Mobile Home Park Pad Sites Only

[Scott McDonald]

Hello all.  New here and my first post.  As retirement draws nearer, my wife and I have decided to venture into RE investing.  Having been a general certified RE appraiser for the last 18 years, I have a decent understanding of the financials associated with various property types.  However, I have zero experience as an actual investor/buyer.

We prefer a property type that requires the least amount of attention and one with fewer moving parts. Based on my appraisal experience and dealings with income property owners, my interest is veering toward a MHP with no POHs. I have weighed it against small multi-family buildings but, for our purposes, I feel like a MHP is a better fit.  Although there are probably states in which MHP ownership is less scrutinized, we are not biased toward any geographical area.  

I have learned that one option is to buy a park with POHs and convert the homes to tenant ownership through owner-financing.  

I would appreciate any feedback/opinions/ideas or direction to any threads or other resources dealing with the topic.

[Frank Rolfe]

Think like a lender since mobile home park investing is based on leverage. Lenders want decent infrastructure (city water/sewer, paved roads and a parking plan), usable density (no more than around 15 units per acre), a mix of home ages but without a huge concentration of homes from the 1960s and 1970s, a desirable location in a metro of around 100,000, and a cap rate that's at least 2 points or more higher than the interest rate. As long as you follow the sweet spot of lending you can't get into too much trouble. 

I would focus on parks that are within 5 hours radius of your home -- that way you can drive out and back in one day. That's an important attribute when you're starting out.

As far as finding deals, we have sourced over half of the 300+ mobile home parks we have purchased over the past 25 years from brokers, with the other half from a combination of online, cold calling and direct mail. The more deals you look at the better your luck will be.

Covid-19 has now proven that mobile home parks are the best real estate sector for the new America. Affordable housing is in exactly the right position going forward.