Hedge Fund...Buying Mobile Homes...Not Parks...But Mobile Homes

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QUESTION:

  • “Have you heard of Hedge Funds buying new Mobile Homes and putting the new MHs in a Mobile Home Park that they do not own?”

One of the Mobile Home Parks in our area is cleaning house (moving out all their existing Mobile Homes…at least the older ones). Once the Park is cleaned up then a Hedge Fund will buy new Mobile Homes for the Park.

From my understanding the Hedge Fund does not own the actual Park. From what I understand the Hedge Fund will just be the proud parents of lots of new Mobile Homes.

I understand Hedge Funds desiring to invest in the actual Mobile Home Park.

However, I do not quite understand why a Hedge Fund would desire to own actual Mobile Homes that “someone” will be required to Rent or Sale.

Has anyone heard of Hedge Funds doing this?

Or could anyone shed light on why a Hedge Fund would desire to own Mobile Homes?

We own 2 MHPs, so we buy Mobile Homes as an end to our goal of Lot Rent.

However, if you do not own the dirt, you are left with lots of depreciating assets and Tenants (or if they can sell them…Home Owners).

Thank you in advance!

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Never heard of it,but it does make perfect sense on a big picture.

My thoughts upon reading your post was Berkshire Hathaway (Warren Buffet’s Co), might be the one since they do have hedge funds as well as many other investments. Including the Manufactured Home industry itself, Vanderbilt Mortgage & Finance, and more. Just consider it a very large “Lonnie Dealer” that could put new, NOS, or repos on the spaces.

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@Kirstin - who told you this? Is this unsubstantiated rumor?

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@Ivan_ilych , as per your question:

  • "Who told you this? Is this unsubstaintiated rumor?

No, it is not unsubstaintiated rumor.

One of the Owners of the MHP told us.

Over lunch one of the Owners of the Mobile Home Park told my Husband and me that a Hedge Fund was buying new MHs and bringing the MHs into their MHP.

The Owner told us that the Hedge Fund required the following to be complete before they moved in the new MHs:

  • Water: Upgrade
  • Electric: Upgrade
  • Fence: Install Between Another MHP
  • Playground: Install New Playground
  • Older Mobile Homes: Remove Older MHs

We have watched them do the Water, Electric, Fence and remove Older Mobile Homes.

In fact we have had 3 of their Tenants who own their MHs call us to move their MHs to our MHP.

Please note that each of these Tenants found us.

We did NOT solicit any of the Tenants.

In fact the manager of the MHP gave the first Tenant our phone number.

Personally, I just do not understand how a Hedge Fund owning depreciating MHs (and NOT the dirt) could be a good thing.

If you have a Hedge Fund or could explain this to me, I would love to learn. I desire to constantly learn.

I agree with JD ( @jd585 ) that it is like a “very large Lonnie Dealer”.

JD ( @jd585 ) and Ivan ( @Ivan_ilych ), thank you for your comments!

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Hello Kristin,
Do you have any update to this post? Name of the Hedge Fund? Please share the name of the park where the Fund is operating?
Please respond to stevelboden@gmail.com.
Thank you,
Steve

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@steveboden, as per your post:

  • "Do you have any update to this post? Name of the Hedge Fund? Please share the name of the park where the Fund is operating? "

Approximately one year ago we had lunch with one of the Owners of this particular MHP who stated that he had a “Hedge Fund” who was posed to fill up their Mobile Home Park with new Mobile Homes. We did not ask the name of the “Hedge Fund”.

Fast forward to a year later this particular Mobile Home Park now has:

  • Total Lots: 40 Lots
  • Total Filled Lots: 3 Lots
    • New Mobile Home: 1 Lot
    • Manager’s Mobile Home: 1 Lot
    • Old Mobile Home: 1 Lot - (was told that it did not have the proper “Wind Zone” to move)

Our understanding from others (not the owners) is that the “Hedge Fund” was an individual that had:

  • License: Manufactured Dealer’s License
  • License: Mortgage Broker

It appears that this individual (“Hedge Fund”) brought in one New Mobile Home.

Our Mobile Home Park was actually blessed with 2 Mobile Homes that were forced out of this particular MHP. Our 2 Mobile Home Owners were told that they had “X” amount of time to move their Mobile Homes.

Thankfully, the 2 Mobile Home Owners came to us and asked if they could move into our MHP. After processing their Applications, we gladly said yes :slight_smile: .

It is our understanding that this Mobile Home Park’s Business Plan has now changed to the following:

  • Fill up this 40 Lot MHP with Mobile Homes from another of their MHPs

One of their other MHPs is next to an Interstate where the government has plans to make a New Exit/Entrance Ramp.

This Exit/Entrance Ramp off the Interstate could remove a portion of their Mobile Homes.

The amount of Mobile Homes to be removed depends on the Exit/Entrance Ramp selected (about 2 weeks ago the government presented 3 Different Exit/Entrance Ramp Designs with different amounts of Mobile Homes needing to be removed).

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Sounds like the Hedge blew out.

I know of a local company that at one time or another in the past some how acquired quite a few homes in a local park and owns them on title as legal owner. This particular small company finds tenants, places them, has them sign the deal to buy the home, and then they take over the lot rent in the park that the company does not own, and pays the mortgage on the house. Now, the company that places the buyers in the homes has turned over some of these houses 6 or 7 times. So, they are in the business of reselling the homes over and over, and making money hand over fist on an already paid off asset. Not sure if this is the same type of thing, but this little company makes a lot of money annually off their system. Might have been what that guy at the MHP was trying to do in your neck of the woods.

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