A Mobile Home Park may not be your first thought for an investment in real estate. However, you would be wrong to dismiss it.
Andrew Lanoie, with Four Peaks Capital Partners, real estate investment strategy focuses on the Mobile Home asset class. They identify parks that meet the underwriting requirements, make offers, acquire and manage parks across the USA.
The mobile home park marketplace is fractured, and unorganized. There is a limited supply of mobile home parks and new ones are not being built. The sellers are many times legacy owners, or have owned and managed the park for decades. Management is rarely professional, and consequently, there are opportunities to increase efficiencies and improve the net operating income.
The asset class of Mobile Home parks are essentially affordable housing. Yet, it provides the opportunity for ownership and the expression of pride of ownership.
The fractured marketplace allows buyers to engage directly with owners and sellers. Banks are not always excited about lending on a park. The owners who have owned the parks for years often have no debt, which makes seller financing an option to sellers not wanting to give up the monthly income.
The lack of professional management provides multiple opportunities for improvement. The tired owners likely have some vacancies and are likely charging lot rent that is far below market rent.
Transitions always provide a shock to the existing residents, but raising the rent is easy. Filling the vacancies is easy when you partner with a company that specializes in mobile home financing. This will all you the opportunity to market and attract potential residents that would otherwise be renting a two bedroom apartment to own a home of their own.
Mobile home park residents rarely have resources significant enough to pay for moving their mobile home from your park to somewhere else. This creates long term residents.
When residents fall into financial hardships, this often provides opportunities for park owners to acquire the home left by the resident for very little. This can be sold as is, renovated and held as a rental. Most park owners prefer to sell the home and just rent the space.
Four Peaks Capital Partners is an investment firm focused on acquiring mobile home parks.
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