With America more polarized than ever, the uncertainty between blue and red has never felt greater. But now that the election is behind us, it’s time to get down to business—regardless of who comes out on top.
During our recent event, The Red or Blue Playbook, we explored strategies for mobile home park owners to succeed under the new political landscape. Whether you’re already making moves or adjusting plans after the election results, this event is packed with insights to help you navigate the path ahead.
Your host, Frank Rolfe, one of the largest mobile home park owners in the country and famously dubbed the “human encyclopedia of all things mobile home park” by The New York Times, brought his signature no-nonsense approach to break down what’s next for park owners. His politically incorrect take was backed by common sense and decades of past performance.
If you missed the live event, don’t worry! You can now access the full recording, including the lively Q&A session, where no topic was off-limits. It’s an opportunity to dive deeper into the political landscape and its impact on our industry.
Don’t miss out on this important discussion—because in times like these, knowledge is power.
The Red Vs. Blue Playbook - Transcript
Frank Rolfe: Welcome to our lecture series event. We have aptly titled The Red or Blue Playbook for Mobile Home Parks in honor of the presidential election that's coming up really very soon. We thought that it would be interesting to look at the different perspectives of the election night and to see what the impact will be on mobile home parks based on who is victorious. So again, the goal is to basically explore how to harness the election for financial gain regardless of who wins, because this is mobile home University and we're all about the whole concept of trying to maximize investment dollars. And in every power change in American political history, there's always been winners and losers based on who was positioned properly for whatever was going to occur. And we are no different. So our goal here is to try and show you things to ponder in your buying of existing parks or even the parks you own based on how the election goes on that fateful election night.
01:02
Frank Rolfe: But also, as a disclaimer, we are only approaching this discussion strictly from the perspective of mobile home parks. We're not gonna get involved in any topic that does not mobile home park related, or that doesn't have some kind of mobile home park impact. Someone gave me this hat a while back. It says, make mobile home parks great again. I dunno if you can see that there. And that's kind of what we're doing tonight. We're looking at this strictly as mobile home park owners and buyers we're not going after any direction. We have no interest in anything else for the sake of this discussion, other than what would happen based on who won what and what the impact would be on good old American trailer parks. So let's start off with the red party. So if the red party wins, what happens?
01:49
Frank Rolfe: Well, what are the main items I think that people are overlooking, but to me may rank number one, if there's a red win on election night, is that the Trump party is committed to supporting their base and their base means they will move a lot of federal dollars to suburban exurban, what we now call super commuter and rural areas, because that's where a lot of the red votes come from, as opposed to the blue votes, which come predominantly from urban centers. And this is a very important point because most of the mobile home parks, by far, the majority are located in suburban ex-urban, super commuter and rural areas. Let's go over for a minute what those terms mean. Suburban, we all know that the suburbs is that ring of cities that typically are around the urban core, which are where most people live who work in the urban core.
02:46
Frank Rolfe: Many people live in downtown, but a lot of people live in the suburbs and they go there because it gives them more space and probably better schools, et cetera. And then they commute in. And so I think we all know what suburbs are, which then says, well, what is an exurb? An exurb is the term that has been coined for the net layer of cities that are beyond the suburbs. So the exurbs require a little more driving. If the average suburban commute is, I don't know, 15 minutes, then your exurban commute might be 30 minutes out. And there's a new name, a new term, which I think is a pretty good one called the super commuter. So the super commuter is the person who lives beyond the suburbs and beyond the exurbs, and they make a conscious decision to do that.
03:38
Frank Rolfe: And they're willing to drive up to an hour away from work every day because they prefer less density, lower crime, sometimes better schools, and definitely better home prices. So they just say to themselves, "You know what, I'm gonna devote an extra hour a day of driving an extra 30 minutes on my commute in and 30 minutes on my commute out because I wanna live a little bit farther out because I can get a better house and a bigger yard and such." And that's called the super commuter. And then beyond the super commuter, you have what is called the rural area, which by definition means not a lot of population. Typically not a lot of economy going on in those rural areas. Successful rural areas in our industry are typically areas where people retire who are affluent. Colorado is the perfect example. You have many retirees who move to Colorado because of the scenery and they just enjoy it.
04:29
Frank Rolfe: They don't need jobs 'cause they're retired and so they're perfect for rural areas 'cause they get everything they want. Low density, big house, great view, and they don't have to worry about commuting. And again, if there's a red wind, then that's where the money will go. So you'll start seeing more money go into the economies and suburbs, exurbs, super community and rural. And from a mobile home park owner's perspective, that's fantastic because just about a 100% of our portfolio is located in those areas and not in urban areas. Also, if you have a red wind, we've already heard the economic agenda, which is heavy reliance on tariffs. Now, tariffs have good and bad aspects. You probably have heard of both. But from a mobile home park owner's perspective, the one big part of tariffs would be, would build more US manufacturing.
05:19
Frank Rolfe: That's the intent. And of course, once again, people who live in mobile home parks typically have a strong affinity with manufacturing. That is a job that many of our residents are involved in. So as a result, if we bring a lot of automobile plants back to America and other manufacturing park's will definitely be beneficiaries because that's definitely kind of a blue collar employment that is a big part of your tenant base's way to get the money to pay the rent. So once again, that is an initiative that would be very beneficial to park owners specifically.
05:57
Frank Rolfe: Now you might say, well gosh darn it, it's gonna ruin our imports of goods from China or something. Well, that doesn't really help me because I have no mobile home parks located in China. You might say, well, it might make the stocks collapse. You rely on cheap imports from other countries. Once again, that doesn't matter as a park owner. So what matters as a park owner is that your customers have gainful employment and hopefully stronger earnings over time. And definitely that policy would get you that as a park owner. Another big thing you'll have on a red wind is it's already been said that Trump would fire Powell almost immediately. He's tempering that back now and saying, well, he might fire Powell. It depends on what Powell does, but there's no question that when Powell went on his interest rate rampage in Q1 of 2022, no one really knows what was really going on there because we all knew rates would have to go up over time, but never at that rate of speed.
06:56
Frank Rolfe: I don't think any economist supported what he did. I'm not sure anyone did. And it was like he was on a one man mission to destroy the economy and destroy the real estate industry in particular. And I don't know that it really worked at all, although only know historically years from now whether or not his policies were in any way a good or bad idea. But one thing was for sure, they dislocated many people who suddenly became frustrated that the complete lack of the typical accountability and transparency of what the Fed was doing. And so I'm not sure that Powell is the right guy for that job. He's an old guy with no skin in the game, doesn't really care what happens to the economy and I don't really know that he's the steward that you want going forward on the economy.
07:45
Frank Rolfe: Same with Janet Yellen. She's a million years old and has been a part of the government since the '70s. And the problem is when you have people who are government people, they don't know the real world and they don't have to buy things or sell things or earn an income or any of the factors that business people do. And I don't think that we can go on with kind of an academic approach to interest rates. If you want them to go up, you need to go up gradually. Some people suspect that Powell raised the rates so ferociously because he knew a recession was imminent and needed to get the rates up so he could then drop them at the point of the recession. To me, that would be the smartest reason for what occurred, because typically interest rates decline three points in recessions.
08:27
Frank Rolfe: We know there's a recession right around the corner next year in all likelihood. So perhaps that's why he had to move so quickly is he said, "Oh my gosh, the recession's gonna hit any minute. I gotta get the race up at least three points 'cause I gotta then drop them three points." But again, if there's a red win, I think definitely you will see interest rates decline. Definitely, I believe if you have a red win, you have a lower risk of stagflation. Now, I was an economics major at Stanford and I'm definitely not God's gift to economics, but I have historically since college continued to read different economic journals and books and things perhaps out of habit. And I've read a lot on stagflation. And for those who are unfamiliar with it, I was an adult during the era of stagflation, so I was there.
09:18
Frank Rolfe: If you're not in your '60s, you really can't say you are because you weren't an adult during the era of Jimmy Carter. But what you find is that stagflation, which is the combination of high inflation and a stagnant economy, it's literally the worst thing you can have happen. If you look in economic textbooks, that is the absolute worst occurrence is stagflation. Stagflation is similar to an airplane. I don't know if anyone knows much about airplanes, model airplanes or real airplanes. The worst thing you do in an airplane is go into a stall. That's when you try and go up too severely. And then the plane, literally in the absence of wind going over the wings, it just falls like a baseball. You can't do anything. You can't maneuver it. So when you go to a stall in a plane, your crash is imminent.
10:05
Frank Rolfe: And so the same is true economically. If you have a period with high inflation and recession, you just can't do any worse. And if you look at what they found when Reagan tried to fix Carter's stagflation crisis, what they found that that made it all work, the way he pulled it out was with lower energy prices. So you just look it up on Wikipedia. So the playbook in the Reagan era that was learned was if you have areas of stagflation and you have to lower prices rapidly, there's no greater way to lower them than getting energy prices down because energy prices pretty much set the stage for almost everything inflationary gasoline at the pump, shipping production of plastics and everything else. So definitely if you have a red win, you will lower the risk of stagflation because of this one main point. And that is Trump's endless chant of drill, baby drill.
11:05
Frank Rolfe: So lowering energy costs by raising supply is definitely going to fix stagflation for the most part. And also from a park owner's perspective, in certain states, it's gonna be great. So if you own parks or buy parks in Texas, Louisiana, Oklahoma, North Dakota, or any other oil and gas market, you would indeed be a huge beneficiary of the drill baby drill program because the very fact that we would have an economy very focused on oil production and then distilling that into petroleum, we can use in gasoline, that's gonna be a giant, giant positive impact into the states. That that is a big part of their economy.
11:52
Frank Rolfe: And then of course, capital gains tax, although it's never really going to be safe under anyone because the president doesn't unilaterally set capital gains tax. That's a product of congressional voting. But nevertheless, having the president who supports capital gains is far superior to one who does not. So your odds are certainly better because someone who does not support it could always veto it if someone tried to extend it or amend it. But that's another big plus from a park winner of a red win, would be the safety of capital gains tax. And we all know the capital gains tax is the attractive tax rate you get. The lower tax rate is a park owner if you hold the asset and sell it where you've owned it at least for a year. And that's a big benefit to anyone owning any real estate sector. So we would definitely hate to see that go away.
12:44
Frank Rolfe: And with a red wind, it's pretty assured it probably would not go away. And then you've got a lot of tax benefits that are set to expire here soon. Things such as your estate exemption, your total amount before you trigger state tax, all different tax rates, individuals, corporations, all of those are coming up. And if you have a red win, you again have no guarantee that they will be extended, but you have a much better shot, if you have a blue win. Probably not a shot at all. 'Cause those could all, any extension that was voted by Congress could still be vetoed. So that's another huge red issue. Also, if you have a red win, you'll probably see some pretty major reductions in the quantity of government workers. Now that is going to have perhaps a negative impact on some parks, but it's based on where you're located at.
13:39
Frank Rolfe: So for example, obviously Washington DC would be hammered because if the, if Trump went in and did all the different layoffs he's discussed, you'd have a whole lot of for sale signs popping up in front of houses all over the Washington DC suburbs and exurbs. But there are other markets that could be impacted. For example, Kansas City has the second largest number of government jobs outside of DC. Now, it will all depend on what programs were reduced. Some of the programs that have been discussed to get rid of, for example, the Department of Education. I don't have any idea where their offices are. I think they're in Washington DC, I do not know. You would be able to research this topic more if you have a park where there is an excessive number of government workers and see what the impact would be.
14:27
Frank Rolfe: There's no extension of that, to my knowledge, into the defense system. I don't think it would impact military bases at all. So a whole lot of America would not really have any impact. But if you own a mobile home park in Suburban Washington DC area, you might say, "Oh, this would be a terrible thing to have happen." Well, it may be based on where your parks are located at. But again, that's just an impact it would have on the mobile home park industry. This one again, hearkens back to Reagan's playbook of solving stagflation and probably one of the great contributors of what we have going on right now. And that was the Green New Deal. Now, I don't know where where the Green New Deal came from. I don't know who authored it. I don't even know where the term was invented.
15:11
Frank Rolfe: The general concept was let's get rid of petroleum as an energy source and replace it with the wind and the sun and batteries and all of these types of things. And they call it Green New Deal because as these are more environmentally friendly, although I don't know, I've read articles saying the production of the minerals required to power all those batteries and to build those wind turbines are actually dirtier and worse than anything that was used to create that power using regular old oil and gas and natural gas. But the bottom line to it all is that the, if the Green New Deal is basically canceled, then you could do that through, for example, ending subsidies on electric cars. It'd probably kill the electric car industry blocking the imports of different things from China and beyond of batteries and just changing our whole dynamic in the country back to a acknowledging we're based on oil and gas and stop trying to build ev charging stations and stuff. That's gonna cause a collapse in many parts of the stock market.
16:15
Frank Rolfe: So I would no doubt you would see some stocks just tumble beyond belief, but it's kind of a necessary piece of the puzzle if you wanna end stagflation and beat inflation. And again, that's not my opinion. If you look, just go on Wikipedia and pop up some articles on how Reagan was able to navigate us out of the Carter Mass. That was the big driver. It was about his drill, baby drill kind of concept. So it's not a new one when people think, "Oh, this is unique to Trump." No, this was a Reagan concept, but it proved to be enormously effective. And so this ties back to again, what would lead to lower risk of stagflation lower inflation. So that's another issue. Also. You're gonna see a giant political change if you have a red win because as we know, these last several years have been filled with these concepts of DEI and the free rent movement and all of these things.
17:11
Frank Rolfe: And I don't know any park owner who's in support of the free rent movement. I don't know how that would be possible. Maybe there are a few, maybe someone who inherited an apartment building would be radically opposed to what their forefathers did as far as real estate and say, yes, I wanna give them away for free. I wrote an article, I do this new weekly news reviews that I produce every week. And there was a recent article that I think I reviewed on there of an apartment complex they're building in a blue state somewhere, where the concept is that the people who have nice jobs pay nearly 4,000 a month rent, and the other half of the building pays no rent. And those people are, are people who were on section eight or worse.
17:58
Frank Rolfe: And the problem's going to be, I don't think that works in society. The article said that the people would be happy to pay 4,000 a month because 2000 of their four goes the people who pay zero. I don't know where they're getting this information from. I read an article a while back on the Free Love Movement, which was around 1967, 1968. And the Free Love Movement was a movement against marriage because they said that marriage was effectively racist and that marriage was in every ways bad and that we had to get rid of marriage. And of course, let's be honest, all that was, was a bunch of guys who didn't like the idea of marriage. And so they had this concept that free love would be the national system and as we all know it didn't work. After people pushed for that movement for a while, ultimately people realized it was not a good idea. It wasn't leading to happier quality of life or life in general.
19:01
Frank Rolfe: It was crushed by a huge outbreak of venereal diseases if you research it, but it kind of was put to bed after a period of years. The free rent movement is probably not a lot different. There is not going to be any free rent just as there is no free lunch. If you don't have rents that are large enough to support investment in real estate, people will stop providing real estate. So if you think we have a housing shortage now, just keep on with the war against landlords and pretty soon you won't have any. But at any rate, if we have a change in government and there's a red win, I would think a big part of that would be the end of a lot of those initiatives. And I think all landlords are more than happy to see the free rent movement follow the same trajectory as the free love movement and come to an end.
19:56
Frank Rolfe: Now, let's flip it around now and let's see what happens if there is a blue win because right now the election appears to be kind of a toss up. So what's the first option that you would see? Well, to me, one of the biggest items if there's a blue win would be, gasoline is going to go way up because they will say that that's a mandate that all Americans really want green energy. And so the war against the petroleum industry would only accelerate. And I would be terrified of that just from someone who reads a lot of economics books. And again, I urge you to be as updated as I am on energy and it's important in the inflation battle. So you would see gas and oil go through the roof as far as cost. And again, they learned during the Reagan era that that is the way you solve inflation and it's also the way you create inflation as your oil and gas policy. So inflation will go nuts if that were to occur.
20:52
Frank Rolfe: So that is a huge issue to me, perhaps one of the biggest. And because of that, because unless there is a change in oil and gas, now if the blue team suddenly says, wait a minute, we were only kidding about the green new deal. We've decided we're also adopting drill baby drill, then you might have a different ending. But if that's the goal, if that's the point, if we're going to just continue to try and end all reliance on oil and gas, then stay inflation is just, it's a done deal. You're basically 100% aligned into the Jimmy Carter era. And it will just be horrific. And as someone who lived during the Jimmy Carter era, that would be absolutely terrifying to relive those times again. I had a summer job, for example, during the Carter era, and this sounds impossible to young people. Of course, COVID sounds impossible, probably to people not that old at this point.
21:48
Frank Rolfe: But I had a summer job where my entire job was nothing more than to keep a car filled with gasoline. I worked at an ad agency, I think probably about a junior in high school. And what would happen is the owner of the ad agency, it was one of Dallas's largest ad agencies, he would give me the keys to his car every day when I came in, come in, typically he's always late, but let's say by 9:00 AM, he would give me the keys to his car. And I had only one job, and my job was to keep his car filled with gasoline, because that's how hard it was back then. So I would go down to his car, which was a nice car, it was a Mercedes 450 convertible, and I would start the car, and I would see how much gas he had, and typically he would show up with a quarter tank, and I would spend the entire day trying to get it back to full, in between his meetings, and when he had to go to the airport. And what that involved was basically going and getting in giant lines, city block long, with cars.
22:44
Frank Rolfe: And we would all sit there, and you couldn't run the car, 'cause you'd run out of gas, so you had to turn the car off, it'd be 100 degrees out, and you would typically turn the car off, sit in the car, or actually get out of the car and stand next to it, because the line moved at the speed of a snail. And hoping that by the time you got up to the gas pump, there would still be gas in the pump, but often you would get up to the gas pump, and there would be a sign that said, we have no more gas. And then what would you do? You would look at your gas gauge, you would try and triangulate where the next gas station was and drive to the next gas station, or you would get back in the line with everyone from the last gas station who couldn't get gas, and pray that you could get up to the pump. And I spent an entire summer doing that. That was my full-time summer job. And I dread ever going back to that environment, but that is what would happen if you follow the initiative of, we don't want all the gas anymore.
23:40
Frank Rolfe: So that's very scary to me indeed. Also, of course, if you have a blue win and we continue on with the Green New Deal, all your oil and gas markets are going to get crushed. Many of them already have been over the past, you know, three and a half years, but you're going to see that even accelerate because the fact that there will be no hope for another four years on that is really going to hurt markets. You know the markets, the oil producing regions of Texas, like middle of Odessa, the parts of Louisiana, parts of Oklahoma, parts of North Dakota, those will be the most greatly injured from all of that from a park owner's perspective. And then this is another big problem from a park owner's perspective on a blue win is they're going to try and continually shift more federal aid from the suburban, exurban, super commuter rural areas over to the urban cores because that's where the blue voters come from.
24:43
Frank Rolfe: And Biden tried this during this last several years. It didn't get any notoriety. I followed it, but Biden was trying to change the way we calculate metro areas. He wanted, right now a metro area starts at 50,000 people. He tried to have it where it started only at 100,000. He wanted to take all those metros under 100,000 and remove them from the federal database of what's a metro. And the whole intent was you could then take all the money from all those 50,000, 60,000, 70,000, 80,000 and 90,000 metros and reallocate it among the larger metros. So it would be a crushing thing to have occur if you were to do that because all of those 50,000 person metros would suddenly find they don't have any federal funding anymore. But that's just kind of how that playbook works. So that again would be very, very bad for mobile home parks because there's almost no mobile home parks in downtown New York or downtown Chicago or downtown Boston. They're almost all outside of the city center. So if you want to refocus all of the money to the city center, that means you're taking that money away from areas where mobile home parks are in fact located at. And there we have it.
25:55
Frank Rolfe: I didn't know I had a slide on that, but there you have it. The whole intent this last three and a half years was to quietly behind the scenes do it. Now it never ended up happening. I think there was enough pushback from people inside the government, probably the people in the metro area thing, probably people say, well, we'll just litigate this thing that it did not occur, but they tried. That was part of what was going on. You'll also have greater crime in urban areas unless there's some change in the blue handbook of crime fighting. And that's actually a benefit. That's a blue benefit mobile home park industry because as crime increases in urban areas, more people continue to leave and move to suburban and exurban and super commuter areas. So that one kind of has a whiplash effect. It's terrible for urban areas, but in this case, terrible for urban areas translates in good for the areas where most US mobile home parks are located at.
26:57
Frank Rolfe: Now, of course, you're going to have higher stock prices probably, it's already been mentioned. So if you are heavy into the stock market, you probably want a blue win because very likely the blue win will do better for the stock market than the red because a lot of the Trump initiatives, such as the tariffs and movement away from green new deal is going to really hurt the market, which has now become very reliant on stocks that are fairly much focused on the green new deal and similar kinds of initiatives.
27:24
Frank Rolfe: So that's something, but again, we're not in the stock market business. I'm a mobile home park person. I wanna make mobile home parks great. And so the stock market going up doesn't do me any good. The things that make the stock market collapse do me more good than the ones that make it go up. And you'll probably have all those tax breaks expire. So all of the positive changes that were done in the state planning, as far as the maximum lifetime exemption of gifting of things, that will all end. And so it'll go down substantially. I think it falls down by half or maybe more. And again, that's not necessarily mobile home park related, unless you own a really big park that's worth a whole lot of money, or you have an assembly of parks that are worth a whole lot of money. So if you don't hit currently and would not hit currently anywhere near the lifetime maximum exemption of your estate, then probably wouldn't matter to you. But for a lot of park owners, it would have an impact.
28:27
Frank Rolfe: Capital gains tax is going to be a wild battle if they really wanna go there. A whole lot of donors to many of the people in the House and Senate come from real estate people, and it will be a very unwelcome concept to eliminate capital gains. So as a result, I don't know that that could be done. As we'll talk about in a minute, I don't see any way that Blue takes House and Senate and presidency. And I don't think in the absence of that, you could get that passed. That has become way too ingrained into our American capitalist system as far as the differentiation between capital gains and short-term gains. I don't think we're ready for that change yet. I think there's a lot of ramifications to that that we do not know that we may not like a whole lot. That may be a really bad time to respond. If you see people say, well, if there's no capital gains tax, I won't do any long-term investing. I don't really know. I'm not schooled enough in the economics of what happens in that case, but I guarantee you it's probably pretty severe and probably pretty bad.
29:37
Frank Rolfe: Also, you're going to have higher taxes for those who pay taxes. Let it be noted that only about a half of Americans pay any income tax. And I kind of find it funny in these ads when they talk about the 1% don't pay enough tax. The 1% pay 40% of all US taxes. So when they're saying that the 1% does not pay its fair share, well, I don't know, 40% out of 100, just the 1% seems like kind of a lot. But I think someone once said, well, let's make the other 99% pay their fair share on it. But the problem is that half of Americans pay none. And so what happens when you're trying to do more programs where you give money to this and give money to that and got to pay for them somehow, you'll have to raise rates on those who do pay taxes. And I'm going to assume most people watching this who are park owners or park buyers, you probably pay tax. And so therefore that is probably not a good thing for you as a park owner buyer.
30:39
Frank Rolfe: Also, we've probably witnessed over these last three and a half years, something that I never thought I would see to this degree. And that is the kind of world chaos. And it may be that it's just kind of cyclical. I don't really know, people are all up in arms about the flooding in North Carolina as this was caused by global warming. And then as many of you saw, they had a bigger flood than this back in 1940. So that kind of killed off that argument. So a lot of things that happen in the world happen in cycles, but we've got a lot of issues right now. I, as many people are probably are glued to your TV. I keep my TV on all day long with the sound off, just watching for like a newsflash that we're in the middle of a nuclear war or something, because it's getting just about that bad. We have the war in Ukraine. We have the war in the Mideast, just a lot of things going on.
31:38
Frank Rolfe: And what is causing that? I don't know. We're making some very, very odd decisions, which make no sense to me. I don't know why we have aligned ourselves to the point of no return in support of Ukraine, for example, because it hasn't seemed to work. Now it's all going backwards and we've spent so much money, but even worse, put ourselves in a precarious position. And so, I'm afraid that the blue playbook, I don't know if that has caused these events, but it doesn't seem to be really curing them. And from a park owner's perspective, I just want to basically have a nice life and run parks. And I don't really want to be sucked into some kind of like, major world calamity event. So I consider that bad. The narrative of the free rent movement, of course, that will accelerate wildly in a blue win because people will say this is a mandate from Americans that they hate capitalists and hate all that. And as someone who gets often quoted in those articles, I mean, I appeared on John Oliver back in 2000 and what, was it 2018, '19, I think, where I was called the largest a-hole in America, which was ridiculous because I don't think I would qualify to be the largest person in America on anything.
32:58
Frank Rolfe: But whenever these things come up, I get all kinds of strange threats and stuff. Most of them are from people in other countries. I don't consider that a very, very high level of threat, but it seems odd to me because, excuse me, but I kind of thought I was in America, which has been based traditionally on capitalism. I read a lot of books. I buy a lot of books at the state sales. If you look at all the books that you find, the 19th century, earlier 20th century, back then all Americans dream was to be a part of the capitalist system, to go out, build businesses, do things, make lots of money. And so it just seems odd to me in just the last few years, we're totally discarding that concept in deference to a new one, which I can't quite figure out. I mean, I try and talk to a lot of younger people and because I'm an old high school debater, I like learning both sides of every argument.
34:02
Frank Rolfe: And so I've done my best to try and understand the movement against capitalism. Like, where does it come from? What's the plan? And it's hard because those discussions often, they can't be held at an adult level. The people who hate capitalism hate it with such gusto that just the mere mention of it and they go livid. But sadly, that will no doubt accelerate. People will say, oh, well, all capitalism is bad. Being a landlord is bad. The articles will accelerate. So that's a problem for park owners because owning any real estate at this time and for the last three to three and a half years has been viewed as being an evil thing. If you charge rent, it's evil. I remember I was once interviewed by NPR and the reporter asked me, so they said, do you like to raise rents? I said, well, yes, if I own a property, I wanna raise the rent now in line with market conditions. But if I buy a park where the lot rate is $200 and the market rate is $500, yes, I'm definitely going to raise it ultimately to $500.
35:06
Frank Rolfe: I'll probably do it in regular increments annually at $50. And they said, well, why do you have to raise them? Well, because that's what you do in business is you try and maximize income. And then they said, well, why don't you lower them? So that's not what you do. Like that makes, it makes no sense. But that was to them very, very thoughtful. They weren't sure I'd ever thought of maybe I should lower my rents. And it's, again, it's really hard to work in an environment like that because we've had this one playbook for so very long as a country, almost since our founding, that I'm still trying to come to grips with the whole, I hate capitalism movement thing. But again, if you have a blue win, that's probably going to accelerate.
35:49
Frank Rolfe: Now, regardless of who wins, whether it's red or it's blue, there's some other 800 pound gorillas in the room that need to be analyzed because these are things that are pretty big, what you would call megatrends that are, we're kind of going to be stuck with as a country no matter who the ultimate winner would be. And the first one is the potential for stagflation, which I cannot emphasize enough. If you read any political handbook based on the economics is death. So when you have a society that is stuck in stagflation, it is literally the airplane plunging to the ground and there is no solution. Now, as the plane plunges to the ground, hopefully it picks up enough speed, it can then try to pull out of the nosedive, right? Just with the engine off, just gliding. But if you can't do something to get over the wings, then the end result is catastrophic.
36:50
Frank Rolfe: So we can't let us get into stagflation. We can have inflation with a strong economy, we can have the absence of inflation in a recession, but you can't combine the two, it's a toxic thing. And that risk is very, very real right now. I'm not so certain we're not already in recession. It's a sad ending, because as you know, the only number right now that does not signal recession is the employment, which is provided by the government, which they just corrected their last employment numbers and said they'd overstated them by 800,000. So do I believe suddenly they spiked up? No, not at all, because we just went through this where they said that we had strong employment and that, oh, I'm sorry, we've made a nearly 1 million job mistake. But that's a huge issue, would be stagflation. That's definitely on the radar of our screen.
37:39
Frank Rolfe: You also have a retreat to state rights, and this is probably a good thing. I read an article recently somewhere on what they described as the new civil war in America, which is not a war you would fight with guns and cannons, but would be basically the nation splitting up just in no different than the civil war using the legal system. And the way the concept would be would be that the states would simply ignore the federal government. You already have seen that. I mean, the federal government states, for example, that marijuana is illegal, and yet you have states which say that marijuana is legal, but yet it's not under federal law. And there's many other examples like that.
38:26
Frank Rolfe: So what do you have going on there? You basically have states that say, yeah, well, federal government, we don't really care about you anymore. We don't care what you say. And the federal government used to get around that. They used to enact their will using what they called the Chevron Doctrine. The Chevron Doctrine was something the Supreme Court ruled on incorrectly years ago, stating that federal agencies could pretty much write whatever laws they wanted, and they didn't need anyone's permission. That if Congress simply said, hey, let's start a federal agency on playing backgammon, that they could bring out a set of laws on backgammon, and they go around and throw people in jail over how they played backgammon. Then recently, the Supreme Court overturned the Chevron Doctrine and said, no, it didn't work that way, actually. If Congress starts an agency, it doesn't bless any of the roles of the agency. Those also have to be blessed by Congress. So that means basically everything that's ever been passed goes back into legal limbo. In the Mobile Home Park industry, what that would mean is you could go and re-litigate such items as everything that HUD requires, everything from installation guidelines to the fact that mobile homes have to stay on the old boat trailer, et cetera. And that's a big deal.
39:39
Frank Rolfe: I've interviewed several people at the state associations. Many of them think that basically everything in America today, OSHA, HUD, it all will end up going back to the court system where it will probably take up to 10 years to ultimately be ratified. So maybe that's where things are really gonna head as the states seem to be so polarized different between red and blue today. It may be that we just basically break up as a nation that is kind of unified and instead just break up into our little subcategories of states and just tell the federal government to get lost because they've lost most of their power now. So we'd all pay taxes in to get national defense. But beyond that, I don't know that the US government would have the ability or for example, I'm here in Missouri to enact their will on Missouri.
40:29
Frank Rolfe: If they said, okay, well, you can no longer have assault rifles. I think Missouri, which is very red state would say, well, I don't care what you say. We're not gonna do anything with assault rifles. Let's litigate it. Then just go to court for 10 years or longer as it just winds its way through the justice system. But that's more than likely where things are going to go regardless of who wins. There's so much animosity between the red states and the blue states that these articles I've read based on this kind of the cold civil war, it does make sense to me. And then these recent Supreme Court decisions kind of also make that look like a very real possibility. Oh, there we go. I didn't know I had an extra slide on that. Yes, indeed. Then we're all gonna have to face the fact we've got another giant elephant in the room coming up in the new year in January. The dockworkers strike didn't end. The media liked to played it like it was successfully negotiated to a conclusion. It was not.
41:31
Frank Rolfe: The dockworkers wanted two things. They wanted higher wages and they wanted a promise there would be no automation at the docks. The owners of the docks, they agreed to the money portion but they did not agree in any way to the automation portion. So that strike basically starts back up after the election. And I think it was mostly a political move that they pretended it was solved, but it's not solved. If the dockworkers strike were to start again it'd actually go through. And you probably saw the head of the dockworkers union talking about the fact he didn't give a rat's rear what happened to America. Where we could just blow up and burn to the ground. Their position was, we don't care. Then this could be the strike to end all strikes because without the ability to import goods everything will come to a screeching halt. Within two to three weeks, you would have no things in grocery stores or Home Depot or Lowe's or anything. So we don't carry enough inventory anymore under modern inventory control to last very long.
42:32
Frank Rolfe: So that's a huge issue that you have coming up that I think a lot of people, many people I talk to it's, oh yeah, well the dockworkers strike, man, we got that thing solved. No, you didn't get it solved at all. I cannot see the companies that own the docks agreeing to no automation or technology. It would be nuts. I can't imagine the car industry saying, oh, okay, well we'll basically end any future car, robotics on cars, it would never happen. So I don't really know how that will end. We're all gonna find out here in January. Also don't forget our government's completely broke. It's kind of odd. If the government was a human, it would be like you're one probably most derelict relative who doesn't have gainful employment, has maxed out their charge cards, about to be evicted and everything else. They seem to have immediate accountability on a regular basis. The government seems to be able to go on losing money forever.
43:28
Frank Rolfe: I don't know how far they can go on that. Like, I mean, at what point do the trillions of dollars end? I don't think any of us know. But one showdown that's coming up very soon is the fact that the government's once again out of money and it cannot go on unless Congress appropriates more money for it to squander. And that deadline is here. They keep kicking the can down the road and now have done so until after the election, but it comes up almost immediately. And I have no idea what happens with that. I keep imagining we'll probably have a government shutdown. We've had them in the past, but is it possible you'd have a shutdown and there would be no reopening? And then what would happen? I don't really know what happens on that. That's a huge issue. So, the bottom line to it all is that, the US is gonna be a total mess in 2025. It doesn't really matter who wins. We are almost certain to have just so many macro issues that transcend any blue or red playbook that you just can't get away from any of that.
44:34
Frank Rolfe: But if you wanna try and figure out how all this plays out, do some research. Go on Wikipedia. It's a great resource. It wasn't there when I was in college. And when I was in college, the best you could do is go to the library and get the card catalog and look for topics. Today, you can do what you did at the library in a millionth of a second on Google and much better than library I ever had has every article known to man. Read up on the area that is the closest to where we are now because history just runs in cycles as the old saying, history repeats itself, it's constant. But right now, where you are at is basically the era of Carter Reagan, which elapsed during your '60s. You were not an adult during that period. You can't possibly talk intelligently about it. So if you're 40 years old, you can't say, oh yeah, I remember back in the Carter era.
45:22
Frank Rolfe: Well, you weren't alive in the Carter era. But for those who were there, I was there. You probably remember it vividly. For younger people who don't know anything about it, read up on it because it reads, if you take out the names and the dates, it reads very much like what you are seeing right now. It's literally the black and white version of the color version of what's happening and what's transpiring right now. Now, the bottom line, if you add it all together, of everything that I just talked about, the Mobile Home Park industry would definitely benefit from a red win more than a blue. I'm talking just from a Mobile Home Park owners' and buyers' perspective because where Mobile Home Parks are located, which is suburban, ex-surban, suburban commuter and rural areas, and all of the different things that are beneficial to park ownership, such as capital gains tax, you name it, even the industries that would prosper on the red win, which are most of what our tenants work on, that would be the most beneficial.
46:27
Frank Rolfe: But the key item is whether the red team or the blue team wins, everything's gonna be just fine, right? So what's gonna happen, no matter what happens in all of this, is you're gonna have huge demand for affordable housing. It's just that industry is not going anywhere. Every day I wake up thankful that's the industry I'm in because I see people in many other industries and I can't even imagine the horror of being in some of them. Like I can't even imagine how freaked out you would be if you were in the office building sector. Can you imagine that? Can you imagine if you own a portfolio of big high-rise buildings in downtown anywhere America and your occupancy is now, I don't know what, 50%. Like, how does that play out? You know, in St. Louis, which is an hour north of me, you have the AT&T Tower, 1 million square feet, kind of a red granite building, high-rise building, million square feet, sold at auction recently for $3.5 million, cost $100 million to build it. So I can imagine, back in like 1980-something, what do people do? I have no idea. I would be so terrified if I was in the office sector, if I was in the retail sector, namely big shopping malls, I don't know what to do.
47:47
Frank Rolfe: So every day I feel like I won the lottery, like I'm in the middle of the world's greatest happy dream because I am in the affordable housing market. And that seems to be the one constant in life is the need for the New York Times called low-cost places to live. And what's even better about being in the Mobile Home Park business is we don't have to worry about new parks being built. That is by virtue not of our industry, but of the eternal hatred of most American cities and towns for Mobile Home Parks and mobile homes in general. So it's very comforting to know that no matter what happens here in November, we are definitely in the right industry for these times. Also, since we're gonna have a recession, and for those who say, oh, no, we're gonna have a soft landing, it's never happened before. We've never achieved in American history the, "soft landing".
48:42
Frank Rolfe: And there's no way that our current cast of folks are better than anyone who are their predecessors. I can think of many, many administrations and people that are held in much greater esteem historically, and they couldn't pull it off. It's not gonna happen. It would be like, instead of a three-peat Super Bowl, you'd have a 10-peat. It won't happen. Why have we not already announced we're in a recession? Well, you probably have noticed the only thing fueling American consumption right now is credit cards. So it's not even real earnings. At one point, the credit cards get maxed out, just like the federal government on their federal debt. Only unlike the federal government, the consumer can't just keep printing their own credit cards. They can't just buy some plastic and a printing machine and make more credit cards and just keep going crazy, going down to the mall. At some point, they're tapped out. And more than likely, all of these things will all come together in the new year.
49:34
Frank Rolfe: Also, if you read up historically on recessions, they typically start at the start of a new presidential term, because whoever's elected comes in, and they want to look like the heroes. So they're gonna say, oh, my God, this country is down the toilet. Here are the real numbers. You've all been fed a bunch of nonsense, a bunch of malarkey as far as actual performance. These are what's really going on. And then when people realize how bad things they are, they all stop spending, and then we have a giant recession. So you're gonna have a recession. They happen every eight years. We haven't had one in 16. That's why I know we're gonna have one, and it's gonna be a big one. But the good news in our industry, just from a Mobile Home Park owner, is that recessions lead to two great things for Mobile Home Parks. One, lower interest rates. The Great Recession led to the lowest interest rates in American history. I don't know if we'll go that low again, but definitely, we're gonna see lower rates when the recession hits. And the other positive is it just accelerates the demand for affordable housing. So we are a fully contrarian industry, and we do better when times are bad. So we'll be fine no matter what happens of red, blue, and the big recession ahead. That's good for us.
50:47
Frank Rolfe: Also, inflation is great for real estate. I remember this back when I was in economics at Stanford, and you remember certain things in life. I don't know why, but for some reason, it struck me when we talked about inflation, maybe because I was there during the whole Carter era. So it's like that was a big topic for everybody. And there was a thing in my economics handbook of what does well in inflation, and I gotta memorize this one for when I'm an adult. Okay, what is it that works at these terrible times we're in right now back then in the '70s? And it said there's only two things to own, metals, like gold and silver, and real estate, because those two hold their value in the times of inflation. And that's been proven because we've seen real estate go up a whole lot in these last three years when inflation went up 20%. Well, real estate pretty much matched it. So real estate's great with inflation, because as things inflate, values inflate, rents inflate, your mortgage stays static. It doesn't inflate.
51:48
Frank Rolfe: If you have a $500,000 mortgage on a $700,000 Mobile Home Park, and inflation runs rapid, and your rents go up, and the value goes up to a million, well, your mortgage is still sitting there at 500,000. So inflation, which is more than likely where we're gonna be for some time, that's really good for our industry. You know, the Chevron doctrine really helped a lot, because it now means that we can re-litigate all these things that people thought were out of bounds. And the Mobile Home Park industry, more than many, needs to re-litigate the whole thing. They just need to start from scratch. They need to comb through every inch of every HUD doctrine ever made. Let's start with some of the basics. They need to overturn the whole HUD installation guidelines. We know they're stupid. Everyone knows they're stupid. You don't spend $10,000 or $20,000 to save from re-leveling the home, which costs $200, but fewer times. It makes no economic sense.
52:44
Frank Rolfe: Let's get it tossed. All the different conditions and things they've done on mobile homes, such as the fact you can't take them off the boat trailer upon arrival, it's re-litigated. Go over it again. There's a whole lot of items, even in fair housing, that could be re-litigated, tons of things in OSHA that could be re-litigated. Everything in the entire industry needs to be re-litigated. I'm certainly counting on the state associations and MHI to carry the torch to do that, because our industry has been picked on ad infinitum for over half a century, and it's time for it to fight back. And the Chevron doctrine gives it that opportunity, and I hope it runs with it. And yes, it may take 10 years to resolve a lot of these stupid things that we've been required to do, but let's get the process going. I'll hopefully be around in 10 years. Let's get that going. Also, and let's talk about this item, because here's one that I get endless criticism on, and probably all park owners do, and I know everyone does in the media because of the whole free rent movement. But our industry has the greatest potential for rent growth of any form of real estate by far, and yet we're so chickened as an industry that we can't even talk about the McChicken.
53:55
Frank Rolfe: I pulled into McDonald's earlier tonight 'cause I had to give a speech tonight, and so I pulled into McDonald's and I looked at the value menu, and they don't even have a value menu. And the good old McChicken, which used to be $1, McChicken is now $3. So the McChicken is up 300% just over the last few years, and yet people still buy the McChicken because at $3, it's virtually the cheapest thing on the entire McDonald's menu. And yet you never see the articles about those darned people at McDonald's with their 300% price increase, because most people have the common sense to say, look, it was $1 and now it's $3. It's still cheap. But in our industry, if you had a $100 lot rent and the apartments were at $2,000 and you went from $100 to $200, that's 100% increase. The apartment guy, he can go from $2,000 to $2,080 and he's no problem there. He can match or be what you do, but the percentage is smaller 'cause he starts off with such a much larger amount. So if we go up $100 and they go up $200 and they're at $2,000, they're up 10%.
55:09
Frank Rolfe: But if we start at 100, we're up 100%. It's all about the numbers. No one ever wants to point this out. I try and do it every week when I do my news review, the ridiculousness of focusing strictly on percent, but that's how it works in America today. But the bottom line is when you throw that out the window and just look at the dollars and cents, the average lot rent in America for a Mobile Home Park is running about $300 a month. The average apartment's at $2,000 a month. The average single family home is at $400,000. So we've got to be a little more proud of what we do to be able to face the criticism of the fact that, yes, we can raise our rents a lot and still be by far the cheapest thing in town. And what proves that is the residents. They never leave. They haven't left because even if you take your rent up as they've in Colorado to $1,000 a month, you're still half off apartment rents. So we've been beaten down forever on that, but it's just a fact of life. The Mobile Home Park lot rents are absurdly low, have nowhere to go but up. And typically, if you raise your rents up, say $50 once a year, nothing's going to happen. Bad.
56:16
Frank Rolfe: You won't lose anyone. It's still the best deal going around. But we need to be more proud of that issue. It's one failure of Park owners. McDonald's had no problem taking the chicken from a buck to three, and they faced criticism at the time. Oh my gosh, people won't be able to afford to eat now and those kinds of comments. But it's just a fact. We are absurdly cheap. I look at some of the rents on parks we buy. I mean, it's so absolutely whacked out. You have to wonder, what were the residents thinking all this time? They asked the guy at work, what do you pay rent on your apartment? Oh, I'm paying $1,800 a month. What are you paying? $240. Everyone knows that it's absolutely absurd. Also, most Mobile Home Parks have a huge potential to boost NOI from filling vacant lots, because probably the average in our industry is 80% occupancy. And the demand for affordable housing is out of the roof. So if you have vacant lots, what's going on is you probably have not been daring enough to bring homes in to fill them. It is true. You will have to fill the vacant lots. It's not gonna magically happen. People aren't going to bring homes in from afar to fill them. You'll have to do it. But there's a huge potential to do that. We have filled thousands of lots in our careers, and it's not hard. Once you learn how to do it, I mean, you have to have a methodology and a science, but definitely there's money left on the table on that which you can tap into.
57:41
Frank Rolfe: There's also ways to improve Mobile Home Parks through other potential NOI increases in the form of billing back utilities, which should have been done long, long ago. Almost all of America has sub-metered water and sewer, except Mobile Home Park owners. And we need to end that. People need to be accountable for what they use. It's the only way to foster conservation and make any sense of it. Also, there's a lot of parks which have big water leaks. We've bought parks that have $5,000 a month of water squandered into the ground, which all we had to do was then go in and fix it. And also, some parks have these legacy managers who have been around forever who are paid vast sums of money, which you can replicate on someone who's much, much less. We had a park in Kansas City. The manager was making over $100,000 a year, and they were replaced with someone who was far better, making about $30,000. So there's all kinds of things like that that we can do as an industry to also improve our position. I mean, another reason that we basically are in great position is we are contrarian. We always do better when the US falls apart. How do I know that? Because I've seen it happen twice. One was the.com bust back in the year 2000. And what happened with parks? They got better. Times were terrible. All the headlines, oh, my God, we're all gonna die.
59:00
Frank Rolfe: Parks were getting more full. Rents were going up. And then the biggest ever as far as the proof of the contrarian niche of Mobile Home Parks was the Great Recession. So here comes the Great Recession. The whole world ends as far as people are concerned. And that was probably the most glorious period for park owners as far as occupancy and rent gains was during the Great Recession. I remember going to some events back then. People would go around the room and say, hey, whatever you do, keep the current leadership in position. Just vote to keep everyone's status quo because as long as we're in the dumpster, we're doing fantastic. So we are a truly tested contrarian niche. So whatever happens on November 4th, whether it's red, whether it's blue, the key item is just be happier in the Mobile Home Park business because out of sheer luck, and really just sheer luck, we are all in the exact right place at the right time. If we were having this discussion back in the 1960s, for example, we wouldn't be so happy because back then America seemed to be on a path to endless prosperity.
1:00:06
Frank Rolfe: People didn't need Mobile Home Parks. In fact, they moved out of them in droves by the 1970s. But right now, when you are in the lowest cost form of detached housing in America, that's pretty much where you want to be. So you should wake up every day with a smile on your face that you are in exactly the right industry at the right time. Now, if you want to learn more about Mobile Home Park investing, I urge you to consider our Mobile Home Park investors bootcamp is coming up this weekend, October 18th through 20th. We'll show you how to identify, evaluate, negotiate, perform due diligence on, renegotiate, finance, turn around and operate Mobile Home Parks. It's a virtual format. You have no travel time or cost. You go from the safety and convenience of your home or office, but you might consider coming to that event. Now we're gonna move on to questions. So if you have any questions, and we already see we already have a bunch in here, so we'll just start jumping into those. We have no topic taboo, so you can put anything you want on here.