Mobile Home Park question

[Brett Miller]

Looking into buying our first park. What are the pros and cons from park owned homes vs tenant owned homes (not sure if that's the correct terminology). We have primarily been in the commercial building space but this opportunity has come up so wanted to ask questions from experienced owners. Thanks!

[Frank Rolfe]

The "park" in "mobile home park" stands for parking lot -- that's what the name means. You want to stick with that axiom. When you own the land and not the structures magical things happen. Like little R&M, low management duties, and your customers are stakeholders in your business because they own the homes and you own the land. When you own the homes you ruin the business model. On top of that, no decent bank or appraiser will count anything beyond the lot rent, so nobody is going to back you up on your home rental business and there's zero liquidity.

When I bought my first park in 1996 I knew nothing about renting mobile homes -- I was totally clueless. In only one year I learned that I would rather light myself on fire and jump off the Empire State Building than to do that business model any more. One reason that many moms and pops sell their parks is that the rental homes have burned them out.

Owning a park lot is where it's at. Stick with that model.