Story Time — Your First MHP Deal

[Ben Morand]

Hey guys! So I’ve been interested in MHP investing for quite some time now, and in the light of everything going on, they seem to prove even tougher as an asset class than ever before (in a good way), with massive loads of people losing their jobs and searching for bottom-line affordable housing.

So with that being said, if you’d be willing, I’d be interested to hear how others got started in the business. Details of the first deal, successes, failures, etc. Feel free to share whatever you’d like!

Thanks guys!

[Frank Rolfe]

First deal: Glenhaven, Dallas, Texas. Bought for $400,000 with $10,000 down and seller carried $390,000 for 30 years. Sold for around $1.5 million about seven years later. Lessons learned from that deal:

1) Don't buy master-metered gas (when it failed I solved it by bringing in propane tanks).

2) Manage master-metered electric very carefully (didn't even know what it was until the whole power system lit on fire one day).

3) No pay/no stay is the only way to go on collections. Nothing else works.

4) Inject a "pride of ownership" into your residents with immaculate common areas and they will take the ball and run with it.

5) Don't let city officials push you around -- find a good municipal lawyer and your problems are suddenly solved.

6) A successful mobile home park is like a high-density subdivision in which the neighbors watch out for each other and have a strong sense of community.

7) NEVER rent mobile homes -- sell them at whatever price you can get and focus STRICTLY on the land rent.

8) Smart owners copy what other successful park owners are doing verbatim and bad owners try to be pioneers.

9) Think like a lender and you will always be successful (my happiest moment was when I got a conduit loan on Glenhaven as that confirmed that all my steps had been correct).

10) Don't listen to your friends, family and peers when you buy a mobile home park as they will all say you're nuts.