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Mobile Home Park Investing

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Logan M.
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#1 Mobile Home Park Investing Contributor
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  • Provo, UT
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Three little known truths about Mobile Home Parks

Logan M.
Pro Member
#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
Posted Dec 22 2023, 11:48

Three little known truths about Mobile Home Parks:

1. The cash flow is great, but rent collection is always a challenge. I have at least one tenant per park that I am always fighting with about paying rent.

2. You can make more money by holding onto homes in parks but it creates way more work and I don't believe it is worth it in the long run.

3. In Some of my communities I make more money on seller financing the homes I own than the lot rents.

I will add more of these truths but I find most investors without parks don't know some of this information.

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Dave Rav
  • Summerville, SC
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Dave Rav
  • Summerville, SC
Replied Dec 23 2023, 05:47

@Logan M. I think you hit 3 important points.  Especially with #2.

If I may add:

(to build onto Logan's point #1, regarding rent collection) - the larger point here is overall management burden.  This asset class seems to require more touches with management than other classes.  Be it rent collection (ours actually is nicely automated and not really problematic), getting tenants to follow rules, maintenance, etc.

"Sticky" tenants - moving a mobile home is a big deal, and a substantial cost.  Generally speaking, tenants shy away from doing this.  Therefore, tenants will more likely remain in your park.  Of course, there are always exceptions (they use their tax return $$ for the move, another park offers to pay for the move, etc)

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Joshua Christensen#4 Multi-Family and Apartment Investing Contributor
  • Real Estate Broker
  • Albuquerque, NM
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Joshua Christensen#4 Multi-Family and Apartment Investing Contributor
  • Real Estate Broker
  • Albuquerque, NM
Replied Dec 27 2023, 11:27

Do either of you (@Dave Rav or @Logan M.) ever look at doing deals out of your area?  What are some of the challenges or advantages you see there?  Thanks!

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Dave Rav
  • Summerville, SC
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Dave Rav
  • Summerville, SC
Replied Dec 27 2023, 11:56

@Joshua Christensen we do not.  Maybe Logan has some advice here?

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Replied Dec 28 2023, 05:56
Quote from @Logan M.:

Three little known truths about Mobile Home Parks:

1. The cash flow is great, but rent collection is always a challenge. I have at least one tenant per park that I am always fighting with about paying rent.

2. You can make more money by holding onto homes in parks but it creates way more work and I don't believe it is worth it in the long run.

3. In Some of my communities I make more money on seller financing the homes I own than the lot rents.

I will add more of these truths but I find most investors without parks don't know some of this information.


 With regard to point 2 it is very dependant on rental demand.  We drive double the cash flow out of our rentals vs our TOH rentals.  We keep them in good shape though and have a maintenance manager hired as an employee to stay ahead on upkeep and maintenance.  Website to submit maintenance requests keeps thing timely.  Even with the labor expense we are way out front.

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Logan M.
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#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
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Logan M.
Pro Member
#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
Replied Dec 28 2023, 08:11
Quote from @Joshua Christensen:

Do either of you (@Dave Rav or @Logan M.) ever look at doing deals out of your area?  What are some of the challenges or advantages you see there?  Thanks!


 I would look anywhere in the US but some states I won't buy and it all comes down to the Landlord laws.

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Sherry McQuage
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  • Real Estate Broker
  • Moore County, NC
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Sherry McQuage
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  • Moore County, NC
Replied Jan 3 2024, 14:37
Quote from @Roger D Jones:
Quote from @Logan M.:

Three little known truths about Mobile Home Parks:

1. The cash flow is great, but rent collection is always a challenge. I have at least one tenant per park that I am always fighting with about paying rent.

2. You can make more money by holding onto homes in parks but it creates way more work and I don't believe it is worth it in the long run.

3. In Some of my communities I make more money on seller financing the homes I own than the lot rents.

I will add more of these truths but I find most investors without parks don't know some of this information.


 With regard to point 2 it is very dependant on rental demand.  We drive double the cash flow out of our rentals vs our TOH rentals.  We keep them in good shape though and have a maintenance manager hired as an employee to stay ahead on upkeep and maintenance.  Website to submit maintenance requests keeps thing timely.  Even with the labor expense we are way out front.


 What does TOH mean?  I'm just now starting to learn about Mobile Home parks...I might be buying one in the next year.

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Replied Jan 4 2024, 07:21
Quote from @Sherry McQuage:
Quote from @Roger D Jones:
Quote from @Logan M.:

Three little known truths about Mobile Home Parks:

1. The cash flow is great, but rent collection is always a challenge. I have at least one tenant per park that I am always fighting with about paying rent.

2. You can make more money by holding onto homes in parks but it creates way more work and I don't believe it is worth it in the long run.

3. In Some of my communities I make more money on seller financing the homes I own than the lot rents.

I will add more of these truths but I find most investors without parks don't know some of this information.


 With regard to point 2 it is very dependant on rental demand.  We drive double the cash flow out of our rentals vs our TOH rentals.  We keep them in good shape though and have a maintenance manager hired as an employee to stay ahead on upkeep and maintenance.  Website to submit maintenance requests keeps thing timely.  Even with the labor expense we are way out front.


 What does TOH mean?  I'm just now starting to learn about Mobile Home parks...I might be buying one in the next year.


 TOH means Tenant Owned Homes; POH means Park Owned Homes.  Easy Cheesie!

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Logan M.
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#1 Mobile Home Park Investing Contributor
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Logan M.
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#1 Mobile Home Park Investing Contributor
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  • Provo, UT
Replied Jan 31 2024, 11:59

If you buy a park @Sherry McQuage and there are a lot of POHs I suggest selling them asap.

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Sherry McQuage
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Sherry McQuage
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Replied Feb 1 2024, 07:59

I was talking with the owner of a mobile home park within 45 minutes of my home; he inherited it from his father.  He says he wished he had a storage facility instead, because it would be less to manage.  I think I will pass on buying the park.

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Nathan Harden
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Nathan Harden
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Replied Feb 1 2024, 10:13

I love it. This is a fantastic post. Precise and straight to the point.

When structuring your seller finance deals for the tenants, what terms are you offering to them?

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Logan M.
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Logan M.
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#1 Mobile Home Park Investing Contributor
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  • Provo, UT
Replied Feb 1 2024, 14:46
Quote from @Nathan Harden:

I love it. This is a fantastic post. Precise and straight to the point.

When structuring your seller finance deals for the tenants, what terms are you offering to them?


 If they have a good history of making payments I will do 0% down and typically do about 10% interest over 10-20 years depending on the community. 

I try to get $300-$500 more than they currently pay.


One key piece is that their lot rent has a 3% automatic increase per year.

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Logan M.
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#1 Mobile Home Park Investing Contributor
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Logan M.
Pro Member
#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
Replied Feb 1 2024, 14:47
Quote from @Sherry McQuage:

I was talking with the owner of a mobile home park within 45 minutes of my home; he inherited it from his father.  He says he wished he had a storage facility instead, because it would be less to manage.  I think I will pass on buying the park.


 It takes the right kind of person to manage MHPs, a little crazy haha

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Replied Feb 2 2024, 05:54
Quote from @Sherry McQuage:

I was talking with the owner of a mobile home park within 45 minutes of my home; he inherited it from his father.  He says he wished he had a storage facility instead, because it would be less to manage.  I think I will pass on buying the park.


 Sherry, Don't walk away too quickly.  That seller attitude is exactly what you are looking for in addition to being family owned/inherited.  When I hear those comments I get increasingly engaged.  Just because someone is says they are frustrated having to manage something so much I can guarantee you it is because they are managing it poorly.  My number one park is 70% POH and I spend maybe 30 minutes per week engaged with it and make a great return.  Message me if you want some help evaluating it.  

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Christine Letch
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Christine Letch
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Replied Feb 2 2024, 06:06
Quote from @Logan M.:
Quote from @Joshua Christensen:

Do either of you (@Dave Rav or @Logan M.) ever look at doing deals out of your area?  What are some of the challenges or advantages you see there?  Thanks!


 I would look anywhere in the US but some states I won't buy and it all comes down to the Landlord laws.


 Logan, good morning! If I may ask, what states are you avoiding due to landlord tenant laws/rules? We are just starting out narrowing down states. We have over 20 years in the rv and camping world so MHP are totally new!! Thank you in advance! 

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Jordan Moorhead
  • Real Estate Agent
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Jordan Moorhead
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Replied Feb 2 2024, 08:15

@Logan M. the proforma on POH always seems to outperform reality

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Logan M.
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#1 Mobile Home Park Investing Contributor
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  • Provo, UT
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Logan M.
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#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
Replied Feb 2 2024, 09:55
Quote from @Christine Letch:
Quote from @Logan M.:
Quote from @Joshua Christensen:

Do either of you (@Dave Rav or @Logan M.) ever look at doing deals out of your area?  What are some of the challenges or advantages you see there?  Thanks!


 I would look anywhere in the US but some states I won't buy and it all comes down to the Landlord laws.


 Logan, good morning! If I may ask, what states are you avoiding due to landlord tenant laws/rules? We are just starting out narrowing down states. We have over 20 years in the rv and camping world so MHP are totally new!! Thank you in advance! 

This is a good start for where I buy real estate.

I know this is meant to be somewhat of a joke but states that lean blue tend to be much less landlord friendly.

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Christine Letch
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Christine Letch
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Replied Feb 2 2024, 15:04

This is a good start for where I buy real estate.


I know this is meant to be somewhat of a joke but states that lean blue tend to be much less landlord friendly.
I totally get it! We are currently in PA and I can assure you the joke is correct.