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Christopher Nelson is an experienced technology executive (2 x IPOs), real estate investor, author, and the Principal and co-founder of Wealthward Capital. Wealthward Capital is a real estate investment firm with a diverse portfolio of over 3,000 multifamily units, mobile home parks, and ATMs.
Christopher shows technology employees how to achieve financial independence through education and creating passive income portfolios. He is currently editing his book, “From No Dough to IPO”.
In this episode Christopher shares his story of how past mistakes have taught him to implement an accelerating mindset for building wealth and creating value with what he’s learned along the way. “The biggest lessons are always found in our failures” says Christopher, sharing how his journey to financial freedom has been fueled by distilling failures.
Christopher has found the perfect niche in mobile home parks. He shares his knowledge of how these businesses are made for cash flow and he explains how they diversify your income.
Don’t miss this episode to incorporate Nelson’s powerful advice into your daily routine so you can build an extensive income stream!
In This Episode
- Christopher’s journey to successful IPOs.
- The value found in learning experience and the education of the ultra wealthy.
- Asset class and current market of Mobile Home Parks.
- Nelson’s personal wealthy strategy and ways he accelerates his wealth journey.
Hey everyone and welcome to today’s show on Wealth Strategy Secrets. Today we’re joined by Christopher Nelson. Christopher is an experienced technology executive, having gone through two successful IPOs, real estate investor, author, and the principal and co-founder of Wealthward Capital. Wealthward Capital is a real estate investment firm with a diverse portfolio of over 3,000 multi-family units, mobile home parks, and ATMs. Christopher shows technology employees how to achieve financial independence through education and creating passive income portfolios. He is currently editing his book “From No Dough to IPO.”
Christopher, welcome to the show, man.
Hey, thanks so much, Dave. Excited to be here.
Awesome to have you on the show. I guess for folks who aren’t really familiar with your background, let’s start out with your journey. Talk to us about the tech side. We have a ton of entrepreneurs and people in the tech industry in our audience, so you can throw out as many acronyms as you like.
Great, I can dig into the acronyms. Well, you know, I saw technology as a great way when I was in school. I fell in love with tech and thought this is the future. I wanted to work in an industry that I saw a lot of growth, possibility, and potential in. Graduating in 2001, it was interesting because that was a downturn. The bubble burst, there weren’t a lot of jobs. I was thinking about this the other day. Recently, we’ve talked about a lot of people getting laid off. Companies were literally sending offers, and then these companies imploded and went away. It was a very crazy time.
I chose to work for Accenture, a large technology consulting firm, to focus on building skills and the ability to execute. While I saw the vision and opportunity to work for equity, I wanted to build my skill set first. That ended up being the right move down the road because I built what I call career capital—a set of experience and results that, when it came time to start working for startups, I was able to trade for good portions of equity.
Nice, yeah. So what domain were you in on the tech side? Were you doing business consulting, or where were you specifically?
I was in systems integration. I worked on a lot of financial systems implementations and then CRM. What really accelerated my career was in 2004 when I had the opportunity at Accenture to start the salesforce.com practice, which was a brand new delivery model. Software as a service is now ubiquitous, but back then it was a client-server model. I was really frustrated by a lot of those implementations because we spent so much time on the basics and fundamentals. When did we get an opportunity to really accelerate the business? I saw software as a service as that ability. You have a lot of the core features out of the box, and now we can iterate quickly to deliver high value for the business. That’s where I spent a lot of time between 2004 and 2009, delivering that to clients globally.
Got it. And what firms were you with on the IPO side? Tell us a little bit about that journey going through an IPO.
Well, yeah, to summarize, I think the biggest value is always in our failures. When I left Accenture, I was at the height of my career. I was a global expert technical architect for salesforce.com in 2008, and we were unicorns, very rare at that point. I was literally being flown around the globe and found myself in Tokyo, very burnt out, though I didn’t realize it. It’s important for people to realize that when you’re burnt out, you’re not going to be making the best decisions.
When I decided to invest my time and talent in choosing my first startup, I made a very emotional decision. Instead of moving towards something I was focused on, I was running away from fear. The first company I chose for a startup turned out to be an abject failure. Within a year, I found myself in a company that wasn’t advancing, working for a bad boss, etc. But out of that came a lot of learning.
This mindset shift helped me accelerate my wealth strategy. I needed to invest my time wisely. As a W-2 employee with tremendous career capital in salesforce expertise, I had traded to a company where I wasn’t getting any value. The second time, I went to a company called Splunk. I joined Splunk in 2011 as employee 417, and that got me to my first IPO. I worked there for five years and then joined a company called Yext pre-IPO. They ended up going IPO, but it wasn’t the right fit for me and my family. So I decided to leave that company before the IPO and go to a company in Austin, Texas, called Forcepoint. It was a private equity company, and I wanted to see if I could achieve the same results in private equity as I did in venture capital-backed companies. It did not IPO, but in 2020, I joined a company called GitLab, and we IPO’d in October of 2021.
Nice, yeah, nice. You’re absolutely right. There’s so much to be said for the value in the learning experience. As entrepreneurs, we’re going to make mistakes. You’re always going to make them, but it’s all about accepting those and learning from them so you can build upon that. So many people are afraid to actually take action because they might make a mistake.
That’s true. One of the most powerful things I did in the midst of that abject failure, nursing this ulcer, was to look at the decisions that led to that. It can be a painful and aggravating process, looking into failure and distilling out the lessons. But the reality is that after-action review or that discovery, whatever you want to call it, is a powerful salve. It’s powerful medicine that will actually heal that wound and then give you these lessons that are now etched in your brain or on your soul. You will carry them with you and realize you’ll make different decisions. Some of those were understanding and being clear about my value and having a due diligence process, just like you do for real estate, in the companies I go to work for. That led me to Splunk and ultimately now to GitLab for those two successful IPOs.
Yeah, now that’s really insightful because conventional wisdom teaches us to focus on fixing our weaknesses and trying to be a jack of all trades and knowing all of these things. But in the real world, it’s actually about doubling down on your strengths. To do that, you have to have great wisdom around what your strengths are, where you play best, and how you can capitalize on those.
That’s right, that’s right. How do you continue to invest in that? It’s so interesting, and you’re right. Part of it is what we’re taught. We believe that being risk-averse in our talents is really spreading it out and diversifying like we would a portfolio. But too much diversification is dilution. Say that again, too much diversification is dilution. We have to move in and find that sweet spot where we are focusing on that big investment that is our strengths, shoring up where we need to. The other thing is we surround ourselves with a team of people that help us achieve our objectives together because we have that diverse set of strengths and weaknesses.
Right. For me, Christopher, in my entrepreneurial journey, I’ve built a few companies over the years. It’s interesting because most entrepreneurs go through this transformation where their first business is built out of what they already know—existing relationships or expertise. In your case, Salesforce expertise. We build these things based on what we know and what we can leverage. But as you get more insights into your strengths and what you do well, your next business is about building something even greater. You’re getting better at your strengths and building a team of people who complement those other areas where you’re weak. The strength of the team is so much more powerful. Ultimately, what I find, which is underrated, is it’s all about fulfillment and passion—getting up every day and being super fired up about the business you’re running.
It really does. It’s interesting how that unfolds over time. I had this conversation earlier this week where someone was talking about pursuing your passion. My story is that when I was in college, my passion was software engineering. I thought I wanted to be a software engineer. I got accepted to this great internship, and that whole summer I was bored out of my mind. I didn’t find fulfillment in it because I needed more interaction with people. I was by myself too much. I ended up in a recruiting center and found an alum who worked for Accenture. They said, “Hey, you can solve difficult technical problems with people and advance businesses.”
The reason I bring that up, and I think it’s poignant to what you said, is that we find our passion as we’re developing our skills. I focused on how to build my skills and get joy out of the skill and work. Now, it is the passion. While working in technology, I realized my passion was building teams that solve big problems, not just the technology itself. I really enjoy building the teams. Now, like you and I, we’ve found this passion for financial education. We understand that so many people, even high net worth individuals, don’t know how to leverage the equity and money they’re making to secure financial independence and freedom. There’s a huge chasm of knowledge. I get excited every day to continue talking about this journey to help people out.
100%, Christopher. I think part of the reason is because the education is just so lacking. In traditional academia, nowhere is it taught how to actually protect and multiply your money. We’re learning about a particular expertise within a certain domain or topic. We learn how to make money, and I think most people are good at that. But people just don’t understand the concept of how to multiply and grow your money as well as protect it. It’s also about capital preservation. What are we doing to do that?
You’re right. We have many entrepreneurs who’ve had eight-figure exits, but it hasn’t been taught to them anywhere. Frankly, people have been busy raising families and building companies. So where do you find the time to actually learn these types of topics?
And the other thing I think is important to add is that you’re right, there’s a lack of education, and then there’s this big machine with different messages for us. There’s the fast-food wealth management industry. The message is really the same: “This is really complicated, you can’t do this, give it to us. We’re going to take your money, put it in this mutual fund, and charge you 2 percent.” It’s really not about whether you succeed or not; it’s about their control. When you have those messages everywhere, you hear it all the time. As we are onboarding investors, we hear, “I’ve heard from my wealth manager that this is risky.” Of course, you’re going to hear that from them.
But when you break through, and this is what we’re talking about on this podcast, the strategies of the ultra-wealthy are beyond that. One of the reports I look at is from Tiger 21, a private group of people with a net worth of $10 million or more. You can look at their asset allocation. Generally speaking, the stock market takes a quarter of their allocation, and half of their allocation is divided between private equity and real estate. It’s exactly because of what you said—capital preservation. None of those people are applying the four percent rule. They’re not draining all of their earnings and taking their account down to zero, hoping they have enough for retirement.
Those are the people who have bought into the fast-food wealth management industry. What they’re doing is investing in assets that will preserve capital and continue to give them income, dividends, or checks. They’re also buying businesses and depreciation so they pay less taxes. This is where I’m excited about podcasts like this, focused on the education of the ultra-wealthy. How do we break through this noise? How do we get better educated and then break through the noise of those larger industries trying to scare us into letting them control our assets?
The thing that just singes me, Dave, is this whole concept of when the bond market broke. There used to be a strategy of having 50 percent of your money in bonds to preserve capital and send you income. All of a sudden, they invented this four percent rule that I would argue is robbing future generations of wealth.
Well, absolutely. You said it so well, Christopher. It is a machine because the government and all of these top Fortune companies want you to put your money in a 401(k). Think about it from their perspective: the government knows that you’re deferring taxes until your later years, taxes are likely going to go up, and they can predict that income stream. They’re even telling you how much you have to take out in a given year, so they know what the revenue is going to look like in the future. But don’t you want to be on the right side of that equation? Instead of something else telling you what you can do with your money, getting control back from corporate America and Wall Street is key so you can make the right decisions.
Well, you’re right. This, to me, is a core strategy of the ultra-wealthy. They see themselves as the managers of their wealth, and they’re putting together teams that execute their strategies. This is something I communicate to my investors and why you have this podcast, right? It’s to teach people that we need to be our own managers. If somebody is taking a fee, we’re clear on what the fee is for, and we make sure that fee doesn’t come with a lot of fear, control, or low value. I support the thesis that what fast-food wealth managers do, you can get from robo-advisors for a quarter of the cost.
100 percent. Whether the market’s going up or down, they’re still making fees on assets under management, and that’s their business model. Fundamentally, it’s incorrect because they don’t have alignment with your interests—it’s really alignment with their own interests. I know plenty of them, and they’re all building businesses based on assets under management. We do have to break the mold. Just going back to what you talked about earlier, Chris, you really hit the nail on the head. This is why we’ve actually created this comprehensive wealth strategy. The first phase of it is all about mindset.
How many people have you talked to about investing in real estate, and they say, “Well, that’s risky,” or “That’s an alternative asset class”? That’s what their advisor is saying. But last time I checked, real estate is probably one of the oldest industries around. They call it alternative because they can’t sell it to you—that’s why it’s alternative to them. You have to start with the right mindset, be open-minded and creative, and take in these new ideas. Let’s challenge what they’re saying. I started my journey by challenging what they were saying. The traditional approach was the market’s going to go up and down, but over the long haul, you’re going to make seven percent. Every one of them told me that. But being a problem solver, I just couldn’t agree with that logic. I knew there was a different way to solve that.
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Yes, and I think for myself, I read Robert Kiyosaki and understood conceptually and could see it. I would always walk around and think, “Who owns this building? Somebody owns this building, somebody is getting the benefit of all these rent checks.” It was that mindset. I would argue that in the mindset of the ultra-wealthy, they look beyond the hype. They look beyond the messages sent to everybody and say, “Okay, what do I need to do to achieve the outcome that I want?” That was truly what got me on my real estate journey. I realized people are owning and buying real estate and getting all the benefits from it. So how can I do that as well?
Living in the Bay Area, a very high cost of living area, I was able to look and see opportunities for crowdfunding, syndication, and all sorts of different avenues. Moving to Texas allowed us to really see and feel all the real estate here, and at that point, there was no looking back.
Sure. Christopher, tell us a little bit about your personal wealth strategy. What does that look like?
Well, my personal wealth strategy is really taking that Tiger 21 vision to heart. I want to have half my portfolio in income. When I say income, I want something that is seven percent or more cash on cash return. I don’t want that delivered in the future; I want those checks coming in monthly or quarterly. That’s very important to me because I believe that having income in your portfolio today, not waiting to create it, is crucial. Over the last few years, we’ve been deploying hundreds of thousands of dollars into real estate, getting out of equity. It’s really important to have that income because it’s always going to be a backstop to your portfolio and give you options.
The other half I have in growth. Some of that growth can be real estate or funds where you’re not getting monthly or quarterly checks but getting it when the buildings exit or through construction. I’m also still in the market and participate in some venture investing as well. That’s my broad strategy. I try to make sure that on each side of that growth and income, I have diversification but not dilution. I want to make sure I get the impact of the companies I’m owning in the stock market or the investments I’m owning on the real estate side.
Yeah, that makes sense. That’s a great point about diversification. Coming from that financial planner perspective, they talk about diversification as having a mix between equities and bonds and then determining your risk profile. It’s this broad matrix which ultimately doesn’t get you that far. It’s all about having focus. If you look at the ultra-high net worth individuals, they’re focusing on domains and industries that they know, understand, and can control choke points in. They have inside knowledge. So, as you focus in that industry and then diversify within that, that’s how you actually diversify with focus.
It really is, and that’s a good advanced strategy for people to start embracing. As you get into real estate and pick an asset class, whether it’s multi-family, self-storage, or mobile homes, you’re going to want to diversify geographically and across different operators in the way they operate. It’s about understanding the nature of that and thinking about how you can blend into other asset classes as well. That’s what I try to educate my investors on—how to create a blend that will diversify but not dilute.
Right. Christopher, can you tell us a little bit about the asset class of mobile home parks? We haven’t had any guests going into this in detail, so tell us about the demand, the current market conditions, and your perspective.
So, yeah, I’ve had a journey over the last couple of years of really investing heavily in multi-family. We started back in 2015 and then started Wealthward Capital in 2017. We began partnering with others, investing in multi-family here in Central Texas. It goes back to my focus on income. I think we need high income in our portfolios, and mobile home parks became interesting to me because, like self-storage, they have higher cash flow.
The reason they have higher cash flow, similar to self-storage, is because they have lower operating costs. Operating expenses for multi-family can be around 50%, and then you have debt on top of that, so the margins for cash flow are thin. Mobile home parks generally have a 35% operating expense line, and that’s conservative. You can operate parks down into the high 20s with efficient operations. This means that mobile home parks are made to cash flow.
They also generally have a tenant base that stays for 10 years or longer. With good operations, they are made for cash flow. When you talk about demand, mobile home parks are scarce. Scarcity, in the economic sense, means high demand and low supply. They’re only building a fraction of a percent. Many municipalities don’t want to see them physically—”not in my backyard”—and they get better tax income from multi-family versus mobile home parks.
They’re not building them and are even tearing them down. In some communities, they’re removing mobile home parks to build Class A buildings in front of them. But the scarcity works in favor of investors. Right now, there’s incredible demand due to a lack of affordable housing and the silver tsunami. A lot of people are retiring, and 50% do not have any savings, so they’ll be living off fixed incomes. This is where mobile home parks fit into the portfolio.
As an asset class, we’re investing heavily right now because we see this scarcity, high demand, and high cash flow.
Right, and how does that compare from a depreciation standpoint to multi-family?
Depreciation is pretty on par, especially if you’re doing some capex. You can get a cost segregation study, and people are generally surprised at the amount. I’m not a tax professional, but we’ve definitely been seeing first-year depreciation from our mobile home parks in the 60 to 80 percent range. With a good cost segregation study, and some of it trailing out over time, it’s significant.
Right, and what are they able to depreciate on that cost segregation study in a mobile home park? What are the physical assets they’re looking at?
The physical assets include all the paving, anything that is underground, and all the infrastructure that we have to support. Those are some of the key components. We also have buildings and structures that are not part of the mobile home parks themselves. There are a lot of different pieces. If you’re doing some capex that year, you may have the opportunity for some bonus depreciation for the investment you’ve provided.
Yeah, it makes sense. Can you tell us a little bit about the market as well? I know it’s a bit of a bifurcated market. You’ve got some big players coming in trying to buy assets up, and there are a lot of mom-and-pop operators.
Yeah, the market is very interesting because it’s still a very immature market. This is where we’re seeing opportunity. Even in the way they classify mobile home parks, there’s no standard. They don’t have Class A, Class B, Class C; they have the star designation—five star, four star, three star, two star, one star. This was created by a gentleman in the 50s as more of a marketing mechanism than a true standard.
Five-star parks that are retirement communities with a hundred pads or more are trading at very low cap rates and are very desirable because they have all the traits of mobile home parks—high cash flow, low operational overhead, and a safe and secure tenant base. These are generally retirees who have set themselves up well or are just really nice-looking parks. When you go down the stars—four star, three star, two star—if you have a four-star or three-star park with a hundred pads and above, there will be competition for that because larger players can come in on a national level and purchase those.
What you’re not seeing and where we’re finding a lot of opportunity with our Thrive Community Fund is in the lower four-star and three-star parks with less than 100 pads. There are a lot of inefficiencies there, with many mom-and-pop operators who don’t have a lot of debt and run it as a cash business. They might collect cash but not deposit all of it. They operate it based on the cash they collect, so they could have a great park but run it at 60% occupancy because they’re tired of dealing with people.
This is where there’s a lot of opportunity to go in and make some changes to really turn these parks around.
Right, I think everyone’s familiar with the multi-family value add and the opportunities that you can do, but what are some of the typical things you would do with a park?
Number one, basic landscaping. When you think about where you want to be as a mobile home park operator, you really want to be sort of a glorified HOA. So, getting in there and doing landscaping, some paving, and other things is really easy. With the homes, a lot of them have great steel frames, so going in and doing exterior rehab and getting the homes to look very nice is not hard. They have a technology called cool coat, where you’re able to seal the roofs, get rid of rusty roofs, put a nice standard color on them, and it also insulates from the heat and moisture.
For $1,500 to $2,000 per door, you can have the exterior looking very nice. We like to landscape and touch the exteriors of all homes in our parks, so they get a very nice look and feel. The rest is operations. Our focus is on physical safety. When we take over parks that are the majority park-owned homes, while that’s not our long-term model (we want to get to tenant-owned homes), the park-owned homes are on month-to-month leases. We can then address tenants who may not have been screened or who aren’t abiding by park rules or laws by not renewing their leases.
We can start changing the community by ensuring we manage to rules, regulations, and physical safety. With this nice physical appearance, we can turn things around in 90 days. We’ve had tenants tell us they never thought it could be like this—they’re now proud to live there, it feels safe, their kids are playing in the yard again, and they see tremendous value. That’s exactly what we’re trying to do: partner with our tenants to create a safe, nice community that they feel proud to live in.
Yeah, that’s great. I really think of that as impact investing. We’re trying to impact not only the lives of our investors by helping build wealth together on this journey but also help our communities by making their lives better.
And that’s exactly how we see it, Dave. This is an opportunity for us to have a win-win-win. Our property management team is a veteran-owned business, and we’re hiring veterans into that. So, we see it as taking care of our tenants, taking care of our veterans, and delivering great returns to our investors. This is exactly how we want to continue to grow this business.
Right, and are there any typical MSAs that you guys are focused on?
Right now, we’re primarily focused in North Carolina. We’ve anchored our project out of Fayetteville, North Carolina, which is home to Fort Bragg and Pope Army Air Base. It also has some other employers there as well. We’re expanding into North Carolina and looking throughout the Southeast. Our strategy is focused on buying smaller parks in areas with a lot of density.
We chose Fayetteville because, in an MSA of 500,000 people, there are 400 mobile home parks. One hundred of those meet the criteria of institutional players with 100 pads and above, and then you have 300 parks that aren’t on their radar at all. Our goal is to get those parks under management and manage them as a portfolio in the city. We’ve been operating there a little over a year, and in August, we should have a thousand pads under management.
Great, that’s great, Chris. In terms of acquisitions in this current climate, are you experiencing any headwinds, or how have acquisitions been going for you?
We’re not. Quite honestly, I think the current environment has potentially accelerated some of these mom-and-pop investors to say, “Okay, we’re ready to cash out.” Maybe they thought they were going to hold on for a big payday, but now a few things are working in our favor. Number one is our brand and what we’re doing with the parks. Many of these owners have owned these parks for 30 or 40 years and see it as a legacy. They want to see something done well with the park; they may know a lot of the tenants and want it given into good hands. They’re also looking for partners. We’ve done three-quarters of our transactions through seller-owned financing. They’re running a cash business and appreciate having a minimum of two years to get their financials in order. We usually negotiate five-year terms but can exit after two years. The terms tend to be very favorable for us, with fewer fees for us to take over. We’re seeing a healthy acquisitions pipeline in this environment.
Right. Christopher, if you could give just one piece of advice to our listeners about accelerating their wealth journeys, what would it be?
I would say it’s really focusing on income in your portfolio. The one thing that has allowed me to sleep well at night and given me peace of mind in a down market is having a broad exposure in my portfolio to real estate. That’s the asset I chose—it’s a broad asset and diversified. Knowing that I have significant checks coming in every month and every quarter, even when I’m seeing the market beaten down, gives me peace of mind. This strategy accelerates growing your wealth by providing income and diversification. If you don’t need the income now, it can help your investments so you don’t have to liquidate too early. I would say focus on income in your portfolio.
Yeah, that’s great, Christopher. I really appreciate you coming on the show today. It’s always a pleasure when we get together and share ideas. I know the audience is going to love this one. So thanks again. Is there any place folks can reach out to you and connect or follow you if they want to learn more?
Yeah, if you want to learn more about what we’re doing in mobile home parks, they can go to thrivecommunity.fund. If they want to learn more about my company, Wealthward Capital, they can go to wealthward.com (that’s w-e-a-l-t-h-w-a-r-d, Wealthward, like moving you towards wealth). They can check us out there. I’m also launching my own podcast soon for technology employees called “Tech Careers and Money Talk.” They can sign up and get all the announcements for that as well.
Awesome, thanks again, Christopher. Really appreciate it.
My pleasure, Dave. Thank you so much.