No investment is an easy one, but when it comes to mobile home parks there are many ways you can prevent losses and actually continuously grow your net income since one move can change the game completely when it comes to these type of big investments. In this blogpost we are going to go over some of the most important things you should know before you invest on a mobile home park.
Now, we know that if you’re looking into this you have already done a ton of research, and this is one of the biggest things we encourage you to do, since not all of the answers are in one place, but when it comes to mobile home parks, even though they have been great investments for years now, there’s not enough information about it out there, and that lack of understanding for the way this business works or has worked for others can bring in a ton of doubt when it comes to finally jump into it and investing in it yourself.
1- Not too close!
A ton of investors have said this before about this type of investment, and the reason is basically you need to make sure you have a broader boundary between you and your park, usually having someone manage it while you’re not there, this also makes this a great passive investment, since you can visit it and make sure it’s running exactly how you want it to a few times per month. Make sure the park is around 2 hours away on a plane and about 30 minutes away from the airport in which you land, to cut on expenses since it all will be add up to what the park’s expenses and cut down your net income.
2- Managers are key!
The biggest mistake you can do when they invest on a mobile home park is having a bad manager to help them out with it, since they are the ones who will keep the park running to perfection while you’re not there and making sure everything goes okay with the residents. If you pick a bad property manager for this, it will make your ideal investment into a sour turn, unbalancing your net income with your expenses making you lose money instead of win it.
There are many ways you can afford a mobile home park, and if you come from a more traditional setting, you would know that the regular way is with a lender, a bank or a hard money loan, but when it comes to this type of investment, although these stands they are not the only ones! It’s very common for these type of deals to have something called seller financed, in which they do the line of credit for you, with less paperwork and more trust with your seller, the only money you have to build up is the downpayment and for that, you can work it up with a syndication.
4- There’s no need to own Mobile Homes!
Some think that because you want to invest on a mobile home park you must also own the homes in it, and that could not be further from the truth! Although yes, you can actually own a few of the houses in the park, renting mobile homes can be a bit of trouble, since as per usual whenever someone is renting there’s no sense of pride or ownership for that house, so that only makes the prospect of having to care for it that much less for the tenant, so for parks, the biggest tip is for you to only own the land and nothing else! Granted you can try out having a few homes in the park, but that it’s entirely up to you!
5- Is it dangerous?!
Actually, here’s the thing, mobile home parks have a terrible reputation, but as with everything, it depends on where you’re buying and who are your residents. Some parks work only with the elderly, some parks work with ex-cons, some parks don’t have strict criteria and some do, you will have to do your own due diligence on who lives there, and make sure you meet every single one of them, do some background research, but usually a park is not dangerous, everything can be fixed with a few calls to 911, but it’s quite calm depending on your park!
These are things you can learn through going in and visiting the parks yourself, talking to other park owners and seeing what they are looking for when it comes to buying one, and we obviously invite you to learn more and more about a topic in which you’re about to put your money and time into! We have a video about some of the facts some investors don’t know about mobile home parks if you want to continue growing your knowledge!
This is a topic we are learning as we go as well, and we would love to continue showing you guys! Do let us know what you think, have you ever worked with a mobile home? Have you considered going into a park? Let us know!