Interview with Mobile Home Park Appraiser Erik Hanson from Colliers Valuation & Advisory Services

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Welcome back to the Passive Mobile Home Park Investing Podcast, hosted by Andrew Keel. On this episode of the Passive Mobile Home Park Investing Podcast, Andrew Keel interviews Mobile Home Park appraiser and mobile home park owner/ investor, Erik Hanson.

Erik Hanson owns and operates manufactured housing communities in his home state of Wisconsin. His first mobile home park community acquisition was in 2021 and he has been steadily expanding his portfolio since. Alongside mobile home park community ownership, Erik Hanson is a seasoned real estate appraiser, holding the esteemed MAI designation from the Appraisal Institute.

Erik Hanson’s journey into commercial real estate appraisals began in 2001, encompassing various property types. However, in 2012, he shifted his focus to specialize in mobile home park properties and RV Park/ Campground valuations. He joined Colliers Valuation & Advisory Services in 2023 and is a member of their Manufactured Housing Community (MHC) valuation team.

Andrew Keel is the owner of Keel Team, LLC, a Top 100 Owner of Manufactured Housing Communities with over 3,000 lots under management. His team currently manages over 40 manufactured housing communities across more than 10 states. His expertise is in turning around under-managed manufactured housing communities by utilizing proven systems to maximize the occupancy while reducing operating costs. He specializes in bringing in homes to fill vacant lots, implementing utility bill back programs, and improving overall management and operating efficiencies, all of which significantly boost the asset value and net operating income of the communities. Check out to learn more.

In this episode, Andrew Keel and Erik Hanson dive into strategies for Mobile Home Park operators and investors to enhance the value of their trailer parks and streamline the appraisal process. Drawing from his dual roles as an appraiser and mobile home park owner, Erik offers invaluable insights. Their discussion spans topics ranging from mobile home park industry downsides to educational opportunities within the mobile home park asset class, along with how to best identify mobile home park market lot rents.

Tune in for a wealth of knowledge and insights into the mobile home park investing industry!

***Andrew Keel and Keel Team Real Estate Investments (Keel Team, LLC) do not endorse any interviewee. This interview is for informational purposes only and should not be depended upon for investment purposes. ***

Andrew has been featured on some of the Top Podcasts in the manufactured housing space, click here to listen to his most recent interviews: In order to successfully implement his management strategy, Andrew’s team usually moves on location during the first several months of ownership. Find out more about Andrew’s story at

Are you getting value out of this show? If so, please head over to iTunes and leave the show a quick review. I have a goal of hitting over 500 total 5-star reviews, and it would mean the absolute world to me if you could help contribute to that. Thanks ahead of time for making my day with your review of the show.

Would you like to see value-add mobile home park projects in progress? If so, follow us on Instagram: @passivemhpinvesting for photos and awesome videos from our recent mobile home park acquisitions.

Talking Points:

00:21 – Welcome to the Passive Mobile Home Park Investing Podcast

01:54 – Why Erik Hanson got into trailer park appraisals and real estate investing

07:45 – Getting educated on mobile home parks

11:00 – What to do when you’re looking for Mobile home park mentors

12:33 – Erik Hanson’s appraisal career history and back story

15:11 – Mobile Home Park market Lot rents

21:49 – Mobile Home Park Cap rate premiums from a valuation standpoint (direct billed utilities?)

26:00 – What we don’t know about the Mobile Home Park appraisal process

33:30 – Mobile Home Park Investing: Park-owned homes vs. tenant owned homes

34:30 – Increasing the value of your Mobile Home Park

37:00 – The most challenging parts of the Mobile Home Park appraisal process

38:20 – What happens when Mobile Home Park owners aren’t transparent with appraisers

40:50 – Erik Hanson’s mobile home park investment portfolio

44:16 – Mobile Home Park Investing Lightning Round Q&A:

– Your first mobile Home Park Investing Deal

– Cluster in geographic areas

– Being too lenient on Mobile Home Park Tenants

– Mobile Home park Operator qualities

– Be prepared to explain everything

– Mobile Home Park Appraisal quirks

– Erik’s perfect Mobile Home Park looks like this

– Raising mobile home park lot rents

52:18 – Getting a hold of Erik Hanson

53:00 – Getting comfortable with the Mobile Home Park asset class

53:51 – Conclusion


Links & Mentions from This Episode:

Erik Hanson’s LinkedIn:

Colliers Valuation and Advisory:

MHU Investing Forum:

Keel Team’s official website: 

Andrew Keel’s official website:  

Andrew Keel LinkedIn: 

Andrew Keel Facebook page:

Andrew Keel Instagram page:

Twitter: @MHPinvestors


Andrew:  Welcome to the Passive Mobile Home Park Investing podcast. This is your host, Andrew Keel. Today, we have a very special guest with us in mobile home park appraiser and mobile home park owner, Mr. Erik Hansen.

Before we dive in, I want to ask you a real quick favor. Would you mind please taking an extra 30 seconds and head over to iTunes to rate this podcast with five stars? This helps us get more listeners, and it means the absolute world to me. Thank you so much for making my day with that five star review of the show. All right, let’s dive in.

Erik Hansen owns and operates manufactured housing communities in his home state of Wisconsin. He acquired his first community in 2021 and continues to expand his portfolio. Erik is also a real estate appraiser and holds the prestigious MAI designation from the appraisal institute. His career as an appraiser began back in 2001 with a variety of property types.

In 2012, he started specializing in RV park, campgrounds, and mobile home park properties. He joined Colliers’ Valuation and Advisory Services in 2023 and is a member of their manufactured housing community valuation team. Erik, welcome to the show.

Erik: Hey, Andrew, thanks for having me. Appreciate the invitation.

Andrew: Yeah, I’m excited to dive in here. Would you mind starting out by telling us about your story and how in the world you got into appraising mobile home parks?

Erik: Yeah. First of all, most people don’t aspire to be appraisers when they’re growing up. My background, at an early age, I grew up with an agricultural background. I didn’t grow up on a farm, but worked on actually one of the largest poultry farms in the state of Wisconsin. I did that growing up.

When I graduated high school, I went to work for a large commercial construction company during my summer breaks from college. That was my first dive into commercial real estate. This particular company was building schools, hospitals, hotels, and a lot of really big projects. These were all in Wisconsin, so that’s how I spent my summers. Like I said, I got acclimated to commercial real estate.

Fast forward a couple of years. I was probably in my third year of college. I met a real estate appraiser. I guess the wheels started turning that maybe this has some potential. I met him actually in one of my real estate classes, and then I followed up with a phone conversation, had a meeting with him, and he brought me on to his appraisal company. That particular company had a residential division and then a commercial division.

The commercial division was appraising all property types throughout Wisconsin and then some in Minnesota and Iowa, the tri state region there. I started out with typical stuff such as apartment buildings, office buildings, industrial, retail, a little bit of everything. I had done that for a number of years, did additional training appraisals and courses, and things like that.

I think it was around 2012 when I started my own appraisal company. At that time, started into mobile home parks, which was completely by accident. I didn’t know much about them probably just enough to be dangerous. I got a call from a lender that I had done a lot of work for on different property types. They said, well, we have a buyer and a seller for mobile home park in La Crosse, Wisconsin, which is where I was living at the time. You want to take a stab at it? That’s what got me started.

Coincidentally, the buyers on that were Frank and Dave. I had no idea, of course, who they were at the time. The banker said, well, why don’t you look these guys up and see who they are? I started searching. Wow, they’re really, really into the business. Through that connection, Dave got me connected with the mobile home university website. I started doing some of the chatting on the form at the time, answering some appraisal related questions. That’s really how I started building my network mainly with people buying parks.

Actually, I got acquainted with a very good friend of mine now. He’s been my mentor through the mobile home university website. He was looking for an appraiser on a park in Nebraska, so we started talking about that. That deal fell through, but we ended up becoming really good friends. He’s acquired several parks over the years in the Midwest in Great Plains.

I got some relationships started there, and then lenders were on there too looking for appraisers. I started a really, really cheesy website, At that time, it was on the front page of Google when you search for mobile home park appraiser. That got me a lot of traction, and now it’s a lot of word of mouth.

I did my own thing for a while, and then teamed up with some other appraisers. That was more on a regional basis. At that time, I was basically upper Midwest in Great Plains. Eventually ,I went to work for a national appraisal company and branched out even further, and now I’m with Colliers. We, of course, have international coverage. We do appraisals as a company all over the world in mobile home parks and RV parks in North America, Australia, and probably some other areas as well.

Our team is probably about a dozen people that really specialize in those two asset classes. We get asked, who do you work for, that type of thing. A lot of the volume, of course, is lending work on the transaction side, but we also do a fair amount of private party work. An example of that would be, we would do work for an attorney to settle an estate. They need an appraised value as of date of passing for the estate settlement, those types of things.

A lot of different clients, local banks, regional banks, a lot of agency work. Life lenders work for a lot of the large REITs and things like that for their own valuation purposes, so a wide variety.

Andrew: That’s interesting. Yeah. Wow. A lot of demand, I’m sure, over the past couple of years. Let’s go back to 2012 though. I think the MHU forum was ingenious. That’s such a great resource. We’ll make sure to put a link for that in the show notes, but the MHU forum, there’s just a ton of information on mobile home park investing questions.

You can get in there, and there are active operators, there are appraisers. There are lenders that are giving you know, feedback. A great resource for anyone interested in mobile home park investing is that MHU forum. How else did you get educated on the asset class, specifically for mobile home parks, back in 2012 to learn about what you needed to know from an appraisal standpoint?

Erik: A lot of it was boots on the ground. At that time, when I’m out inspecting a property for an appraisal, I’m driving all the parks in the area and talking to either managers or owners. Honestly, at that time, they were a lot more accessible than they are now. With all the acquisitions that have gone on in the last decade or so, it’s harder to get ahold of people. That was one way.

The original podcasts, Jefferson Lilly had a podcast, and there were some other ones too. I listened to all of those. Frank was doing some YouTube stuff, some of the brokers were doing some YouTube stuff, and all that was before Facebook really took off with all the different—I don’t know how many groups I’m involved in now. There’s a bunch of them that you can ask a question and get an answer pretty quickly on mobile home parks. So a lot of those different things.

I went to Frank’s boot camp in Minneapolis. I can’t remember the year now, probably ‘17 or ‘18 when they were still doing the live in person. That was just fantastic. I highly recommend it. Frank Rolfe, if the listeners don’t know who he is, he is a wealth of information on mobile home parks. When he says he’s accessible to talk about deals, he really is.

I’ve called him and he’s on break from a meeting or boot camp. He’ll answer the phone, talk to you about a deal, and tell you what he likes, doesn’t like, and things like that, which is really pretty neat.

Andrew: I’ve had the same experience. It’s like he picks up the phone very often. In every boot camp, he’s got at least a hundred people in the room. Think of all the students he’s had, but he still picks up the phones. I think there was like a weekly call on Wednesdays. Every week for an hour, he got on and does a live Q&A.

I remember when I first got started, I just sat on those meetings and just was listening to all these questions and answers. This was before I owned any parks, and it was just so educational, so I agree. Frank’s been on the podcast and he’s coming back on soon, so excited to interview him again.

Erik: Yeah. That was a great experience. As part of that boot camp, I still stay in touch with several of the people I met there. Some have bought parks, some have not, but it’s been great for building the relationships and just general learning.

Andrew: My very first equity partner, my very first investor, I met at the first MHU boot camp I attended way back in 2016 or 2017. Yeah, definitely good networking.

Erik: I don’t know if they’re doing those in person yet or not, but I definitely recommend it. Even if it’s a virtual thing, it’s a really good learning experience. I would say, overall, talking to different owners and operators has been by far the most beneficial.

Andrew: What do you ask them when you’re talking to them? What do you want to know?

Erik: Here’s the thing. I’ve been doing a lot of reading in the last couple of years, and there’s a lot of themes that recur in a lot of these books I’ve been reading. I’ll give you some examples later. One of them is when you’re looking for mentors, how are you adding value to them?

As an appraiser, that’s really easy. I’m doing some appraising in this market and trying to get a handle on lot rents and things like that. I saw you own a park in that market, let’s have coffee or something and talk about that particular market. It’s really, really an easy sell. They get some upside on that.

Okay, well, you’re submetering water and sewer, how did that process work, or how is that going? Those types of questions. A lot of operational type questions, and I continue to do that when I’m doing appraisals on the mobile home parks and RV parks. Really dive into how it’s actually operating. That’s been a great learning tool.

Definitely working with a mentor, I wouldn’t go and just say, hey, I need a mentor or somebody help me. Have something to offer them. Maybe it’s the boots on ground running a park for them or something, or managing a property. Who knows? But have something of value that they can use in exchange for their knowledge.

Andrew: Great tip there. Erik, how many mobile home park appraisals would you say you’ve completed? Just a ballpark number.

Erik: I’ve been appraising for about 22 years, so I would guess the overall number of appraisals is probably somewhere between 2000 and 3000. I would guess maybe half of those are mobile home parks and RV parks, something like that. Maybe it’s 800 or a thousand. I don’t really keep track of it. It’s available if I need it.

Andrew: Yeah, that’s a ton.

Erik: Yeah. Those are all the ones I’ve appraised. But then on top of that, when I’m driving the parks, driving the rent comps, and driving parks that have sold, it’s thousands of mobile home parks over the last 22 years. I can still pretty much remember most of them that I’ve been through.

If something eventually sells, I can make a mental note. Yeah. I drove through that a few years ago, and I remember what was going on there. If I stop and talk to managers or some, I see about once a year. In certain markets, I work in a lot and you get more familiar. I always exchange data with the managers.

Andrew: Have you been [inaudible 00:13:48]?

Erik: I probably have, and I probably didn’t know they were yours at the time. Sometimes they’ll just say, well, somebody from out of town owns it, I’m the manager, what can I help you with? That’s a cool thing. I’ve been through a lot of properties, seen a lot of stuff.

Andrew: Let’s dissect that, because I think you’ve been through thousands of mobile home parks. What have you learned from that? What have you taken away that’s like, hey, when I do my own mobile home park investing, these are the type of parks that I want for my own portfolio?

Erik: It’s morphed a little bit. When I got my first deal, I need to get a park. I’ve been looking forever. I looked for a lot of deals, and it just didn’t make sense, or the location wasn’t right. But now, it’s not even the size of the market, but more of the parameters, the single family housing size. It used to be 100,000 but I’d like to see 200,000 or 250,000 for median home price.

The median income is over 50. Is pushing a hundred? Where is that at? Those type of things. Where are lot rents going in that market? Is that a really good market, everybody’s in the 300s, and it should be pushing 500? I still see some of those markets.

We used to have a lot of 200 markets. Okay, we can get to 300. Now we see a lot of 300 markets, getting to 500, 500 markets getting to 900. They’ve really gone up. What’s the overall potential for those lot rents in that market based on things that are going on there?

Andrew: Yeah, let’s talk about that. What things would be going on that would give you that inclination that, hey, lot rents are 300, we look at 10 comps, here’s the subject property, and then all of them are mom and pop owned? But the median house price is 350. What are the things that you’re looking for that tell you, hey, lot rents are about to pop?

Erik: Similar size markets, especially in the upper Midwest. You go to Iowa, for example. There’s a lot of areas that maybe there’s a town of 5000 or 10,000 people. You would look at similar size markets. Where are lot rents going in those markets? Are the economies similar? If they are, that probably tells you there’s some room for growth there.

To your point, we still see a lot of mom and pops that just have not raised rents. We talk a lot about acquiring a park with under market rents, which is fantastic. That’s what everybody wants. Sometimes I look at it and say, maybe they could be too far under market. If your market is 500 and that park is 150, that’s great. But how long will it take you to get up to 500?

By that time, then the market is 800. Is it really that great of a deal? Maybe not. Is the lot rent 150 because that’s what your tenant base is? Or it’s just because mom and pop didn’t raise the rents? There’s definitely a difference there.

Andrew: That’s a good point. I see those deals quite a bit. I have a deal right now. Market lot rent should be 550. There’s one operator in the market getting 550. That’s a bigger REIT, and then all the other properties are mom and pop owned, including the one that we’re looking at getting under contract. But all the other lot rents are closer to 295-305 a month lot rents.

It’s like, hey, they’re getting it. It’s similar quality, but I don’t want to be the guy that comes in and raises rents a hundred dollars a month year one. I don’t want to end up on the front page of the newspaper, so there has to be something else, another story to be told capex wise or just another way to add value besides just the rent increase.

Erik: Yeah, and that’s a good question. We get that a lot. What’s the best way to add value? My number one thing is roads. That’s just an obvious visual thing. The parks look so much better with a brand new road or newer roads that were just seal coated. It just totally changes the perspective of the park. Also, what are the quality of the homes in that park?

I’ve seen very, very nice senior parks that are 1970s homes, but they’re all in fantastic condition. I’ve seen all ages park where they’re 1970s homes and the park looks terrible because they weren’t kept up. It’s important when we talk about lot rents.

Generally, the larger operators, the REITs, and those type of entities have the higher rents, but also they typically have the swimming pools, the basketball courts, and they have some more amenities. They have professional management on site. They have a full time maintenance person, full time office people, usually multiple. There’s more to it than just being in that location. Generally, a lot of newer homes and things like that, newer roads. Those are things to look at too, when you’re looking at lot rent.

To your point, I don’t think anybody really wants to be the market leader. What’s that gap between the market leader and what’s historically been charged? That’s definitely a fine line. But if you’re repaving roads or actually paving roads, taking it from gravel to asphalt, I think that’s a big value add. I think that takes you to the next rent level, whatever that is, if it’s $50 higher or $100 higher.

Andrew: Is that how you value it in your, in your appraisals then? Or do you give them like, oh, that’s a hundred basis points lower cap rate because they have new roads? How are you valuing from a valuation standpoint new blacktop?

Erik: It’s a combination of all. Basically, how do we increase value? We either have higher income, lower expenses, or a combination of both. You also have your visual of the property. What is the appeal of that property on top of higher rents, lower expenses?

If we’re repaving the roads and rents go up $50 in that first year, how is that going to affect the NOI? Also, how does that affect the maintenance? Because now we’re not fixing potholes constantly, because we have brand new roads. There’s a little bit, there’s the income side, there’s also the expense side of it.

Andrew: I feel like to fix some potholes, okay, it’s $3500 a year, right. To repave a whole property is $350,000. I don’t know from an income and expense standpoint, it really adds up. The appeal piece I think looks better, right?

Erik: Sure. How much can rents go up, and how much is the cost of getting that rent up? It’s a mathematical thing like anything else in the analysis. Sometimes it just doesn’t make sense. You see parks out in Wyoming, for example. One park has paved road, one park has dirt, not even gravel, just dirt, and they have the same lot rents. If I own the park with dirt roads, why am I going to spend the money to pave when the lot rents are exactly the same? In that case, it probably doesn’t make a lot of sense, in other areas it might.

Andrew: Let’s talk about this a little bit more here. Let’s talk about cap rate premiums. What would you give public utility parks versus private utility parks in terms of a premium on the cap rate from a valuation standpoint?

Erik: That answer has probably changed over the last few years, because it used to be everybody wanted public utilities. We still do to an extent, but a lot of those parks were acquired, and now a lot of private utilities. Sometimes there’s no difference. We see a lot of parks in Ohio, for example, that have the packaging plants on site that sell at a six-cap. The park with public utilities sells at a six-cap, so there’s really no difference.

Generally, it’s hard to narrow down to one specific thing on that cap rate. Is it just because of the utilities or is it the age of the homes? Is it new roads in one versus the other? Is that location maybe a little bit better because it’s closer to the school, Walmart, or the manufacturing facility? Overall, it’s usually not just one factor. A long winded answer, it depends.

Andrew: You sound like an attorney. It’s your own portfolio. Just a gut feeling, you’re looking at two identical parks, one’s public, one’s private. What would you give the premium for the public utility park?

Erik: I think a reasonable range is probably 50-100 basis points. Another side of the equation that I’ve experienced personally, in certain states, you can bill back water and sewer on private utilities without submetering, basically a flat fee based on what local municipalities charge for water sewer. I don’t want to say it’s a profit center, but you’re making more than you’re spending on your water and sewer income.

Of course, you’re pumping septics, eventually replacing a well or septic, and things like that, but purely the income and expenses, the income side is higher there. Municipal water and sewer, when you submeter and bill back, usually not a hundred percent collection. You have leaks, you have people move out and don’t pay their bill, and things like that. You have that little bit of slippage there.  Different ways to look at it a little bit, but all other things are equal. Cap rates can be a little bit lower for municipal utilities.

Andrew: Let’s talk about direct build public utilities versus just regular public submetered utilities. All things the same, what would the premium be for a direct build public water sewer system versus just a submetered public water sewer system?

Erik: That drops the cap rate even lower in most cases, maybe another 50-100 basis points. Obviously, there are other factors involved there, but that’s the premium, direct billed. Generally, the cities are maintaining part of those lines or all those lines to and things like that. A lot of times, you have publicly maintained streets in the park too on top of that, so it’s even more of a cost savings for maintenance, snow palling, and things like that. That’s the premium, which doesn’t exist in a lot of markets, but that’s the best case scenario.

I get this question all the time about cap rates. A lot of times, it’s area specific, but it’s more investor specific too. What’s your cost of capital? Do you see the upside? Are you buying it as is that’s a four-cap, because there’s an opportunity to infill?

Rents are below market and there’s just a ton of upside. Is that four-cap as is? Does that really matter? We’re looking more at year one, once we’ve owned it, what the property’s doing, where does that come out? It’s a loaded question.

Andrew: There’s not a cap rate, for sure. Yeah, I totally agree with you there. What don’t we know as mobile home park investors, active owner operators? What don’t we know about the mobile home park appraisal process that we should know?

Erik: Okay, that’s a really good question. A lot of that comes on the lending side. For the most part, you can’t go to your lender and say, I want Erik or I want Colliers to do our appraisal. They have an approved appraiser list, and some are much more sophisticated. For the most part, the lenders that are very active in the space use appraisers that are familiar with the specific property types overall.

What we tend to see is it tends to be more local lenders that want to get into the mobile home park space. Maybe they’re going to give you a little break on the interest rate, but they’re still going to use your local appraiser. You’ve run into that. I saw your YouTube video. It just went through a terrible experience, because they just probably weren’t as competent as some others.

Andrew: In that scenario, it was a small town bank, doesn’t do a lot of mobile home park loans, was doing this deal because we’re sophisticated operators, and that made them comfortable with it. But they used a small town local appraiser that appraised it at a 12-cap on actuals for this mobile home park. It was a smaller one. I think it was 34 lots, but it was all public utilities submetered at a 12-cap on actuals. The deal didn’t appraise in purchase price, and it became this messy situation. That’s just a bummer, and it can mess up a lot of deals. I think it’s super valuable to go with someone that knows the asset class specifically.

Erik: There’s more and more lenders now that are involved in the asset class than there was five years ago and definitely 10 years ago. It’s definitely worth reaching out if you know other operators in those markets or even in those states. Who’s lending in South Dakota or pick another state? Generally, somebody knows a lender that’s involved in that market and can get you on the right track there. We hear that often, and it’s an unfortunate part of the business that happens.

Andrew: Yeah. What essential steps do you take? We talked about driving through the comps earlier, but what other essential steps do you take when evaluating a mobile home park? What specifically do you need to look at to be able to come up with that valuation? Obviously, income like we talked about earlier is a big part of that, but what else plays into that?

Erik: Yeah, the rent roll. Where are things at is on the rent roll. Obviously, try to verify the rent roll with what’s actually on site. A lot of times, there are discrepancies there. Somebody maybe just moved out. Maybe that rent roll is a little dated so it doesn’t quite show what’s actually there. Profit and loss statements going back a couple years, property survey to see where the boundaries are. That can be important in situations where maybe you have an older park and some of the homes are not within the right setbacks, or maybe they’re encroaching on a neighbor’s property.

I ran into a Fannie Mae deal where the homes were actually on the neighbor’s property, so we got to figure out how to solve that. It’s going to take actually moving the homes back to the correct property. There’s some cost involved there that we got to consider. Things like that are important.

Some of the records we get are really sophisticated, and others are drawn on a piece of yellow paper. When that happens, we base it on what the market is going to pay for insurance, an onsite manager, and maintenance. What’s the typical maintenance cost per site? Things like that.

I know a lot of people analyze deals, and they’ll run a percentage of effective gross income. They say, well, I’m going to use 30% and analyze my deal real quick. Those are a little bit outdated now with where a lot of rents have gone and where expenses are gone. I always advise, manually underwrite it with your insurance costs and what you think maintenance will realistically be, things like that. What do you think utilities will realistically be? Those sort of things.

Like I said, we’ve seen all kinds of really good and really bad. We try to reconcile it to the best of our ability, and then we also talk to the potential buyer. What do you think you’re going to do with the property? Some of those are way, way out of line, and some of them are pretty realistic. Again, we have to reconcile that. How many homes can you realistically infill in the next year? In the upper Midwest, you lose probably four to five months with the winter season. Let’s take a real, real view at this.

Those tend to be the more difficult properties to appraise. We have some infill, we have below market rents. Where is this actually going to go in year one and year two? How long is it going to take to get what we call stabilized, 95% occupancy, at market rents, and things like that?

Andrew: Let’s talk about that more real quick, because that’s a really important point. This is something you can typically pay a little bit more for, but there’s an as is appraisal, appraised value, and then there’s a stabilized value that you can typically pay. I think it’s usually around $500 more to get the as stabilized value.

I’ve been able to work with some of these local banks to say, hey we’re buying value add deals from those mom and pops that are putting their P&L on a yellow pad of paper, and their rent roll is a ledger, this written ledger that they’re giving you. On those types of deals, they don’t look good year one because there’s $200 a month lot rents and a $500 a month market that’s 70% occupied. What we’ve been able to do is get the as is, the stabilized values, and then show a bank, hey, can you loan us the money based off of the stabilized value because this is what we’re going to do year one? Is that what you’re seeing other operators do as well with those two valuations?

Erik: Yeah, absolutely. An important thing to talk about, the as is value, that is always required. That’s federal standards regulations we have to follow, but we get a lot of requests for stabilized value. That may be as simple as getting it to market lot rent. You’re at 300, market’s 350, and you’re going to that in year one.

In a year, it’s at 350, here’s the value. Other scenarios, much more complicated with infill, several bumps in rent, some infrastructure issues, capex, and things like that. Some can get quite complex. Of course, the farther we get out in the future, the harder it is to project where the market’s going to be at.

Andrew: Totally, yeah. We’ve seen it where the local banks will say, okay, we’ll give you 75% of the as stabilized value, but you got to put $500,000 in this escrow account, and we’ll release that money to you based on invoices showing you did X, Y, and Z improvements. But that’s a great way for those looking to do value add deals and get some additional leverage there. Erik, tell me about park owned homes, the income they create, and how you consider those in your appraisal.

Erik: Most of the time we don’t value park-owned homes. Most lenders don’t want those included. What we do is we will allocate out the site rent from the total rent. For example, if the total rent your tenant is paying is $800 and site rent is $400, we bring that $400 out, and we run that as a lot rent scenario. Basically, we’re valuing the park, just the real estate, based on site rent only. That’s the simplest answer.

You get into some different scenarios where sometimes the park-owned home rent is so low, it’s barely above the lot rent. You have some different situations there, but that’s the simplest way. We look at all the occupied sites whether or not they have a park-owned or tenant-owned, and that’s how we come up with our lot rent and run the valuation that way.

Andrew: Got you. What can mobile home park owners do to add the most value to their properties right before refi appraisal or just a refi or a sale event? You mentioned roads earlier. What other things have you seen operators do that you’re like, okay, that is going to increase the value of this property X, Y, Z?

Erik: Getting the financials in order, painting a clear picture of what has happened and what we project to happen or they project to happen. On the turnaround, if you’ve spent the last two years dumping a ton of money in for capex and all these different things, lay that out. Maintenance was a 100,000, but really 90,000 of that was fixing water lines or something like that. Explain why those historical financials aren’t really all that great to use in the analysis.

Of course, higher lot rents are obviously driving value. We often see a bump in rent increase right before a sale. That obviously helps the value there, things like that. I would say financials in order is a big thing. There are smaller things, new signage, fences, general cleanup, but that’s all part of the rehab process. A lot of those things are being done anyway.

Andrew: Yeah, and other things like off street parking. Is that a premium curb and gutters? How do you give a premium to a property that has those amenities versus a property that doesn’t? Is it just strictly compared to the comparables in the area?

Erik: Yeah, a lot of that. If they don’t have off-street parking, that should be reflective in the  rents they’re receiving. That property should not have as higher rents as property with two off-street parking spaces.

Andrew: In a perfect market, that’d be the case. But with the majority of these properties being owned by mom and pops, that’s just not the case, Erik. I’m sure you’ve seen it as well as I have. Like you said, those properties in Wyoming, I’m seeing that in a lot of other states. All the states that we own, which is 12 where one has gravel roads, one has fully paved roads with curbs and gutters, and they’re both getting $500 a month lot rents.

Erik: In that case, we don’t have enough evidence to suggest it makes a difference to have off-street versus on-street. Sometimes that’s just what the market is. It doesn’t really make sense, but that’s what happens.

Andrew: What’s been the most challenging mobile home park property you’ve evaluated during your appraisal career and why?

Erik: Wow. I don’t know if I have one specifically. I would go back to the properties that have a significant amount of capex required. Some of the older parks that have vacant sites, are they amendable to modern homes? Can we actually get a three bedroom, two bath in there? Do we have to put a smaller home? Can we even get a home in some of those smaller sites?

Is it really 90 sites, or is it 70 sites now with today’s homes, setbacks, and things like that? you can get into zoning issues, and some areas require you to be modern setbacks when you infill homes. Now we have a whole different set of issues to deal with. Those are some of the things there to look at.

Andrew: Two more appraiser questions. (1) What are some of the top mistakes that mobile home park appraisers make? (2) As community owners, how can we make sure that doesn’t happen?

Erik: We never make mistakes, it’s usually a lack of data. I say that jokingly, but not really. A lot of times, it’s just stuff we don’t know. We don’t know that you have 10 homes coming in next week unless you tell us that, and that’s a pretty generic example, but things like that that we don’t know you just replace the water lines. We’re going to ask the question. But if the manager doesn’t know, or somebody in the process doesn’t know, we have no way to know that.

A lot of it are things that we just don’t have the knowledge of. We, of course, ask it. It’s our due diligence. Here’s all the things we’d like to know about the property if possible to make a better informed analysis of it. Same as on the buying side, but probably not as intense.

Andrew: Got you. The last appraiser question is we bought about 50 commercial properties, some self storage, some mobile home parks. I’d say on about 40 of them, the appraised value comes back at the purchase price. It seems like a common thing. Why do you think that is? Is it more common that that happens in commercial versus residential? It just seems odd. Do you guys get the purchase contract?

Erik: We always request it, we don’t always get it. Sometimes it’s amended afterwards, of course. There’s no good answer to that. Some appraisers are just shooting for that number, and that number seems to make sense. I see a lot of deals that are worth well above what the purchase price is. It tends to be most of those are off market. Some are on market though, somebody missed something along the way, and this guy figured out what’s going on in that market that somebody else didn’t. There’s just some deals to be had.

To be fair, most lenders are only going to lend on the lower of the purchase price or the appraised value. Even if you got a screaming deal on it, it doesn’t necessarily matter for the loan part of it at purchase. It matters probably more on the refinance part year or two down the road based on what lenders have told me over the years.

Andrew: Yeah, that makes sense. Tell us about your portfolio, Erik, of the mobile home parks that you own.

Erik: I’ve got two parks in Wisconsin, the first one I bought in 2021. That park was actually listed locally in MLS and never made it to LoopNet, CoStar, and those different subscription services. That one is 31 sites. We have 26 active sites, private utilities. At the time I bought it, it was half long term RVs and half mobile homes.

We ran into some zoning issues, initially. I had conversations with the county about the use before I bought it. My plan was to make it all mobile homes eventually, and they were on board with that. The comment was also made that, well, that plan changes will work with you on zoning or conditional use, things like that. About a month into ownership, I got a letter that I have 28 days to remove all the RVs, or it’s going to be a big trouble. I had additional conversations with the county about the plan, the process, and things like that.

It’s been a turnaround project, replaced a septic, actually put in new electrical lines for eight sites, brought in several homes. We had several organic move-ins, which was awesome. That’s where tenants bring their own homes in from different communities for different reasons. A lot of that was family oriented, which was awesome.

One of the things we did on that park which is really neat and has worked well is we basically said, anyone bringing in a home, even if it’s a little bit older, we want new skirting, new siding, new roof, new windows. We want the outside to look good. Clean up the community. We’ll give you 12 months to do that. Whatever the inside looks like, it looks like. As long as it’s habitable, we don’t necessarily worry about that, so do whatever you want there.

Everybody that is in the park now has followed that. We have a few legacy tenants that we’ll have to have for that conversation down the road. That’s one thing that really helped clean up the park. That park, the roads were only a year old at the time of purchase, so that was a big attraction.

Down the road, we found out that we may be able to connect to municipal water and sewer. There’s going to be a road project coming through. In about two years, they’re going to widen the highway, and highly probable they’ll run water, sewer, and cable lines along with the new highway. There’s some opportunity for some upside there.

It’s been a major turnaround project, but we’ve got better residents. We’ve got better homes. It’s been a real learning experience. I never would have expected all that for the first park. I haven’t necessarily had any cash flow from it yet, but it’s been a great learning experience. I’ve done a little bit of everything there and experienced a lot of different things that hopefully make me a better operator going forward.

Andrew: That’s so cool. That is awesome. We are running out of time a little bit, and I have a bunch of questions here. Do you mind if we do a lightning round, you just spit out the answer, and we’ll just go right to the next one real quick?

Erik: Yeah, absolutely.

Andrew: Okay. What do you think is the toughest hurdle to overcome in mobile home park ownership?

Erik: Buying the first deal, absolutely. Signing your name on that first contract. That’s step one, and then getting that to closing. I’ve had some deals I’ve locked up, and then they didn’t work out for different reasons. That first one was really hard to get the closing…

Andrew: The analysis paralysis and the nervousness.

Erik: It is. I went into the title company on that first one. I’m shaking, like, is this really happening? This is such a cool experience, but it’s nerve wracking. Once you get that first one, it goes a lot smoother.

Andrew: What do you feel is the best investing strategy in the marketplace right now for mobile home park investing?

Erik: I would say try to cluster in a certain geographic area. That seems to be the trend. As I’m in the business, I like that idea. I’ve talked to local owners not necessarily saying sell me your park, but I’m an owner in this market if I can help you with anything with contractors, things like that.

Don’t put it out there that I just want to buy your park, but just, I’m here, and we’re looking at additional deals. If that time ever comes, let’s have that conversation. That’s been a real positive there.

Andrew: That’s awesome. What mistakes have you made with your mobile home park investing that you think we can learn from?

Erik: I’ve been way too lenient on late payers. I fell for some of the sob stories, because life happens to everybody. Some of it’s legit and a lot of it’s not. You figure out pretty quickly whose stories aren’t legit, and those people just need to find someplace else to live.

Andrew: If you were going to invest passively as a limited partner into a mobile home park fund or an individual syndication deal, what are the most important things you would want to look at as a passive investor?

Erik: Quality of the operator. One of your previous podcasts, I can’t remember who it was that said, it’s important to me that that operator is actually operating the parks, it’s not third party management. That’s a huge thing. How about you give me a list of the parks you own starting with the first one you bought? Maybe I’m going to drive through a few of those and just look and see what kind of operations you’re running. One of your turnaround parks, what’s that look like now that we’re in year three? Where have you gone with that to get more of a comfort level?

Andrew: That’s a great, great golden nugget right there. What have you seen? You said you’ve been through thousands of parks. With third party managed mobile home parks, would you say you’ve noticed anything different about those parks versus ones where they’re owner managed?

Erik: I would say, obviously, they’re not financially invested in the deal. Maybe they’re not as motivated to get that new tenant in or get that home set up as fast as possible, and no one specific. I understand the need for third party. There’s some people that just want to be completely hands off. There’s definitely a need for that. There’s certainly not a lot of people in the mobile home park space that do that, certainly not up to the level of apartments and different asset classes like that.

Andrew: Totally. One thing that I had written down here, Fannie and Freddie. We’re talking about agency debt. When they hire you to do an appraisal, what are some of the quirks that they bring to a deal, if you wouldn’t mind sharing?

Erik: They have their different requirements on park-owned homes, no tongues on the front of homes, and things like that. But they are extremely thorough in their underwriting. They question everything. As an operator, you need to be prepared to explain every dollar and cent that’s coming in and going out. As appraisers, they expect us to do the same thing too.

If there are some ups and downs in income, it’s not simply where we can say, we’ll take the average of the last three years for insurance. Why was it higher in 2022? We had a fire in the clubhouse. Okay, now I know that, now I can put that in the report that that was an unusual year for that expense, or things like that. Same on the income side. There are some different things there. Definitely some hurdles to jump through as an operator and as an appraiser, but certainly some attractive financing terms if you have a park that fits their criteria.

Andrew: Totally. Yeah, there’s been quirks on the parks that we’ve gone through agency financing on, where they’re doing these engineering reports and requiring repairs after the refi closing for sidewalks that have a little bump in them. They want to make sure that those are flattened out, road repairs, and oil and gas leases that were found. We had to go back, the oil and gas lease had been sold to three different owners, and we had to go and get them to sign off on an affidavit.

You really got to have your ducks in order before you go down there. I definitely recommend an ALTA survey. We found through going to this process, gas lines that went underneath of some mobile homes, they wouldn’t do the loan until we got those fixed. There are definitely some stringent requirements there, so thanks for touching on that. Erik, what does the perfect mobile home park look like in your eyes and why?

Erik: I would say 50 or more sites, direct billed, city owned, and maintained streets from an expense standpoint. Other than that, more market oriented, like we talked about. Single family home prices, where’s the opportunity for a lot rents to go there? What’s the demand in certain markets?

On my two parks, just a quick example. I ran one Facebook marketplace ad once, and I got 50 responses in two days. I pulled the ad and I haven’t advertised since. That’s awesome that you have such demand there, that the park sells itself and the market sells itself. I’d be leaning more towards the market in my own experience with what I’ve gone through on the turnaround park, not that I can fix anything, but I can tackle a lot of things that two years ago, I had no idea what I was doing, infill, utilities, and things like that. A lot of things can be fixed, but that location, you can’t really do much about that.

Andrew: That’s a good point. What do you think is the biggest threat to mobile home park investing?

Erik: Rent control. We see some rents getting really high in some markets, and some are justified with the capex that’s being done. Others, you just raised rents $300 in year one. Maybe that market supports it. Is that the right thing to do? That’s the gray area. I think rent control creeps in when those things start to happen.

Every market’s a little bit different. Every state’s a little bit different with the regulations and things like that, but there’s definitely more chatter in different states about the rent controls, and then that changes everything. I think we all need to be a little cautious about where things are going and what we’re doing to improve those properties to justify what we’re going to do on the rental side.

Andrew: Totally. Yeah, totally agree with you there, because rent control is not the answer. It never is the answer. Look at the statistics, it doesn’t work. It’s just a couple of bad operators that can give the entire industry a black eye. Erik, we’ve covered so much today. Thank you so much for coming on the show. If any of our listeners would like to get a hold of you, what would be the best way for them to do so?

Erik: Yeah. Find me on LinkedIn. I’m readily available on there, and shoot me a direct message. My email and phone number is on there, so I don’t have to give it right now. LinkedIn is my thing now. I’m on there almost daily, sometimes multiple times a day and checking out RV park stuff and mobile home park stuff. I like to talk to operators and investors and seeing what’s going on out there.

Andrew: Awesome. I’ll make sure to put the link to your LinkedIn page in the show notes so you can find that there. Erik, what’s one last bit of important advice you would give an interested, passive mobile home park investor before we sign off?

Erik: I would say whatever asset class you’re going to be investing in, be comfortable with it. Even if you’re investing with an experienced operator, you still need to be comfortable with that asset class and know a little bit about what’s going on there.

Andrew: Definitely. Yeah, get educated, understand enough to make a good decision. That’s great advice.

Erik: There’s really no excuse not to be educated now. There are so many resources, most of them are no cost to learn about mobile home parks, RV parks, or any asset class. There’s really no excuse to not know what’s happening.

Andrew: Agreed. Thanks again, Erik, for coming on the show.

Erik: Yeah, it’s been great. I really appreciate the opportunity. I look forward to talking down the road.

Andrew: Same here. That’s it for today, folks. Remember, please leave a review if you got value out of this show. I really appreciate it as that helps us get more listeners. Thank you all so much for tuning in.

Andrew is a passionate commercial real estate investor, husband, father and fitness fanatic. His specialty is in acquiring and operating manufactured housing communities. Visit for more details on Andrew's story.

Keel Team provides unique opportunities for passive investors to enter the mobile home park asset class without having to deal with the headaches of tenants, toilets or trash.


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