All of my long-time REI guru friends have drilled into my head that real estate is the most historically proven asset class and, currently, (according to all of their opinions) MHPs come out #1.
Ok, I’m sold.
However, I’m still working full-time, have sole custody of a small child, and only have about $60,000 to throw into a deal. These are not meant to be construed as excuses, but, rather to acknowledge that MHP investing requires exponentially more time and attention than say a turnkey SFH.
Furthermore, I’m not quite sure how comfortable I feel going alone to some of these parks. I’d like to be working with others on any MHP project I’d pursue.
All this to say: In what capacity should I consider getting involved with in the MHP niche? (The attracting factor to MHP investing for me would be the relatively passive consistent cash flow)
Should I sign up for a bootcamp? Or am I not yet “qualified” to participate in this space?
My wife and I own/run 5 parks and both still work full time. It’s not passive by any means but gets easier as you go. The key is to have good boots on the ground that you trust. $60k might be a little light to buy your first park, but we’ve had plenty of creative deals where we’re able to get in for 10% down or so. The other option is to partner.
Either way, do your reading here, listen to a whole bunch of MHP podcasts, and jump in!
I had started out in the land of single family fix and flips and soon became tired of that. Mobile home parks made sense to me and knew I wanted to get into this asset class. I began reading everything I could find (mostly Frank and Dave’s stuff) and also attended one of the boot camps. Every day, I would look over the parks for sale online and anything new that came to market, primarily to better understand what was a “good” deal and what was not so good. After about a year and a half, I was able to purchase a 34 space park in a good market in Illinois. The park was purchased with owner financing and about 20% down payment. I also had a good financial partner that committed most of the funds we needed to close the deal.
The learning curve was big for me, taking on this size of property and implementing what I had learned. Made lots of mistakes, but have become better as a landlord and business owner. That was 12 years ago and I’ve owned several parks since. I’m really not that smart - I just kept working at it and would encourage you to do the same. To answer your question, I don’t believe there’s any prequalification needed. There are plenty of “smaller” parks out there that can be a very good and profitable investment for you. If nothing else, give it a shot and see if it fits the kind of investment you are looking for. Go and drive through some parks in your local area, talk to a few residents, network with other park owners.
Thank you so much for taking time to respond to my post and sharing your experience. Ok, good to know this can be in addition to a full-time job. About how many hours would you guess are committed weekly to attending to your parks? Good boots on the ground as in reference to the park manager? Or others you trust? It appears there are some potentially desirable parks running for around $1 Mil; If I could go in with a partner for 10% down ($100k, so we could each put in $50k) that could be doable…? Partnership is the only option for me. I will not jump into this space unless I have a partner to work with. I’m hoping to perhaps find one in this community. And, yes, I’ve been immersing myself in all the MHU literature, audio, videos, podcasts, etc… Incredible info. Thank you again!
Thank you so much for taking the time to respond to my post and sharing your experience, Rob. I appreciate it. I wish the Bootcamps were live/ in-person. What part of the learning curve did you find to be the most challenging? I have no doubts I can do this; What’s holding me back is 1) not having a partner to work with yet in this space (mandatory for me) 2) feeling unsafe at mobile home parks. There is one MHP (Santa Barbara Estates) in our affluent county and just driving by it I can start to feel my heart race and sweat drop. Can someone who has a phobia of visiting mobile home parks invest in them? lol.
If you find an attractive deal, there will be financial partners interested in partnering with you. Not advocating that you partner with just anyone, but most of the time there is more money ready to invest than there are quality deals to invest in. You can also tie up a deal and then look to assign it for a fee and build up your personal savings for a future park to buy.
There are certainly some scary parks out there, but also many many good ones. Having a solid onsite manager helps separate you from the day to day tenant interactions.
MHPs are actually easier than a Single Family House. My suggestion is to find deals. The key to this business is buying right, filling the park, making the park nicer, and raising the revenue. Easier said than done.
Money is not the problem. Finding the right deal is the problem.
If you go out and find deals to buy, you will be in the driver’s seat. There are plenty of investors on this forum who would love to partner with you if you bring them a GREAT deal. You can also flip the contract and make some quick cash.
One of my partners worked full-time when he bought his first park with me. We bought a second park for him and he was able to quit his job to run the parks. He took a little haircut on his monthly income, but down the road, he will make WAY more.
If you do some very good/great moves, I expect you could turn your $60k into $600K in 3-5 years. Will it be easy? no, but it is possible. The best part is the money will be tax-free.
The first Park is always the hardest.
When I purchased my park I was working full time as you are. It needed a little work, catching up on some neglected maintiance and upgrades. For the first two years I was there most weekends and had many evenings with calls from tenants with “issues”. Several late nights and many evenings each month doing paperwork and record keeping. I self managed with the assistance of a part time onsite tenant manager.
I would suggest that you partner with experience and sit back as a silent money partner to start.
There is a steep learning curve including learning and fully understanding your state Landlord Tenant Regulations. Learning the regulations is a major part of being a successful landlord.
Do not make the mistake of underestimating the time commitment of operating a business.
@lorean87 I’ll do my best answer. Remember this is just one persons experience. My oldest park that I’ve owned about 5 years I’d be surprised if I spent more than 5 hours a month on, and that includes rent collection. The most recent purchase it’s probably more like 5-10 hours a week, but that’s a heavy turnaround.
Boots on the ground means manager, yes, but also vendors. Park 1 I have a septic pumper I trust and knows the park — septic “maintenance” takes about 5 minutes a year between emailing them and paying their bill.
Your hypothetical is possible, but I’d read @SDGuy ’s post. Worry less about down payment money and more about finding a deal. You can put $50k into a $2,000,000 deal and raise the rest, too. Start by going through mobilehomeparkstore.com, get all the P&Ls for parks in your area, and just driving them. You’ll start to pick up on things.
Thank you for the detailed honesty, Greg. This is precisely why I wanted to pose this question on here; I historically have had a very bad habit of being delusionally optimistic with any new project I take on assuming it will be easier/ faster/ cheaper than it actually ends up being. Pursuing the prudent approach of striking the perfect balance between the proverbial “ignorance on fire” Vs. “knowledge on ice” is my objective. Ya’ll are an invaluable resource!
@Rob_Mosher @Greg @westewart @SDGuy -To summarize: “Lorean: Get educated, find an awesome deal, post it on this forum, and everything else will take care of itself from there” Yes?
You got the idea.
If you find it they will come…
PS. I am also Delusionally optimistic. I need to be constantly reeled back in.
However, My Optimism has paid off handsomely. Never Give up, Never Surrender, Burn the Boats, etc.
@SDGuy It’s nice to meet you, Anthony. Thank you for sharing your real name. And thank you for the YouTube share. I forwarded it to my text messages as a reminder to watch while driving around this evening. I’ve thus far been blown away by the level of support on this platform. There appear to be numerous MHP investing “gurus”/ programs out there but, as far as I’ve seen, this is the only one I’ve found with a community to interact with…
You live in San Diego, it seems. That alone would make one optimistic
Old saying is, “Do what you do best, and do it better than anyone else.” If you haven’t worked in the apartment, motel, housing rental business you are not, In the Know, I would not jump in and buy anything until you got your feet wet. If you work full time but have a few hours a week you can spare go to a park and see if you can get a part time job or even tell them you want to learn the business for FREE! You might work in the office for a few weeks and hate it. You might love it and get hired there or somewhere else. In either case you will gain experience to make a more informed decision.
It’s clear that you’ve grasped the potential of MHP investing. Given your commitments, exploring passive MHP investments may be a smart move. Owning your own MHP is definitely not passive, despite what you might’ve heard elsewhere. With limited time and a desire for collaboration, joining a knowledgeable network or partnering with experienced operators via a syndication or investment fund could be ideal so you avoid the headaches of dealing with tenants, toilets and trash.
Best of luck,