Introduction to Mobile Home Park Syndications
Investing in mobile home park syndications can be a beneficial step for those considering the purchase of their own mobile home park. This investment strategy involves pooling funds with other investors to acquire and manage a mobile home park, providing a collective ownership model that could offer valuable insights and experience.
Understanding Mobile Home Park Syndications
Mobile home park syndications are a form of real estate investment that allows investors to collaborate, combining their financial and operational resources. By investing in a syndication, you can gain exposure to the mobile home park industry without the full responsibility of direct management. It’s an opportunity to observe and learn from experienced operators, which could pave the way for your own future investments.
Key Learning Opportunities in Mobile Home Park Syndications
How Deals are Sourced
One crucial aspect of any real estate investment is the ability to find viable properties. In a syndication, learning how sponsors locate and secure mobile home park deals could prove invaluable. This knowledge can potentially benefit your own investing efforts, providing you with the methodologies and strategies used by seasoned professionals.
Keel Team, for example, sources their deals by direct cold-calling, off-market, mom and pop owned mobile home parks. By building a relationship with them, they typically securing lower than average retail prices when mom and pop decide to sell their prized asset.
Funding Strategies
Understanding the financing of mobile home park deals is another critical learning point. Syndications often employ a variety of funding methods, including bank loans, private lending, and investor capital. Observing how these are orchestrated can provide insights into structuring deals that potentially optimize financial outcomes while managing risk.
For example, Keel Team looks for acquisition financing through local/credit union type banks, holding roughly 75% LTV. The balance is typically geared with private investor capital, where they will likely hold a share in the mobile home park itself.
Market Targeting Reasons
Why certain markets are chosen over others is a strategic decision based on various factors, including demographic trends, economic stability, and growth potential. Learning from a syndication’s approach to market selection can help you make informed decisions when it comes to your own mobile home park investments.
Keel Team typically focuses on secondary markets within the Midwest of the United States. They have found from experience that these areas are more cash-flow heavy rather than appreciation heavy, perfect for their overall investment strategy.
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Operational Insights
The day-to-day management of a mobile home park is usually complex and requires a nuanced approach. Participating in a syndication allows you to see how experienced operators handle the complexities of mobile home park management, from tenant relations to maintenance and regulatory compliance.
Managing Value-Add Projects
Many mobile home park investments involve value-add strategies to increase the property’s worth and revenue potential. These may include infilling vacant lots, implementing utility bill-back systems, and addressing deferred maintenance. Understanding how these projects are planned and executed can help equip you with the skills needed to enhance the value of your future properties.
Reserves and Contingency Planning
Knowing how much reserves a syndication maintains for unexpected expenses is important for financial planning. This insight helps in understanding the importance of liquidity and financial buffers in real estate investing. Be sure to ask the operator for a detailed breakdown of how much reserves they plan for.
Exit Strategies
Finally, understanding the exit strategies employed by syndication sponsors can possibly provide a roadmap for realizing the investment’s return potential. Whether it’s through refinancing, selling at a market peak, or another method, knowing when and how to exit is as important as knowing how to enter an investment.
Keel Team primarily focuses on the Buy, Renovate and Refinance Model, with their main objective of holding their assets long-term with agency financing, like Fannie Mae and Freddie Mac.
Conclusion: Are Mobile Home Park Syndications the Right Learning Path for You?
While not everyone may be ready to dive into mobile home park syndications, for those considering this venture, it generally offers a practical, lower-risk way to gain industry knowledge and experience. Whether you’re looking to eventually purchase your own mobile home park or simply wish to expand your real estate investment portfolio, mobile home park syndications can provide a foundational understanding of the complexities and opportunities within the mobile home park asset class. This experience, although indirect, could be invaluable as you navigate your own mobile home park investment journey.
Discover more mobile home park investing insights, and key considerations with Keel Team when embarking on a passive mobile home park investment through a syndication. Reach out to us below to get in touch with a representative!
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Disclaimer:
The information provided is for informational purposes only and should not be considered investment advice, nor a guarantee of any kind. There are no guarantees of profitability, and all investment decisions should be made based on individual research and consultation with registered financial and legal professionals. We are not registered financial or legal professionals and do not provide personalized investment recommendations.
Tristan Hunter - Investor Relations
Tristan manages Investor Relations at Keel Team Real Estate Investment. Keel Team actively syndicates mobile home park investments, with a focus on buying value add, mom & pop owned trailer parks and making them shine again. Tristan is passionate about the mobile home park asset class; with a focus on affordable housing and sustainability.