Winning And Losing In The Mobile Home Park Market: Podcast Episode #9

 

 

For those seasoned veterans in the mobile home park (MHP) industry, there are a lot of stories to share. Some deals go like clockwork. They’re easy, fair and everyone comes away happy. Others involve missteps, sometimes costly ones. The one consistency is that each purchase or sale of a MHP is a learning experience. For first-time investors, or those thinking of getting into MHP ownership, hearing about the experiences of others is invaluable, but what makes a deal a win and what makes it a loss?

 

What a winning park can look like

The first step to a winning park is the purchase price. Compared to the market as a whole, what kind of deal are you getting? The next win is the state the MHP is in when you buy it. How full is it? What repairs do you have to address right away? If occupancy is low, you’re winning the more vacant lots you fill. If rents are below market, you’re winning when you add enough value to convince tenants to pay more without complaint. You may also need to make smart decisions about what to do with your vacant lots to make them more attractive. The answer to increasing revenue may be to bring in homes on your own to the lots and then sell them to tenants.

 

All of these improvements and updates come together for the ultimate win in MHP ownership, selling it. If you can improve the park enough to make a significant profit on the sale of your park, you’ve really won the game this round.

 

Why losing happens too frequently

The biggest drawback to MHP ownership is that people don’t talk enough about the struggles they encounter. The parks that you ultimately lose out on provide learning experiences as well. Mistakes you make with one park you most definitely won’t make the next time you invest. 

 

One surefire way to lose out on a park is to be a stubborn owner. This is especially true when it comes time to sell your park. Every owner has their ideal price they’d like for their park — the sweet spot — but you can’t hold on to that number so tightly that you miss out on the sale completely. Park owners fail when they can’t sell a park they want to get rid of, so be flexible in pricing, even if it means taking a little less than you want.

 

Another way to lose is to neglect your parks. Even if you live far away from them, don’t think they’re going to come together without some kind of supervision. If you can’t be at the park regularly, at least at first, carefully vet a property manager who understands MHPs, is trustworthy and relates well to the tenants. Keep track of them, double-check that rent is coming in and that requests for repairs are being addressed. Nobody wants a park that’s on the verge of destruction, and you don’t want to own a park that gets shut down by the city, there’s no profit in that.

 

Where to find your own winning deal

New mobile home parks are constantly coming onto the market. If you’re new to the MHP market or just looking to expand the number of properties you own, staying on top of listings helps. It’s even better when a listing has already been reviewed by an industry expert. With listing information on the Mobile Home Park Expert website, you can see vetted opportunities selected by the Expert himself, Glenn Esterson. Check out his podcast to learn about a few currently available and then see what else is online. New listings are added regularly.

 

Podcast Transcript

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

Glenn Esterson: Doing fantastic. How are you doing today, Jason?

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