Superbowl XLVIII is over, and it's time for reflection on exactly what happened. Whether you were a Bronco or Seahawk fan, there were some important lessons demonstrated in this year's contest. And they are all apply to the mobile home park industry every day.
The "Underdog" Won
Nobody figured that Seattle would win by the margin they did. Most professionals were betting on the Broncos to be the victor. But Seattle dominated from the initial possession, against all odds. That's exactly how the mobile home park industry has been doing it year after year. Against all odds, the "underdog" of commercial real estate has outperformed all other forms of commercial real estate.
Execution Was Key
Peyton Manning is a phenomenal quarterback. But on that day, the Broncos were unable to execute on their game strategy. And that's the same way it is in the mobile home park business. Although renting land is the easiest form of real estate investment, it's still important that you get the job done on the basics, like collections and grounds maintenance.
Defense Dominated Offense
Nobody was sure what would happen when you had the #1 offense in the NFL and the #1 defense meet head-to-head. But the answer was that defense was key. And that's how it is also in the mobile home park business. Successful operators focus on defense - good due diligence, making sure to stay clear of litigation from tenants, etc. - rather than taking crazy chances. The goal is to make returns of 20%+ per year, and not to risk everything on some speculative venture. The first rule that all mobile home park investors follow is that "before there can be return on principal, their has to be return of principal."
You Can't Fight Inertia
Almost immediately, the general trend was for the Seahawks. They had the momentum the entire game. That's how the mobile home park business has been for the past several years. As the U.S. economy continues to decline, it has pushed millions of Americans into the need for affordable housing - over 20% of all U.S. households earn $20,000 per year or less. On top of that trend, there are over 10,000 Baby Boomers per day retiring on social security payments of $1,200 per month. With those trends behind it, it's not hard to see why mobile home parks outperform all other types of real estate.
Just as the Seattle Seahawks are the winners of this year's NFL championship, so is the mobile home park sector the winners of commercial real estate, for the same reasons. But unlike being NFL champions, which lasts for only one year, the mobile home park industry has outperformed for years now, and should continue to be winners for years to come.