Mobile Home Park Mastery: Episode 174

The Five Historical Eras Of Mobile Home Park Construction

Subscribe To Mobile Home Park Mastery On iTunes
Subscribe To Mobile Home Park Mastery On Google Play
Subscribe To Mobile Home Park Mastery On Stitcher

Cars have gone from steam to gas to electric. Planes have gone from propeller, to turboprop to jet. And mobile home parks have also evolved over time. In this Mobile Home Park Mastery podcast we’re going to review the basic evolution of the mobile home park and how it impacts investing in this sector. Beyond just history, there are significant areas of interest with the era of park construction and how your property will potentially perform as a result.

Episode 174: The Five Historical Eras Of Mobile Home Park Construction Transcript

Cars have changed over time, initially powered by steam, then gasoline, and now even electric. So it only makes sense that things that are pulled behind cars could also change, as could where you park them. This is Frank Rolfe, the Mobile Home Park Mastery Podcast. We're going to talk about the five historical areas of Mobile Home Park construction and what the ramifications can be for your investment in them. Let's start off with the earliest version of Mobile Home Park or back then called the trailer park. These were the trailer parks built by cities to attract wealthy people to stop in the city, spend the night. Who knows they might buy something and they might even locate their business there. Vanderbilts, Astors, Rockefellers, they all had fancy trailers they pulled behind their automobiles back in the 1920s. However, I've been unsuccessful in ever finding any of those early trailer parks. And I think for good reason. Bear in mind the first trailer parks ever built were built on city property.

Cities built them to attract these wealthy customers and since they're on city property, they'd been turned into other uses over the decades. So it seems unlikely I'll ever be able to find an original 1920s trailer park. The kind with a big metal sign over the entrance of proudly announces the name of the city and the trailer park, the private airport back in the 1920s for many cities, I'm afraid those are now gone. So we don't even have to discuss those as an investment option, so let's move to the next. The next type of trailer park you'll find there's a kind that was typically located behind a motel.

So way would work is those who were driving a car without a trailer, they would stay in the motel. But those who had trailers well, they had to stop too. So where do they go? Well, a lot of motels realize that those travelers going down route 66 or whatever road they're going on, there would be money if they could just give them a spot to pull over for the night. So what they would do is, they would have you go in the entrance of the motel to the very back, often initially into a field and park your RV, and you could sleep back there. They had electrical connections for them, typically no water sewer, but you had that in your home to begin with. So I've got postcards of those and most of your motel chains, particularly at way out in the country had, if you look at the signs on them, you'll see a little thing that says RVs with an arrow. And basically that meant that your RV was welcomed to park behind the motel for the payment of some small amount nightly.

And then what happened is a lot of those motels found that over time that business got to be fairly lucrative. There seemed to be more and more of these trailers on the road. So then they started putting in a little more improvement. That they would put in typically asphalt roads and parking pads and green spaces. And eventually what happened was, the trailer park outgrew the motel while motels became of less value because bigger chains open newer ones and theirs was outdated and typically small. At the same time, the expansion in the industry made it more lucrative to focus on the trailers. And how do I know I've seen these locations? Well, when you see a Mobile Home Park that has at it's very front old motel units which at this point had been converted typically into efficiency apartments, you now know that you found one.

Now let's talk for a minute on what the infrastructure would be like in those properties, because there are those properties and you'll find them for sale. From the infrastructure perspective, one of the big problems you have is going to be master metered electricity because most of those properties were set up so that the park paid the power for the entire park. And then that way when you pulled in each night, you could just plug in, like an RV Park. So infrastructure can be a challenge. Typically galvanized metal pipe, clay tiled sewer, those are okay, no problem there, but the master meter power is what can give you a headache. The next problem you have typically is the density. The density was very dense because again, these began just as parking lots. People were not going to be spending large amounts of time there. Not needing spacious yards. And on top of that, since this is one of the earliest stage versions of a Mobile Home Park, the homes were very, very small. Only eight feet wide, typically in width and not greater than typically 32 feet in length.

So it's a miracle with those properties today if they can house a modern home, which is at least 14 feet wide, and typically at least 48 feet long to be a two bedroom, one bath model. Also the location should be discussed because some of their locations are quite spectacular. If you go out to California, Southern California and you go down Pacific Coast Highway, you'll see some of these Mobile Home Parks still there on the sides of the beach. And that simply because they were there at a time when America was still growing and these locations were still possible as city fathers didn't hate Mobile Home Parks back then. So what happened over time is it began as a motel along Pacific Coast Highway or any other scenic highway with a great location. And over time it became a Mobile Home Park and the hotel went away. In some cases, the people would actually tear the hotel down and yet the park still remains.

So the locations can be very, very attractive. And those really offset those other issues. So even though they typically have often master metered electric can sometimes work around that, it's just a matter of math for you to how many amps it handles. And even the density can be fairly high, well that's offset by having a terrific location. So those actually are not bad properties, definitely investment grade if it's in the right spot. Then you went from the park behind my motel era to the Golden Age. So the Golden Age to me would be the 1950s to the 1960s. That was the start of the Golden Age. This was the era in which returning GIs on the GI bill grew to really grow fond of mobile homes.

It's the era in which you had Elvis Presley and two movies living in a Mobile Home Park. It happened at the World's Fair in 1963 and Speedway in 68. Even had Lucy and Ricky, I Love Lucy fame traveling across America. He, the prominent Manhattan architect, living in a penthouse in their newly found in beloved trailer. That's from 1951. So in the Golden Age, what you had is, you had an acknowledged need for places to park mobile homes. But now there's a little more thought put into it. It was no longer just parked behind my motel. Now it's going to be the main course, no longer the appetizer. So what do you do when you're trying to build a Mobile Home Park from scratch circa 1950s, 1960s?

Well, they put a lot of effort into it. Moms and pops hand custom honed these things sometimes with the theme such as my first park Glen Haven, which was 1951. And of course, Glen Haven had a Scottish theme. Every street had a Scottish name like Ken Ross. And you have others that were built around other features might have a really neat custom tutor mansion in the front perhaps or Olympic swimming pool. So people were trying to capture the fact that people had very high demographics back in that era. So what's the infrastructure like in those properties? Well, it can be good. Sometimes it can have the same issue as the old park behind my motel version with master metered electric. Of course that's what Glen Haven had, but not always. A lot of the owners at this point realized this isn't just a overnighter now. This is someone who will be there for a month or a lifetime. And they started having them pay their own utilities. They also started building bigger yards, better roads, better focus on parking pads, better focus on amenities.

So just as the mobile home was coming into an age of prosper in the Golden Age, so were the parks themselves. Some of them are really quite spectacular. What about the density? Well, again, the density of the homes back then, the homes weren't this big, but there's a bigger focus on providing that yard, that sense of community. So those lots will traditionally still hold modern sized homes, which is fantastic. And then the location, those locations are typically fantastic. Some of the best locations in many markets are those early mom and pop golden aged parks, simply because they were there right before the city, the city grew around them.

So then we went from the Golden Age parks to later in the Golden Age, in the late '60s to the early '70s and we hit a home run and that's the HUD era of the Golden Age. So what do you have going on there? Well, what you have is you have the mixture of people trying to harness this new creation of mobile homes with very high demographics, with state of the art vision, trying to build a all encompassing great community. Now what caused these and the reason they're called HUD, HUD gave very, very attractive financing to those brave enough to build this new housing source. And if you took them up on their loan, however, they came with a covenant, you had to build it to the government specs and their specs were really, really tough. They wanted to have a clubhouse, a pool, commercial bathrooms, a commercial kitchen capable of feeding the entire park in one sit down meal if needed.

They wanted to have paved streets, extra wide with a little bit of curve to them so they never appeared to be shotgun, typically curb and gutter, concrete sidewalks often. And just a general feel that made you feel like you were really into what would seemingly be a single family subdivision. Now, what's so great about these properties is that they were so overbuilt. They still last today in great condition because they were so well engineered. If the concrete today or back then would have been one inch thick they'd build two. There was really not a whole lot of focus met on making it cheap or the least expensive it could be, but the brilliant, the best it could be. So what are the factors of it? Well, the infrastructure of course, based on what I've just told you is extremely good. By these HUD era parks traditionally, you don't have master metered power. You've also typically got galvanized metal water and clay tiled sewer, both of which are completely fine. No problem there. So infrastructure is pretty done good.

Density is superior. Typically at this point in the movie, they were building much, much larger yards. The focus was on giving people a complete but less expensive version of a single-family subdivision. So they wanted to have larger yards for people to play, have pets, put up swing sets, just enjoy green space. Also, they always had a parking design, typically two car parking pads so you could park by your front door. So infrastructure was great, density was great, and the location of these is once again extremely good. Now at this point, cities are starting to maybe turn a little or ponder if they really want to have a plethora of Mobile Home Parks in their city, but nevertheless, you're still very early stage. You have decades to go of future growth by the time you hit 2020. So most of these properties are very, very well located.

We've owned a lot of these HUD properties and in some cases, the city grew around them. We own a Mobile Home Park who was actually in Wikipedia because the entire city of Glenn Heights grew around that initial development that was the first development in the city. So these HUD parks very, very attractive for investment. And then you go to the modern era, that was the modern era. It'd be parks that have been built since that HUD era, after cities started to lose their desire to allow new Mobile Home Parks to be built. Now, those of course offer great infrastructure because you're going to have PVC water and PVC sewer, typically paved streets, parking pads. Density is great because the density is much lower, typically seven units to 10 units per acre. But the real problem with the new properties is you just don't get that location because now you're having to go where cities will allow you to go as opposed to being in the middle and have the cities grow around you. So that's typically the problem.

Today, most cities don't want to have a Mobile Home Park in the city boundary. So they'll allow you to build something that is typically out in the county. So the most recent properties, despite the fact they have better infrastructure and better density, typically don't provide that award-winning location. So what does it all mean? Well, it means number one, that all Mobile Home Parks are a little different. They're all customized. They're all precious. Just like people, they're all one of a kind. But it means that basically unlike most any other sector real estate not necessarily do the modern turn properties represent the best value to you as an investor. I would venture to say that the best of everything I just described are definitely those Golden Age Properties, either generation one or generation two, either the pre, what I would call HUD era or the HUD era.

So the stuff from the '50s or '60s, and then stuff from the late '60s to the early '70s. So when you're out there looking at Mobile Home Parks to buy, to me it's always good to try to figure out the history. It gives you some semblance of idea of what you're looking like on infrastructure and the density and the location, but to not really cast any immediate judgment based on the age. When someone says to you, "Yes I have a Mobile Home Park and I think it was built in 1953," you might want to rejoice because that might have a really spectacular location. And if someone says, "Oh, I've got a brand new Mobile Home Park for sale that was built in 2010," I would perhaps be worried that it does not share the type of location that you are hoping for. Again, this is Frank Rolfe, Mobile Home Park Mastery Podcast. Hope you enjoy this brief discussion of the five different types of mobile home parks based on era and what the limitations and the advantages are. Talk to you again soon.