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Every Friday, join us as we dive into the latest in real estate multifamily with David Moghavem, Head of East Coast Acquisitions at Trion Properties. David invites top experts who know the ins, outs, and trends shaping the real estate multifamily market across the nation!
Whether you’re a seasoned investor or just curious about where the next big opportunity might be, Deal Flow Friday brings you the weekly inside scoop on what’s hot, what’s not, and what to watch for in today’s ever-evolving real estate scene.
David Moghavem (01:39)
All right, everyone. Welcome to another episode of Deal Flow Friday. I'm your host, David Mogavum. And today we have Andrew Kramer. Andrew, how you doing?
Andrew T Cramer (01:51)
Good man, thanks for having me.
David Moghavem (01:53)
Great, great to have you on everyone. Quick intro on Andrew. Andrew is owner of Bridgeview Asset Management, who's completed more than 40 mobile home park transactions, estimated total volume of 300 million and been managing more than thousand units across 20 properties. Bridgeview focuses exclusively on properties in the Pacific Northwest, which is actually similar to how Tryon started and cut their teeth.
And Bridge Review is also vertically integrated, also similar to us, in-house management. So Andrew, it's great to have you on. It's great that we met on LinkedIn and that you reached out. I mean, I think it's amazing how LinkedIn just connects people who are out there talking, sharing ideas, and it allows us to connect. Otherwise, we wouldn't have Connect otherwise. So I'm glad that you reached out and we were able to connect.
Andrew T Cramer (02:47)
Yeah, it's really, it's very cool. think it's kind of like, it's like a giant conference, but you don't have to.
go to Tampa Bay and sit in a conference room. So it's very, I agree with you totally. was hesitant with the whole kind of social media thing for a while, but it's been really cool to kind of share ideas and also, it's been really cool to kind of see the response and kind of really getting to filter through and find people that are really interested in kind of meaningful, impactful investment. So totally agree.
David Moghavem (02:56)
Hehehe
Yeah,
in the beginning it's hard to kind of find your voice when you're posting on LinkedIn and social media. I think there's a name called like imposter syndrome where you're like, just, this feels a little cringe. But once you start flowing and you start meeting people, you find your niche, you find people who are like-minded, sharing opinions, beautiful things happen. Like I think this is one of them. So I'm excited.
Andrew T Cramer (03:23)
Very much so.
Mm-hmm.
Definitely.
David Moghavem (03:45)
to learn about your business and talk through this and share ideas and excited for the audience to hear it as well. Yeah, so let's get into it. So first of all, why don't you tell us a little bit about Bridgeview? I would love to hear about your investment thesis in mobile home parks, manufactured housing, RV parks, And yeah, would love to hear your thesis on mobile home parks.
Andrew T Cramer (03:53)
Yeah man, for sure.
Yeah, well, again, thanks again for having me on. Love getting to talk with you. So Bridgeview, I founded the company probably about 12 years ago now. And I would say the vast majority of what we do is kind of...
really finding various ways to add value within manufactured housing in the Pacific Northwest. So we do that in a variety of ways, whether it's really kind of hands-on intensive turnaround type deals where you're making utility upgrades and adding a bunch of units and changing operations and management, all the way to just, sometimes it's just a simple matter of like a shift of perception where you find a property that might be in a market that's off the
radar, not in sort of that in between Seattle and Portland kind of core corridor that everyone thinks of with, from a real estate standpoint in the Northwest. There's a lot of, we get into a market that might not be something that even lenders are looking at and we might get seller financing on a deal and do some kind of operational changes that maybe make it more appealing to the lending community, for example.
niche I suppose is figuring out different ways to add value in kind of creative and multifaceted ways. That's kind of that's kind of our strength.
David Moghavem (05:27)
Yeah, love how
one of your examples was kind of taking a deal where maybe a lender wouldn't touch it or a buyer, you you have to get seller financing rather than traditional and almost institutionalizing it in a sense, right? Or de-risking it a bit. Maybe talk a little bit about some of the intricacies of that, where mobile home parks were before in that type of asset class.
Andrew T Cramer (05:44)
Exactly.
David Moghavem (05:55)
to where it is today where maybe it's a little bit more institutionalized.
Andrew T Cramer (05:58)
Yeah, I mean, you can kind of go back, you know, you can go back a long ways and the sort of the how parks evolved is kind of interesting where they were sort of this largely kind of a post World War Two phenomenon where it was a they predominantly showed up.
with sort of westward expansion. And so there was a lot of there was a need for developing cheap housing rapidly. And so that kind of created the initial market and unfortunately created a lot of the stigma that still exists today because there were no codes. And so a lot of them were built to really poor standards. And then that fast forward about 1976 when HUD actually stepped in and created a code for manufactured housing. And so really since then, manufactured home beyond 1976 has been built to the same
standards as any other type of housing. It's funny with stigma though I think they're very, they have a lot of staying power and so I think you know well beyond it's been you know we all have that sort of mobile home stigma right where it's a trailer park, trailer trash, whatever you want to say and that's a real challenge I think for both.
David Moghavem (07:00)
And you saying that's a challenge, sorry to
cut you off, that's a challenge. And I think you were just about to answer it both from like operations, but also from an investment standpoint, is it also a stigma? Are you finding that it's like, you know, different type of investors attract more to mobile homes or are disincentivized to invest in mobile homes versus traditional housing options?
Andrew T Cramer (07:10)
completely, yeah I think...
It's
been really interesting even in the 10, 12 years I've been doing this to kind of see how...
the investment community sort of shifted. like if you think about institutional loans, the Fannie Mae, Freddie Mac world, even when I was starting, they did have loan programs for manufactured home parts, but they were very, very tight. And there was almost, we consider like high-end, class A, five-star, if you want to use the sort of mobile home terminology. And even in that short amount of time, in that 10 years, their standards have shifted to really accommodate a much broader spectrum of assets, which is obviously great from an investment standpoint.
it opens up, opening up lending really creates more investment opportunities. But it's also indicative of the fact that just sort of investor perception is slowly starting to shift. Whereas before, think, the previous generation might be buying these things from single unit operators who may have literally built the park, right? It might have just been someone with a farmhouse and 10 acres of land and they slowly added homes over 30 years. That's how a lot of parks started. And to now where like there has been a lot of consolidation,
And I think that has sort of driven investor interest and it also driven sort of the lending standards to change a little bit. But I think overall, it's interesting just because there's a little more diversity in what you can do and, you know, you can kind of take on
on
some really some deals that need a lot of capital investment, need a lot of management and there's lenders that are willing to partner with you on that now.
David Moghavem (08:48)
Yeah, mean, listen,
the parallels are clear also with mobile home and manufactured housing to multifamily. It's just different tiers of asset class. But the value adds are generally the same. And being vertically integrated, you're able to come in, get your hands dirty, be a little nimble, be closer to the residents and see what their wants and needs are in order to improve the property.
Talk to me a little bit from an investment standpoint about what your guys' target metrics are, cash flow yields you guys aim to get. Would love to also hear the thesis on the Pacific Northwest, which we share a positive sentiment on. Maybe the rest of the world doesn't right now, but I think we're in the minority there with us being a little bit bullish on the Pac Northwest. So maybe first start talking about some of the target metrics and yields and then
a little bit about location as well.
Andrew T Cramer (09:47)
Yeah, so we're not, I'm a little bit nontraditional because I don't really, we obviously look at cash flow, we really look at that in terms of.
you know, what's our ability to borrow against a property when we're purchasing something. I'm a huge proponent of seller financing. It simplifies things a lot. It allows you to, it just streamlines the closing process in so many ways, because you're not necessarily dealing with a bunch of third party reporting. So particularly on the acquisition side, I think, and it's starting to become a little more commonplace, I think. I don't know if that's because sellers are kind of falling in love with property values that are a couple of years old, and they're willing to kind of carry a little bit because they want
they wanna hit that sale price that they've, yeah. And so I really, I'm strong proponent of that whenever I can. I really, from,
David Moghavem (10:29)
It bridges the gap. It definitely bridges the gap, 100%.
Yeah, but what about on the exit? Are you
guys seller financing to your buyer on the backend or are you guys, like I guess what's market financing on the backend when you're selling?
Andrew T Cramer (10:46)
Yeah.
Yeah, I endeavor to kind of hold things in the long term and we have sold properties in general.
the stuff we like to do is going to be when it's stabilized or when it's able to be sold to another buyer or almost invariably it's at a point where it is financeable with third party financing, whether it's institutional or with regional banks. So we haven't had that conversation from a seller financing standpoint in general, but we do quite, what is very common for us is to do a stabilizer refinance.
David Moghavem (11:23)
Mm-hmm.
Andrew T Cramer (11:29)
cases
almost you know those are always either a third-party lender or an institutional lender so a big part of our business plan is yeah
David Moghavem (11:36)
and they know you're experienced and you can bring a
bank in that you guys have a relationship with and relationship lending and you can cash flow and give a yield to your investors through that way of refined stabilizing.
Andrew T Cramer (11:42)
Yep
Yeah, and I think obviously the institutional lenders are great and that's kind of the gold standard. For me personally, the regional banks can be...
there's some value just to ease of transaction and like, you know, closing an institutional loan takes a long time. There's a lot of legal fees with a regional bank. Sometimes you're like, you know, touring the property with your loan officer and like having lunch with them and then that's kind of it. So there's some it's a much smoother process. And yeah, like you said, I think it's there's different things. I mean, for if you have, you know, if it's a fairly complicated syndicated investment ownership structure, that can be a little bit hard for a regional bank to get
David Moghavem (12:18)
Of course, yeah, it's the relationship.
Andrew T Cramer (12:32)
a solid understanding of. But, you know, I so the truth is I do both. I think it really depends on the the asset. And I've you know, it's it's really when we buy something, I'm always looking at it as a long term hold. I would I would hate to ever get sort of stuck. And it's like I need to sell this in four years and suddenly something out of my control changes. So we really have definitely sort of a long term focus when we're buying something.
David Moghavem (12:36)
Mm-hmm.
Andrew T Cramer (12:56)
when you talk about the other thing about manufactured housing is you've got people who own homes. And when you take steps to add value to the property, you are also adding value to those tenants' homes. And I've seen that happen many times where the value of the tenant homes goes up as with the property value.
know, that's sensitive and you can do things where if you just raise the rent, obviously the tenant property values can go down. And so there is a way to do it where everyone kind of where the value increases for everybody. And we strive to do that. It obviously creates for economic reasons, it creates a much happier tenant base, which is ease of management. I think it creates a much more sort of long term where everyone's on the same side of things. They know that if rents go up, there will be corresponding improvements to the property.
it's so much simpler from an operational standpoint. And like I said, it's cool to see someone where, you know, some of these parks we buy that the homes are unsellable because of the condition of the property. And then we go in and, you know, fix utilities, you know, fix roads, lease vacant spaces, maybe rehab some of the like rental housing there. And then suddenly these houses are worth, you know, 40, $50,000, which is a huge amount if you're someone, you know, any anyone really, but like to be able to create that
David Moghavem (13:52)
Mm-hmm.
Andrew T Cramer (14:10)
equity without having to give anything back if you know what I mean where it's like if you buy this park and you increase the value of the property by spending money you get a return on your investment the additional benefit is these tenants get to participate in that and now suddenly if the rents go up you know 10 20 30 percent it's you know no one's complaining because you've created so much value for them they're more than happy to pay that higher rent so I think the that that's what I've seen there's definitely a way for everyone to win and it's a unique
situation whereas you know traditional multifamily rental housing you don't have sort of like tenants with ownership with ostensibly an ownership stake in what you're doing so it's it's it unfortunately works both ways and I'm sure you know as I'm sure you've heard as everyone the sort of there's a lot of bad press about what I'm talking about because the negative side of it's very real too people can get stuck their property value can go down
David Moghavem (15:02)
Yeah, let's double click on that a
little bit. how are tenants participating in some of the ups? Like maybe let's dive in a little bit to that and then talk a little bit about some of the cons that attribute to that stigma that we were kind of alluding to earlier.
Andrew T Cramer (15:16)
Yeah.
Yeah, so mean quite simply, know, think just if you picture, you know, any property, but that's got, you know, let's just think of one that's maybe 35 units and but the streets are muddy and, you they're not paved. And so there's potholes everywhere and the septic system is backing up and they have to pump it, but they don't pump it enough. So there's, you know, bad smells and raw sewage maybe on the ground. And then you've got utilities that aren't working as you can imagine. And just remember, we're just thinking about that tenant's home right now. And you own your home. You have a title of your
home but if you want to leave no one's moving in no you can't sell it it's worth it so the value is effectively zero and say your rents are you know $500 a month so if you know say Breezy who shows up and buys that park we we grade and pave the roads we upgrade all the utilities we upgrade the septic we upgrade the well so now your living situation is improved because now you can drive your car close to your home and you've got a safe place to live we know we always had things like security lighting locking mailboxes really what we consider to be sort of our standard
David Moghavem (15:53)
Mm-hmm.
Andrew T Cramer (16:20)
standard
suite when we're buying property. But now so yes, Bridgeview has taken that investment and we've gotten a nice return on our investment. But if again, you're just thinking about that tenant, that home, now there's a market for it. If they want to leave Portland or Seattle or Tacoma and move somewhere else, there are kind of what, you know, getting back to the market, the rental demand and the housing demand is very significant in the Pacific Northwest. And so now you've got something that many people want.
And so now you have an asset that you can sell. Or if you don't want to sell it, now have, you know, you have a source of housing that's going to be substantially less expensive than trying to find an apartment or a home. So, and that's, you know, that's the positive side of it. And now if you kind of to answer your other question, why does that not work out all the time? It's pretty simple. Now let's back up again to that same park, same property. And let's say when I was done, the rents were now after a couple years of rents are $700 a month. And so that's substantially higher.
David Moghavem (16:55)
Right.
Andrew T Cramer (17:20)
But that same person now can leave with 50 with a $50,000 asset that they can then sell to someone else and obviously there Yeah, and they're how they're there. They're there You know their quality of life has improved and I would argue and we strive to do this their quality of life
David Moghavem (17:26)
It's liquid now. Yep.
Andrew T Cramer (17:37)
improvement exceeds that $200 a month. And so that's what we always are thinking about. But so the problem is, why doesn't this always work? Pretty simple, right? That say someone else buys that same property, they do nothing. And now your rents are 800 bucks a month. And now that you still can't your home, your home is still worth nothing. Or maybe let's say it was worth something, say it was worth $30,000. And maybe the conditions aren't as bad as it would initially laid out. But if nothing happens, nothing changes and your rents go up 50 60%. Well, now your the value
David Moghavem (17:39)
Mm-hmm.
Andrew T Cramer (18:07)
of that house has gone down, right? Because you got to think about the space rent payment plus whatever housing payment that individual would be making in order to purchase this asset from you. So that's a situation and unfortunately that happens a lot because well it's easier to do nothing than to do something.
David Moghavem (18:22)
Yeah, there's a bit of a push and pull right
between value creation and then capitalizing and raising rents accordingly. I mean, we face the same thing in the multifamily side, but I think it is a little bit sensitive in the manufactured housing mobile home park space because it is their asset on the premise. It's their home and they're creating, you know, if you raise the rents, there's a market to just, you know, leave and go to another property here.
Andrew T Cramer (18:31)
Yeah.
That's right, it's their home.
It
David Moghavem (18:51)
their
home is there. It's just a little bit more sensitive and it's a little bit more illiquid.
Andrew T Cramer (18:54)
That's exactly, yep,
and what you just said is exactly sort of the, from a legislative standpoint, if you want to step in and correct this bad behavior, which is buy something, do nothing, and still have higher cost of housing, well, that's when rent restrictions and things come in. And so when you think about, you know, and I...
David Moghavem (19:12)
Right. it does rent control
for, you know, Oregon has statewide rent control. Does that apply in your? Yes. OK.
Andrew T Cramer (19:18)
Yes.
And I think, I don't want to get, we can delve into the politics of rent control, but I think really the problem, and just let's keep using that same analogy of the park with the problems that one group might be able to step in and fix, improve quality of life, rents go up. The problem is in a tightly rent controlled market, it's very hard to...
make that park, make those investments because you are ultimately, you need to recruit investors, you need to bring on lenders and if they don't see a commensurate return on that money going in, it's very hard to do that now. And so it's like on the one hand, understand rent control because I agree that someone, you shouldn't just be able to buy something and crank up the rents and do nothing and then exit and let the next guy do it again. but rent, when you, legislation is always kind of, it's always a broad source.
David Moghavem (20:02)
Mm-hmm.
Andrew T Cramer (20:10)
not a scalpel, right? So like they can't just control rents for bad actors, they have to control rents for everybody. The problem with that is while it helps prevent that rent gouging behavior, it also prevents, you know, bridge view from doing a very rehab intensive deal because if we can't, you know, generate that marginal increase of income to justify the money we're putting into the property, we can't do that deal.
David Moghavem (20:11)
Yup.
Why would you go above and beyond
in improving the community if you can't raise the NOI to where it justifies that from an economic standpoint?
Andrew T Cramer (20:43)
I mean, we just, you we bring on investors, we bring on lenders, you just, you flat out, whether you want to or not, you just flat out can't do it ultimately. And then remember, not only are...
you now have that let's go back to that same tenant who's living in this property that's in a poor state. That's who really suffers in my mind because now no one is going to buy that property because and now that probably is going to keep getting worse. And so where there was an opportunity to create tremendous value for not only you know the owner of the land who's doing who's doing the intensive rehab work but also the tenants living there all that goes away when you when you when you're not able to kind of when you're not able to do things. And so that's my I'm not saying you
I don't want to, like I said, I don't want to get into the politics of it. just think that the difficulty of legislative decisions like rent control is it's sort of, there's unseen impacts. And to me, the people who really suffer from that are the people who could be making 50, know, if you're living in a low income situation and you go from zero to $50,000, that's life changing. And if you can't do that now because of, as a result of legislative impacts, that to me is sort of, you know, cause like investors will just go to another market. You know, it's not like, it's not as if, so the people
David Moghavem (21:27)
Yeah, but
Yes.
Andrew T Cramer (21:54)
The people who bear the repercussions of that are the people living in these properties now that now can't receive that investment, I guess, if that makes sense.
David Moghavem (22:01)
Yeah.
It makes sense.
Listen, it's not to make it political again, but you you are specific to Pacific Northwest and we've been in the market. We were one of the most prolific buyers in Oregon in the Pacific Northwest from, you know, 2016 to 2018 in multifamily. And right now, the sentiment, you know, or I wouldn't say now, but the past few years of sentiment coming out of COVID was due to the politics.
people were divesting out of Pacific Northwest. And what you're seeing today though is now there's no supply coming online. It's very hard to build because of this rent control dynamic. You can't justify building. And there's also a PUD, it's moratorium on new construction for affordable housing, at least in the multifamily space. And so you do have a little bit of a better supply demand economics than maybe
some other markets in America like the Southeast or the Sunbelt markets where it's completely overbuilt. I guess what's your thesis? Obviously we talked about the cons and the political side and rent control and how that inhibits you to carry out some of your business plan. But what are some of the pros that keep you bullish on the Pacific Northwest?
Andrew T Cramer (23:25)
I think, and to be fair to the state.
There are exemptions for new construction, right? So like, you're right, the issue with new product have to do with a whole litany of things. It's extremely difficult to build there. There's a very, there's, you know, really in the entire Northwest, there's really a finite amount of developable land, particularly in the Western Cascades where, you know, 90 % of the population is. There's all kinds of reasons why supply is difficult. And so yeah, I totally agree with you. I we have built parks before, you know, we're building one up north of
David Moghavem (23:32)
Mm-hmm.
Andrew T Cramer (23:59)
Seattle right now. so that, you know, I think development's tough no matter where you are. It takes a long time. It's expensive. It requires a lot of equity. There's not a lot of debt around new construction. So I think that's always going to be tough no matter what. What keeps what's keeping me in the Pacific Northwest is the the general, in my mind, the general metrics of why people move here. That's all still there. I mean, like this is fundamentally this is there's a huge lifestyle pull for the Pacific Northwest. I mean, you've got mountains, you've got the beach.
You've got a tremendous outdoor lifestyle in my I kind of get the vibe that like outdoor lifestyle type Things is increasing overall. There's a lot more people who are seeking that type of you know enhancement to their lives And so I think for that reason there's always gonna be a general push to the northwest So I think like from a population dynamic standpoint, you're gonna continue to see growth I like the northwest because there are there's other opportunities where we've we're moving into the eastern
David Moghavem (24:40)
for
Andrew T Cramer (24:59)
part of both states, for example, and we're looking at stuff out in Idaho and Montana, kind of greater Pacific Northwest, if you want to look at it that way. And I think there's really neat stuff, because it's such a different place. I don't know of any other place in the country that has such a difference, sort of politically, culturally, between like Eastern Washington and Western Washington and Eastern Oregon. They're very different. so because of that, there's been different types of growth. But you look at places like Spokane, the Tri-Cities in Washington,
the sort of Umatilla County area, Boardman, Hermiston, where there's just tremendous data center construction. And I think it's one of the top two data center markets in the country. So there's neat stuff like that. for me, I just love getting to know all these new little places in the Northwest. we've had a ton of success with finding these markets that aren't necessarily, when you read the JLL housing report, it might not show up there,
too small. But, buying, you know, buying property in that 10,000 person town can be tremendously successful. And, you know, those rural communities tend to have an even harder time recruiting new housing. So what will often happen is a growth plan for an Eastern Washington, Eastern Oregon County will sometimes fail simply because there's just not enough housing. So like a big company might want to show up with a presence there and they might bring employees, but it's like, well, they can't live anywhere. And so I think it's kind of it's
David Moghavem (26:27)
Yeah.
Andrew T Cramer (26:28)
It's cool to be sort of a participant when you see growth like that. that's such a, you know, from a financial standpoint, can really, you know, when you are sort of coming in and then there's, you know, the population's growing significantly. And that's the other big difference, right? Like a town of 10,000 that goes to 13,000, that's a massive increase in population. Whereas like adding 3000 people to Portland or Seattle or Tacoma, that doesn't even move the needle. you kind of get to smaller changes are much more impactful.
those correspondingly really have an impact on the housing market and the value. I like that because I continue to see tons of things like that. But you kind of need to be on the ground. You need to really understand the dynamics of all these little markets. So that definitely keeps me in the area.
David Moghavem (27:14)
Yeah, I think that last part
is key too, right? Because you need to, in these tertiary markets, it's not as diversified from an employment standpoint. It's a little bit more rural and niche, tertiary. I guess my question to you, Andrew, is how do you protect your downside on some of these type of markets where maybe people don't venture out? Obviously, boots on the ground helps, but what else do you do to protect your downside?
Andrew T Cramer (27:44)
Yeah, and you're absolutely right. Like I think you have to be, you really, you you don't want to, you don't want to buy in the factory town and then the factory shuts down. That's obviously that that's a catastrophic issue. so you got you, know, front end, not to sound, you know, not to sound cliched, but you know, the front end due diligence is critical that you have to say, you know,
David Moghavem (27:53)
Exactly.
Andrew T Cramer (28:05)
If something significant shifts, what's that going to do to my business plan? And you know, one of the, like I find that's what's so confusing to me about like about military towns, for example, where you have a military base that might have, you know, that might be huge, but every year or every four years, there's a risk that that base will close. And so there's some examples that like, yeah, and I just can't get comfortable when you're like, whoa, 5,000 people might just pick up and leave.
David Moghavem (28:28)
How do you underwrite that? Yeah, exactly.
Andrew T Cramer (28:34)
there's
only 10,000 people in this town so there are certain places you kind of have to stay away from. What we look for is even small diversification is still significant where you've got say like you know maybe
you know, a market that might have a little university, but it also has a lot of agriculture. Maybe there's a big egg processing center and maybe there's maybe a transport company is headquartered there. There's all these things where you can have you can have diversification. It doesn't have to be, you know, five thousand jobs here and big Fortune 500 companies like you have to kind of really parse in and look at things where if there's enough different individual employers, you're going to be able to have pretty successful opportunity there. I think that's sort of where
That's kind of what we're looking for, I would say.
David Moghavem (29:24)
Nice. Yeah, it makes
sense. think just even a little bit of diversification. Like you said, I think when the market was hot, we were looking at some of these secondary tertiary markets just to find some yield. yeah, yeah.
Andrew T Cramer (29:37)
Yeah, that's where that's where you can get in trouble because if you if you're chasing yield
and you're kind of looking for stuff like well and you see that even so I didn't mean to interrupt you but I think like the That's where you can get yourself because if you're just looking at if you look at something in terms of like proximity to Seattle or proximity to Portland like That's where you will find yourself. That's really like to me That's not a you lose a lot of that. It has to able to stand alone, right? You have to be a psych
David Moghavem (29:48)
Exactly.
Exactly. And those that
was where I was getting at. Like when we were looking at that in hindsight, like those were the ones that got crushed now. And those ones are like illiquid at this time, even in the multifamily space. And so it's interesting to kind of hear, you know, your boots on the ground. And I think that's that's the key, right? Like if you're close, your ears close to the ground, your boots to the ground and you're seeing it in real time, you're talking to
Andrew T Cramer (30:10)
Yes.
It's weird.
David Moghavem (30:29)
the locals that are there and telling you where are the right blocks. I think that goes a long way. But in general, when things get frothy, if you're not boots on the ground, you won't know. You won't know if this is frothy or not. And whether as if you've been there for a while and you know, you're like, this is getting too high. People are stretched thin. Like this is about to blow up. Yeah.
Andrew T Cramer (30:43)
Eh.
Well, the numbers can be deceptive, Like, just
thinking about, like, if you are close to a big major market in a good economy, people are going to move there because it's like, well, I don't want to buy a house in Seattle, so I'll go 60 miles east into the mountains and there's a subdivision that I'll buy there.
They don't really want to be there. that makes sense, they kind of have to be there. And I think that sometimes like, but you'll see this is like, oh man, there's growth here. There's houses selling for good numbers. I'm okay. Cause like when us and multifamily, like we're fundamentally way more long-term than the subdivision guys are. So you'll look at that, like housing prices are rising, populations growing. But if you don't really take the time to understand why is it growing? And that's why, to be honest, I sometimes, not sometimes, all the time, I like these markets that don't, aren't in the sphere of the big MSAs because they kind
David Moghavem (31:07)
Yeah, yeah, right.
Andrew T Cramer (31:35)
have to figure out a way to like stand alone. And so you go out to someplace that really can't have that proximal benefit of being next to Seattle or Portland. And what are they doing? And are they diversifying? Is it an old timber town? now maybe they're getting into like, you know, all the sort of alternative greens and they're converting old mills into something like that. Like, that's really interesting. that or they maybe they've recruited research because they've got a bunch of infrastructure, a bunch of power. So you can see these things that are, you know, again, where like, even if
David Moghavem (31:55)
Interesting.
Andrew T Cramer (32:05)
hiring like 10 or 20 federal researchers for a location. I that could be tremendous or like a company is setting up there because they've got access to some commodity product due to old infrastructure. There's that's and obviously like that gets into the into the weeds but if you can take the time to understand it those are the markets that not only like withstand things but they grow and they do all sorts of cool stuff. yeah the what we consider tertiary markets from sort of a conventional real estate standpoint
point.
Like they, you're right, they can be, it's a little more sensitive, but I'd say the strong ones are really, really strong, just as the weak ones can be tremendously weak. it's just a matter of.
David Moghavem (32:44)
Yeah, I think also it's also a
difference in capital structure, Like from, you know, just from this conversation, it sounds like you got you guys buy deals, you get your hands dirty, and you're kind of holding it for the long run and you get cash flow appreciation. I think, you know, our strategy where this is where we differ is we're doing, you know, three to five year holds, flipping, buying, renovating, selling, and buying in markets that have diversification.
Andrew T Cramer (32:59)
Yes.
David Moghavem (33:13)
it creates liquidity and we're looking for markets that yes, we can maybe have longer term holds have a little more conviction, but we're also looking for markets where there's just more liquidity and more transaction volume so that we can get in, get out and create our value and move on to the next create our value and move on to the next. So I think that's where things differ as well. But listen, both great strategies, you know, I think
Andrew T Cramer (33:15)
Of
Right.
Yep. Yep.
David Moghavem (33:42)
with what you guys have going, it's really impressive. And I love how you guys are addressing the housing crisis from the other end of the crisis. We're kind of in like the workforce, blue collar, gray collar. I would say you guys are in the renters for life, probably bucket or a little bit of a lower demo tier, but.
They all need to be addressed, right? This this behemoth of this housing crisis nationally and need to be addressed. Talk a little bit about how separate from a return standpoint, you guys are addressing that housing crisis in the space you're in.
Andrew T Cramer (34:23)
Yeah, think, you know, one thing I'm hoping we can, there can be a little bit more.
discussion about and education about is just how forget you know manufactured housing parks but just take the product of a manufactured home and how efficient that can be from in terms of adding density to any given market because it's up on you know for most code standpoints once you're up on that frame with an axle underneath it the code changes. So there's some really incredible efficiencies to in terms of adding housing to a market and I think one of the problems is kind of getting back to what we're talking about earlier with just that stigma. There's a lot of even
like you know Take Habitat for Humanity which is a phenomenal organization they kind of want nothing to do with but I mean for the most part want nothing to do with manufactured homes because of that stigma that still exists and I think in terms of delivering affordable product quickly not only within parks but also just in general if you want to add housing it needs to be part of the conversation and I think it's so it's not funny it's tragic that this stigma that was well deserved 70 years ago but it really isn't now yet it sticks around
around, be like, oh yeah, we want to do stick frame. mean, I've heard that. I can't tell me how times I've heard someone say, you prefer stick frame. And I just want to scream because it's exactly the same. The codes are exactly the same. There are two different standards. You've got IRC and IBC over here and HUD over here. But the standards are identical in 99.9 % of circumstances. So it's really, to me, just, that's one thing that I'm hoping that we can change and say, hey, if you need to, if you're a nonprofit or if you're a city or a county and you're
to add housing building that big giant CMU blocked apartment building is not your only choice and that's you know I think figuring out a way to do that is something that I'm very I'm really trying to do I haven't quite worked it out yet but certainly education and just saying look we can you know delivering building new that's one of the actually one of the main reasons I'm trying to build new or we I'm building new parks just to sort of prove it can be done the return standpoint for me personally is going to be calm
David Moghavem (36:17)
Right.
Andrew T Cramer (36:31)
you know, little better than breakeven, just because I had to recruit some pretty, you know, adventurous investors who wanted a pretty good return as a result. But just to prove it can be done and say, hey, this is not just like some old 50 year old product that no one's doing new versions of. And I think in addition to that, there's some really cool technology that's existing in the manufactured housing space where there's some, it's all early stage, but I'm hopeful that some of this new, like both with like,
example, 3D printing or just sort of modular prefabricated units that can come together quickly. It's in the early stages because a lot of these guys are kind of tech guys and they're not used to the very strict regulated world of residential construction. they're there and they're spending money and they're investing in these new really cool new technologies. And I am optimistic that we're going to start to see a proliferation of that. they'll be sort of emerging of sort of need for affordable housing with this as
David Moghavem (37:25)
for
Andrew T Cramer (37:30)
part of the conversation. I think it's really critical that we figure out what to do that and that's I think education is a first step in just letting people know that you know there's a better way and that these perceptions while in some cases valid in many cases aren't and there's really there's great opportunity here that is safe that is you know not only affordable but safe and clean and long-term and really a good solution.
David Moghavem (37:32)
You're
Yeah, I mean,
you hopping on this pod and getting out there is one of the first steps to kind of educate investors around the world, around the country on kind of alternative investments and asset classes and understanding kind of more. There's a broad spectrum of housing that reaches all the way down to kind of mobile home parks.
Andrew T Cramer (38:18)
I'll give you a great example. I wrote an article about this, but the city of Portland has a great city ordinance that allows
The summary of it of which is with very limited expense and permitting time, you can add a prefabricated structure to any residential lot and you can put three in any church lot. And it's just this massive opportunity that no one's really taken advantage of because I just for the reasons you're saying, it's just it's a lack of knowledge. But that's that's a you know, that's a perfect, perfect situation for manufacturers to step in. And you can you know, you could there's I can't remember that I think there's 12. I know there's
I know there's, I did a quick study, there's 550 churches in the city limits of Portland. And so you could add 1500 housing units for, know, not even a fraction of the cost of trying to build new homes in the city of Portland. So that would be, you know, there's 10,000, 12,000 homeless people in Portland right now, approximately. And, you know, think about what 1500 housing units could do to solve that problem, particularly delivered in a way that's just without question going to be the least expensive means to deliver housing.
housing. So there's and I guarantee you in every municipality I know Portland because I've worked in Portland extensively but I would venture most places have some version of that or could easily accommodate some sort of code variation like that and it's it's it's one of those things where if we can just get a couple more people on board and understand it because I think the other there's also some very very very reasonably placed mistrust from between the nonprofit community and kind of us on the development side. I think there's been and and
David Moghavem (39:54)
For sure, 100%. I mean, that's
Andrew T Cramer (39:56)
Bye!
David Moghavem (39:57)
my take if it's kind of the housing crisis is we just need to build more and we need to build more and we need to build more vertical and there needs to be zoning laws of where to do that. Obviously there's a lot of NIMBYism that wants to make sure it's not in their backyard, but we need to put it somewhere. And that kind of attacks the housing crisis on the top end. And then what you're saying is through manufactured housing and having cheaper costs of
construction, you're able to address the issue from the bottom end, especially with homelessness that have nowhere else to go, right? They have no other option. So I think both sides is what will really be able to solve this crisis. But it starts with municipality. It starts with people understanding the root cause of the issue, which is a simple supply and demand story and not us as landlords, you know.
Andrew T Cramer (40:32)
Yeah.
Definitely.
David Moghavem (40:51)
jacking up prices and being gouging, it's not about that. It's about the fact that we need more housing.
Andrew T Cramer (40:59)
Yeah, I think there's a way that everyone can win here. And that's part of the problem. I think there's a fundamental opposition between tenants and landlords and sort of government and us guys sort of in the private sector. it doesn't really have to be that way. And I think there are ways where housing can be delivered.
at an extremely affordable way that creates value not only for the city seeking housing but also the tenants in the form of home ownership and long term affordable housing and also for investors who are taking the risk and putting the equity up. And we've kind of proven this in some of the deals we've done where there's a way that everyone wins. I think, but to your point, what you just said is true. Where like, there's got to be some consensus that that's even possible. Because I think right now everybody's, the starting point is, all how do we get around the city if you're a private
David Moghavem (41:41)
Right.
Andrew T Cramer (41:46)
How do we kind of control these private guys who are just trying to make money? the truth is everyone's kind of right. know, that's what's frustrating to me is that like there are bad actors out there who are just trying to make a quick buck. There are cities out there, city officials. Yeah, and so it's everybody's got a little bit of grains of truth. And I think that's what obviously that's what makes it difficult for like these very fundamentally opposed groups to kind of come to some level of consensus. But and I think to me, the way I think is like start small, right? Let's let me do one.
David Moghavem (41:58)
But that's part of the story, right? It's just part of the story.
Andrew T Cramer (42:16)
little manufactured unit in one church parking lot. Let's start there and then hopefully we can build from that. So yeah, I'm, that's what I, I'm hoping that one, know, hopefully someone's listening that is affiliated with a church and we can get something like that started.
David Moghavem (42:31)
Yeah, for sure.
mean, listen, on that note, where can people get a hold of you? You know, after listening to you and your take, how do people get a hold of you?
Andrew T Cramer (42:40)
It's
Best place if you just check out bridgeviewassetmanagement.com I've published some everything that we've talked about I've got some more detailed Articles on there and then you know you can obviously contact me there directly if you have questions The same the same articles will get to LinkedIn as well Because obviously you know we were on there as well, but yeah that the bridgeview asset management website And just you know checking me out on LinkedIn. That's if you want more details about
any of the things we're talking about, chances are I've written something a little more detailed and extensive.
David Moghavem (43:19)
Awesome. Andrew, thanks for hopping on again. This was awesome. Looking forward next time I'm in Oregon, we'll finally meet in person. Looking forward to connecting some more. Good luck.
Andrew T Cramer (43:32)
Yeah,
for sure man. Thank you again for doing this. is a great, it's really cool to be able to talk about these sort of, you know, alternative categories and I really appreciate you taking the time to talk to me about it. Thanks man.
David Moghavem (43:42)
Of course. Likewise. Thank you. Take care.