through it. And sometimes the results weren’t as favorable as what you had hoped they were going to be. But I mean, I haven’t found anything yet. That has just been that it’s put me out of business. It’s put me you know, saying, hey, real estate stocks, I’m going to go do something else. Now there’s been some stressful, sleepless nights, but just, you know, plough through it, get through it, and then the next time you experience it, hopefully, you’re better equipped to deal with whatever the problem is.

 

Bailey Kramer 33:04 

Awesome, awesome. All right. And number two, limiting beliefs, our thoughts in our heads that hold us back from realizing our potential, what is one limiting belief that you were able to crush? And how did that impact your life

 

Ryan Murdock 33:17 

I’m gonna split this in two and I, part of it already touched on, was just that I had to do everything myself, whereas like, that is my personality type. And now that I’ve learned that, hey, partnerships are working well, and I can delegate and together we can grow larger and stronger and better. I wish I had done that years ago, I wish it you know, early on, I better align myself with people because I would have grown a lot faster. And then I’m going to do a second part of that question is an example I already touched on as well as is like sending that that mobile home park that I found to Brandon, like, my limiting belief was like, Oh, yeah, there’s no way he’s ever gonna want that like, but he did like so shoot your shot man, like you got an authentic don’t like that would have been a huge limiting belief. And it was for a day when I sat on those numbers, like, I’m not gonna send these to brandy, I don’t want him like, I’m just wasting my time. Like, no, does it just get out there. You know, get out of your comfort zone and just go for it.

 

Bailey Kramer 34:11 

Cool, awesome answer. And number three, what advice would you give to someone who’s looking to invest actively or passively in real estate for their first time?

 

Ryan Murdock 34:22  

Actively or passively. So I’m going to split that one and two, so passively, you want to make sure that wherever you’re investing your money, whoever you’re investing your money with, you trust. So if it’s in a syndication or within a fund, or you know, you’re investing just in somebody’s flip, like you can analyze the numbers all day long, and you can look at spreadsheets until you’re blue in the face, but really, what it comes down to is you need to trust the sponsor of that deal. Because it’s only as good as that sponsor, if that sponsors, trustworthy. Hopefully, even if the deal goes sideways. There’s a good story behind it and or he’s going to make you whole and which is not always guaranteed. Don’t go sideways, unforeseen circumstances can tank a deal. But you want somebody that you know has a good track record in business and also as a decent human being, right. So be wherever you give me money to actively, there’s a couple of key points on that one as if you were going to get into active real estate investing on your own for the first time, you are going to make mistakes, and you want to make sure that you are well capitalized to the point that you can absorb financially those mistakes that you are going to make. And that’s true even for experienced real estate investors. I mean, we always make sure no matter what we’re buying is what our capital is, what I’m finding personally, that I have adequate reserves to not only take care of the things that I know are going to be a problem, but to take care of the surprises that pop up. So I see a lot of investors and I was guilty of it myself, just get in with this, you know, no money down, I’m going to get into a deal and man that that works a lot of times, but it can be dicey. Um, if you’ve got a heating system that fails or a roof that leaks or, you know, something significant that needs to be fixed right now. And there’s, that’s a 10 plus thousand $20,000 repair, you’ve got to have a way to deal with that. Because if you don’t, its lights out you’re gonna be you’re gonna be out of business. So, be well capitalized. And if you’re not, then you know, instead of diving in with both feet, on your own partner with somebody on the first deal and learn what they’re doing, whether even if that means going to work for free, you know, helping out renovating during the weekend or you know, maybe investing a little bit of money with an operator and kind of getting a little hands on lesson from them. But I you know, I say this all the time, you wouldn’t go out and just open a restaurant with no restaurant experience, you just wouldn’t do it, it would be it’s a suicide mission, right? But if he worked in a restaurant, even for minimum wage, for six months or a year, you would learn a lot of things that you didn’t even know needed to be learned about running a restaurant so that when you went out to open your restaurant, you’d be much better equipped. So the same thing applies to real estate. If you just kind of dive right in with no clue as to what you’re doing. Like that. That to me, it seems foolish. Align yourself with people that are doing what you want to do and contribute value to them in some way. Even if even if the only takeaway for you is knowledge, you’re going to set yourself up for more success when you do go out have

 

Bailey Kramer 37:04 

Great tips, good tips. And number four, what is your favorite real estate business or personal development related book,

 

Ryan Murdock 37:12 

A huge fan of the four hour workweek, I say this one on every podcast but like that one impacted me more than anything in terms of just changing my mindset that I don’t need to be hands on in my business all the time. Even if I like it, like I want I want that ability to be able to step away so it’s all about building systems and getting things in place. And for me it was you know, when I was managing my portfolio of small multifamily It was like getting phone numbers set up and answering services and handyman and on call guy so that I could leave town and the tenants would call the same number that they always call for anything and somebody would pick up the phone whether it was me or somebody else but they never even knew I was gone. And most importantly my business, my business didn’t suffer because of it. Anybody can pack up and leave and go away from the business and then come back to ruins but building systems so that I didn’t have to be there really was a game changer. What eventually enabled me to build systems that I could just leave my multifamily portfolio moved to Maui and have everything taken care of and operated. Okay, so yeah, for I that all leads back to the four hour workweek and what I learned there,

 

Bailey Kramer 38:19 

Awesome, yeah, I read that book as well. And it kind of opened my mind as well to systems and kind of just replacing yourself out of the equation. So you can work on either something you like more or just doing whatever you really want to do.

 

Ryan Murdock 38:33 

Yeah, you can only do so much on your own before. It’s just I mean; you can only scale so big. There are only so many hours in a day. So the more that you can offload onto a system or another person, even if it’s at a monetary cost is if it allows you to continue to scale, continue to do business or continue to go have vacations and chill out and enjoy your life. It’s money well spent.

 

Bailey Kramer 38:52 

For sure, and then Ryan, Where can the listeners get a hold of you?

 

Ryan Murdock 38:58 

I’m on Instagram at Ryan Murdock 21 sometimes I post some real estate stuff usually it’s like goofing off and scuba diving pictures you get us there or you check out our website. It’s OpenDoorCapitalLLC.com where you can see my bio and everybody else and I will put in a plug to where we’re going pretty heavy into acquisition mode still for the mobile home park so we have a website called BringBrandonADeal.com and if anybody out there brings us an off market mobile home park we don’t need an under contract we just need a warm introduction to the seller either over the phone or an email if we end up closing on that park we’ll write you a finder’s fee check of $100,000 So a great way if anybody knows of a park local to them it’s off market 100 lots or bigger public water public sewer. Get us a warm intro with the seller and you can get yourself a check for 100 grand.

 

Bailey Kramer 39:47 

Sounds like a challenge I’ll be I’ll be right on it.

 

 Ryan Murdock 39:50 

Go for it man. Bring us apart, bring us to.

 

Bailey Kramer 39:52 

That mean? That’s a great opportunity. And it’s cool that you actually did that before I’m sure BringBrandonADeal.com was the thing. So, you know, officially,

 

Ryan Murdock 40:03 

Yeah, no. And we’ve gotten quite a few leads, and it’s generated a lot of interest. So yeah, anybody out there that wants to make 100 grand with a relatively short amount of time, give us an intro to a sale.

 

Bailey Kramer 40:15 

Cool, cool. Well, Ryan, thank you so much for coming on the show today. You had a tonne of value with partnerships, mobile home parks, and kind of sharing your journey about how you went from Maine to Hawaii and all the different asset classes. So thanks again for sharing and coming on the show.

 

Ryan Murdock 40:31 

Yeah, man, it’s been a lot of fun. Thanks for having me on so I can share the story. It’s been a great ride.

 

Introduction 40:40 

Thank you for listening to The Real Estate Investing Made Simple Podcast. For more resources or to connect with us further, please visit our website, www. Baileykramer.com. We’ll see you next time.