All Forum Posts by: Mel Adams

 Sounds like the markets we’re in too, if they’re selling for $100k+. If that’s the case, sounds like a great deal. Several pieces of advice from our experience. 1) Sell the homes using a Realtor — it brings in MUCH higher quality tenants than you would marketing yourself and they screen the garbage out for you. 2) find 2-3 local lenders who will lend on mobiles in parks so your Realtor can refer folks. If you’re selling homes for $120k there is no need for you to finance them. 3) reach out to dealers, they may place a spec home or two. Sure you miss some profit, but it will speed up infill. Good luck!

Picture.  Whichever looks the best.  Your description will be more important than the picture.  Your lease contract will be more important.

Do you live close by?  Do you plan to mow the grass and keep it clean?  Are you a Boss Hog or head Sheriff type of person?  Is this in San Diego and will there be mostly military renters?  “You” have to be the face of this community.  It is your ”family and community”.  To small for hired onsite manager. Are you adequately serviced for utilities?  Water, sewer, fire hydrants.

This isn’t a passive investment.  

Depending on up front cost and “your skillset” this is a great investment.

Cash flow as mentioned above.

1.  Decide if you want a slum or a nice place.  Gear your contracts and property towards one of those, not both.

2.  Contracts- junk cars, trash, porches and add ins, fences and vegetation, noise, age of home, contract length, etc

3.  Existing trailers if junky you need to get rid of them unless you want a slum.

4.  Find out if new trailers need to be put in footings versus just blocked up.  
5.  Cash flow.  Don’t own the trailers.  Check with local Mobile home dealers let them know you will give 1 year free lot rental to any of their new buyers.  Require all trailers to be 10 years or newer unless you want a slum.

6.  Cash flow- during rent up phase offer both long term and weekly rate RV parking.  Get with a National RV parking service.  Put these to one side of the park.

7.  If possible make it a gated community.  This will both slow down the motorcycles and tend to keep people out.

8.  Offer free lot rental to one of the RV people.  Do mowing, weeds, trash and let you know what is going on.  

9.  Out in a security camera system at the gate. Several cameras. 

This is a great value add project, but it is totally hands on.   Not passive.  

It’s all about the market! If I were doing that level of infill I’d want to be sure the homes are selling for cash (or bank financing) at least at the $30,000 price point. Otherwise you’re either going to a) be losing money on every home sale or b) holding on to a whole bunch of POHs. Bringing in homes involves a lot of costs beyond just the cost of moving and installing the home (site work, new pad, utility connections, home make-ready costs, cost of capital….)

Mel sounds like you’re on the right track. Yes test ads are good. You can just use a pic of another home and not a factory stock photo.

All sounds good except I would caution you on buying a park with only 3 occupied lots. You’re going to be negative on cash flow likely for a while and buying, bringing in, setting up and selling is a great way to create a ton of value but it is capital intense and time consuming. Most people underestimate that process. It creates the most value but is also the hardest to do. 

I alway recommend new investors find a light value add deal that has in place cash flow and a clear path to stabilization with maybe some infill but not heavily weighted on it.

Doing a very heavy lift for your first deal is riskier but also holds you up from doing more deals as it will take you years to fill that up which will take a lot of your time that could be focused on more deals. Not saying you shouldnt buy it but consider the value of your time and your goals and see if taking on a heavy lift gets you there. 

My profile has some great resources for MHP investors. Hope this was helpful. Good luck with it. 

I don't know that there is a "best" market for MTRs. But there are definitely locations that don't work well. I always recommend you start by looking at your specific property. What is the location, how big is it, how is it laid out? This, more than anything, will help you determine who your target guest is. The mistake I see a lot of people making, especially right now, is thinking any property can work as an MTR and any guest should be happy to stay there and pay 2x-3x the market rate for an LTR. That just is not the case. The location matters. Guests want to stay in an attractive property with good amenities in a SAFE location. Those are pretty much universals (unless you're catering to construction or oil field workers - very specific niches). Travel medical professionals typically prefer their own space - not a room in a shared home. For this reason, 1/1s and 2/1s work very well for this guest type but expect to be able to collect 1.5 - 2x market rate if targeting this guest type - the days of massive per diems for travel medical professionals are gone. Digital nomads typically prefer a super cool space (like a Yurt with good WiFi or a tiny home with good WiFi) OR they like 2/1s so they have a separate, dedicated office space to WFH. Families prefer 3+ bedrooms. Sometimes these are families relocating to the area who need to rent before they buy. Insurance placements pay THE premium in this niche and usually are looking for 3/2 and bigger, nice neighborhoods and excellent quality. There are always exceptions, of course, but you can begin to see the nuances and why it's so difficult to name a "best" market for MTRs. 

I wonder if they care about their surroundings. Hospital areas aren't always surrounded by the nicest surrounding residential areas. That's true here. Maybe that doesn't matter to traveling nurses. Maybe they just want to get off their shift and be in a bed as quickly as possible. I don't know the nature of the tenant yet.