Interview Transcript of Matt Follett: President of Follett USA:
Alan Olsen: Welcome back. I’m visiting here today with Matt Follett. Matt is a successful entrepreneur and residing in the Northern California. Matt for the listener, can you give us some background of things that you’ve been involved with in your life and how you started out?
Matt Follett: Alan, thanks for having me. I really appreciate the opportunity to be here with you today. We’re in Idaho, and it’s beautiful around. I graduated from the University of Utah in 1987. And I took a job selling apartment buildings in the San Francisco Bay Area. That that was kind of the start of my entrepreneurial real estate business. I learned quickly that I wanted to sell things people wanted to buy, I wanted to sell things that, you know, were motivated opportunities. And at that point, 1988 89 apartment buildings were less than favor. Mobile, home parks, manufactured housing communities were really popular people they would multiple offers, whenever they became listed, that sort of thing. Says, gosh, I want to learn about mobile home parks, and spend a bunch of time and energy and what not, and be started selling manufactured housing communities throughout California. My goal became, I want to be the guy on the other end of the phone, I bought my first community with a partner, Mike Boris, who’s still a partner today 1989 and slowly bought another one. My goal became one a year I’m going to buy one a year while I was continuing my brokerage business, dabbled in self-storage and in the early 90s, mid 90s bought a couple storage facilities but always with a focus on manufactured housing. continued to grow that business. And by Oh 2000 decided I wanted to focus mostly on my own portfolio, with some with a few limited partners really expanded that at one time, had over 11,000 home sites, which was a fairly significant size of portfolio at that time. And it’s been a good business, it’s been a really good business for myself and my family.
Alan Olsen: You know, it’s California is homeless problem. And also not just homelessness, but high real estate prices, I imagined the manufactured home you know, being the entry point into a lot of markets has been really red hot recently.
Matt Follett: You know, it’s good throughout the throughout the United States, because we provide housing to American families, you know, we provide a housing stock, it’s very rare in our country that you can buy a nice new home for $50,000 and use manufactured homes for 35. Or, you know, similar pricing, it’s the housing opportunity for Americans to, to really capture that American dream and have that opportunity to own their own home and add at a much lower price point. Clearly, if you had a manufactured home on a bluff, overlooking you know, the Bay in San Diego, it’s going to be quite a bit more money. But overall, there’s a great opportunity for people to have a home.
Alan Olsen: So to clarify, there’s two aspects to that there’s one a mobile home, and then there’s a mobile home site. Do you deal in both?
Matt Follett: We primarily provide the sites we own a number of communities can we rent the homeowner. You know, they own the home and they put it on our land, so to speak, and we leased land to them. And we provide streets and club houses and pools and fencing and that sort of thing.
Alan Olsen: What’s your geographic region?
Matt Follett: Are you the western United States at one point, we were nationwide and decided to kind of bring it in we were as far east as Omaha, Nebraska, with a heavy concentrations. And we really like Texas, California, we have a number of communities. We’re just in the process of selling our last community in Arizona, we’ve enjoyed the Arizona markets over the years. And just like anything, there’s a time to to buy and a time to sell. There’s a huge influx of capital recently, over the past couple years into manufactured housing, a lot of private equity groups or funds are putting large amounts of capital towards buying MH manufactured housing communities in the nation. And maybe it’s time to sell some of those properties. We’re looking at actually selling a number of properties these days.
Alan Olsen: When you’re looking into the future real estate market, a lot of people get nervous with stock markets. And they say well, we’ll go with hard assets, right? What’s your perspective? And I realize everyone thinks differently. But what about you on a personal level?
Matt Follett: On a personal sort of level 95% of my wealth, my net worth is in hard assets in commercial real estate. Lately, we’ve taken a significant new tact of focus on buying self-storage facilities in core markets where there are higher barriers to entry. We’ve we we’ve had good opportunities there. But also, there’s less red tape less political issues that we have to deal with as far as municipalities or rent control things like that are becoming more and more a burden to operating manufactured housing communities in the United States.
Alan Olsen: Yeah, you know, rent control is a very common thing in California and other states are you really like seeing them. That’s definitely an
Matt Follett: Oregon enacted a statewide rent control ordinance for manufactured housing, but it was it was not as harsh as many other county or city municipal rent control ordinances in the state of California, more friendly, I guess, would be a good way to say that in a state of state of Oregon. Other states have it in various ways Florida has it in a unique way, but it’s becoming more and more a part of that business.
Alan Olsen: So Matt, for someone wanting to breaking into the real estate market and follow suit, what advice would you have for them?
Matt Follett: Um, you know, that’s a really good question. And that’s a really, really good question. I’m not sure what I how I would advise them. It depends really on what asset class they were focused on or what was really their motivation. If it was a private equity group that was interested in going big in the industry. Probably my advice would be to find a an operator that’s got significant ties, you know, that’s been in the industry for years and years and years, with long term or relationships if it was earlier this week, I met a group of people here in Idaho, Wyoming that were new to the industry of manufactured housing, and their focus was on B and C properties which I thought had a lot of merit. They were they were they were out there, especially in in more rural states, the south and the Midwest, where there’s a lot more opportunity to buy properties that are less sought after, you know, but they could provide housing for American families by putting new homes in these communities and backfilling these communities.
Alan Olsen: Matt, I appreciate you being on today’s show. And if a person’s owning a storage facility wants to sell it to you, how do they reach you?
Matt Follett: Call me
up 916.802.0112 or MFollett@follettUSA.com. Matt, thank you for being with us today. Thank you.
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This transcript was generated by software and may not accurately reflect exactly what was said.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
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