There is probably no greater way to destroy a conversation than to say “I own a mobile home park”. It typically triggers a negative response that is typically reserved for violent criminals or wearing a Green Bay Packers shirt to a Cowboys game. But why is that? In this episode of the Mobile Home Park Mastery Podcast series, we’re going to review the types of reaction you get by admitting you own a park, as well as the root cause of these responses. As you’ll see, there’s a whole host of reasons that most Americans have a very poor opinion of the mobile home park industry – and all completely unjustified.
Want a sure fire way to make any conversation immediately awkward? Then tell people you own a mobile home park. I've been facing that dilemma now and I thought it'd be interesting here in the Mobile Home Park Mastery podcast to go over the five most typical reactions I get when I say that I own mobile home parks, and to try and explore why the average American has these five reactions.
The first reaction, the most common reaction, is disgust. You say you own a mobile home park and immediately visions of Eight Mile and people living in old flat-roof trailer parks with junk everywhere, knife fights and beer bottles happening all around you immediately come to mind. People are immediately turned off. Where do they get that idea? I don't own anything that even remotely resembles the type of mobile home park the average American thinks of when you say the words. Now, why would that be then? Well, the media has done a phenomenal job over the last several decades in creating the stereotype for all Americans that mobile home parks are horrible places. They do it through such shows as Cops and Trailer Park Boys. And then there's the movies such as Pink Flamingos and then more recently, 8 Mile with Eminem.
Now, is that what mobile home parks are really all about? Absolutely not. Are there some dreadful mobile home parks in the US? Certainly there are. We've all passed them driving around, but they are very, very few and far between. There's 44,000 mobile home parks in the US, and in the variety depicted in those TV shows and in those movies, maybe out of the 44,000 maybe there's a few thousand. But that is certainly just a fringe element. That is not the meat and potatoes of the industry.
True mobile home parks look more like high-density subdivisions. In fact, perhaps that's what they should be renamed. Or the fact that there would have mobile homes in them may not even be the case. 50 years from now, all those mobile homes may all go away and be replaced with tiny homes, as you've seen on HGTV. Perhaps then the perception will change. Or maybe at some point the media will start realizing that 8% of Americans live in mobile home parks and possibly they should give them a fair shake. But it's unlikely because they know they can sell time, commercial time, by always portraying mobile home parks as the bastion of sex and violence, and as a result, I'm not really sure why they would change the stereotype. But it's kind of sad that most Americans think so poorly of their fellow Americans, those 8% who live in mobile home parks, without giving them the fair shake of even knowing or learning what a mobile home park is all about.
The next most common reaction I get is anger. Right now we are locked in this US cage fight between capitalism and socialism, and basically anyone who's a landlord must be a bad person. That's the way that many people see it. So we're always lumped, as mobile home park owners, in with payday lenders are evil drug companies that charge $80,000 for a single dose of medicine in some cases, without anyone ever really thinking through what we do and how we actually fit into the spectrum. You see, mobile home parks are the only form of non-subsidized affordable housing in the United States. No, single family can't do it and apartments can't do it. And when apartments pretend they do it, they do it through subsidies that you and I and all the American taxpayers pay. But in fact, the only one who actually produces honest to goodness real affordable housing in America are in fact mobile home park owners.
So we are part of the solution, certainly not the problem. Never have been. But nevertheless, for some reason, whether it's Elizabeth Warren or John Oliver or somebody else who knows nothing about the industry whatsoever, we always end up with the short end of the stick simply because we deal with residents who are often lower socioeconomic incomes. So as a result, we are then demonized as people who prey on the poor, when in fact, nothing could be further from the truth. We don't prey on the poor, we're the salvation of the poor. And even using the word "poor" I find insulting because most of our mobile home park residents are not poor. Never have been. Don't meet any of the US definitions of poor. Typical household in a mobile home park is earning anywhere from probably $30,000 to $50,000 a year, and if you go to Wikipedia and look it up, that does not in a million years define you even as poor.
The third most typical reaction I get when I tell someone I own a mobile home park is confusion. They don't even know what that means. Often they think I must sell mobile homes. You see, a lot of Americans don't even know that a mobile home park exists. They've never even been educated on the fact that there's a business model known as the mobile home park. So when they hear the word mobile home, they think of that dealer they saw on the highway. They think of the person who goes in there and hauls the mobile home in, maybe does the repair, but they can't fathom there's any industry beyond that. Now, who do you chock that blame up to? Well, probably the industry itself. They've done a terrible job of public relations and marketing for half a century now. But also, partly it is that besides those 8% of Americans live in mobile home parks, most people don't even really know what they are.
So maybe we should have a course in high school or college on mobile home parks. Well, probably unlikely to happen, but might be a good idea. Until that time, I don't blame people for being confused. Most people don't even know exactly the change of names over the years. We went from trailer to mobile home to manufactured home. Nobody much paid attention, nor did they care. And once again, I chock that up to the mobile home park industry doing terrible public relations. But nevertheless, confusion still abounds. Can I do anything to help that? I try. I do these podcasts. I read a newsletter every month. I try and explain to people all the time that mobile home parks are actually a legitimate form of real estate investment. But nevertheless, all I knew is after I tell someone I own mobile home parks, I invariably get a call later from someone wanting to know how they can buy a cheap double-wide to go out on their farm. They just simply did not understand the fact that I own land. They always think I'm involved in retail sales.
The fourth was common reaction I get as a mobile home park owner in a social situation is acceptance. A lot of people are finally understanding that mobile home parks are a good investment. They've learned that because we've had some good public relations, not in general with the public, but in the financial realm. Sam Zell, as we all know, is the largest owner of mobile home parks in the US, and of course, Warren buffet is the largest manufacturer and financier of mobile homes through Berkshire Hathaway. And that's helped a lot for people to accept the fact that we're legit, that we're normal, that we're a good, successful way to invest their money.
So, many folks who are in the multifamily industry, own apartments, possibly a duplex, it's not too hard for them to understand a mobile home park. Basically, what it is, it's just kind of like an apartment complex, but nothing but detached homes. But on top of that, it's a little different because we own the land and not the buildings. But for many people who understand real estate, they're starting to accept that what we do seems to be like a good idea. In fact, just look at the top owners of mobile home parks in the US. You have number one, ELS, that's Sam Zell's company. That's a public REIT. Number two, Sun Communities, which is another public REIT. Number three you have Brookfield Asset, which is a Canadian public REIT. Number fourth, you have the country of Singapore known as GIC, the Singapore Nation Sovereign Fund.Those are fairly big players, I think we would all agree. Three public REITs and the country of Singapore. So possibly, it's the fact that we now have reached this advent of large institutional ownership that's finally given credibility to the industry, but I take my hat off to those few people who do in fact hear the concept of mobile home park and smile and are acceptant that it's not a crazy thing to be doing.
Finally, the rarest reaction I get is envy. Now, who would envy a mobile home park owner? Well, only those who know the kind of money that mobile home parks can generate. We are truly the most lucrative form of real estate today and that's simply because most people, instead of having envy or even acceptance, have confusion, anger and disgust, so they never even think about investing in mobile home parks. What a shame for them, because they don't realize what a great industry it is. But others have learned. They've been reading, they've been watching. They can do the math. They can see a 50 space mobile home park at $200 a month lot rent is creating $10,000 a month of revenue. They also see how much these things sell for and say, "Wow, that's a bargain." I pay twice that much for, instead of a mobile home park, with an apartment complex that generates only that same amount of income.
And I think you'll see more envy as times go on. Just recently, you probably saw the most expensive mobile home park ever sold, sold for $237 million. A lot of people woke up and thought, "Wow, how is that possible? How could there be a quarter of a billion dollar mobile home park?" And the answer is, it's not hard. That's an 800 space mobile home park gets $2,000 a month in lot rent. Do the math. You end up at a value at about a four or five cap at about $237 million. Now, I'm not saying that's necessarily something anyone would want to buy, but definitely when people start looking at the numbers and pondering what's going on, they're going to start being a little jealous of the fact that mobile home parks can generate so much money.
Now what do I do? You know, I simply look at my own fixture as an industry by bringing old communities back to life. I also feel that we are the only form of non-subsidized affordable housing in the US. Are these things bad? Is it bad to bring old communities back to life and make them nice places to live again and create pride of ownership among the residents and a sense of community? Give people a chance to live in a three bedroom, two bath home and have a total monthly cost of, in the US, an average of $280 per month? Is that wrong? I don't think it is and therefore I'm a little offended by those who look upon what we do with disgust and anger.
I feel sorry for those with the confusion. I wish that we had more ways to teach people about real estate and certainly about mobile home parks. I understand those who accept the industry because I, as many people do, feel that all forms of income-producing real estate should be looked basically at income. And then I certainly understand those who are envious of the industry and I think over time more people will be a little more curious, a little more envious about what we do and they'll want to get into it. But I mostly blame our industry, the mobile home park industry itself, for not doing very good public relations over all these many years and not really educating Americans on exactly what the industry is or how it works. And I definitely blame the media for doing their darndest over the last almost half a century to portray mobile home parks as bad places to be.
If you simply can look back on YouTube, not that far back, look back in the 1960s, you'll see Elvis lived in a mobile home park in two different movies. In fact, Elvis lived in a mobile home park in his spare time in real life. He had his own mobile home in a mobile home park that he owned, he owned the whole thing, located about 10 miles away from Graceland. He loved living there. In fact, Priscilla Presley once wrote in her memoirs that her happiest times with Elvis were in the mobile home park and actually not in Graceland. So why are we thought of so poorly today? Well, it's a media invention. We were the top of the pack in the '60s. Elvis lived in the mobile home parks. Today we're relegated down to Trailer Park Boys.
Will things change over time? I hope that they do. I'm getting tired of all those awkward responses in social settings when I tell people what I do. But hopefully over time that will change. This is Frank Rolfe with the Mobile Home Park Mastery podcast series. Hope you enjoyed this. See you again next week.