I’ve been lurking on the site for a while now and decided it was time to introduce myself. My husband and I are at the early stages of MHP investing (i.e., learning, research). We’re working our way through the MHU home study course at the moment (love it!) and have been reading, researching and connecting with other MHP investors to understand exactly what we are getting ourselves into . We currently own 2 SFR’s, but after listening to a couple of podcasts that featured @Jefferson Lilly, we became intrigued with the concept of MHP investing.
So, I would love to hear from other investors on the site - “wanna’ be’s” like us, new/beginning, experienced - doesn’t matter. A few questions:
What attracted you to MHP investing in the first place?
Where are you in your journey (education, seeking first deal, own 1-2 parks, veteran investor, etc.)
What are your goals and what’s your “why”?
How did you find your first deal, or how are you pursuing your first one?
What lessons you’ve learned at this point in your journey?
What’s the single most important piece of advice you have for someone just starting out?
I’ve really enjoyed reading the good, bad and ugly about Frank and Dave’s deals in the study course, but I know everyone has their own unique experiences so I look forward to hearing your stories!!
I’ll be the first of many responses, I hope. A little over 10 years ago I was buying the houses I was living in and fixing them up. I had picked up my rehab skills from working with Habitat for Humanity for a number of years. For some reason that is completely unknown to me now… I was obsessed with rehabs. I finished my new home rehab and decided to buy my first foreclosure before that was even a thing. I wasn’t sure if I would rent it or sell it - and I really wanted to go crazy, so I was up at 5:00am to paint for a couple hours before work, then back over there after work until midnight. I’d work my day job and alternate nights between seeing the family and working until midnight. I was so into it, it was hard to sleep at night thinking about what I was going to do the next day at the house. I put in real wood floors, crown molding in most of the house, real travertine 18 x 18s in all the bathrooms, granite tile countertops that I cut myself to fit and of course, high end stainless steel appliances that I found at a great deal. I decided to keep this beauty as a high end rental. I rented it out and was on to the next one, and the next and next and next. I found a duplex that one half had been burned out in a fire. (When you are in the attic stomping the ceilings out of the second floor with a respirator mask, you know you are doing a rehab. This was after my desk job all day of course.) Fast forward to the market crash when I was buying single family vinyl boxes for $40,000 and renting them section 8 for $950. I got money any way I could. Home equity loans for down payments on my first few bank mortgaged homes. Then a $50,000 house completely on credit cards Then private money from a couple friends and family at 10% interest. So I got up to 15 houses and about $15,000 per month gross rents. I was doing fine. Netting about $5k per month added to my 90k desk job. But I couldn’t just shut up and sit at my desk. I hated working like that. Painfully hated it. But I never had the guts to quit. “Luckily” I worked in the book publishing industry, so we all got fired. Like… all of us. We knew it was coming about 6 months before it happened so my choices were… Another job… Kinda retire on my $5k per month. (maybe my wife would work instead of me!) or go all in double down on real estate. So here I am on this forum. I knew apartments were too expensive for me, so I got interested in MHPs. It looked like a dream. $10k in a house and rent it for $495 per month (lot rent included). I couldn’t miss, right. I looked at my first park. It was in the town I grew up in only an hour away and my parents still lived there and wanted to help out since they are retired. I got my pencil out and imagined how much money I would make. “Fill up the park, tenants will appreciate our wonderful, nice rehabs, my MHP tenants would be just like my higher end SFH tenants, right!” This can’t miss. I figured my $250,000 32 lot park with 27 homes in it would be a money machine. The previous owner kept the POHs and I would buy them off him slowly. It was the first deal I looked at and it was good enough. I jumped on it while I still had a job and could get bank financing!!! Remember the double down… My last day of work was April 30, so I decided I should really kill it and I found a 58 until Seasonal MHP by a lake with a great manager. So I borrowed the $100,000 down payment and bought that too. I closed the week after my last day at work. Don’t tell the bank. Then 3 months later a campground in the same town came up for sale. No finances, no books, old guy that claimed nothing. It was a cash deal for $225k so I got private money together and bought that too. So in about 6 months, I was neck deep in a totally new game. The cash burn was like a space shuttle taking off. I spent pretty much everything I had or could get my hands on to buy the POHs from the previous owner and turn them into rentals. We screwed up by doing about 10 rehabs at one time. So we were almost done for about a year with nothing coming in on all of them. I was burning through my severance money, my $5k house money, any reserves I had built up with the houses and even deposit money that I had never touched before. It was triple dog dare ya - double down - all in. We were sure we would be rich - someday - if we didn’t go broke in the process. So now we are winding down on the rehabs. We finished most of the reasonable ones and have them rented. Some renters have trashed the places in just a few days even but some people have been ok. We haven’t tried lease options because of the SAFE act thing and for other reasons, but that could be another thread. Finally, I couldn’t let all this fun and experience go to waste, so I reinstated my brokers license and now specialize in helping investors buy and sell MHPs and Campgrounds. I do lots of marketing and have what I think is a decently sophisticated way of handling lots of calls and contacts (another thread). I currently am in charge of making sure everyone gets paid for working for me, that the bills get paid and working full time on brokering parks. I see lots of deals now so I have what I think is a good perspective on park values. I’m also thinking about ways to possibly revolutionize some of the problems in the industry. I love what I’m doing now brokering parks. I haven’t missed my desk job even one second. My wife watches me work night and day - and reminds me that I haven’t sold a park or make a dime since early June. I remind her I made as much money by early June as I made in a year at my desk job - but of course, I dumped all that in rehabs at the MHP. I know this is crazy long and if you are still reading, something must be wrong with you too! I am a total business guy running a decent sized business now. I can’t stand anything that resembles a rehab. I don’t take too many tenant calls, but I must admit that I have put a lot of stress and pressure on my dad as he manages the tenants and the rehabs at my MHP. It can be an overwhelming job. I need to figure out how to get him retired again. That’s what’s up. I think I know the industry and market in Indiana. I’m looking at 4 seasonal MHPs tomorrow in a drive-athon multi park visit all over the state. I have to find a new park for a 1031 buyer. I do love running the business though. I do it if I wasn’t even getting paid - of ya. I’m not. My website should be a .org instead of a .com. We keep telling ourselves… If the parks will just break even this year… But there has to, has to be - a magic day when the rehabs are done and the park is rented and we clear out any remaining problem tenants. Then things will be good. That’s when I will create a home study course about how to get rich on passive income. So please don’t tell anyone how much work passive income really is. Thanks for letting me share… and oh yeah, I just put a 230 campground under contract.
Wow, Trent! That’s an incredible story! And some pretty funny quotable stuff in there too I chuckled quite a few times reading your post. Thanks for sharing - I really enjoyed reading it. That’s why I love to hear different people’s stories - each one is so unique with its own twists and turns.
Wishing you positive cash flow and boatloads of passive income!!
I went a similar route with SFR’s and got burned out working on them. Yes, I had S8 tenants with generally good and some mixed results. My goal was to move into apartment buildings big enough to support an onsite manager. Except for discounted notes or foreclosures, I would not ever buy an SFR again. I too, had a very serious time giving up up my day job at a hospital med center complex, which will be final next month, due to the income security issue. My wonderful wife is not even interested in owning a MHP no matter what the cash flow is, so now I buy notes and make other passive investments from my sdira. I may yet in the future own a MHP, but for now I’m liking being a capitalist. I’m at the point where I don’t want to own anything that requires day-to-day management.
Jim Allen
GJS, Brecht Palombo and Scott Carson do a great job teaching on this subject. My partner has interviewed Scott on his podcast and I went through Brecht’s course a year or so ago. Here are the links for those resources:
At age 54 I was looking at taking early retirement by age 56 with 35 years service. This would mean a reduced pension requiring me to either take a part time job or find another source of income I could use to supplement my pension. We had always talked about rentals so I researched, looked at homes and decided a park would be the easiest to own while still working full time for the two years to retirement. Found one within an hour of home, owner wanted $500,000. 33 homes with one POH. Income about $5300 per month.
Took out a home equity loan and put $125,000 down, seller took back 285,000 at 7.25%.
I flipped several homes ($15,000 - $20,000 profit per flip) in the community over the years and now 7 years later Mortgage is paid off, we owe about $200,000 on our HELOC and income is now about $7000/month. We have 2 vacant lots due to house fires. We will bring in and sell the homes making about $15,000 -$20,000 per home and increasing the monthly income to about $7600/month. Will demo the POH and bring in/sell another new home (similar profit). Also potentially two more new lots if I want bringing the total to 35. In 3 more years we will be debt free and decide if we will sell or keep the community a few more years. If we sell we will hold the mortgage if the next temporary caretaker is interested.
GJS, there are several places to learn about notes as Charles points out above. You can buy whole notes, fractionalized notes, or discounted notes (others too) enabling you to keep your capital working. It’s one more asset class, look on the Internet to learn more. At some point, I may pursue buying notes from the moms and pops who hold them after selling their MHP, provided there is no conflict of interest. I could see a number of ways to do that which benefit both parties.
Jim Allen
Hi Greg, Just read your post regarding possibly selling the park you own. It ends up being two years down the road and I suppose I am in the market for a park so reach out if there is interest! Thanks
. We currently own 2 SFR’s, but after listening to a couple of podcasts that featured @Jefferson Lilly, we became intrigued with the concept of MHP investing.
I chuckled quite a few times reading your post. Thanks for sharing - I really enjoyed reading it. That’s why I love to hear different people’s stories - each one is so unique with its own twists and turns.