I'm biased, I love mobile home parks. Properly managed in the right location they are one of the best cash flows out there. Plus, the supply of parks is dropping and for some reason (insert politics here) in the US we keep creating new low income folks so demand for quality low income housing continues to go up. Properly managed means, you run it like a parking lot, not like a horizontal disconnected apartment building (owning the homes too). You get economy of scales and many parks today are poorly managed with all kinds of junk for expenses and rent not current or rent rates not at market levels. So once you take ownership, you can add significant value quickly by just cleaning up the expenses, getting rent to market rates and enforcing the two big rules, "No pay, no stay" and "No play, no stay." Once the park starts to look like a community again, you can fill all those empty lots (this part isn't so easy but doable) and double your tenants in many instances. Then refi out your original cash and then some and do it all over again plus.
Resilient too, we did not lose any income during covid, sure, we've had some slow pays but we are 100% current on rents for January 2021.
You can't swing a dead cat around here without hitting a new self storage unit, those have been great investments but it looks to me like the supply/demand curve is shifting in favor of the supply side so it will or has already become a renters market. Then it's a race to the bottom and I'm not interested in that at all.
Multi-unit can be very similar to the Parks with one big difference, all the maintenance.
Investor · Fishers, IN · Member since 2012 · 520 posts · 499 votes
5y
Hey Frank!
I'm partial to Self Storage for obvious reasons. To mention just a few: historically recession-resistant, simple business model (buy it by the gallon & rent it by the shot), similar to multi-family but with a much lower expense ratio, and is typically always in demand (unless you come across a market that is overbuilt and therefore over-supplied).