Podcast Episode #16: Mobile Home Parks and Risk!

On today’s episode, Glenn and Jason discuss Chapter 7 of The Mobile Home Park Manifesto. It focuses on the risk exposure and management necessary in the mobile home park arena. To be successful in most entrepreneurial endeavors, some level of risk is unavoidable. But going out on a limb, especially in business, can be frightening even for the experts. Is the risk truly worth the reward? The Mobile Home Park Expert believes so. Here’s why, along with some pro tips for getting comfortable with risk-taking.

A fresh perspective on risk

One of the first steps to managing risks is understanding its inevitability. Due diligence can only go so far. Just like there’s no perfect person, there’s no perfect process either. “The reality is, most people regret something they overlook before they close the deal. There’s always something you didn’t… check out because you didn’t know what you didn’t know,” says Glenn. This goes especially for beginners.

The three biggest risks when entering the mobile home park space aren’t even property. Municipality, management, and funding all present possible failure points without extensive due diligence. The next biggest risk comes with verifying income and expense streams.  Next is utility systems and tenet bedding, and more considerations the further you go!

Choosing the risk of mobile home parks

So why choose the risks of this sector? It’s a fair question. Many newbies of the industry are at disadvantage when it comes to managing risks. Granted, there are many recommendations for addressing these, but most rely on experience.

For instance, a strong pipeline of task distribution bolsters efforts and reduces risk. This usually doesn’t form, though, until after you’ve broken your teeth in the business a bit. Keep in mind also that every new deal will bring its own unique challenges. Again, the know how for dealing with these issues comes with time and intention.

Mobile home park risk management takes preparation

In the mobile home world, risk is around every corner. Like anything else, success hinges upon preparation. One recommendation is to keep a running list of due diligence and intelligence items. Keep them around to constantly build upon, checking and adding boxes as you go.

To date, there are no services that generate and/or manage these lists. That can make the effort largely independent. Some of the outlets that you’ll collaborate with will have their own lists though, which can help too.

Vetting property managers with risk in mind

Another way to manage risks comes in the form of property managers. To note, these may prove difficult for smaller parks to come by. But for parks with 100+ spaces and “three or four hundred dollar lot rents,” it’s a much likelier possibility.

This will run park owners anywhere from $40,000-$50,000, or 5-10% of their revenue. As a result, you’ll have a team on hand managing day to day operations. Once in the position, this can be a wise investment that lightens at least some of your load.

If you’re interested in mobile home parks, risk is inevitable. The space is full of twists, turns, and the unexpected. For newcomers and vets alike, read The Mobile Home Park Manifesto for tips and tricks of the trade. To learn more on the pitfalls to avoid when assessing risk, check out our previous episode here.

Podcast Transcript

Jason Sirotin:
Hello and welcome to the Mobile Home Park Podcast. I’m Jason Sirotin, here with my good friend Glenn Esterson Glenn, how are you?

Glenn Esterson:
I’m doing fabulous today. I hope you’re feeling better and up and running.

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