From reading almost every post on the forum, I see some of the season veterans talk about not owning a park with 30 or 40% percent occupancy. Or only finding “Good Parks”.
Have some of the established people forgotten how it was to be starting out with little to nothing but a dollar and a dream?
Truth of the matter is how are some of the beginning investors with little money supposed to get into this game? Very unlikely we can afford a 4 million dollar 300 lot park 80% percent full.
The little guys can’t compete with the big guns and most of the good deals get snatched up like an alien invasion to people with bigger pockets. Shouldn’t the little guys start off small until we can make a name for ourselves?
Well, the first thing you need to do is not view yourself as a ‘victim.’ Instead, view yourself as an ‘entrepreneur.’ I’ve talked about the importance of how one views oneself both here on this forum, and in my podcasts (search for my name in iTunes). Please have a listen if you have the time.Entrepreneurs solve problems like this every day. They go to their local REIA meetings, and onto forums such as this, and they meet other investors that will put up the money they do not have. And/or entrepreneurs find 100% seller-financed opportunities. Entrepreneurs then they make money and make a name for themselves and they get their ball rolling.Some entrepreneurs, like Jim Johnson on this forum, got started buying individual mobile homes for just a few thousand dollars (Lonnie Deals). He then grew and purchased his first small MHP, then his second and larger MHP, etc.You might also read Jim Clayton’s ‘First A Dream’ book. He started dirt poor as a sharecropper’s son, and ended up selling his company to Warren Buffett for $1.7 billion dollars. I believe Jim owned about 1/3 of the company. You do the math on that. Nobody in the MHP business started with less than Jim, and only Sam Zell has ended up with more.Be an entrepreneur, not a victim.My 2 cents worth,-jl-
Jefferson I don’t think Ty views himself as a victim. I see a guy that hasn’t yet discovered all the options available to him. Participating here at least he has his foot in the door. I am a little guy as well. I have not bought my first park yet but am in the process of trying to get one under contract. It is a fixer upper (39% occupancy) but something that I feel I can build on. I will start small and get the ball rolling as you say. I also came across a larger park that is out of range for me at the moment but if I do some legwork on it I think I might be able to get a team lined out to do a deal. Ty I don’t know what your financial situation is but you could always partner up with someone on a larger project. Good luck.
I don’t believe this forum is telling anyone they need millions to invest. In the real world everyone starts off small and builds but the point being made is that you want to start with a business that will be profitable or you will likely fail. Some do take failing businesses and turn them into a success but you need to start with a business that has that potential to begin with and, surprise, you need lots of money to make that happen. Pay now or pay later.You can work hard to get the money needed to invest in a solid business or you can throw what you have into a failed business with the dream of turning it around. I am bias however because I invested my time in earning the money I needed to invest in a solid business rather than rebuilding a failing business. In the end a dollar and a dream is only worth a dollar.
Just thinking, ok. With over 30 years in the business would I do it again, yes and no. With the large investors and syndicators around like flies on honey thinks have radically changed al least on parks with 75 spaces or more. Presently I have buyers saying name your price we want in. Thus if I am looking for larger quality properties or with easy larger returns those parks are in HIGH demand since we presently have CHEAP money with banks paying no interest to depositors. I personally believe there are more buyers than sellers and thus a lower cap rate like what happened in Florida with 6-7 caps on parks can??/ possible occur especially when the only parks left are owned by syndicators and they will bid against each other… So the best deals are probably less than 50 spaces since the only completion for them are ones with limited resources. I would not be buying the parks larger than 75 spaces now since for the last year on the park store I have not seen properties with fantastic returns that were the normal 30 years ago. Just my observations from the heartland. We presently are upgrading our parks for maximum return and efficiency. If you see a fantastic deal with 75 spaces or more without rentals we are ready to buy–show me!!
When I left high school in 19blahblah, I had a $90 car, 1 part time job, and $300 in a passbook savings account. Not much by today’s standards. The most valuable of those 3 was the part time job. Valuable because it provided income which paid for day and night classes and valuable because I learned about work and this lead to full time job(s) and career in manufacturing. The job is the fundamental ingredient to build savings. Once savings are big enough, then you make investments. Investments are the fundamental ingredient to build wealth. Voila, now you can buy a 400 space park, if you choose, on your terms. Last word on wealth: there was a recent article on MSN which said that, as I recall, of 20 famous investing billionaires living today, 17 of them started out penniless.A word each on being poor and being a victim. Poor people are poor partly because they make consistently bad financial decisions. Everyone makes bad financial decisions, I made my share, but the way to make smart decisions is to learn about money and wealth and value and leverage and growth and insurance and so on. Victims, and I see them from time to time at the hospital/med center complex where I work including my own department, are locked in an endless loop of blaming someone or something for their situation.Some good reading: The Goal by Eli Goldratt and The Oz Principle by Connors, Smith, and Hickman.I’ll add one thing to what Jefferson says above. Being an entrepreneur is choosing to do something while being a victim is choosing to not do anything.Jim Allen
Well, I have a small park for sale. $325k. 13 homes and a duplex. All owner-occupied, except for the duplex. Park’s in very good condition, firing on all cylinders, city services, and has some up-side. Too small for the big guys, but, in my humble opinion, a very good starter park. I’m moving to the other side of the country; too far to effectively manage it.dkshinnick@gmail.com for a PDF describing it.dave
Here is a thought, our first park of 235 spaces was purchased with $10,000 down and worked with the owner for a year to understand the business and then take over. When you have little money go for broke since what do you have to lose and if you FIND a WINNER for the rest of your life you will be thankful. Being a seasoned owner I am now much more careful to preserve wealth and look for smart deals that cash flow without rentals. Like I have said it is presently more difficult to buy the underpriced property–if not SHOW ME I am ready to buy the 75 space park or larger.
Ummmm… I have a 37 space park I picked up for $135,000 a few years back… If your playing in the $600 per month space rent market you will pay a whole lot for each lot. Make your sandbox in the under $200 per month box and a whole new set of options are out there…
Ty,Here’s the deal/issue etc:It comes down to basic leg work and beating the bushes. The good deals don’t make it to MHPS or Loopnet. The brokers have pocket listings, but even then the cap rates are low.BUT - the deals are out there. I just started getting serious about bringing in leads, built a small system around the whole thing, and it’s shocking to me what’s available. Mom and Pop are there, waiting to sell. Cap rates anywhere from 11-15%, seller financing, etc. But it takes a fair amount of hard work to find these deals, but that’s what makes it fun! More importantly, if everybody could get access to the deals, they wouldn’t be so cheap anymore…
Ari, you are exactly correct in your pursue of parks and you must work at finding them. What needs to be mentioned is the Mon and Pop parks are at much lower percentage now than 25 years ago and believe within 10 years they will be nearly extinct. The ones at LoopNet and The Park Store are already picked over before they hit on their websites. Ari, if you see ones bigger than you are comfortable with leave me a note.
It was 32 occupied and rents were 135. The owner paid W/S/T. Now rents are 200, the park is at 34 occupied and the city direct bills water / sewer and I allocate trash. Local rents are $275 - $300… no place to go but up…the w/s/t was billed at about 18,000 yearly…
Brian -You can. It’s not rocket science, it just requires time and/or money. Get a list of parks, contact the owners, find out if the park is for sale. Evaluate, make offers, rinse, repeat.Good luck
Ran into one like that yesterday except on septic.