Sure, capitalism is under attack in America today, but not having enough to pay for your retirement is a lot more serious than being politically correct. The amount you have to save in America for retirement is completely unrealistic. Experts claim that amount to be $1.6 million yet only 5% of households have even half that amount saved. But that doesn't mean you can't fix this situation immediately if you take action. Mobile home parks can fully fund your retirement if you use proper strategy and science in analyzing your options.
Here's how the math works
Let's assume you buy a 50-space mobile home park at 80% occupancy, with a current lot rent of $395 per month, in a market where the single-family homes are $250,000 and the average apartment rent is $1,200 per month. And let's assume that you buy the park at a price in which the mortgage payment wipes out any immediate cash flow. So what do we know? We know that the $395 lot rent is ridiculously low, and that you should be able to raise it $50 a month annually until you hit a fair rent – and let's assume that's two years, so that's $100 per month of cash flow [40 occupied lots x $100 x 12 = $48,000 per year]. And we also know that the demand for affordable housing is enormous and you should be able to fill those ten vacant lots within two years, as well [10 x $500 x 12 = $60,000 per year]. The combination of the two is $108,000 per year in cash flow. But there's one thing we left off: expense ratio. If the tenants pay their own utilities, then the expense ratio would be 30%, so the final annual cash flow number in two years of ownership is [$108,000 x .7 = $75,600]. That's more cash flow than $1.6 million would produce at a 4% CD rate. Retirement solved.
Why mobile home parks are the only sector of real estate where this is attainable
20 years ago you might have claimed you could hit that same target with a 50-unit apartment complex. But that opportunity has passed. Apartment rents have topped out throughout America due to the simple laws of “value”, which is not surprising since a U.S. average $2,000 per month apartment rent seems really, really high. And the massive oversupply of new apartments, built since 2020, has literally saturated the market. But what about office, retail, lodging or self-storage? Are you kidding me? Those sectors are not producing cash flow but simply foreclosures.
Management is “passive” as it's just a parking lot
If you're thinking “but I just want to retire and not screw with managing a property” then there's something you need to know about mobile home parks. A mobile home “park” is defined as a “parking lot” for mobile homes. It's one of the most passive styles of investing. You are not responsible for fixing toilets or leaky roofs. You simple rent your land to mobile home owners, who then pay you monthly for that right. The average park owner spends four hours a week managing their property – that's less than you would be spending in retirement on a round of golf.
No technology risk
At a time when technology has destroyed office buildings with remote work, ruined retail with Amazon, and destroyed hotels with zoom, every investor would be a fool not to contemplate the potential damage from technological advancement. The good news is that mobile home parks appear to be completely safe from this risk. Housing is such a basic need that there's no way to house people without basic shelter, and you can't float mobile homes in outer space.
Barrier to entry guarantees scarcity and value
It's also worth noting that mobile home parks have one advantage over each and every other real estate sector in America: virtually no city or town allows new mobile home parks to be built. The key reason is the stigma against “trailer parks” and that has no signs of ever abating. Since no new parks can be built, there is zero risk of the same over-building that has ruined the apartment sector.
Conclusion
If you don't have $1.6 million in your retirement account, you can match or beat that with a single mobile home park acquisition. And there are around 44,000 of them to choose from. If you don't have a better idea, you need to start learning about mobile home park investing today.