I am considering purchasing a home in a trailer park in Riverside, CA for my first rental property. The inside is remodeled and it looks very nice! Super livable. Now, this is something I can afford now. I would like to know if anyone here has purchased a trailer park home for their first property and if they recommend it or not. I'm not sure if I should just save up some more and wait or jump on this deal! I am feeling super excited to get my feet wet in real estate investing. Thank you ahead of time!
Check park rules first, they may have restrictions, limitation, etc. along with residency approval. Just a couple questions:
1. Will you be meeting prospective tenants at Park if they are interested?
2. Who will go over lease contract/term (you or Park manager)? I'm assuming you.
3. Talk to park mgmt to find out how the relationship works between you and them.
Good luck, I think this is a great way to go!
@Navjot Dhaliwal as this is your first deal, triple check the space rent anything below $200k here is probably going to have space rent in the $600-$800+ per month range which really eats into your cash flow. Just because it is cheap does not mean it is a good deal.
@David Braut Wow thank you for your response! and I agree, now that I am doing more research, I am thinking out of state will be best!
A home in MHP is nothing but an expensive, hard-to-move, piece of furniture. You may buy one and, park rules permitting, rent it out but you will always be a lot renter at the mercy of a park owner.
Disclaimer: Not an experienced landlord. Do not own Trailer park properties. SFR Only.
There are a few things to keep in mind. Terms such as "Trailer", "Manufactured home", "prefab", "Modular" etc etc seem to be thrown around by different people with different meaning. Generally, a trailer will be slapped on the foundation and count as personal property. In most cases, these trailers tend to depreciate over time. Cheaper materials, hard to find replacement parts, and other headaches. There are, however, homes that are pre-fabricated but still have to be built just like a stick house on site. In this case it is real property and will likely appreciate with the market.
You will often hear park owners discuss strategy on this site and one thing seems to be constant: They want to sell the homes to the occupants and collect the lot fees. Now think about that. Why?
Once again, please take my advise with some salt (moderate amount). As i have stated, i am not a pro and never claimed to be. Just sharing information i have gathered on this subject. If anybody wants to correct me, i am open to learning.
I just turned down a deal in Rancho Mirage for $57000 ARV $100,000 ,needed about $20000 in work. The kicker is the lot rent at $680 @Navjot Dhaliwal , its a slow moving park the lot rent can really eat up your profits
It may work. It works well for some. Due diligence will tell. Run the numbers.
Be wary of advice from some who aren’t and haven’t been in the business.
Just because mobiles aren’t real estate doesn’t mean they can’t be a good investment.
Many mobile homes built in the last 25 years or so are made if the same basic material as stick built. With a little maintenance they will hold up well.
As a note - I’ve worked with mobile homes for 20 years.
@Navjot Dhaliwal make sure you buy both the land and the home. I'm in the mobile home park business, not mobile homes. If you did not own the land the home is sitting on, it would be a losing game for you as the land owner has all power. In my case it's me.
@Pavel Shemyakin :
In most cases, these trailers tend to depreciate over time.
As do all dwelling types, from garden sheds to mansions. With few exceptions, land appreciates. dwellings depreciate. Buying an MH in a park is a bad idea because the buyer acquires a depreciating asset and the MHP owner keeps an appreciating one.
Hi @Navjot Dhaliwal . I'm glad you are seeking counsel. I am a huge fan of mobile home park investing. My investors and I have invested millions in mobile home parks this year, and in fact, I just published a special report on this topic (reach out to me if you'd like a copy).
I have owned 4 individual mobile homes, and 3 were among the biggest disasters of my two decades in real estate investing. I would recommend you not do this.
It's not just me either. I work closely with quite a few mobile home park investors, and they all feel the same way. They don't want to own the trailers. And when they end up with one, they do whatever they can to get rid of it ASAP.
Frank Rolfe was on the BiggerPockets podcast this summer and he was on my podcast as well. He is the 5th largest owner of mobile home parks in America. He feels very strongly about not owning individual mobile homes.
I really hate to sound this strongly, but I wish someone would have told me this 19 years ago when I bought my first one. I hope this is helpful. If you can partner with someone to buy mobile home parks, that is an entirely different situation. Do it!
@Navjot Dhaliwal I recommend you look into John Fedro's pod cast/ You Tube channel. He advises on Mobile home investing. He is apparently very successful and has a one on one consulting / training arm too. LOTS of good information. He has been on BP podcasts as well. I'm interested in Mobile Home Parks but watch his channel to get the home knowledge, as I'll inevitably own a POH, Park Owned Home. Many MH flippers out there making a living or using it as a stepping stone to bigger deals and a business model. Here is one I just watched yesterday. https://www.youtube.com/watch?v=uZQR4vNSEyg If this gal can do it, you certainly can. @Paul Moore has VERY valid points, so be smart.