Mobile Home Park Mastery: Episode 177

Why Parks May Be The Most Valuable Land In Any City

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Mobile home parks may just sit on the most valuable piece of land in any city they serve. A bold statement? Not when you understand the rarely-discussed value of holding the key to infinite zoning. In this Mobile Home Park Mastery podcast we’re going to explore the amazing land value and potential that virtually all mobile home parks possess and give real-life case studies to support this argument. Like a 3-D puzzle, you may be shocked to learn the reality behind this claim and the implications going forward.

Episode 177: Why Parks May Be The Most Valuable Land In Any City Transcript

Warning! Mobile home parks may be the most valuable piece of land in any city they serve. Do you believe that? This is Frank Rolfe, the Mobile Home Park Mastery Podcast. And yes indeed, mobile home parks just might be the most valuably zoned property in any city in America. Now, what am I talking about? How does that make any sense at all? We all know that surely, land zone for an office building land zone for some other use, surely has to be higher than a mobile home park. Just a bunch of trailers sitting on land. How can that be that valuable? Well, it is. And let me explain to you why often, a mobile home park holds the key to some of the most valuable land in America. Let me start with an example. I owned a mobile home park once in Lake Worth, Texas. It's up northwest of Fort Worth.

It was a very, very ugly property. When I bought the property, the only thing that saved it from being criticized frequently was the fact that it was hidden from view to almost the entire city. There was thick jungle of green all the way around it. A thicket, trees and bushes. Not really unattractive. And the entrance to the park was disguised because there was a 711 right in front of the entrance. 99.9% of the city had no idea there was even a mobile home park located there. They either saw a 711 from the highway, or if they went down the secondary streets, all they saw was what appeared to be a green Arboretum or perhaps even more like a green jungle. Operating that mobile home park for years, no problem at all. One day, they decided to expand Jacksboro Highway and they tore down the protective cover of that 711 and suddenly the whole city could see the mobile home park.

Well, almost immediately, I received a call from the city from the Zoning Department and they said "your mobile home park has to go. We are working on getting some very, very important, big box retail stores to locate on Jacksboro Highway and you're not helping much. People are coming in, our chamber of commerce is driving people around, telling them how great the city of Lake Worth is becoming and then here's this hideous mobile home park right there on the highway. And you just killing us by being there." Well, I said, "what do you want me to do about it? It's a mobile home park. It's all about affordable housing. Yes, they are older trailers. They're not really in bad repair, but yeah they don't look like big mansions, but what's the option?"

"Well, the city says, "here's the deal. We'll give you any zoning you want, to get out of town. If you will agree to demolish that mobile home park, once the property is sold, we will zone in anything you want. And you can put it on the market with any broker you want. With the only understanding that is, once it sells, the park gets demolished." I thought about it. I asked people "what's the most valuable zoning in all of Lake Worth, Texas" and they said, "well, the most valuable zoning would be... It's like a RR Regional Retail Zoning. And you'll be a corner on the highway. And that's where the value is." I went back to the Zoning Department and said, "well, someone told me the most valuable zoning I can get, is this RR Retail. But apparently you don't grant it very frequently." "We'll give it to you." "Okay. And what about the concepts of spot zoning? Because I'm in a residential...

"No, you can have it. Don't you worry." And that's exactly what happened. Lo and behold, just to get rid of the park, the city rezoned it. No questions. All the neighbors loved the idea and I sold the park and the park was scrapped. Years later, I owned a mobile home park in Springfield, Missouri, right on the sunshine highway. Those of you who go to Bass Pro Shop, we'd like to know the tribute the Bass Pro Shop began on Sunshine Highway there in Springfield, Missouri. And it just started in a gas station. The guy was selling bait and fishing rods out of a gas station. And that's where it all began. Not too far from the park in fact. Didn't have a lot to do with the story, but gives you a little flavor on Sunshine Highway. It was an old highway, but had suddenly new life in it.

And it really turned the corner when they built a new Super Walmart on Sunshine Highway. City was very excited about it. They even expanded the road there, traffic lights all kinds of work. They go ahead and they put in that Super Walmart and suddenly, all these signs popped up. Land for sale. I called one of them just to find out what my land on Sunshine Highway was worth. I wasn't near the Walmart. I was a couple miles down Sunshine Highway. But the very first broker I called and I asked, "Hey, what's the land going for per square foot?" And he said to me, "why do you want to know?" And I said, "because I've got that mobile home park on Sunshine down the street." And he said, "I knew that mobile home park, I got someone who wants to buy your frontage."

I said, "what will you give me for it." "May be five bucks a square foot." And again, this was about 20 years ago. That was a good price. I said, "why would he want to buy my land in front of the mobile home park?" He said, "that's simple. You see all this land, I'm brokering all around the Walmart. These are giant farms and things where the minimum you can buy is an acre upon acre. I got a Harley David Superstore." He just wants to buy enough to build a Superstore.

And the way it works in Springfield, the front 400 foot of depth of the land is automatically zoned commercial. We don't even have to get rezoning. All we have to do is just change the property, replan it and subdivide it and we're good to go. That sounds easy enough. I call the Zoning Department. "Is this true?" He Said, "Yeah, you're already zoned commercial to 400 foot depth. Your whole frontage on Sunshine times 400 deep, that's your land. You don't have to do any rezoning. You're good to go. Yeah. We'll subdivide your no biggie." We did the deal and sold the land off to Harley Davidson. I thought that's pretty neat. And we took the mobile homes that were on the front. Most people didn't want to be on the front. It had all the road noise from Sunshine Highway. But we still had some occupied... lots of terrible... We had just enough vacant lost to move them all into the back.

That's the end of the movie. The park is now full. Sold off the front. And the broker calls me and says, "well, now that I got that done for you, let's get onto the big ticket item." And I said, "I don't have any other land available. That's it?" "No. You do. You have your mobile home park."" Now wait a minute. That mobile home park is a hundred percent full." And the guy said, "Yeah. But I can get you way more for the land at the back than I did at the front." "That makes no sense. I know enough about land, to know that the land that the front is always more valuable than to land at the back. Commercial use is always more valuable than residential." But he said, "no, you're not thinking of it clearly.

See, I've got this customer who builds very high density, apartments, multistory apartments. They've been trying to build them in Springfield for years now, but they always get denied. But your land holds the key, because the citizens of Springfield want to get rid of your parks so bad. They'll give you any zoning you want, just to get rid of you." Well, it hearkened back to what I learned earlier in Lake Worth. I thought, "you know what? This just might work." We forged a contract, subject to zoning. They put up a whole bunch of earnest money. And if I got the zoning, they had to go ahead and close. And as far as the residents in the park, they had to deal with him. I was not there. I was just going to leave the building with my proceeds from the sale. We went to the rezoning. Now they had notified all the residents within, four or 500 feet of the mobile home park, that there was going to rezoning to put in this high density apartments. Now, bear in mind. These people had showed up in droves earlier to shoot this concept down.

And here we are trying it again, seems like utter madness. All these homeowners to send it on the zoning meeting, it was packed. It was standing room only. I had no idea what would happen. First off, the land developer went up there with his architect and talked about what they wanted to build and all that. And then the City Council said, "is there anyone else in the room who would like to talk about this project?" Well of course, there were hundreds of people. The first one went up and said, "yes, I represent the homeowners on the East side of the property. And even though they absolutely hate this concept, they like it better than the mobile home parks. And we're fine with it." And that happened over and over and over. In fact, not one single person was there to talk against the development.

All they wanted to talk about was how great it would be to get the mobile home park removed. Lo and behold, they voted it in. That was the end. Transferred the title over to the developer. That was it. What were my lessons learned from those two encounters? Well, mobile home parks hold a magical key because most cities hate them with so much a red hot desire to get rid of them. They will grant virtually any zoning anyone wants just to get that park destroyed. And when you overlay that on the simple fact that in America today, there are alternative uses for land, that are sometimes very valuable.

I can therefore say that perhaps the only person in the room who can get those zonings, they get shot down over and over are the mobile home park owners. Simply the concept of trading the mobile home park for another use, regardless of what that use is, maybe all you need to get over the top.

I had a developer call me, who'd figured this out. Out in South Carolina. This guy called me. He was a big home builder. He found me on the internet, found my phone number as many people do, called me up and said, "I got a weird question for you. I'm trying to build a giant development. And there's some pushback from neighbors because I won't be going with this big lots as they have. So must be higher density. And I was thinking of including in my package to the city. I just buy up this really nasty 30 space trailer park. This contiguous to where I want to develop. And just dangle that as bait. Approved me, I'll tear the park down." I said, "Yeah. Well you figured it out. Absolutely correct. You buy that little nasty beat up trailer park. And I bet if you go to them to rezone your giant tract to single family at higher density than the neighbory homeowners would like, they'll still vote you in because they get that terrible old dirt road, trailer park demolished."

Hey, guess what happened? That's exactly what happened. The bottom line to all this is, when people talk about mobile home parks and higher rents and all this stuff. And we talk about... Well, we have alternative uses for the land. They're not thinking clearly, because we don't just have the normal suspects as an ulterior use. We've got anything that we want, because to get rid of us. Cities will literally grant virtually any zoning at all. You could convert a mobile home park probably into a high-rise office building next to a subdivision. Simply, because they want to get that trailer park torn down. That's when people should not take lightly. When people are talking about harassment of mobile home park owners. The simple fact that if we really wanted to develop. Boy, could we ever. This is Frank Rolfe, the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.