Gabriel Petersen Real Estate Background:
- Full-time real estate investor with 5 years of real estate investing experience
- Owner and founder of Great Northwest Home Buyers and Equal Housing Group
- Portfolio consist of 3 flips, 2 wholesale deals, 2 doors under management & contracted a 50 pad mobile home park
- Based in Seattle, WA
- Say hi to him at: https://therealestateinvestingclub.buzzsprout.com/
- Best Ever Book: War and Peace
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Best Ever Tweet:
“Paid advertising is like a switch, you turn it on, and you get leads” – Gabriel Petersen
TRANSCRIPTION
Theo Hicks: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I’m Theo Hicks and today, I’ll be speaking with Gabe Petersen. Gabe, how you doing today?
Gabriel Petersen: I’m doing fantastic. How are you, Theo?
Theo Hicks: I’m doing fantastic as well. Thanks for asking and thanks for joining us; looking forward to our conversation. Before we hop into that, a little bit about Gabe – he is a full-time real estate investor with five years of real estate investing experience. He is the owner and founder of Great Northwest Homebuyers and Equal Housing Group; his portfolio consists of two flips, three wholesale deals, and then a duplex, and he’s currently under contract for four mobile home parks. He is based in Seattle, Washington, and you can say hi to him at his podcast, which is called The Real Estate Investing Club With Gabe Petersen. So Gabe, do you mind telling us a little bit more about your background and what you’re focused on today?
Gabriel Petersen: Absolutely. So I actually got into real estate from digital marketing. I started in the corporate world, did that for a very, very long time, and just wasn’t super-thrilled about it. I wanted something different so I started testing out different fields. I got into digital marketing, did an e-commerce store, and as time went by, me and a friend, we decided we wanted to buy a house, and so we went bought a triplex out in Tacoma, Washington, and in doing that, I decided to use my digital marketing skills to start to get leads and I found it it’s pretty easy to do that and I figured I was onto something, so at that point, I focused my attention on to real estate since then. I stayed in corporate for a little bit too long, in my opinion, and then probably about a year ago, I switched gears to full-time. So have been focusing on mobile home parks in Washington State specifically, but also nationally, we market for mobile home parks, and single and multifamily.
Theo Hicks: Perfect. Do you mind telling us some of the skills that you learned in digital marketing and how you apply that to finding leads? You mentioned it was easy, so tell us how we can also easily find leads through digital marketing.
Gabriel Petersen: There’s a caveat there. It took me a long time to figure out how to do it, but once I figured it out, it became easy, but it’s not a secret. I’m sure everybody listening, they’ve watched some show or some guru out there that explains it, but we do PPC, so both Microsoft and Google PPC, and then Facebook ads. Facebook, we mostly do for remarketing, but we’ve also done just standard Facebook ads. And then on top of that, we also do everything else behind the scenes – drip campaigns, email marketing. We’ve tried text marketing, as well as ringless voicemails, so the whole thing together works pretty well, but the thing that really got me started in the beginning was PPC, Google PPC.
Theo Hicks: Sorry, PPC is pay per click, right?
Gabriel Petersen: Yeah. So Google ads, Google search, search ads.
Theo Hicks: Yeah. So it’s pay per click, and then what’s the other one, because I know there’s two versions. Pay per click and what’s the other one?
Gabriel Petersen: Pay per click, and then organic SEO. SEO is a little bit harder. You’ve gotta have a lot more time, in my opinion. Our site’s ranked, but that’s not where we get the majority of our leads. Everybody who’s getting started in digital marketing for their real estate business, I would recommend either hiring somebody to do SEO or just get started with paid advertising, because paid advertising, it’s like a switch. You turn it on and it goes, you start to get leads. But with SEO, you really got to build it up and it takes time and little bit more effort than a lot of people are willing to get going with.
Theo Hicks: So let’s focus on the four mobile home parks because it sounds like this is what you’re transitioning to. So do you find all those through PPC or something else?
Gabriel Petersen: See, I think three of them, we found with PPC and then the last one was cold calling. So sellmymobilehomeparks.com is our landing page. So we run national campaigns, and that’s PPC across the entire USA, and once we start getting leads coming in, we send them an offer, and based on our specific criteria for buying mobile home parks, if it really fits it, then we’ll buy it ourselves. Otherwise, we wholesale it to other people; but that’s how we got three of them. The last one in Washington State, we actually called the owner.
Theo Hicks: You mentioned before we went online, the breakdown of how you plan on approaching these four. Do you mind saying that again? So you said you’re gonna buy some and then wholesale the others.
Gabriel Petersen: Yeah, we’re actually going out there today, George Washington, it’s a little city out in Washington, and that’s the one that we think we’re going to buy. And the reason we’re going to buy that one is because we got killer seller financing terms. It is 80,000 down, and then 3.5% interest. So we think we’re going to go pull the trigger on that one. The other ones don’t quite fit our criteria for MSA, so we’re going to be wholesaling those ones.
Theo Hicks: How do you, just for your business in particular– so you mentioned that you do the national campaigns, and then once the leads come in, you’ll submit an offer, and then I’m assuming that this one you plan on buying, this will be your first time going to see it in person?
Gabriel Petersen: Yep.
Theo Hicks: So how do you come up with an offer price, sight unseen?
Gabriel Petersen: Actually, I do this with single-family too, is we offer sight unseen, and the reason is because when you’re doing digital marketing, when you get a lot of leads coming in, you just don’t have the time to go to all of the properties. So what we do is we create an offer options letter and we look at the demographics of the area, we ask the seller questions for mobile home parks, we’ll ask them, “What’s the pad rent? Are you on city sewer, city, water?” etc, etc. So once we get a picture of what the property is like, be it a single-family or a mobile home, then we’ll go back, we’ll plug it into our formulas, and we’ll pump out and offer options, and that’s really just to make sure that we’re all on the same page. That us as the buyer and the seller are on the same page of where we think we’re going to end up with our actual PSA signed.
If they agree to the range that we send them and they like what we’re talking about, what we think we can offer, then we’ll go out to the property, we’ll actually see it, we’ll walk it and we’ll get it under contract. But this mobile home park that we’re going out to today, we actually got that under contract before we signed it because we love the terms of the seller financing; you don’t get that very often, not many sellers who are willing to do that, especially when it comes to mobile home parks. So we’re giddy about it; we’re excited.
Theo Hicks: So you offer options. What are the factors in that? So obviously there’s a price range, but are there also one that says seller financing and one, you’re buying all cash or other ones, you’re financing it? Is it like all the different offers you’re willing to do on the property and if any of those makes sense to them, then you go out into the property?
Gabriel Petersen: Yeah, exactly. For a single-family, there’s three options. There’s gonna be two seller finance options, one all cash, and when we look at the all-cash, we’re looking at it as a flip, and then for the two seller finance options, one will be interest-only, and then one will be just standard seller finance, and with each one of those numbers, we can pay a different amount based on the rent and the cash flow that we can expect. So we’ll give that to them, they can look over the three options, figure out which one fits best for their specific situation, and then we can go forward with that.
With the mobile home parks, it’s just two options. We do seller-financed and we do all-cash. Seller finance is always going to be higher than all cash, because, well for one, it’s easier. It’s an easier transaction for us to do seller financing, so we’re willing to pay more for the property because there’s probably going to be less down, there’s going to be less of our time involved getting it to the finish line.
Theo Hicks: So when you’re coming up with these numbers, what’s the target return metric that you’re basing it off of?
Gabriel Petersen: That’s tough. I should have a better answer for you there. We should have one metric, 20% IRR; we don’t though. So we look at each one individually.
For single-family, I like to have at least $200 — well, I’ve been going a little bit higher, so at least $300 per door in cash flow. That’s what I’m offering on there. For mobile home parks, we like to get it between a 9 and a 12 cap. It depends. If it’s on septic and well, then we’re going to want a higher cap rate. If there’s other aspects of the property that make it less attractive, we’re going to want a higher cap rate. If it’s in a great area, we’ll go lower, 9% actually. If it’s in a really great area like near us, Tacoma, Seattle, we’ll go down 6%. So I guess we do have metrics that we go for. So cap rate for mobile home parks, cash flow for single-family.
Theo Hicks: What made you decide to transition from or at least add mobile home parks?
Gabriel Petersen: Well, that one was actually my partner. He had been really interested in this for a while and got us excited about it as well, and then once I started looking into it, it just made a lot of sense. I’ve always wanted to do large multifamily properties, but there’s a lot of capital involved with those ones. They’re just really expensive. Mobile home parks, they’re not as expensive. You have the same number of units and you don’t have to deal with a structure. So there’s no leaky pipes, there’s no broken windows. You think about the headache that comes with owning a property and managing a property, that’s usually gone with mobile home parks, because what you’re dealing with is the electrical is the infrastructure; electrical, the water, the sewer, things that don’t normally break and are easy to be maintained.
Theo Hicks: Alright Gabe, what is your best real estate investing advice ever?
Gabriel Petersen: It’s tough. I asked this on my podcast too and never thought about it myself, but I like the advice “Don’t give up.” I know it’s trite, but it is honestly, in my opinion, really good advice. There’s so many times when I have just been like, I don’t know– leads aren’t coming in as well as we thought they were or the deal didn’t turn out as well as I thought it was going to do, and I just feel like, “Oh, I just want to give up. I’m tired of this”, but if you just keep going, it is gonna work out. You just have to just pedal to the metal and just keep going forward. So don’t give up. That’s the best advice I can give.
Theo Hicks: Perfect. Okay, Gabe, are you ready for the Best Ever lightning round?
Gabriel Petersen: Let’s do it.
Break [00:12:21]:03] to [00:13:25]:05]
Theo Hicks: Alright, what is the best ever book you’ve recently read?
Gabriel Petersen: That’s tough. So I’m reading War and Peace right now I have this thing about reading the best books critically acclaimed. So I started reading War and Peace; it’s really big. I don’t know if it’s the best book ever recently, but Seneca, On The Shortness of Life is probably the best book that I’ve read in the past year.
Theo Hicks: I think War and Peace is like Crime and Punishment. I had a hard time reading that book, too.
Gabriel Petersen: Yeah, it’s long. There’s like [unintelligible [00:13:50].00] pages.
Theo Hicks: I know. It’s long and super detailed, but I’m gonna check out War and Peace. I like reading older books. Okay. What is the best ever deal you’ve done?
Gabriel Petersen: The best ever deal we’ve done… Actually, probably the wholesale that I did just two months ago. It was a duplex near me here in Washington, and I ran the numbers and I had this number in mind that I was going to buy it for, and then in conversation, we had talked to another real estate investor friend of ours, and he offered to buy the contract from us for $70,000 more than we were going to be in the contract for, and we were like, “Well, that’s a no brainer. Let’s do it. $70,000 – that’s an easy paycheck. Let’s close it right now.”
Theo Hicks: If your business were to collapse today, what would you do next?
Gabriel Petersen: Oh man, probably just start another business. Corporate – some people like it; it’s not for me. I really like being an entrepreneur, doing my own thing. So I’d probably just start a new one. There’s tons of different ideas out there. I did digital marketing for a bit, I might do that, but I want to stay in real estate. I do really like real estate a lot. So hopefully I can just restart the same thing I’m doing right now.
Theo Hicks: What is the best way you like to give back?
Gabriel Petersen: Probably my time; in my opinion, that’s the biggest, greatest gift you can give somebody is the gift of your time. So if anybody needs advice or just wants me to look over a deal or anything like that, that’s probably the best gift I could give is just my time.
Theo Hicks: On that note, what’s the best ever place to reach you?
Gabriel Petersen: Go to www.therealestateinvestingclub.com, that is the website for my podcast. Or you can reach out on LinkedIn. Just search Gabe Petersen, real estate investor. I’m sure I’ll pop up; my pretty little face with a blue shirt.
Theo Hicks: Perfect. Okay Gabe, thanks for coming on the show today and giving us your advice on digital marketing and mobile home parks. We talked about how you’re able to find most of your deals and that’s through PPC, pay per click. The other one is SEO and so you mentioned SEO is a little bit harder, takes a little bit more time. So your recommendation was when you’re starting out to focus on a paid advertising, and then maybe hire someone else to get the ball rolling on SEO.
We talked about your transition into mobile home parks. Your business partner was interested in it for a while, and you’d always wanted to do multifamily, but multifamily is a little bit more expensive than mobile home parks, plus there’s a lot less structural things that can go wrong with mobile home park compared to multifamily.
Currently, you’ve got four deals under contract. You found three of them through pay per click and national campaigns and one of them was through cold calling, and then you’re going to end up buying one of those, which you’re actually going to see– I think you said today or very soon, because of the really solid seller financing you were able to get.
We talked about how you’re able to submit offers on these properties without seeing them in person because obviously when you’re doing mass marketing, you’re not gonna be able to see every single deal in person. So you mentioned that you create an offer options letter. So you ask the seller a bunch of questions, do some research to get a picture of what’s going on at the property, and you plug all the information into your calculator to get offer options.
You said for single-family homes, you’ve got three options – two seller financing; one of those being interest only, the other one being standard, and then one being all cash. And then for mobile homes, it was two offers – one seller financing, which is gonna be the highest and then other one, all cash.
The metrics that you want to see to come up with these numbers, the offer numbers for single-family homes is about at least $300 per door in cash flow, and for mobile homes, it is a 9% to 12% cap rate depending on the location and a few other factors. And once you get that offer, you send those in and then if they agree to the offer range or one of the offers or they’re interested, then you will go out and actually see the property.
Then lastly, we talked about your best advice which was to not give up and you gave examples of times where you wanted to give up but had major breakthroughs. So again, Gabe, really appreciate you coming on the show. Best Ever listeners, as always, thank you for listening. Have a best ever day and we’ll talk to you tomorrow.
Gabriel Petersen: Thanks, Theo.
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