The Asset Class Billionaires Are Quietly Buying

Host: There's also a billionaire tax, talking about 5% of the net worth of someone. Is that the stupidest thing you've ever heard? It's crazy. It's so stupid.

Ali: If I had advised my children today, what profession? Become a plumber.

Host: Let's have some fun here. What do you think AI is going to do?

Host: Welcome back to Lifetime Cashflow Through Real Estate Investing. I'm Rod Khleif, and I'm thrilled you're here. I know you're going to get tremendous value from the gentleman I'm interviewing today. His name is Ali Nasir, and he's the managing partner of Rise 360. Rise 360 is manufactured housing. We won't call them trailer parks. It's an asset class I absolutely love, so we're going to dig into it. His signature is cigars. He typically smokes a cigar when he does an interview, and he didn't bring matches with him, so I brought a tool I like to use when I'm lighting my fireplace. It's almost like a flamethrower. That was a joke. I brought a smaller one too that won't be quite as dangerous.

Ali: I might want to use the big one. We actually use torches, but nothing of this size. This is a Liga Privada No. 9.

Host: He asked if he could smoke in here, which has never happened. I think that's pretty well lit.

Ali: Thank you for letting me do this here. I do appreciate it. Amazing torch.

Host: Welcome to the show, brother. My signature is black V-necks, jeans and flip-flops. I teach thousands of people a year that way, not because I'm trying to be cool, but because my feet hurt. I did my first boot camp in a suit and tight black shoes and was miserable. Then I thought, why not just do it comfortable? People didn't care. It's great when you become more free from the opinion of others.

Ali: That's it. I was a bow tie and suspenders guy for many, many years, every day, even if I didn't have an event.

Host: Where did you come from? What did you do prior to mobile home parks?

Ali: I'm second generation in parks. I've done this all my life. My father, much like your story, is an immigrant. He's an amazing man, God bless him. He said early on, “I'm going to teach you how to fish. I'm not going to give you fish.” As a family, we worked in the family business, which was mobile home parks, and we all contributed. I was just a sponge around this guy, who's one in a billion.

Ali: I joke that India's population is a billion-plus, and I'm South Asian, but he's not one in a billion because of the population size. He's one in a billion because he's a serial entrepreneur. When he said he wasn't going to give me fish, that meant at 17 I started venturing out in business on my own. I've done a number of things, but the common theme has been distressed assets.

Host: So you've done other real estate asset classes?

Ali: Other real estate asset classes, but also distressed assets in general: going concerns, Main Street businesses. I took the M&A model, or even a VC model, of throwing ten deals up in the air knowing one is going to be a grand slam, maybe a couple of home runs, and not all of them will make it because they're distressed. I had a central management team: a CTO, a CFO, and myself as general manager or CEO. We would contract ourselves out to these distressed businesses, get them stabilized and flip them.

Host: So you stepped in without putting any cash in, helped stabilize them, got a piece of the upside and sold them. What an interesting model. I'm interested in buying businesses. There are 10,000 people a day turning 65 in this country who want to retire, and a lot of them own businesses. And nine or ten thousand a day turning 80. I'm very into senior housing. I've got six assisted living facilities under contract right now in Texas.

Host: What businesses did you see the most promise in? When you answer, keep in mind what AI is going to do to eliminate some of these businesses.

Ali: Things may have changed, and I don't do that anymore, but I was very fond of transportation and logistics-oriented businesses. The idea of a truck, or any vehicle, coming back empty frustrated me, and I wanted to see how we could leverage that, whether it's ships, Ubers or FedEx trucks. I ended up doing courier, limo and black car more than anything else. I've also done HVAC, a flower shop and a coffee shop. I had two worlds. The mobile home park business we've been in as a family since 1981, and that's always been steady and constant. The reason I'm so focused on it today is that doing M&A deals, distressed Main Street deals and other commercial real estate classes only further reinforced why this asset class stands in a unique category of its own. With all due respect, I would challenge anybody in a debate on that.

Host: I don't disagree with you at all. It's a fantastic asset class. That said, a lot of people know that, and it's much harder to find deals than it was eight or nine years ago. I actually had six virtual assistants in the Philippines logging every mobile home park in the country, state by state. A lot of them are misclassified in the public record, so I had them fly around on Google Earth, geocode them, break down the entities and get the owners' home addresses so I could mail them. I never did anything with it.

Host: Let's talk about your portfolio. Where are you geographically?

Ali: As a family office, we've always been in California. I've done deals out of state, but currently nothing out of state.

Host: I just did a post a few minutes ago. California has legislation for an exit tax for wealthy people. Washington, Connecticut and New York are grouping together to do an exit tax so you can't leave the state. There's also a billionaire tax of 5% of someone's net worth, not their liquidity. You could have a billionaire worth $100 billion with maybe only $100 million liquid, and he's got a $5 billion tax. Is that the stupidest fucking thing you've ever heard? It's fucking crazy. If these guys leave, they take their organizations and tax revenue with them, like Howard Schultz leaving Washington. And who's going to pay it? The people that voted it in. Big names like Elon and Sergey from Google are already leaving.

Ali: Your point is so valid. Even as a multimillionaire or billionaire, you're not always liquid.

Ali: You're not alone. Everybody I talk to thinks I'm nuts for investing in California. Most Californians I know are investing out of state, and non-Californians don't want to come in.

Host: I'm sure you've done well there because rents have gone through the roof. But you've got rent control, eviction issues where it takes forever to get somebody out, and it's overtaxed and overregulated. What's your experience as an actual Californian?

Ali: The cat's out of the bag. Because other asset classes are so saturated, we've seen a frenzy where everybody is getting into this space: not just investors and funds, but the government, lenders and insurance carriers. Everybody realizes this space has been making money and wants more of that pie, so regulations are getting tougher. Nationwide, but specifically in California it's worse: rent control and insurance requirements because of earthquakes and fire hazards.

Host: I won't invest in a blue state. Life's too short for that brain damage. I've got assets in Tennessee, Texas, Florida, Ohio and the Carolinas.

Ali: For me, it's a cost of doing business. Having a Rolodex going back to the '80s of bankers and accountants gives me a really good opportunity because I can source off-market deals.

Host: Do you syndicate?

Ali: We just started that now. My world as a family office is on autopilot, stabilized and almost exiting. But I'm not done. I'm 56 and ready to keep going. A lot of people have come to me over the years who want to get in the game passively and don't have 45 years to learn everything and reinvent the wheel, so they'll invest with us passively.

Host: Are you going to continue to invest only in California?

Ali: People ask me all the time about my buy box and geographic criteria. I'm getting more concerned about the word buy box because people start limiting themselves within that box. The first criteria is: does the deal make sense? Do the numbers make sense? I would prefer California because it's my backyard and I like the convenience of being able to drive to something.

Host: The most successful operators I see in every asset class are geographically specific. They stick to their backyard so they can go see the property. I disagree with your comment about a buy box, though. To be an expert, you need focus. I teach my coaching students to focus on one market and learn it really well, because focus is power.

Ali: I don't disagree, especially for people who are relatively new. Even then, I have a buy box: secondary markets, two- to three-star parks. The minimum lot count for me is 100. For anybody else getting in the game, I would suggest at least 50.

Host: Fifty so you can have on-site management. You do not want to be collecting rents yourself.

Host: What's your lot count now?

Ali: I'm in the business of buying and selling. I don't hold. I've touched close to 10,000 units over the decades, and I probably have around 2,500 right now across seven parks. Some are really large, 200 or 300 spaces.

Host: Are you all lot rent? For the audience, a lot of communities own and rent out the homes. The best model is to convert to lot rent and have the resident buy the home as quickly as possible, for pride of ownership and because maintenance on these homes will kill you.

Ali: Absolutely. You've mentioned on your podcast that being vertically integrated is the ideal way to set this up, and that's how we're set up. We don't have a construction component, but we have asset management and property management, and we've added a dealer arm. We buy the homes wholesale. We won't rent them. We sell them.

Host: You carry the paper or help them buy it. If you've got empty lots, you're crazy not to. If a community is 60% occupied, you're probably buying it around 60% of value. Do you believe those deals still exist?

Ali: I do. As saturated as the market is, a state like California has a huge population and a high cost of living, where mobile home parks are a real benefit to a certain demographic. Florida has over 5,000 communities. Death, divorce, life gets in the way.

Host: The best deals are ones where people have held forever and are tired. A 100-space park typically isn't a mom-and-pop, and there's a lot of competition. I love the business. It's going to be there forever. You can't build them anymore; nobody wants a mobile home park in their backyard. And unlike an apartment, residents own the home, and moving it isn't cheap.

Ali: Our retention is usually a lifetime for the resident. Who's going to move a $100,000 home when it costs about $25,000 to move it? It may be lower in other states, maybe $5,000 to $10,000 per section, and most homes are double-wides.

Host: I was going to get into it in 2008 and 2009 but decided to do multifamily instead.

Ali: If you want to hedge across more tenants and get longer tenant retention, manufactured housing communities deliver. I've seen that since the Iran crisis in the late '70s and early '80s, when mortgage rates hit nearly 20%.

Host: When I was 18, in 1978, interest rates were 18%. We were doing backflips when they hit seven.

Ali: My father was originally in single-family homes. We had about 120 homes in Orange County, Southern California. When rates went that high, those values collapsed overnight like a deck of cards. He salvaged enough liquidity from maybe 30 of those homes to buy a park. We had moved from New York, and he bought his first park on July 9, 1981. He's 82 now and mentally sharp as a razor.

Host: I lost $50 million in 2008 and 2009. I was only at 30% loan-to-value, and I still crashed and burned.

Host: Let's have some fun. What do you think AI is going to do?

Ali: AI is already helping our industry on the back end.

Host: What about all the people in school for legal, accounting, architecture, engineering and IT? I heard Oracle is laying off upwards of 30,000 people. Amazon and Meta are laying off thousands. These are the companies developing AI, and this is just the start. My daughter does my SEO, and I told her she needs to find something else to do.

Ali: I have three teenagers, 16, 18 and 20. They haven't wanted to know anything about mobile home parks from dad, but all of a sudden the parks are starting to look a little prettier. With the impact of AI, being in hard assets and commercial real estate matters.

Host: I've been shouting this from the rooftops: if you have a job that could be threatened by AI, don't wait for the shoe to drop. Learn how to buy businesses, learn AI, or do something. My marketing manager says once his AI setup is running, it will do 95% of his work. Are you implementing any of it?

Ali: We already are. I'm still learning myself, but my team uses it for almost everything. I used to live in Silicon Valley, and we were early adopters. We're not afraid of it. The point is to embrace the future because it's here. We've seen technological revolutions before, but this one is unprecedented.

Ali: At the beginning of the year, when everybody was wishing people happy New Year, I was wishing everybody a happy second quarter. We need a generational mindset. 2026 is the beginning of the second quarter of the century. It also marks the 80th year of our currency as the global reserve currency and our 250th year as a nation. I'm grateful to be an American, but there's some crazy shit happening. As a consumer, I'm concerned I'm going to pay $17 for a latte. But as a commercial real estate investor, I'm excited.

Host: Because debt stays the same, and if inflation causes rents to go up, the value of the property goes up. For every dollar of increase in NOI, it's upwards of $17 to $20 in value. Inflation is a beautiful thing for us.

Ali: As an investor, this is the opportunity. I heard you say this is the time when you see more creative financing.

Host: We're seeing a lot of seller financing and sellers staying in deals for a piece of the equity. We're seeing heavily discounted multifamily deals. Anything bought in 2021 and 2022 is struggling, and even without adjustable-rate debt, expenses have gone through the roof. The trades are going to make more money than white-collar workers.

Ali: I believe the father of AI, who was with Google for some time, said if he were advising his children today on a profession, it would be to become a plumber.

Host: If you're worried about your job, pick a side hustle and get going.

Host: I've got six senior housing facilities under contract. We're buying them for $40,000 a bed. I got an email yesterday about a $150 million deal at $358,000 a bed. We're partnered with an operator. I'm just doing the real estate.

Ali: You're just leveraging the dirt.

Host: Like mobile home parks, I love senior housing because of the baby boomers. The graph looks like a rat going through a snake.

Ali: Demographics aren't talked about enough, and they impact the overall economy in a big way.

Host: I saw Harry S. Dent speak about 25 years ago, and he predicted the 2008 crash. Had I listened, I wouldn't have lost $50 million.

Ali: As lucrative as assisted living can be, another reason I'm so bullish on mobile home parks is what happens when the economy takes a hit.

Host: That will affect multifamily because those people have to pay their rent, although the government helped us with rent relief during COVID. Manufactured housing will always be in demand because it's the lowest entry point.

Ali: For the audience's sake, we're talking about affordable housing. Anytime the economy takes a hit and everybody comes down a notch in lifestyle, we're the last stop for homeownership. You'll always have occupancy.

Host: That's the same thought process I'm using for senior housing. Seniors have nest eggs, so they won't get hammered as hard. I'm looking for recession-resistant solutions.

Host: Service businesses are there too, like laundromats. That's why I was asking you about businesses.

Ali: I want the audience to know that even though I'm second generation in the park business, it's by choice. I did these other things, did well in some and lost my ass in others, but I learned from them. I learned the street smarts at home from dad, but I wanted to understand the fundamentals of underwriting, so I became an appraiser of mobile home parks early on. It wasn't for the money; you could make more as a broker or agent. The experience with Main Street businesses and valuations only made me stronger in this space. On lot count, I'm not limited to communities of 100-plus. We did a deal in Stockton, California, with three communities that together made up the units we needed.

Host: It's the same with multifamily. If a smaller property adds economies of scale in your market and one manager can handle both, it's a no-brainer. It's like assemblage when you're buying land.

Ali: And with vertical integration, you have additional profit centers within the same community. You can profit on the home sale and on the note, so 300 pads perform like 900 in terms of rate of return. That's become more important as saturation increases.

Host: At a senior housing conference last week, someone talked about adding pharmacy, home healthcare and physical therapy components as additional revenue.

Host: What geopolitical factors do people not think about when evaluating asset classes or businesses?

Ali: Many of us talk about tariffs, sanctions and mortgage rates, which are all important. But many investors, especially new ones, aren't thinking about how global issues directly impact your pocketbook and ability to borrow. Take the Japanese yen. For decades, you could borrow at zero percent in Japan and invest in U.S. Treasury bonds at a 5% profit, and that trickled down to banks lending to commercial real estate. That's going away because Japanese bond yields are increasing, which is driving up our yields. Another example is the petrodollar system.

Host: I saw a post that Iran was offering China and Russia access if they decoupled from the dollar.

Ali: Access through the Strait of Hormuz, and the ability to buy oil in Chinese yuan. It's a small amount in absolute dollars today, a few billion, but the trajectory is sobering. This isn't a political conversation. As an investor, the question is how it impacts the math and how we prepare. Maybe it's being more liquid, developing other resources or understanding creative financing.

Host: How do you feel about precious metals? Mine have gone through the roof.

Ali: I'm not an expert, but I understand why people put money in precious metals as a hard asset. To me, it's not an income-generating asset, and I like income-generating assets.

Host: It's my shit-hits-the-fan fund. I bought it as a hedge at $1,500 an ounce, and it's been around $5,500. I've built 29 businesses, and I have shiny penny syndrome, so putting money in gold keeps me from investing it without thinking it through. I'm all about cash-flowing assets.

Ali: Commodities also make me think about rare earth minerals, which directly impact the cost of your cell phone, missiles and cars. For me, it's not about politics. It's about the math. We're also expecting a wall of commercial real estate bank defaults, reportedly up to a trillion dollars.

Host: My SEC attorney told me he got six apartment foreclosure clients in one day. It impacts us, but it's also an incredible opportunity. Warren Buffett said be fearful when others are greedy and greedy when others are fearful. There's been a lot of greed these last few years, and there's a lot of fear now.

Ali: A lot of people are about to get sidelined. The herd is going to move.

Host: This is our time to strike. I appreciate you coming in, brother. It's been a lot of fun having this wide-ranging conversation.

Ali: Thank you for having me, and thanks for letting me have my cigar.