I am still relatively new in my mobile home investing career, but am trying to plan ahead. What are your thoughts regarding how many mobile home parks are reasonable to own throughout retirement? I am looking at stable parks with about 50-75 spaces with primarily lot rent only. Let’s say in retirement I’m willing to spend 10 hours a week on average managing the business (while also having managers for each park). I know there’s no magic number, but how many parks do you guys anticipate owning throughout retirement while also being able to travel and spend more time relaxing with family and friends?
Also, do any of you anticipate (or are you currently doing this) hiring a local, part-time executive assistant type role to help alleviate some of the day-to-day responsibilities so presumably you could own more parks for the same 10 hour a week time commitment, or is this not a good idea? Again, I know there isn’t necessarily a right or wrong answer here, but am more curious as to fellow investors’ opinions and plans. Thanks a lot for your time in replying!
I’d say owning two such parks might take up about that much time. If your retirement is 15+ years away (e.g. you could reasonably pay off the parks and own them outright) then you’d have no bank debt against, say, 125 spaces. Assuming you purchase decent-quality parks (say, lot rents at the $300/mo. level), then you would be clearing $200 profit from each lot. With 125 lots, your monthly income would be $25,000. That’s a nice retirement in my book. But some would say $5,000/mo. would suffice, and some would say not less than $100,000/mo.
As regards outsourcing, there have been many threads on that topic in this forum. Please search for the keywords ‘bookkeeper’ and ‘oDesk’ to get you started. You would be well-served to read Tim Ferriss’ ‘Four Hour Work Week.’
Thank you very much for your insight! I searched the forum for bookeeper and oDesk. I think outsourcing the bookkeeping should be a nice time saver for a relatively modest cost. As a follow up question, essentially you say that 2 parks would support about 10 hours/week of working on the business (5 hours per week per park). If I was able to outsource some of the items such as bookkeeping and any other activity that doesn’t necessarily need my involvement, do you anticipate that this could reduce my involvement to 2-3 hours per week per park, or is this too optimistic? I have read the Four Hour Workweek previously, but this is a good reminder that it might be time to revisit the book. Thanks again for your help!
It’s all about the systems. If you have good systems, your 10 hours a week is probably twice as much as you need. If you have lousy systems. then 10 hours a day probably won’t work. You need a decent manager, who is not an idiot, and then a budget to track where you’re supposed to be at, and then systems to track adherence to budget. If you want an assistant, that’s fine, but you may not have enough for them to do with only 150 lots. If you don’t have a bunch of homes, I honestly don’t know what you’re going to do to fill those 10 hours a week.
You might be able to reduce your involvement to that level. It is all a question of time and money and skill set. For instance, you could outsource the management of your parks to me, and I will guarantee you that you will spend 0 hours/week managing them. I can do it all for you (or manage your property with my group of outsourced people). But after my $2,500/hour consulting fee, there might not be much profit left for you… (:P) But you won’t have to spend any time at all managing your parks.
You are just getting into too grey an area to pinpoint exactly how many hours your involvement will be. But the more you pay to higher-skilled people, the more work you can offload. Get your first park under your belt, begin outsourcing, and see how it goes for you. Your comfort level on what can be outsourced might be different than mine. Your comfort level also may change over time. Maybe your wife will want you to be involved with your park 20 hours/week when you are retired, just to get you out of the house.
