So I am a “wannabe” MHP owner. I’ve been reading these forums, learning a lot about MHPs, talking and meeting with seasonsed investors and have done some investing as well.
However, one thing that came to mind, as I keep thinking and exploring MHPs, is the future of these parks. With so many parks being listed, de-listed and listed again and in many cases these are parks that no one seems to want to buy, it makes me wonder
what is wrong with these parks? are they so bad that anyone investing in them is sure to lose money? Folks have been trying to sell some of these parks for years! Something must be seriously wrong with them to be in that situation!
If they are so bad and current owners are potentially losing money cause the problems they may have are very expensive to repair then what happens to them in the near future? Are these lots/parks becoming extinct?
Considering 1 and 2 above, what about the parks that people currently own? Will they or are they already in the same situation as 1 and 2 above with the exception that they are not for sale YET…? How many more parks will end in a situation similar to 1 and 2 above?
Considering 3 above, what does this mean for investors, especially new "wannabe"s like me?
I would love to own a “good” park or a few of them to have a sustainable income over a long period of time but should I let the above concerns hinder my dream? This in addition to the fact that “good” parks are tough to come by to begin with?
Either way, I would like to Thank this forum, people running this forum and people from this forum who have taken time and effort to speak to me and meet me until now.
A very basic answer goes back to supply and demand. If there is no demand for the product then it’s a bad investment.
If the park is too small and you are too far, it’s a bad investment.
If it has too much deferred maintenance, it may be a bad investment.
If it has aged private utilities with no, or outrageously expensive plan B, it’s a bad deal.
Just keep evaluating until you can have some confidence in your valuations.
You have to be a great operator to make a park profitable and most people don’t have the time or focus to do it.
Parks that can’t make money often continue to exchange hands until they go extinct. They make brokers a lot of money because they sell every few years! Eventually somebody will find a way to operate the park profitably, or will redevelop it. When cold calling I come across parks all the time that have been demolished and turned into super churches. I don’t know why, but that seems to be common.
Like Frank says, parks are consolidating. Good operators own and operate a larger percentage of the parks. Troubled parks will exchange hands, be redeveloped, or quietly go extinct. We see this happen with parks that have WWTPs, bad wells, or lie within a flood plain. Often times, you’ll go on google maps and it will be 50 cracked, overgrown, vacant pads.
One suggestion would be to make yourself valuable and team up with somebody who already knows the business. Learn from them and then strike out on your own. The mistakes you make in your first few parks can be costly.
Louvie, Thanks for your response. I agree with all your suggestions. My primary thought process was mainly regarding your comments about deferred maintenance and aged private utilities and similar age/obsolesence related issues with parks. Once again I appreciate you taking the time to respond.
You hit my concerns right on the dot. Your comment in 1. is very true and applies to any enterprise. I personally would be disappointed if I for whatever reason I would not be able to be a great operator with time and focus. It is a lose-lose situation in my humble opinion! Your comments in 2. and 3. are what worry me more than a bit; it is sort like the fear of the unknown! Of course the same can be said of any business as well. Regarding your comment in 4., I have already talked to some great folks in the field and learned a lot from them. Discussions around teaming up have also happened. However, making myself valuable is subjective to some extent and like any other partnership it takes the right amount of chemistry. But your point is well taken.
Having said that, I would like to once again reiterate that I really appreciate to everyone I have talked to. I won’t mention any names here but you know who you are
This is really an amazing forum with great folks. Just the knowledge I have gained and continue to gain will benefit myself and others no matter what we end up doing going forward.
Success to us all in whatever we do in business and in life.
Jay
