Hope You Had a Happy Thanksgiving!

The first American Thanksgiving was in 1621 in Plymouth, and was the result of a particularly good harvest. We have a lot in common with 1621 this year. For one thing, the interest rates in 1621 were between 4% and 6% – very similar to today. And second, this year has been very good to mobile home park owners, with spreads the highest they’ve been in decades (the difference between interest rates and cap rates), and the demand for affordable housing enormous. Indeed, every megatrend in the U.S. favors mobile home parks this year.

Dave and I would like to take this opportunity to extend a sincere Happy Thanksgiving to our extended mobile home park family of owners, future owners, investors, manufacturers, lenders and other industry veterans. You mean the world to us, and we hope you had a great day today!


Thanks Frank, this forum and your books have been an incredible help for me. Many people on this forum have given me excellent advice that have saved me a lot of stress and wasted money over the years. Thanks!

Hi Frank,

Thank YOU. I mean it. Thanks to much of the advice you give, the knowledge you spread and the materials you provide (I’ve been to your bootcamp twice) I just did the following:

Purchased a park of almost 100 lots on city water/sewer, in a growing metro of almost 80,000 people with diverse employers, unemployment rate below 4%, average housing vacancy almost 40% lower than the U.S. average, average rental housing vacancy of only 1.5% in the town, almost ZERO availability of 3 bedroom apartments for rent, lot rents over $300 / month, almost 90% resident owned homes, median home prices in the city well over $100K with median home prices in the immediate area surrounding the park closer to $200K (including a development of custom built homes in the 4,000-5,000 foot range almost immediately across the street.

At a 15 cap on current occupancy - counting lot rent only.

With - enough vacant pads to add 50% more homes.

Was it easy-peasy?

NO. But thanks to you Frank it was POSSIBLE.

You’re right - it’s a numbers game. I hired an assistant who did nothing but scan deals 40 hours per week for almost 6 months. We used spreadsheets and CRM database software to quickly screen deals based on many of your key purchasing factors and to follow up with brokers.

We narrowed our hunt to states you recommend - and STILL we found the deal.

The deal looked bad on paper - multiple prior buyers had passed and dropped it. The financials made no sense whatsoever - the operator was clearly stealing from the IRS and it turned out his manager and maintenance man were also stealing both the owner and the residents blind.

But thanks to your detailed published metrics on operating numbers I knew enough to dig deeper even after seeing crap numbers from the seller. And that deeper look was promising enough that I looked deeper - and discovered finally what others had not - the manager was stealing the owner blind.

The owner was a lazy, incompetent owner from out of state who both allowed his manager to accept cash for rent, run the accounting software and pay all the bills.

No I am not kidding.

We bought based on pro-formas - and used Dave’s amazingly strong contract. The seller bit - he actually signed the damn contract. Then he decided he wanted out - but he couldn’t get out because he never could provide the diligence items he originally said he would - and we kept pointing out that, therefore, diligence had not started.

This gave us time to keep digging and discovering more - that the water meter readings made no sense (the manager was faking them) and other problems. The entire time the seller grew more desperate because the manager was stealing cash all through diligence.

Why did I do such crazy detailed diligence? Because you told us to.

You always say “Do amazing diligence.” The broker has been selling parks for 20 years and said she had never seen anyone do diligence like ours. I honestly think the diligence process wore out the seller psychologically and this led to him repeatedly caving on price reduction demands from our side.

This was the classic mismanaged property that my efficient-market-hypothesis undergrad econ training is always telling me does not exist.

But it did. By the time we closed we got the seller significantly lower than the initial contract price.

Of course the manager was terminated at the close and just as I suspected residents started showing me printed receipts from the accounting program showing they had paid rent for months - but the software itself had modified entries indicating someone changed them after giving residents receipts - someone was hiding cash.

Of course we are not now taking cash.

We scored Frank - thanks to YOU. Without you, your educational materials, your lectures, your bootcamps - I never would have known what to look for in terms of diligence booby traps and also operating metrics rules-of-thumbs to be able to value deals and demographics and find the diamond in the rough.

I now have a second park under contract with similar upside.

I’ve spent a long time in the apartment industry but am new to the world of parks. You are right Frank - the residents in the park have loyalty. You can feel it - this is their home, they don’t want to leave, many are here for the long run. You never see this in apartments. And you sure as hell never see cap rates like this with rent upside potential like this.

It was a ton of work finding this deal but the upside is incredible - and especially in a good market and in a hot time period for real estate.

The deals ARE out there. It IS work. Running a park IS work.

To be honest I probably could not have executed an exhaustive park search and diligence operation without a full time assistant - so I do have that advantage.

But I could never have done it without you Frank.

I owe you.

Merry Christmas and Happy New Year. To your health. Thank you always.