Mobile Home Investing Trumps Single-Family Houses

Real Estate Investing Single-Family Homes
1

I hope you enjoy our latest blog article:

Mobile Home Investing Trumps Single-Family Houses

Your comments are always welcomed!

Jeanne

2

Interesting, but a little bit one-sided and optimistic if you ask me.

Also, what about things like the SAFE act and other regulatory issues that were not mentioned re: financing?

I’ve been doing LD’s for many years, and frankly, no longer have a burning desire to own a park. Not to say I wouldn’t jump on a good deal, but I’m not a motivated buyer. I see a lot of issues with the model, particularly when it comes to the long-term ownership and exit strategy for such a property.

3

Jeff,

I am not a MH or MHP investor. That said, I am still interested in hearing more.

What is putting you off MHPs?

4

Hi John,

It’s not one thing in particular that’s putting me off MHP’s. It’s more of a function of the aggregate issues I see with MHP ownership. And nothing new that hasn’t been mentioned here before:

  1. Lack of available late model (and new) homes to replace the ongoing obsolescence of older homes (both in terms of size and floorplan).

  2. Gov’t regulations impacting a MHP owner’s cost and ability to offer financing on used homes, which is critical unless you plan to just rent the homes.

  3. Many areas, mine included, suffer from what I would determine to be unreasonably high lot rents, resulting in less demand for these units and the general de-valuing of the home on a retail level. (and on edit: high lot rents lead to an overpriced MHP)

  4. Some areas, mine especially included, seeing an aggressive wholesale marketplace created (in which, I am participating). This drives up the value of used homes even further, and from an MHP owners perspective, increases costs as he must either buy units before they are pulled out, or purchase used ones from wholesalers like me to fill empty lots.

As I said I would buy a MHP (in an instant, actually) for the right price, especially with my familiarity with the business. But let’s just say I’m no longer excited about buying that 10 cap park and turning it around, or holding it long term. Never say never, but I am no longer actively looking for a park.

I hope that helps clarify the reasons for my original comment. There are some out there who disagree with me and will give you four other reason why they are great. The good news for them is, they have one less buyer to compete with!

5

Jeff,

Thanks for the reply.