What is a mobile home park?

It is a single parcel of land with individual spaces. Sometimes they are called manufactured home communities as well as land-lease communities. Homeowners rent the spaces from the park owner.

Do you build new ones?

No, because this is how you lose money. For example, buy several acres of land, pursue government approvals, build the infrastructure, find a dealer to install new homes, advertise for customers, etc. This is a huge financial undertaking and risky. Expect 150% overruns of all initial estimates.

Which ones do you buy?

We only buy fully operational and underperforming properties.

Where are they located?

Parks are all over the country. Our focus is the southwest region within 300 miles of San Diego CA and in central midwest.

How do you value a park?

The value of a park is determined by the net income. This is calculated by taking the sum of all rental income and subtracting expenses to result in the net income. That net income divided by a 10% rate of return equals the value. For example, if the net income is $50,000 the park is worth $500,000

How do you select them?

Careful selection is the key to success. Parks are not created equal. We look at population, jobs, local economy, police activity, utilities, apartment rents, vacancy rates, etc.

Why are they good investments?

They are good investments because residents own their home which greatly reduces overhead expense and management. And since customers own their home, it is a very stable business. Unlike apartments or houses, parks work well as out of town investments.

What kind of return can an investor earn?

Investors looking for a passive return can earn up to 9% annually. If they choose to learn the business and become active investors then higher returns are possible as they gain experience.

Can I earn monthly income or capital gains?

A variety of plans are available. Investors may choose from monthly income and/or long term capital gains. Each investor has different financial goals.

Can I exchange into a park?

Yes – you can exchange into a park. We select the park and arrange for management. After a period of time the park can be sold and exchanged out.

Why do people sell if they are so good?

A variety of reasons – family changes from death, separation or personal financial troubles. Think of a parking lot at the grocery store. People are always coming and going. This is the same with real estate.

Do parks generate cash flow?

Yes, our parks generate immediate positive cash flow from day one. This is a requirement for purchase.

How do you find them?

The search for a park is simple. We identify a target demographic profile and then visit parks in person. We indicate to the manager/owner that we’re looking to buy a park such as this - please contact us if you have any interest in selling. We never buy parks listed with brokers. However, we use brokers to sell a park. Finding parks using our direct method results in higher quality transactions.

How are they different from other income property such as apartments, self storage or commercial?

Those other categories of income property all include ‘improvements’ such as buildings. As the owner of these buildings, you must maintain, insure and manage. This adds cost and time. Furthermore, tenants have no ownership interest and can easily leave. In a tight economy, everyone at least NEEDS a place to live. Parks offer low cost home ownership for the same cost as apartments and are safer.

Is the income stable and why?

Yes, because residents own their home. Unlike midnight move-outs from apartment tenants, parks are more stable. No matter how modest, park residents have a vested financial interest with the home and thus attentive to paying the space rent. Residents are often over 50 years of age, more settled.

What is the park profitability?

The parks we select have an initial minimum rate of return of 10% based upon purchase price. Sometimes the rate is higher depending upon financing terms. The goal is a 20% rate of return from various changes which are identified at the outset. This is part of future exit planning for investors.

How do you finance the parks?

Our financing method is – seller financing, existing loans, and cash. Obtaining new bank loans are problematic due to onerous documentation required and personal guarantees. With our transaction design, clients are assured of privacy and limited liability.