Are MPHs still a good investment?

mobile home university
1

Hello Everyone,

I am new to this forum and new to the idea of owning a MHP.

I have voraciously been reading this forum for a few days now and

after reading about all the new rules and regulations, I am beginning to

wonder if buying a park is a good idea.

I know I may be playing devil’s advocate with so many investors here

that have had great success in the past, but as a newbie, I am

wondering if I missed the boat.

Any thoughts or opinions would be greatly appreciated.

Thanks,

Harold

2

Harold -

Welcome to the forum, but honestly I’m not sure how much value your post will bring to our discussions.

I will answer your question with questions:

  1. Have Frank & Dave shut down their fund because of a change in the market?

  2. Has anyone on this forum started selling their mobile home parks because of new regulations?

  3. Is the stock of Equity Lifestyle Properties (NYSE:ELS) closer to $0, or closer to it’s all-time high?

If you are still truly uncertain whether MHPs are still a good business or not, please keep reading all the posts herein, purchase all the materials off this website, and come to the next Bootcamp. The truth will become plain to you.

Regards,

-jl-

3

Harold,

Mobile home parks have some unusually attractive traits:

  1. Highest yields of all real estate niches

  2. Most stable revenues (since it costs the tenant $5,000 to move out, they never can)

  3. Supply virtually capped since no cities will allow new ones to be built (unlike all other real estate sectors)

  4. Lowest default rate in the U.S. ensures banking availability

  5. Affordable housing is the hottest growth industry in the U.S.

  6. Seller financing is plentiful

While #2 through #5 are the result of restrictive ordinances and factors that will never change, #1 and #6 only exist due to the fact that most mobile home parks are purchased from the original mom & pop builders. Once they die, you will be forced to buy from more professional investors, and yields will then be lower (due to higher pricing) and seller financing will vanish.

So in answer to your question, you will have missed the boat when the moms & pops have all died off. I think that gives you a roughly 10 year window (most sellers are WW II and Korean War vets and their birth dates range from about 1920 to 1940).

4

Hello,Ok, thanks for your expertise. Jefferson, I lost sight of what the forum was about. I now realize it is about helping solve problems, rather than a salesy type of forum where you are constantly being sold to. Thanks for the clarification and thanks Frank for showing me the true, attractive traits of investing in mobile home parks. I guess days reading about the problems skewed my perception.Keep up the good work!Regards,Harold

5

Harold,The hallmarks of this forum are that we treat everyone with respect and encourage open, honest discussion of the mobile home park business. You have not violated either of these rules, and we appreciate your questions. There is certainly nothing wrong with questioning the whole macro industry, and we are big believers in due diligence, which involves questioning every assumption. So welcome to the forum, and keep the questions coming!