Mobile Home Park Investment Analysis Tools

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Mobile Home Park Investment Analysis Tools

Most real estate investors are focused on site-built properties, but the affordability crisis shines a light on the potential of mobile home parks.

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When you think about investing in real estate, several scenarios may come to mind. You can imagine buying a home and becoming a long-term owner or vacation rental. You can also invest in commercial property such as offices, warehouses or retail through real estate investment trusts (REITs). You may not have considered investing in a mobile home park, but more and more investors are doing so.Let's take a look at what's involved in investing in a mobile home park and explore the role that the lack of affordable housing plays in making this investment opportunity more profitable than ever.Although today's mobile homes are much nicer than those of the past, they still require more maintenance and have a shorter lifespan than site-built homes. But when you own a mobile home park, you own and are solely responsible for the land the homes sit on. Residents own their mobile homes and are usually responsible for even maintaining their yards.This is a very big deal. If you own a site-built home or a multi-family home, you need to set aside a lot of money for ongoing repairs and maintenance.

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With a mobile home park, you are solely responsible for maintaining the road and any common areas such as a playground, park or other gathering place that you may offer.If you hire a property manager for a traditional property, they will usually charge around 10% of the rent to manage everything, mainly because of all the maintenance and repair calls they will likely be responsible for. You will probably be able to negotiate a lower rate for managing a mobile home park since they will usually only charge rent. You may even decide that you can handle it yourself.Mortgage applications are plummeting as rising interest rates deter an increasing number of potential home buyers, many of whom have been out of the game for some time. And even if housing prices start to fall now, they will have a long way to go to affect those who were just getting ready to afford a home before the price hike.

Mobile home parks offer an opportunity for those on a tighter budget to purchase a site-built home to still own and be in charge of their space. They are free to paint and decorate as they please, they don't have to let anyone else get a key to their property, and they don't have to hear anyone stomping on them, playing music downstairs, or yelling through the walls. They may also have a small yard where they can cook outside and have children and pets play.

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The White House even acknowledges that mobile homes are needed to help with the housing crisis. Part of the Biden administration's housing plan includes making mobile homes more affordable through expanded financing options.

If you need more convincing that mobile home parks can be an incredible investment, Warren Buffett can help. His holding company, Berkshire Hathaway, has owned America's largest homebuilder, Clayton Homes, since 2003, when they paid a whopping $1.7 billion for it. And of course, all these mobile homes have somewhere to go.

It's worth mentioning that mobile home parks are going nowhere. If you're thinking of buying land for yourself, you'll need to check the zoning situation and make sure it's a permitted use. Quite often it is not. However, the benefit of this is that your market cannot become oversaturated with mobile home parks.

If you have the opportunity to buy an existing park, you'll naturally want to look at the books to see how it works. And if your budget doesn't currently include a full mobile home park or land purchase, or you're just looking to start small, investing in a manufactured home REIT can be a great option.

How To Finance A Mobile Or Manufactured Home

If you're looking to invest in real estate in a way that can help solve the affordable housing crisis, mobile home parks are definitely worth a look. They have a great business model and the current economic environment is conducive to their growth. It must be hard to imagine them going anywhere anytime soon.

Nell McPherson has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway (B Shares). The Motley Fool recommends the following options: long January 2023 $200 Berkshire Hathaway (B Share), short January 2023 $200 Berkshire Hathaway (B Share),  and short January 2023 $265 Berkshire Hathaway (B Share). The Motley Fool has a disclosure policy.

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Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Premium Services Residents of Sansouci Mobile Home Park in Boulder bought the park from its corporate owners last year after their rent was raised. Credit... Rachel Wolf of The New York Times

GOLDEN, Colorado. - When Sarah Clemens moved into Golden Hills Mobile Home Park two years ago, she felt like she'd won the lottery. After years of cramming into a one-bedroom apartment with her, her 7-year-old son is finally settled into his own bedroom, his toys lined up in the yard and the school right on the edge of the park.

Mrs. Clemens loved the friendliness of her neighbors and the opportunity to watch the sun rise in the east and set behind the foothills of the Rocky Mountains to the west. And living there was affordable for her salary as an athletic trainer: After she bought the manufactured home, the rent for the lot it sits on was just $625 a month.

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But just six months after she moved in the plot, and all the stability and comfort it brought with it, seemed suddenly ripped out from under her.

A couple from Colorado who owned the park for years have put it up for sale. Ms. Clemens and her neighbors knew that if the park was taken over by one of the big industrial housing developers that are buying up parks around the state, rents would skyrocket.

"It was like this deflationary feeling of, oh my gosh, I think we have this - I think this is where our roots are going to be," Ms Clement said.

Across the country, manufactured home park residents like Ms. Clemens find their homes at the center of the bull's eye as a flood of investment companies expand their mobile home park portfolios at an alarming rate, threatening the stability of a park. the few remaining sources of affordable housing in the country.

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The people of the Golden Hills settled quickly. They formed a cooperative to offer to buy the park themselves and were on track to secure financing from ROC USA Capital, which supports resident-owned communities across the country.

For months they were full of hope. Three blocks of beige one- and two-bed houses were bustling with community meetings; residents distributed flyers and newsletters. Local politicians rallied around them, and the city voted to zone the park for domestic industrial use only.

But to no avail: In July, the owners rejected their initial offer, and a higher one a few months later, and instead sold the park to Harmony Communities, an operator of manufactured homes with 5,000 residents in 33 parks across the western United States. . The company quickly proved the fears of Golden Hills residents correct by imposing a 50 percent rent increase and issuing a 12-page list of new rules for the park.Harmony Communities spokesperson George Antipas defended the rent increase, noting that the new rents are still lower than similar parks nearby. “We believe in charging fair market rent,” Mr. Antipas said, adding that additional revenue would go toward repair costs and that need-based subsidies were available from the city.

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Then, just a month after buying the park, the company offered to sell it to residents — for a much higher price than the company had just paid for it. However, once again the deal fell through when the company rejected the residents' offer in January.View from Sarah Clemens' window in Mobile Golden HillsFree investment portfolio analysis tools, investment analysis software, mobile home park investment analysis, investment analysis, free investment analysis tools, investment tools, mobile home park investment, analysis tools, investment analysis portfolio management, investment portfolio analysis tools, home network analysis tools, investment analysis tools