Anybody own a mobile home park?
Thoughts?
Thoughts?
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KC - What size parks do you own? Are they close to you or do you manage from a distance?
KC,
Have you shifted your park ownership style, in regards to keeping occupancy stable, to a lease to own model? Chattel financing has all but dried up for the homeowners in the parks. Dodd-Frank placed even more stringent lending standards on originating seller-financed loans (the SAFE Act, but worse) this past month. Many of the larger-scale owners I am friends with (500+ spaces) have shifted to purchasing newer homes for their parks and facilitating lease-to-own / rental programs. Problem is that you then become a rental property manager.
Mobile home parks are still a very attractive niche to me, but the operating model has changed a bit now and looks like a hybrid of the "mobile home glory days" (parks full of home-owners, who rarely moved and required no management) and rental property ownership. It's not like this makes owning them unattractive, with proper management teams in place. Automation is still the goal.
Also, the fact that so many owners are retirement age and own their parks debt-free is very attractive. Seller financing is more readily available in the non-investment grade sized parks and more attractive to the seller than a straight cash sale since retiring owners are risk averse and can't eek out better returns in the equity markets or high-yield debt markets than they can carrying a note on a park which they trust. Also lowers their tax-liability at the time of sale and spreads their gains over a defined period.
The conventional wisdom is that building a new MHP is not a good strategy. Cost of filling empty lots are high.
building a new MHP has been discussed at length at Mobile Home Park University
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