I’m hearing from a number of brokers who are stating that the market for MHP’s has swung significantly in favor of the sellers as of late. I would like to hear the feed back of this forum on those thoughts.
We own 101 parks. If it were a seller’s market, we’d own none. Brokers tell you that type of thing because they think it will motivate you to move quickly and overpay. According to single family home brokers, California has been a “seller’s market” for 50 years, even during the cycles in which you can’t give a property away there. Don’t listen to the “noise pollution” from brokers and watch the facts. The facts are that cap rates are still very high, like 10%. In seller’s markets they drop down to around 6% in some cases. You’ll know when it’s a seller’s market, as the inventory on Mobilehomeparkstore.com will be near zero.It’s not just mobile home park brokers that thought up the “seller’s market” scam. The stock brokerage community had that figured out in the 1920’s. That’s where the Great Depression came from.
Frank, thanks. I’m familiar with the sales pitch just thought that maybe with all the notoriety brought to the industry over the last couple of months (NY Times, Bloomberg) that maybe the cat’s out of the bag and people are jumping in quickly.
One big contribution of the New York Times and Bloomberg articles was that it re-affirmed the safety of lending on parks to the big banks. One of the largest conduit bankers was a big fan of those articles, as it better defines to shareholders why this is a great industry and one that’s worthy of institutional-grade debt. As far as causing a horde of new park buyers, we’ve not seen it yet. It takes more than two articles to break down decades of “stigma” with most real estate professionals.
Remember that brokers will do or say anything to get a deal together. They are the master manipulators with the biggest egos out there.
No doubt the stigma is alive and well. When I meet with new potential clients (lenders) they always want to know what type of experience I have. When I mention appraising MHP’s I usually get the deer in the headlights look. Most investors I deal with have the same reaction. Same investors who have no problem being a slumlord to the drug dealers living in their dump apartments, but won’t get involved renting lots to blue collar factory workers.