Mobile Home Park Investing Articles

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Scarcity = Value. And There’s Nothing More Scarce Than Mobile Home Parks

Gold is at around $2,500 per ounce right now while silver is around $28 per ounce. Why is gold more valuable than silver – about 100 times more? Because gold is much more rare. In this same manner, mobile home parks are the rarest of all commercial real estate, and this one fact has created extreme wealth for owners simply by having the title to a mobile home park in their name. Why are parks so scarce and how does this manifest into financial gain?

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How To Make Money From The Current U.S. Interest Rate Cycle

Weather forecasting is all about taking past events and applying them to future conditions. In this same manner there is a tremendous amount of predictive science possible from a simple historical interest rate chart from the U.S. Federal Reserve. Let’s first make some significant observations:

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The Top Four Signs of A Troubled Mobile Home Park Sewer System

When you own a mobile home park you are in charge of a large water and sewer system – whether you like that or not. That's because virtually all mobile home park water and sewer lines are on your private property and the utility provider has no responsibility over them. Although most mobile home parks have little problem with this issue – except for the occasional water leak or sewer clog – there are certain cases of mobile home parks that have extreme sewer problems and smart buyers will want to get price reductions to accommodate the work needed to fix them or avoid them altogether. So what are the top four signs of a troubled mobile home park sewer system?

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When The Tide Goes Out You See Who’s Been Swimming Naked

We get asked frequently about when – and if – mobile home parks ever end up in such bad financial problems as to come to auction in foreclosure or in a distressed sale format. While most mobile home park owners tend to be on the conservative side due to decades of negative stigma, and most banks are only willing to lend at about 70% LTV based on pessimistic underwriting, nevertheless there are some operators who get in trouble through a combination of too aggressive lending, seller financing without a plan when the loan comes due, or basically no management ability or plan. Here’s a primer on how these deals come to market and how to take advantage of them.

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Warren Buffett Disobeyed His “Moat” Mantra And Look What Happened

Warren Buffett’s Berkshire Hathaway bought around 63 million shares of Paramount in 2022 and then lost around 50% on that investment in only two years. Buffett admitted that where it all went wrong was in relaxing his standards regarding a “moat” – a wall that protects a good business from competition. Paramount had no “moat” and the competition destroyed it with shares plunging from $30 to around $13. We have always adhered to Buffett’s “moat” mantra and that’s why we’re in the mobile home park business.

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Rethinking the Renaming Trend in the Mobile Home Park Sector

In recent discussions within the mobile home park sector, the term "land-lease communities" has surfaced as the newest contender for renaming what many still call a mobile home park. This industry has seen its fair share of rebranding efforts, from "coach park" to "trailer park," and now to "manufactured home community." Each iteration aims to shake off old connotations and refresh the image presented to tenants and investors.

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Important Life Lessons From The Galveston Hurricane Of 1900

In August 1900, Galveston Island, Texas suffered the worst natural disaster in U.S. history, with over 10,000 killed in a single hurricane. This crisis could have been largely avoided except for the flaws in human nature that we see bringing continual losses in the stock market over the past century. Here are the life lessons from the Galveston hurricane that apply to investing and should be avoided if you want to be successful.

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Balancing Acts: Managing Tenant Relations and Rent Collection for Landlords

Evictions often paint landlords in an unfavorable light, suggesting they lack compassion. Yet, this simplified view doesn’t fully capture the true dynamics between property owners and tenants. Let's consider why eviction can be a necessary part of property management and how landlords can handle it thoughtfully.

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Bing Crosby Owned A Mobile Home Park?

Yes, and so did George Burns, Gracie Allen, Barbara Stanwyck, Greer Garson, Jack Benny, Claudette Colbert, and Danny Kaye. Even Lucille Ball owned a mobile home park. And then there’s Stanley Marcus – the founder of Neiman Marcus – who owned a mobile home park in Dallas. Effectively, all the stars and notable people of the 1950s owned mobile home parks at one point. Why?

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Navigating the Challenges of Acquiring Mobile Home Parks with Park-Owned Homes

Acquiring mobile home parks often presents a unique set of challenges, particularly when a significant portion of the homes within the park are owned by the park itself. The key to successfully navigating these transactions lies in the delicate balance of negotiation, especially regarding the valuation of park-owned homes. While some parks may have a negligible number of such homes, making little impact on the overall deal, others can feature a substantial percentage, ranging from 20% to over 50%. This scenario places the valuation of these homes at the forefront of the negotiation process.

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Mastering Maintenance: The Art of Mowing in Mobile Home Parks

Mowing a mobile home park is much more than a cosmetic chore; it's an essential part of park maintenance that, when done properly, can enhance the community's aesthetic and keep residents happy. Unlike desert parks where the landscape takes care of itself, most parks require regular grooming. As we delve into the grassy expanse of mobile home park maintenance, let's mow down the details.

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Maximizing Profits from Mobile Home Parks in Today's Market

In the vast landscape of real estate investments, mobile home parks stand out for their unique potential for profit. Whether we're talking about modest-sized parks, sprawling complexes, or RV parks, the most lucrative investments share common characteristics. As we navigate through an evolving market, here's an updated guide to making money with mobile home parks.

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Unlocking Seller Financing Opportunities in Mobile Home Parks Today

In the landscape of real estate investment, mobile home parks (MHPs) hold a unique position, distinguished by the prevalent opportunities for seller financing. This financing option remains a compelling advantage, especially in an era where traditional bank loans can be elusive, allowing investors to navigate through challenging financial terrains.

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How Do You Prepare For Stagflation? Very Carefully.

The last time the U.S. faced “stagflation” was 44 years ago under Jimmy Carter. I should know because I was there. In fact, I was 19 years old when it arrived and I had a summer job standing in lines at gas stations all day long for an advertising agency owner who tried to keep his car full of gas so that he could go to meetings. It was during a period of gas rationing which was just one part of the complete collapse of society as we knew it. The general tenor of the period was desperation and disbelief and we all knew that Carter was so bad at his job that it would be a miracle if we survived until his term ended. Fortunately, Reagan stepped in and saved America. Sound familiar? History has literally repeated itself as discussed in this article.

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Mastering the Art of Negotiation in Mobile Home Park Acquisitions

In the vast landscape of negotiation advice, a common misstep is to oversimplify the process, especially when it comes to substantial investments like mobile home parks. Unlike the transactional approach often depicted in media or generalized negotiation guides—which can range from selling everyday items to negotiating multi-million-dollar deals—the reality of negotiating a mobile home park purchase is far more nuanced.

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Navigating the Challenges of Difficult Tenants: A Modern Guide

In the world of property management, encountering challenging tenants is an inevitability that many of us dread. These individuals test the limits of our patience and policies, often seeming to revel in the chaos they create. From incessant complaints about trivial matters to outright rule-breaking, their actions can significantly impact the harmony and operational efficiency of a mobile home park.

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An Unexpected Affirmation from Warren Buffett

Warren Buffett hasn’t been buying much lately – noting that the stock market has no bargains -- but apparently, he quietly has been loading up on housing stocks – placing big bets that housing is the strongest part of the economy going forward. So why is Warren Buffett putting so much money into the U.S. housing industry at a time in which he earlier declared that “the incredible period” for the American economy has ended and projecting lower net income for all businesses going forward?

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Next Year Will Be The Start Of The Blue Collar Renaissance – And Mobile Home Park Owners Will Prosper As A Result

Recent studies have found that 4 out of 10 companies are laying off workers in 2024, with the vast majority “knowledge workers” (people who are paid to think) who are being replaced by Artificial Intelligence (AI). While that will certainly be the catalyst for the 2024 Recession it also ushers in a new Megatrend that you better be prepared for and one that will be among the largest of this century: the replacement of “knowledge worker” jobs with AI. And there will be major winners and losers from this transformation.

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Mobile Home Park Bargains Are Still Out There!

I was an economics major at Stanford and one of the core principles of capitalism is market efficiency. In a perfectly efficient market, there are no great deals and little opportunity outside of the regular small advancements brought on by inflation. Everyone has perfect knowledge of every deal on the market and then bid them up to the point in which there is no profit. You are seeing that right now in the stock market where all key indexes are lower now than in January. Indeed, the only money you can make in America is in “inefficient” markets in which competition is restricted due to a lack of complete knowledge by all competitors – the type of efficiency that can then ruin any opportunity for profit.

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Why Mobile Home Parks Are Better Than Gold

Robert Kiyosaki – the author of “Rich Dad Poor Dad” from 1997 – has recently turned to pitching investing in gold as the best hedge to the end of America. We disagree with that. Mobile home parks are definitely a better investment option than gold if the topic is best defense against the collapse of the U.S. economy. But let’s break that down into actual statistics to prove that argument.

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Seizing the Decade-Long Window for Mobile Home Park Investments

Mobile home park investments present a unique opportunity that many ask about—how long will this favorable market last? From our perspective, this golden era of purchasing mobile home parks likely has about 10 more years in its lifespan. That is, of course, contingent on a number of factors that none of us really know but can make educated guesses on.

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Apartments Have Hit Their Rent Ceiling. What’s The Mobile Home Park Lot Rent Limit?

It would appear that apartment rents have finally achieved terminal velocity with aggressive increases during the pandemic coupled with a weakening U.S. economy. In some markets rents are starting to come with small discounts (1% to 5%) or a couple of free months. Of course, that’s on an average U.S. rent of over $2,000 per month. So if apartments have finally hit the “top” where do mobile home park lot rents stand, and are they approaching that limit?

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Vending Machines Vs. Mobile Home Parks: Same Moral

I shot this photo yesterday at our local Walmart down in Perryville, Missouri. I assume it’s the same nationwide. You have three vending machines that dispense three different product lines. And the middle machine – selling Pepsi products in plastic bottles – offers soft drinks for $2 while the other machines selling cans of Coke and generic brands are only $1. Clearly, there must be demand for the $2 Pepsi or Walmart would remove the machine. So how can Pepsi get $2 when Coke is only getting $1?

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Scholar Series: The Good Ol’ Days

In 1958 when Marge didn’t get pregnant as hoped, I was drafted into the army, but got two breaks. I was sent to Alaska rather than Korea. That meant Marge could come up and live with me in Fairbanks if we could afford housing. We couldn’t. Apartment rent was so high there were more mobile homes per capita than anywhere.

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Mobile Home Parks Are The “Farmers’ Market” of Real Estate

If you’ve ever been to a “farmers’ market” you know that it offers superior selection and pricing to what you can get at the supermarket. And the mobile home park industry is like a giant “farmers’ market” in the way it’s structured and the opportunities that exist if you simply take advantage of the opportunity to shop there.

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