Hello everyone,I am new to this forum, but have read most of the postings for the past six months or so. I am experienced in managing duplex rentals, but new to MHP. Let me first take this opportunity to express my gratitude to all the contributors at this forum. I have learned a great deal from you guys.I like the economics of the MHP and wondered why I overlooked this asset class for so long. Now I have decided to invest in MHPs. I am interested in acquiring MHPs in Metropolitans like San Jose, Ca, Seattle, WA etc, and the surrounding areas. Would anyone be interested in offering consultant services to me to acquire MHPs? My plan is to manage the MHPs for a year or so to learn the business, and then hand over to professionals to manage it for me.Chris
Chris -I don’t consult any more, I just purchase properties, but I may have someone in mind for you. Reach out to me directly through my website so I can learn a bit more about your needs.Cheers,-Jefferson-
Chris,I don’t know what you mean by “consult” but we’ve been showing people the correct way to buy parks for about a decade. The truth is that you can learn the basics of the business in about three days (via the Boot Camp), and then the rest is up to you on the volume of deals you analyze and offers you make, as well as working smart. Nobody can find you a good deal, as they will buy it themselves if it’s good. You just have to learn what makes a deal “good” from “bad” and then plow through as much volume as is humanly possible. We own 170 parks and started with zero 20 years ago. If you take out the years that we bought none when cap rates were ridiculously low, that works out to around one park per month. Are we that much smarter than everyone else? No, we just work more hours and maybe work smarter than many people. But this industry is not rocket science, and you don’t need any consultant to make you succeed – once you know what you’re doing.
Hi Frank,By “consult”, I meant I want to hire someone as buyer’s agent to help me acquire the MHPs in specific markets. In the market I am interested in, e.g., San Jose, CA, Seattle, WA and surrounding areas, MHP easily go up to the $2m range, so I am hoping that 5%~6% commission of that amount is decent enough incentive for someone; if not, I certainly will adjust myself accordingly. Thanks for your straight forward comments. I am learning the business in various ways now, and Boot Camp, Due Diligence CDs, etc. are certainly on top of my todo list.
Chris, read the 10/20 Mobile Home Park book that Frank and Dave wrote and do the bootcamp. You’ll learn enough there to make a good start. As for consultants, you’re probably better off being your own consultant. Now, if you want a consultant as a way to manage wealth then those folks are readily available elsewhere.
Frank makes a real good point above, the MHP business isn’t rocket science. It’s a niche in the real estate industry that hasn’t yet been overrun by Wall St.
As for San Jose, there was a recent article in the news or online, it may even be posted here on this website, saying that the last MHP there was likely to close soon due to redevelopment or conversion to highest and best use. The chances of building a new park there are probably zero or less, as with many other areas. That said, the pendulum, as it were, will someday swing the other way where local jurisdictions that have affordable housing issues or crises, like San Jose, will beg developers to come in and build MHPs. Someday.
In the meantime, if it’s YOM, your own money, then doing your homework will allow you make a smart purchase. Likely you’ve heard this before, but it’s often the case that you make the most money on the purchase of a property, not on the sale of it.
If you have capital, then you might do well to pursue an experienced partner (instead of a consultant) who has experience. It’s not that uncommon to partner with those who have skills you lack and it’s actually the preferred way to partner if you ask me.
For clarification, I’m not saying that either Jefferson or his contact are not good consultatnts. Rather, it’s like your car. If you own a car you should have a fundamental, working knowledge of it. Also, Charles makes a good point above as well and many people go that way with commercial RE when first starting out. I always reference Frank and Dave’s 10/20 book because there are valuable lessons there.
Thanks for all the comments. I was thinking along the typical real estate transaction: broker finds me a deal, he or she earns 5%~6% of the purchase price, which is around $100K for a $2m park. I guess none on this forum are interested in this.MHP funds or joint ownership with another experienced MHP investor don’t fit my needs, because my goal is just to allocate some capital to MHP and hold the property ‘forever’.I guess I only have two options:1. Read Frank and Dave’s 10/20 and other related books, and take the bootcamp, and search deals myself2. Find brokers specialized in MHP to find deals for me.
Chris, I am a South Carolina Real Estate Broker-In-Charge and my Husband and I own 2 MHPs.Your options of reading Frank & Dave’s 10/20; taking the Bootcamp; searching for deals yourself and finding Brokers specialized in MHPs sounds like great options.In addition there are individuals out there who will find great deals and assign them to others for them to purchase.I believe that Frank and Dave have purchased assigned deals before.This might be another avenue for you.You have indicated on this post what areas you are interested in. Perhaps you could also put your other criteria such as price point, water, sewer, # of lots, # of Park Owned Homes. Someone might know of a wonderful deal.Frank and Dave appear to have a wonderful Business relationship.However, jointly owning a Business/Property is not for everyone, so I totally understand your desire to not go that route.We wish you the very best!
Thanks Kristin for the comments. The following list are my criteria:1. Good location, prefer metropolitans like San Jose, Ca; Seattle, WA and their surrounding areas2. price around $2m3. must be on city water/sewer4. no restriction on the # of POHs, or # of lotsAssigned deals are welcome.
Chris, your criteria sounds great!May someone on here have some MHPs that they can send your way.We wish you the very best!
Some of what you are learning on this site will not apply for parks in the Bay Area.Good luck finding a 10% cap rate park in San Jose.
You would likely have an equally hard time finding a 10CAP park in Seattle too. By hard I mean virtually impossible. In any event, you’ll need to expand your search to more than two markets and preferably be outside of both WA and CA. Our specific criteria for investing gives us the green light to invest in 700+ viable markets within the US. As such, this means we are able to get our phone to ring a lot and we look at a new off-market deal at least once a day. Most of them are crap, but some of them are not. The point is that you should expand your horizons so that you can more effectively deploy your capital. Finding a park is a full time job, but once you do you can quit your actual full-time job.
Thanks for the additional comments. My plan is just to allocate some capital to the MHP asset class, I have no intention to expand nation wide and build business like Frank or Jefferson. I would be happy with 7%~8% CAP in those areas.
bridgeandbaseball,This is painful to observe. I have to put in my two cents. And hope its read and taken in.-----------Being geographically limited (by choice or not) limits your returns in this asset class. Period.While there are about 50,000 MHP’s spread around the country, there are far in excess of that number of single-family homes in either MSA you mention. So, in order to find a park that fits YOUR needs, you may consider looking outside these mega-competitive and tenant biased areas.I understand the reason(s) you may wish to stay in such markets. I do.The West Coast in particular has SO much more competition from buyers who think just like that. Remember the early 2000’s when everyone and their uncle was ‘in Real Estate’ thinking they would buy and refinance to pull out cash or sell?It was herd mentality then, and its herd mentality now.That being said;If you can somehow see past these issues, I may have a suitable park in upstate NY that I may partner with you. If you are satisfied with 7-8% returns, why not just be a lender and stay clear of the thrill of management? And the liability.----------Just a thought,MikeOne other thing - if you insist on entering the MHP space without attending Frank’s class - you are doing so at your own peril. You just don’t know what you don’t know.Frank doesn’t know this directly – but his class saved me over $300,000 cash by knowing what NOT to do.Thank you Frank.
bridgeandbaseball -We’d be happy to explore a co-investment with you. We did that two months ago with an investor who had very specific limits on what he was willing to buy. His limits reduced his return, but it is his capital, and we negotiated an arrangement that was win-win.PM me, or contact me through my website.All the best,-jl-
Thanks Mike for the comments and they are well taken.I live in northern California and am relatively more familiar with the economics of the west coast states (California, Washington, maybe Oregon). So I decided to invest in MHP in those states which are more convenient to me( Seriously, I don’t want to travel to places like upstate NY).I agree that Frank’s class is valuable. I have about six month time frame since I need to do 1031 Exchange for the future MHP, so I think there is plenty of time to attend the class.