exit strategy for stabilized park

[RJ Broussard]

Hi All,

99% of the discussion I read about MHPs is around buying mismanaged parks and forcing appreciation. Is there a strategy for the investor who might want to purchase a stabilized park for cash flow and then maybe sell down the road. As I write this it occurs to me that maybe the answer is you can sell when it looks like the mismanaged part again :) Anyway, I've seen a few small stabilized parks (20 pads or less) for sale in my market that would have a nice COC return but the analysis paralysis of how to get out in 5/10 years keeps me from pursuing. Any thoughts on the subject would be appreciated.

[Kyle Altenau]

As a general rule of thumb, any asset you buy that is stabilized will have less return than a distressed property. There's two main reasons. The first being the most obvious, that it's just easier owning a stabilized property. The other being that, there are plenty of attractive financing options for stabilized properties vs distressed properties. 

If you're going to look only at stabilized properties, just adjust your return expectations appropriately. If it's your first park, it might be safer to invest in a small stabilized one first, then look for something on riskier (distressed) side next.