A Big Hello To Everyone On The Forum,
I have been reading this forum for a while now. I really appreciate the information freely provided by the experienced investors/businessmen here. I have bought the course materials and will probably make one of the bootcamps in the near future. You could say that I’ve been drinking the Mobile Home Park Koolaid and I am considering buying a MHP. But I’m not sure if I’m totally buying that now is the best time to buy a MHP. I would like to play Devil’s Advocate a bit with the following question that I worry about:
- In an economic environment that has and will probably continue to sow the seeds of inflation won’t the value of a MHP decrease like a bond would with increasing interest rates? I realize that at this moment we are in a very low interest rate environment but I am concerned that if inflation catches hold we would see a very steep decline in bond prices and increases in yields which when applied to the MHP asset class would mean lower purchasing prices.
Or maybe the counter argument is that as long as rents increase with inflation then the underlying value for the asset would be unaffected. If this is the answer then what is the liklihood of rents keeping up with inflation? In the past, say over the last twenty years what has been the “normal” cap rate for a MHP?
I would appreciate your insights and any business-savvy words of wisdom.