All Forum Posts by: Dan Gandee

After purchasing multiple parks and managing them over the past few years here's my synopsis of the pros and cons of owning a park. What has been your experience? 

Pros:

1. Steady Income: One of the biggest advantages of owning a mobile home park is the potential for a steady stream of income. As the owner of the park, you lease the land to tenants who own their mobile homes. This allows you to collect monthly rent from each mobile home owner, creating a reliable source of income. We've noticed great net operating income from our parks and continue to force appreciation through annual rent increases. 
2. Lower Operating Costs: Compared to other types of real estate investments, mobile home parks generally have lower operating costs. Unlike owning rental properties, you are not responsible for the maintenance and repairs of the individual mobile homes. Instead, you are only responsible for the common areas and infrastructure of the park, such as roads, utilities, and amenities. This can result in lower ongoing expenses, making it an attractive investment option for some. This can be somewhat of a incorrect data point as our parks expense ratios are in the 25%-35% range. 
3. Demand for Affordable Housing: With the rising cost of traditional housing options, there is a growing demand for affordable housing. Mobile homes provide an affordable housing solution for many people, especially those on a tight budget or looking for a more flexible living arrangement. Owning a mobile home park allows you to cater to this demand and provide an affordable housing option for tenants, which can result in a stable tenant base and consistent occupancy rates. We have seen this demand through mobile home listings on the brokerage side and it still continues to be strong. We've never had an "expired" MFH listing and this shows us that affordable housing is at it's highest demand ever. 
4. Potential for Appreciation: Like any other real estate investment, mobile home parks have the potential for appreciation in value over time. As demand for affordable housing increases and land becomes scarce, the value of mobile home parks can increase, resulting in potential capital gains for the owner. This has been the biggest gain for our portfolio by repositioning the asset by forcing net operating income and through improvements. 

Cons:

1. Management Challenges: Managing a mobile home park can come with its own set of challenges. Dealing with tenant issues, enforcing park rules and regulations, and overseeing maintenance and repairs can be time-consuming and require effective management skills. If you're not prepared to handle these challenges or hire a property manager, owning a mobile home park may not be the right investment for you. This definitely has been a challenge for us since tenant disputes can get out of hand and suck the moral of the specific area of the park down. We deployed professional property management to combat this. 
2. Dependence on Tenants: The success of a mobile home park is heavily dependent on the tenants who lease the land. If you have high turnover rates or struggle to attract and retain quality tenants, it can impact your rental income and profitability. Additionally, mobile home park tenants may have limited financial resources, which could affect their ability to pay rent on time, leading to potential collection challenges. We fortunately have not run into these issues by screening tenants well and keeping rents affordable. 
3. Regulatory Requirements: Mobile home parks are subject to various regulations and laws, including zoning and land use regulations, health and safety codes, and tenant protection laws. Compliance with these regulations can be complex and require ongoing effort and expense. Failure to comply with regulatory requirements can result in fines, penalties, and even legal disputes, which can impact your investment returns. We keep detailed checklists of all the items that are annually required to keep our parks running which includes water testing, park registration, septic maintenance, and licensing. 
4. Limited Financing Options: Financing a mobile home park can be more challenging compared to other types of real estate investments. Traditional lenders may have stricter lending criteria for mobile home parks, and obtaining financing may require a higher down payment or come with higher interest rates. This can make it more difficult to acquire and finance a mobile home park, especially for first-time investors. We avoided this problem by deploying owner financing and locking in great terms. 

Love keeping in touch with other owner/operators so please reach out! 

-Dan Gandee

I leverage to rinse & repeat. If the bank is going to provide the means to acquire, reposition or refinance for more cashflow, then why are you parking equity in an asset that isn't going to provide you a multiplier effect on income. If you are scared of being upside down, then leave 20% in every property you have as long as you cash flow more than $300 per door per month. That's my rule. 

Hello Jacob, 

First and foremost - Thank you for your service!

This is what I suggest doing as this may be able to free up some inventory that matches what you are looking for and make the payments feasible. 

1. I would try to identify duplexes throughout your area that are not owned by LLC's and trusts. Next create a mailing list and mail these mom and pop landlords and let them know your situation. I.E. Veteran family with small kid looking to find a duplex in this price point and I have this much down payment to work with. Please let me know if you'd be open to selling. See if you can create an owner carry situation from someone that is looking to cash out or liquidate a few properties. Next take that list and skip trace it. Call them and follow up on your letter.

2. I would then try to locate single family properties that have FHA or VA assumable loans. Before everyone yells at me and says that's not possible, it most certainly is. It just takes a little technology, a friendly title company, and the RMLS to locate these properties and create a mailing list. Next take that list and skip trace it. Call them and follow up on your letter.

3. I would then try to find properties in the right areas that could be converted to two units (as poster above mentioned) or an ADU could be built to maximize mortgage offset. My first investment was an ADU over a garage + a manufactured home on the same property.

The biggest components to creating a solution to your problem at hand is...

-Unlocking the right inventory & at the right price 

-Finding sellers willing to work with your target monthly payment using owner carry terms 

-Finding the right loans currently in place to assume 

-Building mailing lists and call sequences centered around the right script, follow up, and consistency to increase your probability 

I'm happy to jump on a call and discuss further to help you get started. 

Anyone investing in car washes in 2023 that need to be repositioned or BRRR? I'm looking to deploy some capital this summer and would love to connect with an owner or operator of several car washes to gain some insights. Thanks in advance!

Totally appreciate your feedback. I feel Oregon has its constraints but I've also invested in certain markets in California with worse laws and came out the other side with 3X appreciation which smaller markets would have never returned. It's all about the risk vs. reward I guess. 

PREFACE: First and foremost, I just wanted to say I totally understand the discussion point of investing in red states vs. blue states. As someone that grew up in Ohio helping my grandfather labor on his small rental portfolio and make nearly no money, I can see the pros and cons of all sides of the equation. Now that I live out here in Oregon with a substantial portfolio of properties (many different assets and many different price points) I'd like to gather some feedback from other investors and property managers on this topic. 

DISCUSSION POINT: Supply and demand will change with a mass exodus of investors, raising prices and raising rents (all good for someone that is patient and has market rents). 

If you are not familiar with SB611 then please take a quick Google Search of the law or click this link: SB611 Proposed Law

This law is a state-wide initiative that is very similar to the "PHASE II" rental protections the City of Eugene is trying to pass as we speak. 

THE PROPOSED LAW:

1. Penalty for landlord "no-cause" evictions to be 3X the monthly rental rate of the tenant as a relocation fee

2. Rental caps will be reduced from 7% + CPI to 3% + CPI 

3. The 15 year new construction exemption will be reduced to 3 years (cap on rents). 

4. A "state of emergency" will be put into effect regarding affordable housing (WTF does that mean?) 

I'm making this post because I've learned over the years that where "there are problems, there are opportunities." 

I'm looking to acquire more properties on creative financing and I believe this may just be the perfect storm for more discussions with tired landlords who've managed their properties poorly and have under market rents. 

Repositioning is my asset management skillset and I believe we can create massive success in a changing climate, while the near sighted investors push the ejector seat. 

What are your thoughts?

BIG ANNOUNCEMENT! Watch The Video!

I'll be hosting a webinar for the Lane County Rental Owners Association (ROA) on April 27th from 5-7:30PM! 

Topic: "Selling Your Rental Property The Right Way"

-What Is your WHY of being a property owner?

-Understanding WHEN is the right time to sell?

-The IMPORTANCE of keeping up with market rents?

-What to do the year BEFORE selling?

-Creating & running an A.P.O.D on your rentals

-Your PRICE isn't the VALUE-Addressing what REPAIRS need to be completed

-Understanding WHAT YOU NEED to package up your property 

-CLARITY to the dreaded Investment Property Addendum And so much more...

1 HR CE CREDIT For Licensed Real Estate Brokers$10 For Members $20 For Non-Members

Just this week I came across two Facebook ads that were targeted to renters to get them to "snitch" on their landlord on the basis of complaints. What government body pays a digital marketing firm to stir up violations and collect more money in fines. What an absolute racket...

If you're unhappy about this, let's do something about it together and stick together. 

If you're fed up about this, let me sell your rental or 1031 it :)