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Real Estate Mobile Homes

yveskleinsky

Bronze Contributor
Speedway Pass
Anyone here have experience with mobile home parks? My dad and I got in a long discussion about them last night. I guess everyone he knows who has ever been involved with mobile homes loves them- true cash cows. I suppose they make me nervous for all the obvious reasons: tier or tenant, how would you handle evictions, (you own the land and they own the house) etc.

Just putting my feelers out there. :)
 

Diane Kennedy

Bronze Contributor
I'll be interested to see where this thread goes. My very first real estate investment was a small RV/mobile home park. I always vowed to go back someday and own a mobile home park again. I've had lots of clients who own mobile home parks and at one time, years ago, was a bit of an expert in them.

So - that said, where do you want this thread to go? I think I could write a book on it...but don't want to put all of that in one post.
 

SteveO

Legendary Contributor
Speedway Pass
FASTLANE INSIDER
LEGENDARY CONTRIBUTOR
Summit Attendee
I never have owned them but have a good friend that has had a few. He hit a home run with a park in San Diego when he bought at the right time. He bought some others in Yuma, AZ and did alright with them. He always told me that he liked the cashflow and shared the basics of the deals with me on a number of occasions.

He has sold all but the San Diego park and moved the money into NNN deals.

His biggest gripe was that they were too management intensive. But, he was a hands on type of person.

Financing was not as easy. He actually went through private financing for the first few because of the hassles with lenders. After he showed his competence, he was getting 100% financing. The lender was attaching notes to other properties for security though.
 

Diane Kennedy

Bronze Contributor
Let's start with the class of mobile home park:

They range from the very low rent family parks to exclusive senior citizen parks. There is even a mobile home park in the Phoenix area that is specific to only lesbians. So it's all over the place.

What specifically were you thinking about? What area of the country?

There are a lot of different streams of income with a mobile home park, which is one of the reasons I like them:
- Storage area for cars, boats, etc (called the 'bone yard')
- Mini-storage units, because people often more stuff then they can put in a MH
- Laundry facilities
- Mobile home rentals (typically at the lower end - look for COCR of over 50% on these)

In general, challenges:

- trying to mix up your market (you can't put families with seniors, for example)
- inground infrastructure (ie, sewer pipes always getting clogged)
- govt restrictions, rent control, zoning issues

If starting your own from scratch, government zoning will be your biggest issue. Also, from a cash flow perspective, it'll take a while to fill up. If buying one, it's tough to know how good the ingrounds are...until something breaks and then it can be very very costly.

You'll need a good onsite manager to just keep an eye on things. I've often thought that would be a good job for a relative - not a lot of work, but you do need someone who is not partying and creating more problems than he is stopping.
 

S928

Contributor
He bought some others in Yuma, AZ and did alright with them.

It's neat to see my hometown being mentioned (regardless of the text). Yes, there are plenty of mobile parks there and the majority cater towards winter visitors while the remainder cater towards lower income folks.

Diane and Steve have pretty much explained the basics of mobile parks: harder to finance, should have the right infrastructure in place, target marget must be specific, management is vital, etc..

Mobile home parks can easily be cash cows - know someone who's made a lot of cheese, ice cream and yorgurt off of them. :blush:
 

nomadjanet

Contributor
We had the opportunity to purchase an RV park at the coast a few years back and passed on it but it would really have been a great investment. I think that parks that cater to retirees and RV's are completely different than the long term parks. Some of the RV type parks along the coast have private putting range and spa like amenities that someone would expect in a really nice condo development.
That being said there is nothing wrong with being a landlord for basic housing needs and it does not have to be a slum. There is a small park not far from our plumbing shop that is owned by a couple of local investors. They rent slots and also own about a dozen homes that they rent out. They maintain the park well & have upkeep restrictions & the neighborhood is at least as clean and well maintained as some of the housing areas that cost 5-10 times as much. I also have a friend that has a small park about 20 units in a rural area that does very well, she has had some of the same tenants for 10 years with no problems.
 

kurtyordy

Bronze Contributor
Bought a 16 pad park back in April, love it. My downside, I own the homes and I pay all the utilities. Should have that changed by June '08. My friend/mentor owns about 6 last I talked to him. These are in the 80+ range of pad counts. He loves them. He uses SteveO investment philosophy of buying undermanaged therefore undervalued investments, changing the management, and bringing them up to par. The biggest issue he advised me to watch out for was the sewage issues.
 
SteveO
Are his initials "C. Alan S.?"
 

Salinger

Contributor
I've had a few clients with mobile home parks. They are generally excellent investments. If they can, they buy more and bigger.

We also have a family friend who, in his 20's started buying raw land in southern Michigan and building mobile home parks. He is now about 70, his daughter runs the business and he and his wife just play all the time. About ten years ago he told us he was bringing in about $200k/month.

George Gradow (Barbi Benton's husband) does well enough with several mobile home parks around the country to live in a huge house in Aspen. Too bad he didn't want to pay the taxes.
 

Sparlin

Bronze Contributor
Read Millionaire Fastlane
Bought a 16 pad park back in April, love it. My downside, I own the homes and I pay all the utilities. Should have that changed by June '08. My friend/mentor owns about 6 last I talked to him. These are in the 80+ range of pad counts. He loves them. He uses SteveO investment philosophy of buying undermanaged therefore undervalued investments, changing the management, and bringing them up to par. The biggest issue he advised me to watch out for was the sewage issues.


I was wondering how this has turned out. Any updates?
 

kwerner

Bronze Contributor
Read Millionaire Fastlane
Speedway Pass
Bought a 16 pad park back in April, love it. My downside, I own the homes and I pay all the utilities. Should have that changed by June '08. My friend/mentor owns about 6 last I talked to him. These are in the 80+ range of pad counts. He loves them. He uses SteveO investment philosophy of buying undermanaged therefore undervalued investments, changing the management, and bringing them up to par. The biggest issue he advised me to watch out for was the sewage issues.

Bumping another update request for Kurt. :D
 
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