Good time to be a Mobile Home Park Buyer?? - Posted by Matt

Posted by Bruce on April 20, 2006 at 08:16:56:

I believe all of those things Karl. Feel free to drink and answer any and all questions. Maybe not in that order.

Good time to be a Mobile Home Park Buyer?? - Posted by Matt

Posted by Matt on April 19, 2006 at 18:05:44:

I live in Utah and have considered doing some Lonnie deals to build the skills for rehabbing a Mobile Home Park. Can anyone give advice as to how the Mobile Home Park market is these days(is there an over supply of parks or heavy interest from institutional buyers)?

I understand that each deal needs to be evaluated on its own merits–but can anyone speak to the overall fundamentals of the market? Do you believe there are a significant number of turnaround projects available at reasonable prices. I’d be interested in hearing from any of you who have,are,or will be looking for parks to buy.


Re: Good time to be a Mobile Home Park Buyer?? - Posted by Daphne Lowe

Posted by Daphne Lowe on April 22, 2006 at 12:50:51:

In answer to your first question, I don’t think there’s an oversupply of MHPs. In some areas there is strong redevelopment pressure, but even where that’s not present, most localities only grudgingly accept existing MHPs. There are very few places where new parks are being constructed.

The answer to your second question is yes. Interest in RE is up generally, including institutional investors looking at the MHP segment. They’re mostly interested in well run (not turnaround) 100+ space parks. I don’t think they’ll have much impact on us small scale investors.

From what I’ve been able to gather talking to folks who’ve been at this game awhile, the MH industry is recovering from its nadir, the result of years of imprudent underwriting and rampant production. Interest in the MH industry has come back, in part thanks to Mr B. With lots of eyes watching his every move, industry visibility has been elevated. Chattel lending is once again on the rise. In most areas, the availability of repos has declined of late (bad news for those of us scouring around for deals, but good for the industry).

On the demand side, the current credit bubble (low rates and liberal lending) has lowered the threshold to homeownership. This has siphoned off the best MHP residents (as well as apt renters). For better or worse (depending on your perspective) I think we’ve turned the corner. As interest rates rise, home appreciation slows, foreclosures increase, and banks tighten their lending standards, the tide will reverse itself and MHPs will benefit from all this. Various economic factors- a decrease in home affordability, recession (lower incomes), or inflation will increase the quality of people who seek residence in MHPs. The demographics of MHPs will improve with the higher socioeconomic status of its residents.

Unfortunately for MHP purchasers, prices of communities are also up. This may change if cap rates (which are a function of interest rates) rise. Alternatively, cap rates may stay low if attraction to this asset class continues to grow, which may happen if for example, performance increases (which I think will occur due to the above mentioned economic factors driving demand and the supply constraints).

I think this is a very good time to get into the biz, especially for those of us who are capitally challenged. Right now its relatively easy to get money (whether from investors, financial institutions, or equity from holdings) to launch ventures. Now is the time to build connections and gain experience so that when the money supply tightens up you have a basis for continuing.

That’s my take on it.


Re: Good time to be a Mobile Home Park Buyer?? - Posted by Steve-MO

Posted by Steve-MO on April 19, 2006 at 19:31:04:

It is very dependent on your marketing area. The single wide financing market is still not competitive enough to have jump started a demand for pads. The speculation is that this will soon change but that speculation has been there for over a year now. However, in our area there is still a good demand for low cost housing and we are keeping full by providing financing (Lonnie deals).

We have eight parks at this time and we’re always looking for the next project. There is tremendous opportunity if you’re willing and able to learn and adjust to your current market.

Bruce? Bruce? - Posted by Steve-WA

Posted by Steve-WA on April 19, 2006 at 18:21:46:

would love to hear your teachings . . .


Re: Good time to be a Mobile Home Park Buyer?? - Posted by JC

Posted by JC on April 21, 2006 at 18:05:12:

Wow… 8 parks

How long did it take you to get there, important skills/knowledge/techniques that make you successful owning several parks and keep finding good deals?

Re: Bruce? Bruce? - Posted by Bruce

Posted by Bruce on April 20, 2006 at 06:08:47:

Wow!! I read the comment from Steve (MO) and got a little excited when I read it. After reading it the second time I realized that the response made too much sense to have come from you. I was right. Anything else I can help ypu with Steve? Perhaps a new coloring book for the afternoon session?

Re: Good time to be a Mobile Home Park Buyer?? - Posted by Steve-MO

Posted by Steve-MO on April 21, 2006 at 22:28:07:

We purchased our first park about 10 years ago. Since then, we have purchased a park about every year. We started at the very bottom. Very little start up money and very few construction skills. I learned every aspect of both before hiring anyone. Had a chance to go through some of the glory years when there weren’t enough pads for all the new homes being sold. When the financing dried up, we quickly started searching for ways we could keep all of our pads occupied. I was fortunate enough to stumble upon this site and began working “Lonnie Deals” to keep vacancy low. Amazingly, this became a great second business with a better return than our parks. We normally have around 35-40 contracts at any given time. I am and have always been excited about this business so I study it and am learning something new all the time.

Your comments are uncalled for - Posted by Karl (Oh)

Posted by Karl (Oh) on April 20, 2006 at 08:05:33:


I find your comment about the coloring book insulting. I happen to know for a FACT that Steve has moved on to big red balloons.

By the way, I don’t own a park yet, but I drink beer with a bunch of guys that do. I believe that makes me qualified to answer any and all questions.

Karl Kleiner

Re: Good time to be a Mobile Home Park Buyer?? - Posted by JC(CA)

Posted by JC(CA) on April 21, 2006 at 22:59:31:

Thanks Steve.

I am looking for my first (small) park. No still haven’t gotten any Lonnie deal yet here in So CA. I am looking out of state for turnkey park with little maintenance, good occupancy, maybe use p/t PM or property management for out-of-state. I will definitely do Lonnie deals or l/o once I purchase my park. I already have the Lonnie books, and Ray’s MHP deal.

I know I will have a lot of work to do and things to learn but I am willing to pay the price for financial freedom and more time to spend with family and friends.

I actually went to a small University in Kansas and had gone to MO(I believe you live there) Joplin nad Kansas City.

If you have any good info on deals that you don’t want, I am interested to here. More success to us all.