I know Frank says not to build a park but...

[Tiffany D.]

I my area of Appalachia, mobile homes are pretty standard. Unfortunately mobile home parks can be super small, haphazardly compiled, and in great disrepair--but not for sale. This area is not a beautiful, tourist area; although there are touristy sites a few hours from here. 

I actually lived in a mobile home (and mobile home park) for several years when we first moved to WV. The park has since expanded due to demand but it is decently far out in the country. However, to some degree, the people of this area expect to drive a while and living a little bit in the country is sometimes coveted. 

Is there any set of circumstance where it would be a good idea to build a park?  Maybe in a really good school district near nicer/newer homes? 

Thoughts?

[Ken Rishel]

Originally posted by @Account Closed:

@Karen Margrave

And there we are, words from a developer :)

There is a post somewhere here that @Ken Rishel made about developing parks/ buying established parks and the verdict was that buying parks is probably a better idea than developing them.

So again, can you do it? Sure but why not follow the path of lease resistance :) 

 Since I was quoted, I guess I better jump in...

I started developing communities from scratch in 1975. Over the years I built 9 communities. They had some things in common:

• All of those communities were upscale (5 star). 
• All of them utilized multi section homes (even in 75) that were top of the line
• All of them were set with "low profile sets" (pit sets, residential sets, whatever you want to call them...)
• All had professionally run intensive marketing and sales campaigns that generated lots of high gross profit sales quickly. (Very important to creating another revenue stream to help pay down the debt.)
• None of them deliberately drew residents from the local area.
• All of the marketing was aimed at promoting a lifestyle rather than the cheaper price of homes.
• All of the communities were planned for 600+ sites. ( I sold some communities before we reached that number.)
• All of the financing of the homes was through a captive finance company which captured another income stream.
• All of the money to finance the development came from a general partnership rather than institutional lenders which allowed us to do things better because of a lack of demands an institution might have made.
• The three communities in Florida were retirement communities that were direct marketed to snowbirds in the upper midwest during December, January, February, and March. All the others were aimed at upper middle income families who worked and lived in very expensive areas and what we offered was a single family home in a good school district they could actually afford if the principal breadwinner was willing to commute.(This was before women were becoming major breadwinners.)

I think this was the pattern of most of the developers at the time, and the only way other than "Mom and Pop" developers that development could work. Certainly it was the method used by Del Webb, who was doing mobile home parks before Sun City, and the DeAngelo brothers, and Maurice Wilder, my first partner. 

With all of that as known requirements to develop successfully, the resources, knowledge, and ability are very important. Developing is daunting. On the other side of the equation was Bud Zeman, once the largest non-public community owner in America, and Sam Zell, the mastermind who discovered mobile home parks as a real estate investment by reading George Allen's first book: How to Find, Buy, Manage, and Sell a Manufactured Home Community and then hired George as a consultant to teach him what he did not know and then went on to create a Real Estate Investment Trust to finance the purchase of existing communities. Both of these men would have (Bud is deceased) contended that there is more money in buying existing communities than developing communities. Most of the new young lions like Ryan H., Ben B., Ken & Katie, Fred B., Scott & family, Four Leaf, Inspire, Matt F., are in full agreement with that and are buying investment grade properties where ever they can find them at prices that make sense. The largest publicly traded companies like UMH and Sun, and Sam Zell's group, ELS, are doing just that as well.

My final thought is this. In an underserved area, a young person building for the future might want to consider developing a community if they have what it takes to oversee such a venture. Unlike a previous poster, I think the long-term returns are far better than other real estate developments. Most however would be better served by learning what they need to know to buy and manage existing communities.