The Cold Hard Lessons of Mobile Home University
The Cold Hard Lessons of Mobile U.
An excerpt:
"It was Day 2 of Mobile Home University, an intensive, three-day course on how to strike it rich in the trailer-park business. Seventy-five or so students had signed up for the class, which Rolfe offers every other month in different places around the country. Most of the enrollees weren’t real estate speculators; they were jittery members of a hard-pressed middle class. They were nervous about retirement. Or they were worried about their jobs moving overseas. Or they were making $100,000 a year, maybe even $200,000, but felt the need to earn more. All of them, though, had somehow come to see the lowly mobile home as their vehicle to financial freedom.
As an instructor, Rolfe has a veritable Ph.D. in the habits and rituals of trailer-park residents. It’s as if he carries a map in his head based on trailer parks he has bought or at least contemplated buying and that gives him a fascinating, if perhaps narrow, view of his fellow citizens. Trailer-park residents living in the North, he told everyone, are rock-solid citizens compared with their counterparts in the South. For one thing, they tend to be neater and also more responsible. In Texas, for instance, 5 to 6 percent of their tenants are delinquent each month paying the rent, compared with less than 2 percent of those living in parks in Wisconsin, North Dakota or Minnesota.
Rolfe avoids buying any parks in New York and California; both states are too “tenant friendly,” he said — too much in the way of time and money are required to evict someone who is behind on the rent. And forget Las Vegas, Phoenix and other locales hit hard by the subprime meltdown. The glut of cheap homes represents competition. “If we look on Zillow and see houses selling for $30,000 or $50,000, we’re walking from that deal,” Rolfe said. In most of the country, the key to calibrating the proper rent means knowing the price of a decent two-bedroom in the surrounding area. If the going rate is $700 a month, Rolfe said, then cap your lot rent at half that. And think long and hard, he warned the class, before crossing the $500 threshold. The industry “sweet spot” is a lot rent of $495, he explained, but raising it by another $5 “could mean death.” On the other hand, Rolfe said, you can always have your tenants pay for water, which is a trailer-park owner’s largest expense.“