Please BRRRR Responsibly

[Allen Lundgren]

So I'm a SFR investor and realtor in the greater Des Moines Iowa metro. And I'm a huge advocate of the BRRRR method.

But holy cow is there some bad publicity going around right now on a trailer park that just changed hands a week ago or so and they are upping the rent 150% in 60 days. Sorry if the new owner is reading this. The deal feels like a 6-18 month BRRRR and sale to me.

I'll be the 1st to say I don't know a ton on trailer park investing outside of listening to the podcast and going to best ever conference. But raising rent on a trailer park from 200-500 a month is gonna cause a lot of house hold stress in low income households. If you make that big of a jump so quickly you darn well be adding value before the jump in prices. Or have a wait list a mile long, which very well could be the case.

I'm sure this new buyer saw $ signs all around... fast growing suberb with trailer park close to new city amenities, no doubt the land value is sky high. I don't doubt rent is way under priced. But I also know in Residential housing we have % caps that we can raise the rents each year. Maybe this isn't the case in trailer parks since it's only a lot. Again I'm not an expert in this area.

I guess what I'm truly trying to get at is don't forget about the human element of our business before we make a dime.

At the heart of our business we are all in this to make money and lots of it... but we are also playing with a human necessity of shelter. You can brag to our friends about how much money you raked in a deal. But raising rents 150% in 60 days and forcing families out of a home isn't something you'd brag to ya mother about, I hope.

Allen

[Chase Keller]

The article stated market rent for mobile home in the Des Moines metro is around $540, so they could probably raise it more down the road.  I don't think those residents have complained for their rent being half of what the market rent is.  I doubt the previous owner was making much money and wouldn't have the ability to keep the place up very well.  It sounds like the buyer is going to be putting in a lot of capital back into the park, so they aren't raising rents without putting the cash back into the property.  I hope they make a lot of money for their efforts.