The average price point for new construction in Florida is $425,000. With the two to 300 space, we dominate that market. So imagine we go into permitting, we close on a lot, our due diligence is done. We already have the permit package ready. We file it as soon as we have a copy of the deed off the website two days later. Done. We created a mini HOA that took care of the road. Now it becomes a maintained road and guess what? FHA financiable. Everybody’s getting their taxes now. They know the data’s coming in and I just see all the showings requests just go crazy. And then we’re seeing offers come in now because I know my buyer needs their tax returns to close. Once you get those little nuances dialed in, it becomes easy.

Thomas, thank you so much for taking the time. I know you’ve done over 500 transactions in this space. I am curious though to take a step back and just see how you got into the space in the first place.

I had the old model, the normal model, right? I had an acquisition company that provided my flips, my rentals, and then we wholesaled the rest. COVID in Florida was bad for a little bit of time, but the market went crazy. So it was great, great, great flipping, like nuts. And then 2022 happened, interest rates. Okay? And what I realized was we were never going to be the best flipper, but also I am 54 today. And I remember when my parents bought their first home in 1981, 17% interest rates. Now, we’ll never see that today, okay? But seven or eight was almost the same thing. So it was like a meteor hit our reality. And you either had to pivot or go extinct. And I was actually working on a manufactured home that I planned on flipping. But when we got rid of the squatters, they had destroyed the home.

(01:44)
They took a chainsaw down the middle of it. They tried to unhook it for me. So when the sheriff opened the door, it was like that old Bugs Bunny cartoon when you see fleas jumping around. He’s like, “You want to go in? ” I’m like, “Nope. Nope.” And so a girl in the office and I did the whole project virtually. Remember the way three estimates for everything had no clue what we were doing. It took 11 months. I thought I would make 50, 60 on the flip. I made 11,000 only. But what I saw was I saw that this was so much more scalable than flipping. It turns out there’s only 27 or 28 line items for this project. There can’t be 29, but it could be 26. It’s never anymore. So when your expense sheets, they’re really dialed in. I had five construction crews working for me. I felt I was working for them. I’m always trying to keep them employed because remember back then it was hard to keep contractor. And now it changed. Now, even though we own construction management with that, we can use all subs. I could go from a $50,000 a week payroll to, I think we’re at seven now. I like that. Okay? I have less hair because of that $50,000 a week for sure. But we don’t have to worry about getting whole crews. It’s just separate vendors like well guy, septic guy, simple. And I saw just how scalable it was and I just ran with it. I could cut back and grow.

Yeah. Why do you think so many investors overlook modular homes or manufactured homes?

There’s a lot of stigma to how they look. So we just won the parade of homes for the second year in a row, and this year they made me compete against regular houses, stick and block from two to 300. Well, they can’t build anywhere near what I can build for that price. So when I found this out, they didn’t tell me that they were getting rid of my own category. Luckily, I have a friend on the committee over there. They told me, “Hey, this is what they’re doing.” So I changed units at the last minute. And when you walk in, all the judges says, “I can’t believe this is a manufactured home.” And that’s how investors feel. They feel it’s the old, right? But it’s hard if you’re doing new units to get financing, okay? It has to be private. None of the big lenders, Kiawi, none of them loan on it like that.

(03:46)
And at one point, when I was flipping, I had a $5 million line with Kiabi and I was racking that out and everything else we were using. And they won’t even look at this. So I think that’s part of it also is getting the money to do it.

A lot of people, at least it seems like it seems harder, but everyone I’ve talked to that’s actually in the business always says it’s easier. Why do you think they always think it’s harder?

Because they don’t have a system for it. So we talked, right? So I have Gary Harper, right? There’s my secret weapon and we built … There was nobody I can go to. Look, I know Tiffany High, I called her, “Hey, I need a system for this. ” She’s like, “I don’t know how to do that. ” I talked to all these people and everybody kept saying, “Go call Gary.” 1-800, call Gary. And so we built out this really amazing system to where most entrepreneurs don’t need that, but your team does. Okay? I work well in my chaos, but nobody else does. And so when you have a system for it, the system carries you. And when you understand that the only differences is going to be the county permitting rules and things like that, everything else, the dance stays the same in the state. And once you realize it’s checklist and your due diligence sheets, and as long as … I have 32 projects going right now and I’m down two project managers.

(04:58)
We’re running that with the ops manager and a project manager because there was an accident with one and then once had a leave for a family emergency, but 32 are being run by two people right now because we’re systemized.

(05:09)
And once you have the system, like with everything else, it becomes easy.

Would you say the buyers are a little different than a normal home?

Well, okay. So the average price point for new construction in Florida is $425,000. With the two to 300 space, we dominate that market because if you look like what they’re selling in that price range, it’s garbage. Okay? It just really is. Okay, we’re 300,000 in Orlando, but that same home, if you bought it in Polk County in the same size lot, you’re probably 230. And so as long as we understand that, that’s our buyer for sure. We know this is our avatar. First time home buyers, people downsizing maybe, but not as much, but they’re who we serve. And

If we give

Them a really good product, look, we own all our verticals, okay? So now I’m giving a builder credit or lender credit, any credit, like we’re like 15,000 worth of credits on a 300,000 home. And so we can do that because we built the footprint and all the little sub verticals to support us to where now we’re just paying ourself the money instead of somebody else. So then we’ve been able to keep prices steady without raising them as prices have gone up the last year or so.

What do you think the most common misconception is from an investor going from traditional houses to modular or manufactured? What do you think that main misconception is?

One, how they look. Okay. If you look at what the new ones are, like I said, I can make them low end or I can make them high end, but I don’t think they’ve really seen how they look, how once you understand the process, it never changes, okay? It never changes. And they’re missing out for sure because … So look, having built spec homes, we’ve all had our stuff stolen, right? My home comes complete, complete.

(06:55)
So imagine we go into permitting, we close on a lot, our due diligence is done. We already have the permit package ready. We file it as soon as we have a copy of the deed off the website, two days later, done. But while we’re in permitting and waiting, my home is getting built. And right now we’re having them built in seven weeks, seven weeks, offline, one week of quality control. So within two months, we’re ready to deliver and you’ve just used your whole permit timeline. Now your home is there. We have done a project in 87 days from when I bought the lot to when I sold it to the end buyer. That county’s different. If you walk in your permit still in Polk County, which is right south of Orlando, it’s the fastest growing county in Florida. It is my absolute favorite because you walk in a permit two days later.

(07:37)
Who doesn’t love 87 days cash conversion cycle? There’s just missing it. That’s it. We factor a holding of only six months on our projects.

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What are some key strategies that you’re using to find the land?

So I come from the investor world, right? So I have a great network of wholesalers and we have taught them to look at things differently. The septic laws and rules in Florida change drastically and they’re changing every six months until 2030 where everybody who has septic either has to connect to city sewer if it’s available or put one of these new nitrogen enhanced units. And those units start at about $12,000 now

(09:01)
Where a regular unit in the same area used to be six. It’s just double because of what they want done. If you’re in like the coastal areas, they can be 25,000. And so once you realize that we taught them how to use the BMAP to find it so they can negotiate better. We don’t do a lot of outbound marketing anymore. We really don’t. People bring us what we want. We buy because we know our numbers. “Hey, if you give me seven days to get all my estimates and the county says I can build, and as long as everything is as you said, we’re going to close. And so people work with us all the time and just bring us stuff. Plus we own the brokerage, so we have the MLS. About half of our stuff comes off of that for sure.

Are you buying any properties that you love the land so much that you’re willing to break down that property and then put a manufactured homes or you’re not really seeing that as much?

What do you mean like an old unit or trees?

I guess an older unit.

Oh yeah. Oh no, no, no, no.That’s one of my favorite strategies because if you have an older unit, you’re not paying the impact fees. So Orange County impact fees, $25,000. Osceola County, where Disney is, $33,000. So let me go buy an old unit. So we just had one go under contract in Orange County yesterday. We’re not even done with the build. 299,000, 1400 square foot home. I’ve done the same model, basically one block, two blocks over on the corner lot. Every time it turns out, that’s what I’m getting. So to go from the old unit that was there to the newer size, it only costs me $2,500 in impact fees because it goes by an adjustment of how much you’re putting down. So I saved 22 grand.

(10:45)
The septic and well are both viable with a little bit of work. I think we put six or seven grand in, not 30. And so as long as you know that, you get every … Look, it’s like with everything else, do your homework, do your due diligence. When we go under a contract info septic, we’re going to get it checked. We’re going to get the well checked. I want a report in writing. I don’t want some guy just telling me it’s good. No, no, put it in writing because they’re not going to say it’s good if you didn’t put it in writing later. I’ve seen it. So once you get those little nuances dialed in, it becomes easy and repeatable.

Are you only doing lands that has road access or are you creating road access at some lots or is it mostly- I’ve done

It once. I’ve done it once because there was this lot and it was so long and wide. So we created the road and then there was six homes there. And what we did was to make it usable for say FHA financing, we created a mini HOA that took care of the road. Okay? Now it becomes a maintained road and guess what? FHA financeable.

And was that a gravel road or was that like actual pavement road?

It was like that tar gravel mix. That’s what the minimum

Number

Was we had to use. Okay. Thankfully they didn’t ask for a DOT quality road because man, expensive.

I was going to say that would have cost.

100 grand, right?

I don’t doubt it. But

I have a great lawyer here. So when things like that come up, I have a guy named Joe Siegel. He writes some of the real estate laws, but also all the land trust laws.

And I’m

Like, ” Joe, what do I got to do here? How can I make this work? “And he was like, ” Oh, that’s easy. Just create an HOA. “I’m like, ” Okay, I don’t know how to do that either, right? So let’s go get this done.

“That’s funny. Yeah, I didn’t think about that. How often do you find a plot of land to do multiple homes on that one piece of land?

Not as much as I would like, especially in central Florida. And if I want to go more off the area, the beaten path, but in this economy though, in this market, I’ve really pushed into where I buy from, it’s Tampa through Orlando, the I- 4 corridor, because those move a lot quicker. As you go further and further out, the buying pool just went away. Now, everybody’s getting their taxes now. They know the data’s coming in and I just see all the showings requests just go crazy, right? And then we’re seeing offers come in now because people … I know my buyer needs their tax returns to close.

So

This is normally as we get … Now it was a little, I think this year, not that I … I know I’m finishing my taxes Monday, but I don’t know when we file, for sure. But I know it was later for most people this year by like a week or so. And I’m like, ” Hey, man, normally by this time it just spikes because we track everything and then someone said, Oh, tax season’s a week later. “I’m like, ” Oh, and then a week later, sure enough, here comes the spike in showings, listings, I mean, request offers. We just got three yesterday. We accepted one. We’re going back and forth on the other two. Okay?

I’m curious if you are doing the plot of land with multiple homes, are you … For example, let’s say you sell four of the six homes, are you separating the lots to where they own the lot? Okay. Yeah.

But when you do it, I’m only developing one at a time too Because I’ve done that before where I’ve done … I did three houses on each side of the street. I thought it’d be a great idea to do them at the same time. Well, the market couldn’t absorb that kind of products because they were all within 1,275 to 1,600 square feet. I was competing against myself.

I would

See the emails from the realtor to my broker, my broker partner, and they’d be like, “Hey, we’ll just go buy the house across the street.” They’re using my own and it took me 20 some odd months to sell all them, okay? So that’s something I wouldn’t do anymore, but what I will do is I have three … I just bought a big one now. It was a little over an acre. We subdivided it into three. So I cleared them all together, what we need to clear. That one has city water, but septic. So we’re putting all the septics in first because we’re getting a discount for them. Yeah. But then when it comes to the homes, only one at a time. We will put the driveway, because over there you have to use a driveway aprons. We’re not putting a full driveway. So when that guy comes, he’s going to put three of them in because we’re getting a discount.

(15:30)
There’s a fee for just mobilizing his equipment and when we’re doing three, he’s like, “Hey, I’ll give you 15 or 1,800 off each one.” Great, let me have that.

Oh, for sure. For sure. What mistakes do you often see investors in this space make that you think could be really easily avoided?

Flood zones. Just because it’s a good deal. So with manufactured housing, you have to build one foot above the high water mark. In Florida, in a flood zone area, that’s five to nine feet. I always joke, are you putting an elevator in? Because grandma’s going to have to … It doesn’t matter how good the deal is. Every time you’re doing that kind of … So you’re looking at a $50,000 minimum fee now to build it that big. “But I got it for 10 grand. Great. You can’t sell it. ” And the flood insurance is very, very expensive.

And I’m sure, especially an elderly person is not going to want to walk up that many stairs to get to the building.

Absolutely. Yeah. But nobody does, right? I mean, we’ve done one before for our customer and we made a driveway. Her driveway is underneath her house.That’s where she parks. It’s like a garage almost. Okay?

Yeah.

But that was her land and that’s what she wanted. Okay, fantastic.

(16:46)
But we stay away from flood zones. We stay away from wetlands. They just think a good deal. They don’t walk the property either before. We have two species of animals that kill deals in Florida. Gopher tortoises to move. Now they’re protected. They’re not endangered, but to move one, six to $8,000. Dang. I was just going to go have … The first time I had this issue, I’m like, “Man, I’m just going to go grab this thing and throw it away.” If I’m talking to somebody, he’s like, “Hey, be careful. The state of Florida, they put GPS in their shells sometimes.” So then you throw a little turtle in the back of your trunk and you go through some place where a toll booth and they got you, right? I’m like, “Are you kidding me? ”

Wow. So

The turtle just ends. So we always walk, we check things out as part of our package of due diligence because Mr. Turtle kills you. But the worst one is they have burrowing owls.

I would’ve thought it would be a gator.

No, gators, they’re just in the water. Let them walk on the land. That’s fine. Who cares? But that burrowing owl, that’s not your lot. That’s the owl’s lot. You will never be able to sell that. It’s his lot.

Wow. And you can’t get rid of those?

Those are critically endangered.

Oh, wow. So you can’t really touch them. Nope.

I was talking to a guy years ago. You know where Marco Island is? So we go on vacation there. It’s a great

Island

On the West Coast. Beautiful homes. And I walk in there every day. I brought my dog with me and I’m talking to the guy who owns this amazing house and I’m like, he tells me he owns this lot. I’m like, “What are you going to do with it? ” He’s like, “I can’t do anything.” And he showed me there’s a stand, a sign. I said, “Do you see that little hole?” He’s like, “The owl lives there.” And he’s the one who told me it’s his lot now. Wow. He wanted to put his boat dock over there and the permitting, because the owl, they wanted to disturb the owl.

Wow.

Yeah. And he didn’t know that. He just bought it as a package and paid, remember your waterfront on a canal and he paid over a hundred just for the lot.

And he can’t do anything with it.

No, it’s a great picnic area, I guess.

Yeah, I guess

So. No, I don’t think he was hurting either because his home was probably three or four mil, right? Yeah, fair

Enough.

It’s like you’re buying a lot for an owl, okay? Right. He was joking

About it.

He’s like, “Yeah, it’s his lot

Now.” That’s funny. I mean, at least he’s in a position where you can laugh about it. Now,

Imagine if you weren’t, right? Yeah. I have three lots that I can’t build on because we made mistakes in my first year.

They’re

Not very expensive lots because where I was buying, but it’s probably 60, 70 grand of real estate that I can’t build on them because we closed without a survey. That’s a no-go. Okay? One had an unrecorded easement we found out about. And then the other one, once the septic law changed, my septic system has to be 60 feet long by 40 feet wide

Because

Of where it is. And now I can build an outhouse, a porta-potty because that reduces the size of your homes considerably. And I don’t have enough room now at that size to put the well in. I can’t get it over 75 feet away.

Interesting.

So those are just good learning experiences.

And those are, I mean, I’m assuming hard to sell. I mean, hard to- Unless the

Neighbors want to buy it for a parking lot, it’s just …

Yeah, that makes it tough. I mean, I’m sure there’s kind of like in the flipping business in normal homes, there’s the onesie, twosies, and then there’s top operators like yourself in the space. Is it very similar in the manufactured homes or not as much?

Yeah. I mean, in Florida, there’s several people who do this now and I’ve trained half of them, okay? I don’t mind. I don’t have a scarcity mindset. They’re doing their couple a year. I mean, we’re going to do a hundred, okay? There’s no scarcity at all. Even if we’re in the same area, I still help them

When they

Run into the problem. But it’s just like with everything else, you can give them the whole system and then you can train them. And then they’re like, but before you become the expert, they decide to change the rules. And then one of them just tried to sell me a lot he has in Osceola and he bought it with wetlands. I’m

Like,

“No, dude, no, no, no, no.” Because there’s this thing here in Florida called the Wetland Mitigation Bank. It doesn’t exist anymore. So he’s 80 grand in on lot servicing and fees. It will take three years to develop the lot alone. And there’s no wetland mitigation bank to help. He’s like, “Yeah, but if I just do this, I said the bank doesn’t exist, man.” It doesn’t. You’re stuck.

Well, what do you think … I mean, I guess simple mistakes like that could be the answer, but what do you think separates those top operators from the onesie twosies that are making mistakes like that?

It’s like even with flipping and building, take your emotion out of it. Okay? I don’t care how much I love the lot. I’m going to see my due diligence. I’m going to see the numbers that the ops team brings to me and it has to fit in our guardrails and people get emotional. But my first year in flipping, I did, oh, if only this happens and that happens in this, I’ll be okay. Let me tell you something. I was never okay. That’s why my first three deals, I made $4,000 total, total. I left another six figure business to come and do this, and I made 4K my first year. So you just got to say, “I’m not emotional, right? It’s not my children or my dog, right? It’s my business. And if we treat it correctly, we’ll be good.”

I’ve never heard about it talked like that. That’s genius. I’m curious, obviously when it comes to the word success, everyone’s got their own definition for it. Everyone’s got their own way of chasing it and everyone’s got their own way of measuring it. How do you define the word success? How do you measure success and how do you strive for it every day?

So I believe my part of it is I’ve attracted a really good team because I became a better leader. So it all starts with me. I had to change me to get here, therefore attract the best people I could because the culture we have is amazing. People just left jobs. My new sales manager in my dealership, she left a Fortune 500 company to come work here. Why culture? The team. And so success is measured by who you can put around you. And then my job is to, look, multiple masterminds, all the money I spend, I give all that information to my team. When my consultants come in, they sit with them as well because they may go somewhere else one day, fantastic. But if I make them the best version of them now, here, we’re great together.

And

Success for me is different probably today than several years ago. Coming into this late, just a personal growth part, just a personal growth part. I really want to know what I’m capable of, not chasing a number. And that’s different because I’m 54, really good journey for the last six years. Okay? I watched my 17-year-old son become this amazing young man because of what I’ve learned. I mean, well, he’s 16, almost 17, but he’s a junior in high school. He’s in college though. Okay?

Awesome.

Him and I read the books together. Like I say, he’s a good man. And so success for me is growing the people around me, but more importantly, serving our clients because that’s a hard demographic to sell. Sir, first time home buyers, they have … But I’m telling you, it feels like we’re breaking piggy banks and counting pennies at closing for them. And then so building a business where I have all the verticals and I can just keep giving back credits right now so we can sell homes.

I like it. I like it. Well, what’s the biggest change that you’re seeing in real estate right now?

The backend pricing. Those numbers everywhere are softening for sure. Florida, especially in certain areas where you have the Fort Myers Charlotte market, the Tampa and the Daytona market, those are three of the top 10 worst hit areas in the country and they’re right in Florida. So what I see is people not really making sure their numbers are good in the beginning. Look, life and business is math. Does it subtract or add value to you or not? Same thing with your due diligence sheet. You got to have that dialed in. And then even now, whatever I take off the back end during the purchase time, I’m adding 5% more just to be a little better because I’m seeing a softening in pricing along the way.

I want to challenge you a little bit. Let’s say the business completely goes away. I’ll let you keep all the knowledge that you’ve accumulated over the years. What would you focus on first to rebuild what you have now?

Am I rebuilding the same or a different business?

Whatever you would want to do if the business went away.

If you asked me, first of all, let me start with this. If you asked me who and what I am, I’m my children’s dad. I didn’t have a good one. He had demons, there were issues. So when we did this business six years ago, my wife and I, we didn’t say what real estate business we wanted. We wanted a lifestyle. And

It

Wasn’t living on the craziness in Miami, it was being present for our children, being able to, one, help. We have elderly parents. We took care of my mom until she passed. Same thing with her dad and mom. And really being charitable in our community, because we both grew up dirt poor. So I would build a business with my knowledge a lot quicker, but with those same principles in mind, this is what I want to do. Okay? Look, I’m in my home office. I have an office. I don’t go. I watch my children go to school today. They have events all the time. We never missed them. We didn’t have that. Our parents didn’t have that ability. So with all my knowledge, I would build whatever widget business we’re going to do with the same backend principles, what we want our life to be like. My wife, she was a corporate banker.

(27:13)
This business retired her my second year because she never had the chance to be a stay-at-home mom.

(27:20)
So I would build it probably a lot quicker. I would hire consultants day one. That was a game changer. Look, I never thought I needed masterminds. Now I’m in a bunch for a reason. Somebody taught me ground up construction on a flight home from Austin, Texas. We were in the same group. Somebody told me, “You need to talk to this guy.” He came in, hung over really bad. And I’m like, “Hey, Chantel told me to talk to you about this. ” And he looks up, orders two mimosas and gave me a three-hour course. But I never thought I would need … I don’t need any of that crap. I think that as guys, we don’t like asking for help. It’s like the whole direction thing. I know where I’m going, relax, right? Okay. But the same thing in business that we don’t like asking for help.

(28:05)
If you ask me what one of my superpowers is, it’s asking for help.

I like it. I like it. If someone is interested in learning more about the manufactured home space, where can they reach out to you? Where can they get ahold of you?

My name, Thomas Laman, you can just do Facebook if you want. Tom at S&T Services of Florida, the property solution team dealership. You can look us, you can Google us right up and hit us there. I don’t know if you’re going to put out my social media links at the back of this because unfortunately we have to be on all of them, right? It’s part of it. I mean, it’s just a business on how people reach you. I just had an Osceola County commissioner find me because one, he watched my podcast. I’m like, “Oh, fantastic.” Two, somebody put my real phone number in the podcast. So that’s not there anymore, but he reached out because he wants to have me in front of his committee to get impact these waves and build that scale.

That’s awesome.

So you have to be on it,

Right? Yeah. Yeah, for sure. Well, Thomas, I really appreciate your time. Everyone, thanks for watching and we’ll see next.

Appreciate

You.

All right everybody. Take care.