housing that will cash flow no matter how bad things get). Here’s why I’m making these choices: No matter how bad things get, everyone will continue to need to eat and have a roof over their heads. Everything else is negotiable! My company, Stromberg Invest- ment Group, has a unique niche in the real estate space. I truly trust our company slogan that “It’s the best kept secret in real estate investing.” Our business model is to buy existing mobile/manufactured homes—dou- blewides that are typically 1,400 to 1,800 square feet on a half to 1 acre of land. These are real estate, not personal property. They have a deed of trust or a mortgage, depending on the state, similar to a single-family home. We get a title commitment on every property. My company currently buys prop- erties in four states: Texas, Georgia, North Carolina, and South Carolina. We purchase about 10 properties a month. After we purchase a home, we rehab it like new, put a tenant in the house, and property manage it. We keep about a third of the proper- ties and bring in private lenders to finance them. We sell/turnkey the other two-thirds to our investors. We don’t use banks; we use all private investors. We structure lucrative real estate deals for private investors inside or outside of an IRA. We have created a win-win for us and for our investors. Our investors are totally passive, and they love that! So, you’re probably thinking, “Why manufactured homes versus single-family homes?” Depending on the area, manufactured homes are a third to half the cost, and proportionately the rent and rate of return is much better. You’re probably also thinking, “Don’t the houses depreciate?” Absolutely not! As a matter of fact, in most
cases, they appreciate the same as a single-family home. For example, for the properties we purchased in Dallas/Fort Worth in 2012 to 2014, our all-in price (acquisition cost plus rehab) was around $60,000. Today, these same properties sell between $150,000 to $200,000. Now, you’re probably thinking, “Why don’t we sell them all right now?” Because the rent rates have increased so much. In 2012-2014, rents were $800 to $900 a month; today they are $1,300 to $1,500 a month. After all expenses, these properties cash flow from $600 to $800 per month. Plus, we get to write off the depreciation and the appreciation. Using my example, the $140,000 of true appreciation is growing tax deferred. I expect with inflation this will continue to go up in the future. My attorney says to never use the phrase “recession-proof,” so I don’t, but he did say I could use “recession resistant,” and that’s what I call it. Here is my 2008 crash story. Back in 2006 and 2007, I was buying the same type of properties I’m buying today, but I was flipping them. When the crash hit, the capital markets froze and I wasn’t able to sell any- thing. I had 18 properties with inves- tor notes, and I have always said, “I would rather take a bullet to the head than not pay my investors.” So, what did I do? I never intended to become a landlord, but I was driven to it. I went out and talked to prop- erty management companies and took ideas from each one of them I liked and created a great property management system, which is truly the key to buy-and-hold real estate! What I learned is that our model works great in good times, but even better in bad times. When a crash hits, people downsize and rent instead of buy. The demand for our
properties, which is always great in a good market, goes up three times in a crash. This happened in 2008 and when the pandemic hit. Our collection rate was 97% and bet- ter throughout the pandemic, even with the forbearances on foreclo- sures and evictions. Therefore, I feel I’m perfectly positioned no matter what happens in 2022, and it’s why I believe affordable housing real estate is the safest and best place to have your money, in good times and in bad! If you would like more information or have any questions, please feel free to reach out to me through our website: Stromberginvestmentgroup.com •
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Glenn Stromberg began his career in real estate in 1982, quickly rising to the top of the real estate game. He owned and managed a Clayton Home
franchise and owned and operated 13 inde- pendently owned manufactured home dealerships. He also ran a successful fix-and-flip business. During his 39 years in the mobile home industry, he developed mobile home subdivisions; owned a mobile home park; owned and operated mobile home sales centers; and bought, sold, and leased single-family homes. In 2006, he formed Stromberg Investment Group with the mission to be one of the best real estate investment companies in the country. The 2008 crisis that took over the American economy led Stromberg to redefine his business model and cre- ate the current model SIG uses, allowing investors a safer option to investing and receiving higher returns without the high risk that Wall Street or the “flipping game” yields. With over 500 homes under management in more than four states, SIG deploys over $1 million dollars in investment capital each month and closes an average of 12 properties each month. Stromberg Investments offers investors lucrative passive turnkey options and long-term lending opportunities.
10 | think realty magazine :: march – april 2022
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