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Podcast Hard Money Lenders Books Washington
BlogArrowCoronavirus UpdatesArrowCrisis Investing 101: The Most Recession-Proof Real Estate Niches
Coronavirus Updates Apr 15, 2020

Crisis Investing 101: The Most Recession-Proof Real Estate Niches

Paul Moore
Expertise: Personal Development, Commercial Real Estate, Real Estate News & Commentary, Landlording & Rental Properties
100 Articles Written
dictionary entry defining the word recession which is highlighted in pink

No one saw it coming. No one could have predicted it. It’s crazy to think that an infection that started with one or two people on the other side of the globe has brought the entire world to its knees.

And this thing is far from over. We all know that.

But consider that crisis is indisputably the absolute best place for smart entrepreneurs and investors to create wealth like never before.

Creating Wealth in a Time of Crisis

Joseph Kennedy, Bill Gates, and Steve Jobs created their companies in times of crisis. And you can be a hero too if you position yourself NOW to capitalize on opportunities in the coming months and years.

Did you know that Warren Buffett made a fortune buying financial stocks in the midst of the financial panic in the fall of 2008? He is known for his saying: “Be fearful when others are greedy, and be greedy when others are fearful.”

Buffett also said, when discussing going against the crowd:

“You pay a very high price in the stock market for a cheery consensus.”

Legendary investor, Howard Marks, of Oaktree Capital was buying financial stocks in Fall 2008, too. A reporter interviewing Marks asked about what he was selling. He informed her that he was buying financial stocks to the tune of half a billion per week—as much as he could get his hands on.

She seemed perplexed, to which Marks said, “If not now… when?”

(By the way, have you taken my repeated advice and read the wonderful Howard Marks book called Mastering the Market Cycle: Getting the Odds on Your Side? You should buy that right now. Then buy and read my friend Brian Burke’s new book on due diligence and passive investing called The Hands-Off Investor by BiggerPockets Publishing—but I digress.)

Marks and Buffett repeatedly talk about the concept of catching a falling knife.

You see, it’s easy to pick up a sharp knife from the kitchen floor without being cut. Even a child can do that well.

But the real skill is in learning to catch a falling knife. It takes skill, focus, and nerves of steel. But if you can do it well, as Buffett and Marks did in the Great Recession, you could be positioned to make yourself and your investors a lot of profit and wealth.

Marks says that to do this right, you don’t want to wait until the panic is over. Don’t wait until the dust settles, and the world is on the way back to normal. Don’t wait until people take a deep breath and see the light at the end of the tunnel.

He says you need to pull the trigger when things look worst—when gloom and doom abound and when pundits are saying, “The world as we know it is over.”

(Sound familiar?)

Though I don’t like the imagery, British nobleman Baron Rothschild reportedly said…

“Buy when there’s blood in the streets, even if the blood is your own.”

So, needless to say, I’m a huge advocate of buying real estate in a down market. While Marks’ knife is falling, and pessimism is at its height.

But I have a thought on how to play this card even better.

Related: Recession Prep 101: Investing in Real Estate During a Financial Crisis

Assets That Do Well in Any Market

What if you could invest in real estate asset types that perform well in a great market… and in a recession, as well?

What if you could invest in or acquire assets that benefit from a degree of unwarranted panic-selling—and pay a very fair price to acquire them from mom-and-pop operators who were about ready to retire anyway?

2 Types of Investments Well Worth Your Consideration

The other day I was listening to a Crowdstreet webinar on the devastating effects of the coronavirus crisis to real estate markets.

(Please don’t listen unless you want to be depressed. It was full of doom and gloom, and honestly, it was unnerving to hear how bad things really are in so many sectors.)

About 44 minutes in, however, the expert panel took on a brighter tone. They said, in essence, that they wanted to turn to two asset types that were actually performing well in the past month—in the face of the devastating stock market roller coaster and real estate volatility among other asset types.

Can you guess what they are?

Self-Storage and Mobile Home Parks

They went on to say that…

“As we know, self-storage can be a counter-cyclical asset… Within the industry, they talk about the 4Ds. We’ve got downsizing, divorce, dislocation, and unfortunately death. These are real things, and this is where the self-storage market sits and the needs that it serves…. therefore, it puts self-storage into a relatively good spot from an asset class perspective.

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“Arguably right now [manufactured housing]is the darling of the commercial real estate industry. You know, if there is one thing that you can look at in terms of wanting to see the leading edge of where we are, go look at the public CRE markets, right? You’ve got hospitality REITs that are getting wacked 40 to 50 percent… They [manufactured housing]are positive because there has been no supply. It’s the most affordable form of housing in the United States and the NIMBY-ism (not-in-my-backyardism) basically makes this stuff difficult to obtain.”

What Makes Self-Storage and Mobile Home Parks Recession-Proof Investments?

So, you may be asking… WHY? What’s so great about these two asset classes?

I’m glad you asked.

Why I Love Investing in Mobile Home Parks

Mobile home parks have been called "the darling of all commercial real estate." That's a pretty big label considering this asset class was basically laughed at a few years ago.

But real estate’s most successful investor, Sam Zell, was laughing, too… all the way to the bank.

Here’s a quick list of what I love about this overlooked asset class:

  • Recession resistant: Steady in all cycles
  • Shrinking supply: Unique asset class
  • Affordable housing crisis: Equates to increased demand
  • High switching costs: Equates to low tenant turnover
  • Fragmentation: Mom-and-pop owners
  • Reduced costs: Low maintenance & capital expenses
  • Less competition: Stigma of mobile homes
  • Portfolio opportunity: REITs looking to buy stabilized assets from us

Why I Love Investing in Self-Storage

I just spoke to our operating partner who we invest heavily with. He informed me that he is renting self-storage at record rates in certain locations.

(This is in a week where hotels, airlines, retail, and restaurants are sucking wind like never before.)

Why?

He said that the four Ds—downsizing, divorce, dislocation, and death—are causing increased rental activity. And his facilities near colleges are getting an influx of students who are heading home for the year… or permanently. They are leasing online and going straight to their units while keeping their social distancing intact.

Wow.

Self-storage REITs are the only real estate asset type that was positive in 2008. That doesn’t guarantee this will repeat in this cycle, but as you will see below, there are many reasons to believe this will happen again in the black swan event that we find ourselves in during 2020.

Related: Caught Off-Guard by COVID-19? Prepare Yourself for the Next Black Swan—Here’s How

Here’s what I love about this asset class:

  • Win-win: Recession resistant and strengthened in economic booms
  • Rents are price inelastic: Tenants not particularly price-sensitive
  • Tenancy duration: High switching costs & perceived vs. Actual length of stay
  • Fragmentation: About 75% independent operators (top 3 <15%)
  • Industry size: Similar to number of Subway, McDonald’s, & Starbucks combined
  • Management: Easy to manage a mediocre facility—hard to manage a great one
  • Powerful business plan: Mom-and-pop seller—institutional buyer
  • Ability to meet demand: Simplicity of unit reconfiguration
  • Ancillary income: Significant opportunities
  • Staffing: Highly trained and supported staff vs. lockbox model
  • Competition: Prohibitive cost of land for new competitors
  • Value-adds: Low-cost opportunities
  • Adaptability: Flexible lease terms & easy eviction process

Here is a graphic showing the performance of various real estate asset classes since 2000. Manufactured housing and self-storage lead the pack. And check out the dip in manufactured housing.

There was no dip!

This doesn’t mean that this cycle will repeat this time around. But it sure is encouraging for those of us who invest in these two asset classes.

So, Now What?

There may be a few more that will perform well. I’m thinking of data centers and perhaps healthcare facilities. I would look into both of those if I was you.

I’ve only touched on these two recession-resistant asset classes briefly here. But I’ve written e-books on mobile homes and self-storage. And look out for the new book I’m writing on self-storage investing to be published by BiggerPockets!

I hope and pray that you all stay safe in this unprecedented time. And I hope you utilize this time to prepare for some of the greatest investing opportunities of your lives! Because they are right around the corner.

Blog ad for Wealth magazine

So, what are you doing to prepare to build wealth right now?

Share below in the comment section!

By Paul Moore
After graduating with an engineering degree and then an MBA from Ohio State, Paul entered the management development track at Ford Motor Company in Detroit. After five years, he departed to start a staffing company with a partner. Along the way, Paul was a finalist for Ernst & Young’s Michigan Entrepreneur of the Year two years straight (1996 & 1997). They scaled and sold the company to a publicly-traded firm five years later. After a brief “retirement,” Paul began investing in real estate in 2000 to protect and grow his own wealth. He completed over 85 real estate investments and exits, appeared on HGTV’s House Hunters, rehabbed and managed dozens of rental properties, built a number of new homes, developed a subdivision, and started two successful online real estate marketing firms. Three successful real estate developments, including assisting with the development of a Hyatt hotel and a very successful multifamily project, convinced him of the power of commercial real estate. Paul co-hosts a wealth-building podcast called How to Lose Money and is a frequent contributor to BiggerPockets, producing live video and blog content on a weekly basis. Paul is the author of "The Perfect Investment—Create Enduring Wealth from the Historic Shift to Multifamily Housing" (2016) and a forthcoming BiggerPockets book called "Storing Up Profits - Capitalize on American's Obsession with Stuff by Investing in Self-Storage." Paul is the Managing Partner at Wellings Capital, a commercial real estate investment firm. Paul is offering free e-books on Self-Storage and Mobile Home Parks here.
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59 Replies
    Dusty Ackerman Specialist from Minnesota
    Replied 11 months ago
    Interesting read Paul. Well said with self-storage. Thanks, Dusty
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Thank you, Dusty! Stay safe.

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    Nick Heil Specialist from Corry, PA
    Replied 11 months ago
    Thanks Paul, I'm a big fan of self storage myself. I own and operate a small portable self storage business where I rent mobile storage containers to customers all over western new york and northwestern PA. It's a great business. Demand on the portable side has slowed for me a little during this time, but most all of the containers I had rented out before all of this started are still out on rent. I love investing in the public REITs, too. I've long wanted to purchase a traditional storage facility, but have found it quite difficult to find good deals on facilities. Much of the time they are just too expensive, but always have my eyes open.
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Thanks, Nick. That is great to hear. I am starting to hear that some of the smaller storage facilities' owners are getting scared and considering selling. I don't think that is something most need to do, but you know how panic-selling goes. Sometimes it is irrational. I'm guessing you'll find some deals in the coming months. I hear about off-market deals occasionally. What are you looking for? Feel free to PM me.

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    Dallas Tibbetts Investor from Coastal Texas
    Replied 11 months ago
    Wonderful read. Thanks for sharing...
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Thanks so much, Dallas!

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    Dan Heuschele Investor from Poway, CA
    Replied 11 months ago
    I felt it was a tease for the upcoming book. The details are mostly absent. In CA, the requirement to provide parking is being removed when close to public transit. Almost everyone is near public transit. How is this related? Most garages are not used to garage cars, but as storage space. No garages in new construction implies that either people have to have less stuff than when they had a garage or they need to find a place to store their stuff (assuming they are not wealthy enough to use livable space for storage). In CA, there are state wide ADU regulations that make it fairly easy to build an ADU. The cheapest ADU is a conversion of existing living space but those ADU detract from existing living space. Duh! The next cheapest ADU is a garage conversion. The CA housing crisis, is resulting in new homes often not being built with garages and existing homes having their garages converted to living space. Where do people without garages store their stuff? Storage lockers.
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Dan, That's a great point that I am not that familiar with. Thanks for sharing! (BTW, the book mention was an after-thought when I wrote this post. I wish I had a book on mobile home parks as well. Maybe next year!)

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    Rick Grubbs Rental Property Investor from Salisbury, NC
    Replied 11 months ago
    Self storage unit builds on your own apartment complex has some of the highest ROI I've ever done. We have a 26 unit apartment complex with no garages or rentable storage units on premises. Hoping to build a 3 garage storage unit right away!
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Rick, That sounds like a great combo and certainly provides some diversification as well. Best wishes!

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    Valerie Buss Investor from Homer, AK
    Replied 11 months ago
    This is a great read, thank you! Do you have any good resources for out of state investing in self storage?
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Valerie, Reach out to me if you'd like to get a special report on self-storage. As far as out of state investing, your choices may be passive investing or buying and hiring a property manager. Let me know what you are thinking.

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    Steven Lowe Real Estate Agent from Scottsdale, AZ
    Replied 11 months ago
    I think that "recession tolerant" and/or "recession resistant" are better terms than "recession proof". I think all types of investment real estate are subject to the effects of a recession so there really is no such thing as a "recession proof" investment. Sorry if that sounds picky.
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Steven I agree with you 100%, and that is a term I rarely if ever use. Thanks for your input!

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    Dan Kryzanowski
    Replied 11 months ago
    @Paul- Fantastic article. I wholeheartedly agree, having invested both liquid fund and retirement dollars (~SDIRA) into Self-Storage. @Steven- Agree that storage is "recession tolerant" and/or "recession resistant"
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Thanks Dan. Great to hear from you again, and I hope you are staying safe.

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    Tech Cheng Rental Property Investor from Germantown, MD
    Replied 11 months ago
    Paul, as always great info. I wish I knew how to underwrite self storage and manufactured homes...I'd love to get into these niches. I know Brandon turner has a fund for his MHPs. thank you
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Hey Tech, Thanks for weighing in. There are a few great mastermind groups and training courses that could help. Scott Meyers has a great weekend course that could get you started in self-storage.

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    Nicole Lenz
    Replied 11 months ago
    It sounds great, but I think the secret has been out a while. There has also been an 'overbuild' on storage facilities in the last year or two and you have to be careful. The same is true for mobile home parks.
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Nicole, Absolutely. It is critical to invest in storage in a location that is not overbuilt. There are many places that are. That is one reason I invest with seasoned pros in this realm. Thanks!

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    Gail Travers
    Replied 11 months ago
    Mobile home investing is predatory and harmful to Americans - veterans, seniors and low income families. Please read the ethnographic 10 year study by Esther Sullivan Phd, Manufactured Insecurity. Manufactured Home communities are organizing to try and get rid of their corporate owners who put the needs of their investors ahead of their tenants. It sickens me when the list of why the "asset class" of mobile home parks is judged a good investment because of the "stigma of mobile homes" resulting in less competition. The stigma of greed is starting to smell pretty bad, too.
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Hi Gail. I respectfully disagree. If mobile home parks were non-existent, millions about 10 million people could be living under bridges. Just like in any arena, there are some evil people who take advantage of others, and that is not the operators we invest with. A New York Times journalist, Gary Rivlin, set out to do an expose on mobile home park operators and lived in a park for about a week. He ended up praising the new park owner after learning that every tenant there was grateful for the nice place to live at rates at a fraction of apartments and home rentals. I really appreciate you weighing in, Gail. We all need to hear diverse opinions.

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    Miranda Paton
    Replied 11 months ago
    Hi! Gail and Paul. I'd like to get in on this conversation. You both are right: It's sad that folks are looking for worse and worse deals in housing (given the now-outdated notion that one's bought home was a safe and substantial savings vehicle), and that the alternative to a bad deal in housing is homelessness. So here's my question: For investors who can't afford to buy and run a mobile home park or storage, can we look at those assets' recession-proofness in a "trickle up" way? In other words, can we look for the next-lowest form of rental housing and find real estate that will appreciate and provide renters with a better quality structure and experience? It seems to me that the last recession, for example, started the ball rolling on Tiny Houses (and, by the way, those seem to require a storage unit to go with them). Since then, the Tiny House fad has turned into some cities relaxing restrictions on ADUs. I am thinking of Portland, OR, here, so this might not apply to investors that are not in crowded and forward-thinking cities. But what if, for example, the buyer chose a modest BRRR property with the intention of adding and ADU to that? I hope you can both see what I mean about looking to a recession as the kind of event that forces us to think in new directions. If we are good investors-- both profitable and ethical to our tenants or potential buyers-- we would do well to look for the things folks will value next. I look forward to your ideas!

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    Ashley Wilson Rental Property Investor from Radnor, PA
    Replied 11 months ago
    As always, love reading your thoughts Paul!
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Ashley, As always, thanks so much!

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    Chris Williams from Fremont, CA
    Replied 11 months ago
    I personally love the idea of owning a mobile home park. Built-in retirement location! I wonder why we don't build more of them. It strikes me as an excellent way to expand affordable housing with relatively little land investment (and improve their "perception" to boot).
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Thanks Chris. It sounds like a great idea. But developer/operators find it hard to get them to breakeven occupancy for a very long time. And NIMBYISM (not in my backyardism) makes it tough to get approvals in most suburban areas.

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    Sean Mortensen New to Real Estate from Pueblo West, CO
    Replied 11 months ago
    Hi Paul. I agree completely and coincidentally, I just finished Howard Marks book last week. It is definitely beneficial to pay attention to the cycles. Please pm me when you have a minute. I’d like to discuss this more with you as my partners and I are looking to get into the space soon. Also, I’m not mistaken, I was at MHU conference in Vegas with you last September...? Talk soon.
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Sean, Yeah to Howard Marks. Yes, I was there with you. It would be great to catch up again. Thanks for reaching out.

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    Jack Martin Specialist from Scottsdale, AZ
    Replied 11 months ago
    Great article Paul! As you know, we own a handful of MHPs here in AZ and during this Covid-19 Crisis, our April rent collections were actually better than March. Although we know there is risk in all asset classes, there is simply far less risk in MHPs than there is in main street real estate. Thanks again Paul. Your perspective is appreciated!
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Thanks so much, Jack. I'm glad to hear your collections are going that well. I wish you the best in the midst of this crazy time.

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    Ian MacDougall Investor from Washington, DC + Central VA
    Replied 11 months ago
    Awesome read Paul! I notice you’re in Lynchburg where I went to school and have a house hacked property that I’m doing a few rehabs on during this quarantine. Any chance you invest in self-storage spots around town here (especially since it’s a college town)? Always been interested in doing self-storage eventually since I’m a beginning investor. Very much looking forward to your book this summer! Thanks again.
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Ian. See my reply below. (Hit the wrong reply button.)

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    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Hi Ian, Thank you! I live right down the road from Liberty, and I assume that is where you mean. Great school. I think it will be a great time to acquire lots of real estate at low prices in the coming months and years. Rehabs, storage, etc. Feel free to reach out and we can talk soon.

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    Tom Miller
    Replied 11 months ago
    Great article Paul! I purchased a handful of houses that I lived in while renovating. A couple I held onto as rentals and a couple I sold. In July of 2019 I tried my hand at real estate investing from a distance. Myself and a co-worker went in together to buy a fix and flip. It was going well and almost complete, so we purchased a second home. Unfortunately, the first had one contract right away but the buyer backed out. It has not sold since. The second has slowed significantly due to COVID-19. It's been a rough start. Anyway, I remain committed to real estate. I wish I had begun years ago. That said, my son (soon to be 18) has watched me and is extremely interested in starting ASAP. I am excited about his interest at such a young age and want to steer him right. I have though often about MHPs and Storage, but am too limited in my knowledge. I would love to connect with you and learn as much as possible so I can pass it on to my son and others with similar interests. Sorry for the long post. Thanks for your time.
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Tom. Thanks - I fear your experience is really common for flippers etc., right now. I think I have some ideas for your son. Check out the book by BP Blogger Chris Prefontaine called "Real Estate on Your Terms." I recommend it all of the time. Please connect with me at my profile and we'll talk about all of it.

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    Phillip Alexis
    Replied 11 months ago
    Great article. I’m a rookie investor and just starting out. I have two units in the New York City area and I don’t know what to do next. Analysis paralysis! Mobile parks sound attractive but I don’t know where to start.
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Hi Phillip, Feel free to connect with me at my profile and I can send you an eBook on investing in mobile home parks. Thanks for reaching out!

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    Raquel Rigby from Spanish Fork, Utah
    Replied 11 months ago
    Can’t wait to read your book!
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Thanks so much, Raquel! It should be out by summer. I have an eBook on self-storage I can send you in the meantime if you want to connect.

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    Matthew Eddy Flipper/Rehabber from Lynn, MA
    Replied 11 months ago
    Thank you Paul
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    And same to you, Matthew.

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    Veronica Haynes
    Replied 11 months ago
    Greetings everyone! Thanks for the article. When we moved to Durham,NC over in 1996 I had this great idea to "buy" a storage unit building. I just knew that it would be the way for my husband and I to take care of our 3 growing boys. No we didn't and needless to say you can't go a mile here without seeing a storage building or one being built. We have 4 universities ,here within a 30 minute driving distance of each other, so there is a demand. There has also been a housing boom , so far that the Coronavirus hasn't stopped. How do you get involved in the storage business when it is all around you. In my research it the buy in were starting at $50,00.-- Veronica Durham,NC
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Hi Veronica. I actually did an analysis of Durham once. Their strong anti-business/development stance over the years and the allowance for them to build a lot of multifamily more recently has made it a great time to have storage there. That was actually a few years ago, so it sounds like some are being built now. 1/3rd of my upcoming book on storage is devoted to answering that question of paths to get in, but I will tell you one great way is by finding a mentor (like BP'er Scott Meyers) or by investing passively. Best wishes!

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    Gail Travers
    Replied 11 months ago
    Interesting discussion and so timely for us here in Akron Mobile Home Park in Western New York! My understanding is that approximately 30% of our residents are in arrears here with rent payments - and that was before layoffs and social distancing impacted our lives. I have no idea what it is now except to say it must be worse. We are owned by Sunrise Capital Investors who bought the park from a family - the Mom and Pop operation that is so tantalizing to investors. It has been all downhill since the purchase. We have organized and our efforts were critical in passing needed legislation in New York State protecting mobile home owners from predatory investors. After Sunrise publicly stated they would sell the park for fair market value, we attempted to purchase our park after securing financing. At the last hour, Sunrise dropped out saying fair market value was not enough. Our owners often presented themselves as helping to save affordable housing by purchasing mobile home parks, jacking up the rent, turning as much of the maintenance cost to residents and then evict those who can't pay the new high rents. Their rationale is that they improve and preserve the parks through investing in infrastructure (never happened here) and then everybody is happy. Then they change the name of the park to have Estates in it (that always cracks me up) and suddenly it is a gold mine . We have fought them every inch of the way and there is a smoldering resentment here for what has happened. We have become problem tenants. There have been multiple attempts to evict families - the court is not interested in putting families on the street. Let's look at what Paul wrote about why it is a good time to invest in mobile home parks: "Here’s a quick list of what I love about this overlooked asset class: Recession resistant: Steady in all cycles - There was a huge need for affordable housing long before this latest recession. The operative word here is affordable. Shrinking supply: Unique asset class. - This is true because of zoning restrictions in many places that in the past have decided parks are an eyesore and a burden to the community. These parks are becoming a slice of Americana that corporate America is preying on. And the Tiny Home trend has helped a bit in normalizing and even glamorizing the idea that less is more. Affordable housing crisis: Equates to increased demand - Ah, yes...the old idea that there is a lot of money to made off the poor - a little gem from Frank Rolfe who teaches others how to become rich through ripping off mobile home owners. High switching costs: Equates to low tenant turnover - Another gem - the captive audience argument. People in mobile home parks can't move their homes because it is cost prohibitive so will put up with high rents because they are stuck. If they are evicted, the park owners just take ownership of the home and rent it out or rent to own to new tenants, often with lousy terms. Fragmentation: Mom-and-pop owners - It is true that many of these owners are aging and need to retire because owning a park is actually more than a passive stream of income - it is WORK!! So investors can wave a bit more than what the park is worth under their noses and they will jump because it is time for retirement. Reduced costs: Low maintenance & capital expenses - The maintenance is low because the tenants take care of their own lots. Our maintenance used to be focused on preventive activities with water and sewage systems, grounds work, road patching, etc. The rent went up and the maintenance went down. Less competition: Stigma of mobile homes - Mobile home communities are like any other community. The fact that the "stigma" is even on this list shows the thought process of investors. Portfolio opportunity: REITs looking to buy stabilized assets from us - This is the lived experience of dealing with life when you represent a passive income stream to companies who bundle parks together as a "portfolio opportunity". Contrary to Paul's assertion that Gary Rivlin, after a week living in a mobile home park, had nothing but accolades for the park owners and said that everybody was so happy there, our experience has been vastly different. That is an old article and much has changed as investors get on the band wagon and bungle management of parks. We have gained press coverage, too. Just google Akron Mobile Home Park and read a little. Future investors need to know there is a movement in the United States to rout this type of predatory investing in our communities. Lastly, I would like to discuss the idea that without mobile home parks, millions of Americans would be living under bridges. The number one cause of homelessness is the lack of affordable housing. Don't contribute by purchasing mobile home parks, raising the rent and waiting for the people who can't afford it to hit the street after eviction. The tenants should have right of first refusal - letting the community purchase the park, preserve the community and maintain the homes they worked hard to purchase before investors get their hands on it. In New York, owners can no longer raise the lot rent more than 3% a year. No more rent hikes of 30-40 percent that puts every single family in crisis. We in Akron have lived this.

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    Christian Drake from Virginia
    Replied 11 months ago
    Great article, What about having secure land for camping pads and hook-ups? I wonder if that market could become overly saturated as we enter this (at the least) mild recession over the next 12 - 24 months.
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Hi Christian, Well, I would have thought that was a great idea, but Green Street Advisors, as well as a friend who has RV parks, told me they are looking at a big downturn in this area. I would say that would be a "wait-&-see."

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    Cordtz Tuatoo Rental Property Investor from Crestview, FL
    Replied 11 months ago
    Great article, Paul! Self storage sounds interesting and will research. Thanks
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Hey Cordtz, Yes, it is wonderful. Feel free to reach out to get my eBook - then check out the Scott Meyers program.

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    Abby Paulson from St. Petersburg, Florida
    Replied 11 months ago
    What do you think about the expertise required to invest in data centers? Working in tech, I know this is going to explode. Any advice on where/how to enter the data center investor world?
    Ronak Shah from Northern NJ
    Replied 11 months ago
    Interested in data center!

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    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    I did a BP live show on Saturday and talked about data centers. You can see the slides on YT or FB. I would like to know how to invest as well and may research it. There is a massive increase in private equity in these deals now. Let me know if you find out anything. Thanks.

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    Rogelio M. from San Antonio, Texas
    Replied 11 months ago
    Paul, nice read! ... if I may, a small correction to your description of the pricing dynamic of self storage ... the pricing is properly described as 'inelastic', NOT 'elastic'. Pricing is said to be inelastic when a marginal increase in pricing will NOT result in a drop of TOTAL revenue, even if there is a marginal decrease in sales volume ... Recall total revenue being defined as Sale Price X Sales Volume. Thank you loads for your blog posts ... I read these always as soon as you post them!
    Paul Moore Investor from Lynchburg, VA
    Replied 11 months ago
    Rogelio. That is NOT the first time I have gotten those backward. Thanks for the correction. You are totally correct, and I hope that our BP editor can fix this. Appreciate you!

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    Cornelius Camp Real Estate Agent from Chicago, IL
    Replied 11 months ago
    Great read Paul. Interesting thought and concept. Will have to look at getting into this area. It makes perfect since!

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    Tomer Versano Investor
    Replied 11 months ago
    Great info as always, Paul. I'll be on the lookout for the new book!
    Paul Moore Investor from Lynchburg, VA
    Replied 10 months ago
    Thanks so much, Tomer! Hopefully mid-June to July

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    Ken B. from yucca valley, ca
    Replied about 1 month ago
    As always Paul an excellent read. Very interested in storage and not sure whats what where we're purchasing our retirement home (Maine).

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