There appears to be a huge amount of information on how to start buying and selling mobile homes and parks. There is also a low barrier to entry: minimal money and minimal training. Is the market becoming over saturated with new investors?
There is information for anything and everything available. Choose wisely on what you study. Frank and Dave have a proven model. I would not say there is a low barrier to entry. I would say its a high barrier to entry. To find reasonable deals, you have to have good relationships with other investors, brokers , or spend lots of time and resources to getting your own deal. New investors who purchase deals can inflate prices if they are wiling to settle for lower returns. Get a good education, and make sure you thoroughly learn to value properties. This will be very important in order to be able to succeed.
Most people buy one mobile home park. A select few buy a handful. Very few buy 10 or more. Meanwhile, there are around 40,000 mobile home parks that will need to be sold simply from the biological clock of the mom and pop sellers. There are not nearly enough buyers in the U.S. for the number of parks that will ultimately be sold.
What holds people back on buying more than one park is typically the capital constraint. While the industry is filled with “zero down” stories, typically the deals require 20% to 30% down. To me, house flipping is a low barrier real estate sector, not mobile home parks.
@Mturn - minimal barrier to entry? Are you a troll? If you call needing hundreds of thousands of dollars in cash on hand to purchase any real park in the $1M+ range a “low” barrier to entry well then - I guess we have different definitions of barriers to entry.
Or do you mean low barrier to entry to become a guru? Your question isn’t really making sense. Have you owned commercial real estate before in any other sectors - multifamily/office/retail?
Thanks for the feedback. I can clarify my question further.
My question was intended to be related to buying and selling of used and new mobile homes not mobile home parks. I agree that at the investment level where you are acquiring parks there is a high barrier (capital) of entry and a significant requirement of industry knowledge. I am currently researching the business and am interested in buying and selling mobile homes prior to purchasing a mobile home park. I think that would provide a fundamental understanding of the clients of MHPs and the workings of MHPs.
Revised question: With the information available in books and on the web on how to buy and sell mobile homes in addition to minimal capital requirements and training needed is trying to buy and sell mobile homes a saturated market (ie a Lonnie Dealer)?
Becoming a “Lonnie Dealer” these days is tough due to one fundamental question - where will you find good used homes to bring in? The industry has been starved for new homes for the past decade or so since chattel lending was discontinued en masse. Most of the guys who were doing parks ten years ago will tell you that back then you could readily find decent used homes for a couple grand or less (repos were common). Where are you going to find those today? I know they are out there but it’s a heavy lift to find them.
In 2016 homes being brought in to most parks are new - and that pace will only accelerate as more operators are embracing CASH and other consignment-style programs in the industry.
I would look for a smaller park to buy and operate if you are looking to build your MHP experience. Being a Lonnie dealer will not prepare you very well for operating a park today.
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