Posted on 02/11/2017 10:40:46 PM PST by 2ndDivisionVet
The mobile home park has been around as a real estate sector for over half a century. However, it has remained in complete obscurity except for a few lucky investors and such heavyweights as Sam Zell. But 2017 is the year in which mobile home parks will finally be identified for the wonderful business models that they are, as well as the prime solution to the affordable housing crisis in America. And this attention is coming from a number of sources.
The U.S. government
After being ignored by the Federal Government for the past 50 years, that period of silence is ending. In 2016, Congress passed H.R. 3700, which will allow Section 8 vouchers to be used to buy mobile homes beginning in mid-2017. That’s a huge step, as there are roughly as many people in Section 8 apartments in the U.S. as there are in all of the mobile home parks in the U.S. combined. In addition, Fannie Mae and Freddie Mac have introduced new programs to finance mobile home parks that are more attractive than any other offering. Finally, there is talk that Fannie Mae and Freddie Mac may start working on making it easier for first-time homebuyers to buy a mobile home, by taking a more active role in re-purchasing these loans. It’s a great year for the industry legislatively.
The media
Although the media has for decades relegated the very concept of the mobile home park as something to ridicule – through such shows as COPS, Myrtle Manor and Trailer Park Boys – that attitude is shifting as a result of the very serious issue of housing those of lesser incomes. The affordable housing crisis in the U.S. is a huge news story, and the nation’s newspapers, magazines, television stations and on-line sources are beginning to look past those old stereotypes and see the bigger story: that mobile home parks allow people to be homeowners and have a nice yard and neighborhood for a fraction of the price of single-family and multi-family options.
Private investment groups
There were three $2 billion transactions in the mobile home park sector in 2016: 1) the sale of Carefree to SUN (a U.S. REIT) 2) the sale of Northstar to Brookfield (a Canadian REIT) and 3) the sale of YES to GIC (the sovereign nation fund of Singapore). Clearly, the mobile home park industry is poised for massive consolidation. The Carlyle Group – the largest private equity group in the U.S. – already owns over 3,000 lots and is buying more. These transactions give incredible credibility to the industry and helps it become more mainstream.
Conclusion
2017 is looking to be a pivotal year for the mobile home park industry. It already has the highest yields of any form of real estate, but it has long lacked respect. This year that missing element is coming into focus, and it’s an exciting time to be involved in the birth of a mainstream real estate investment arena. If you are not currently investing in mobile home parks, you should definitely investigate this opportunity before it’s too late.
I don’t, but who knows what the future may bring? I don’t have any problem with them.
In before the first Britney Spears joke.
They’ve been shutting out trailer parks in the cities around here.
It’s long been known that MHPs are potentially great investments, but they are definitely not trouble free.
It’s kind of a special form of real estate that has zero upside other than people bailing out and paying fairly exhorbitant rent on the ground space. Different from mfd homes, but those too generally have almost no upside and can be tough to get out of.
I’ve been in and around plenty of mfd homes that look fine. Very non liquid.
My home was manufactured. By a builder. Did a fine job.
Using Section 8 vouchers to buy a mobile home is going to succeed just about as well as no doc loans to buy a site built house. In far too many instances, it won’t be maintained, the payments won’t be kept up, there will be no equity because of depreciation due to the undesirability of the neighborhood. Even Section 8 people looking to buy won’t want to live with a bunch of Section 8 people, otherwise they’d be content where they are. This has boondoggle written all over it, I just have to wonder who benefits. Somebody does, it’s just not the people buying these things. No love lost on the mobile home manufacturers either, I suspect. So, look to finance and government in collusion for the culprits, as usual.
If mobile home parks are flourishing, it may be due to the government NOT being too heavily involved in them. Plus, there is one notch even lower on the “home front” which is living out of an RV. Selling most of your possessions and existing in a travel trailer is not a bad way for the elderly who don’t want to be tied down by property issues.
Plus, it affords you the ability to vote in multiple states. ;P
I don’t, but I have an unexplainable love for mobile homes, especially the quality built older models. If I didn’t live in tornado alley, and if I were younger, I’d probably get a little piece of land and a mobile home (with a storm shelter).
I don’t, but one day do hope to afford one in one of the nicer communities near the ocean. Many mobile homes today are nice, and affordable, and no property taxes for “mobile homes.”
In more rural settings, a decent doublewide with a permanent foundation on small acreage will appreciate like a site built house and will sell as well as a site built house if it’s been well kept up and is in a reasonably desirable location.
On the other hand, single wides on rented lots in mobile home parks are highly prone to repossession. They just don’t sell worth a hoot used, and have to be heavily discounted, which means that the people holding the notes on them have negative equity for a very long time. They’re already not the most savvy people with money and they’re already very likely to have marginal credit. So, they let it go back to the finance company.
I used to.
Drove through there the other day and the place was trashed, about 25% of them were for sale.
I paid cash for mine, but in early 2000’s they were selling them to anyone with $500 and a source of income, no matter how small. Of course, Entitlement Income was welcome.
They’d live there a year or so, trash the place, it’d get fixed up and sell again.
The park was/is owned by a corporation that owns scores (possibly hundreds by now) of them around the country.
Mobile home are cheap, about 1/3 the price of regular homes. However, regular homes appreciate in value, manufactured homes generally don't. You will buy a manufactured home for X, live in it for ten years or so, and sell it for X.
There is a high HOA for a mobile home park. However, compared to renting in my area, it is about half the price of an apartment, so you would still save over renting.
So, while the house itself is not a good investment, you can take the money you save vs. buying a normal house, and invest that money in other investments that do provide a return.
Also interest rates are starting to rise, and this will eat away the equity of normal homes. but since mobile homes don't appreciate much, they probably wouldn't depreciate due to interest rates much either. So if you are in an area where normal houses are not appreciating, and interest rates go up, a mobile home may be a better defensive investment and provide a better return.
Mobile home parks: Not a good idea if there are tornadoes in your neighborhood. Houses built with insulated concrete forms are more energy efficient and are much more tornado proof.
I don’t. Would never consider buying one. It depreciates like an automobile, and eventually must be traded in on a newer model.
The dealers are like used car dealers. You’re likely to be bamboozled.
I know a family that traded in their mh while they still owed $15k.
The dealer claimed he’d pay off their old mortgage, but of course he just rolled it over into their new mortgage, and got the used mh free and clear. When he later sold that one, it was 100% profit.
Those old aluminum bodied Spartans with birch paneled interiors are works of art, aren’t they? Especially with the exterior buffed out to a mirror shine.
I know a man with a doublewide and it’s one of thew nicest homes in the area. A lot depends on what you do with it.
Right. As long as I have a bed, a place to shower, a place to keep food cold and a place to make food, and a computer, I really don’t need much else.
I have, although not currently. I also owned 10 and rented them after my husband died. (no life insurance) I’ve sold all but 3 now. Getting out of the business.
My dream was to own a park, can you say CASH COW?????
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