MH Park vs Apartment Building

[Vikram C.]

Guys, how does a mobile home park compare to an apartment building as an investment? I was wondering about the following:

1. ROI. I have seen Jim do an MH park valuation with a 12% cap rate whereas Jon H has done some apartment valuations with a 7% cap rate. I know both were just examples, but the difference in numbers makes me wonder if MH parks offer a much better return based on prevailing valuations.

2. Management. If I were to buy an apartment complex, I would have a property management company run it. Are similar companies avaliable to run a mobile home park professionally or do I have to hire the park manager as an employee? If the latter, how do you manage situations where the manager quits and the park is out of state, etc?

3. Additional Income. What percent of the return from owning a park comes from trading in mobile homes? (I noticed Jim mentioning that he buys homes to fill vacant lots and then sells them on a monthly payment. This can't be done in an apartment building because you already own both the land and the improvement.)

4. Crime, etc. I have never seen a MH park except in movies. Since I watch a lot of action movies, the scenes in the MH parks are usually "interesting!" How are the parks to run in real life compared to an apartment complex?

5. Rent increases. With an apartment complex, I would guess that rents would increase over time to keep pace with inflation. Do lot rents also increase at the rate of inflation? (Over time)

I would love to hear from Jim, Jon (both!), Rich and other experts on this subject. Regards, Vikram