First time park buyer here. Attended Austin 2018 conference earlier this year.
Questions: (1) for all current park owners, are there any practical considerations you missed/neglected when you bought your first park that you wish you had been aware of? (2) Also, for those most recent park owners that have closed within the past year or so, have the attractive features of the asset as touted by Frank, Dave et al., e.g. stable payers/limited delinquency, ability to tolerate market rent increases, relatively “passive” operating asset, 3-4% cap rate spread vs financing, etc., remained true? Or, were there some surprises?
Any help the community can afford would be really appreciated.
I think you’ll find a huge variation across the board depending on who you talk to. The stuff Frank and Dave teach is vital and gives you an excellent frame work to start with. However, I think you’ll find reality to be less rosy and a lot more difficult. Yes there are still great deals out there, but you have to have a huge deal flow like many of the large operators who have earned their deal flow over years and decades in the business. You’re going to notice the market is crazy right now with way too many buyers and cap rates getting pushed down between 7%-8% even though very few deals are actually closing in that range. On site management is crucial and will make or break your park. In some markets, residents will run with $50-$100 rent increases and others can tolerate it. It all depends.
We have three small parks in Tx - north of Houston, San Antonio and Waco area. San Antonio is strong and have raised rates from very low level when purchased. Will increase again within 2 mos and still below market. North of Houston - again we are on low side at $285 - will increase in 2 mos to $325 which seems to be market. Could go higher since no lots available but there is a limit on how much people can afford. Waco strong as well. Surprises - some tenants are crazier than Frank said. Been yelled more than once in short 2 year ownership. Bizarre people - only some - most residents keep to themselves and pay rent on time.