Caveat number 3

My mother, who is very wise, said you should expect to rebuild your house every 30 years or over the term of the mortgage.

30 years is a really, really long time. Rebuilding a MHP is pretty minimal as far as building, but codes and government suppression of MHP drives up the value. But how much is the permission worth and how much will it cost to rebuild? If parks are trading at values in excess of the depreciated cost of reconstruction, that’s pretty steep. Better to buy something below its replacement cost. But the cost to replace and real maintain is not included in the standard cap rate discussion.

Of course you don’t ordinarily rebuild your house from scratch but you redo the roof, upgrade the kitchen, fix the leaks, etc. You can see where the analogy takes you.

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Frank and Dave have done nothing but be clearly open and sharing everything. I believe the rewards reap themselves and it’s served them well. It is the philosophy behind Linux and a number of other projects.

It is inconceivable that citizens will continue to ignore the obvious analogy to assembly line automobiles. Cars built in a factory under factory controlled conditions are just going to be much, much more efficiently put together and sold, from start to finish, to the point that no one would ever try to certify a better or new vehicle. (Except maybe Elon Musk). Certainly not without a factory and not in a garage or with local suppliers and codes and builders and inspectors and…a manufactured factory built home is just the best you can possibly do for the cheapest you can possibly do and then on up from there to mcmansion triple wide. Or “modular” even bigger and two story. Apartment blocks. If they could make 'em cheaper they would.

Homes are simpler than cars and they don’t have many moving parts. the damnd things are just Legos. Keep em dry though. Not so easy sometimes. Let the end user worry about the inside of the box and the community about the outside. Feed water and remove sewage. Telephone Electric and gas and you’re all set. Oh, Roads. My dad said $1,000,000 a mile. For what width I wonder… I’m probably forgetting something. If government ever decides that housing poor people in a 1000 square foot climate controlled space at (say) 10 families per acre is a priority, well, great. Let me know when that happens.

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While I’m at it, @brandon_reynolds picked a superb hosting site for this Forum and deserves a kudos. I am sure there is a lot of stuff that goes on behind the scenes to make MHU work and it’s a great resource.

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In response to your first post - “…the cost to replace and reallyl maintain is not included in the standard cap rate discussion.”

Before we go any further with your discussion we need to make sure we have the terms straight. When you say “rebuild the park” I assume you are talking the infrastructure not the homes (roads/water/sewer/pads/driveways/etc.). If so - then you can’t factor in the cost of replacing worn out infrastructure into the cap rate because cap rate is specifically derived from NOI - which by definition does not include capital expenditures and cash set aside for replacement reserves.

But that’s okay because you get to take depreciation on your cash flow of course - which reduces your tax bill - which in theory makes up for the fact that your infrastructure is always deteriorating - and so the gov’t leaves you more cash to set aside as replacement reserves.

Cap rate is not to be confused with return on investment - it’s simply a derived number used as a comparative yard stick when looking at relative pricing between two or more investments.

But you make a good point - high cap rate assets normally have high cap-x coming up so you have to factor that in, plus the cost of the headache factor - to see if your actual ROI really is higher form a high cap rate park.

Wait a sec - is this post part of some series of posts I’m just coming in on? Not sure I gather the overall point you’re making and I feel like I’m missing something.

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nm I found your first one.

Thank you for the kudos and sharing your story!