Mobile Home Park Investing 101: Turning Around Your Asset

Investing in mobile home parks typically offers unique opportunities and challenges. Unlike traditional residential or commercial properties, mobile home parks potentially provide a distinct avenue for investment and growth. In this comprehensive guide, we’ll explore various strategies and methods to potentially turn around a mobile home park investment, highlighting the potential benefits and considerations of each approach.

Mobile Home Park Investing 101: Turning Around Your Asset

Introduction to Investing in Mobile Home Parks

Investing in mobile home parks can possibly be a lucrative venture for those looking to diversify their real estate portfolio. These investments often cater to an increasing demand for affordable housing, usually offering a stable cash flow and unique value-add opportunities. However, turning around a mobile home park investment requires a strategic approach, careful planning, and an understanding of the market dynamics.

Strategies and Methods for Potential Mobile Home Park Investment Turnaround:

1. Flipping Without Buying: 

This strategy involves securing a contract to purchase a mobile home park and then assigning that contract to another buyer for a fee. It allows investors to profit without the need for substantial capital.

2. Master Lease with Buy Option: 

In this approach, investors lease a mobile home park with an option to buy in the future. This method provides control over the property and the potential for improvement and profit without immediate ownership.

3. Buy, Break into Pieces, and Liquidate:

Investors purchase a mobile home park, subdivide it into smaller parcels, and sell them individually. This can potentially increase the overall value of the investment.

4. Buy, Fix Up, and Flip:

Similar to flipping residential properties, this method involves buying a mobile home park, making improvements, and selling it for a profit.

5. Buy, Fix Up, and Refinance:

After purchasing and improving a mobile home park, investors refinance the property to obtain better loan terms, leveraging the increased value.

6. Buy, Fix Up, and Hold: 

Investors buy and improve the mobile home park, then hold onto it to collect rental income over time, benefiting from both cash flow and appreciation.

7. Buy, Fix Up, Hold, Then Sell:

This long-term strategy involves buying, improving, holding for rental income, and eventually selling the mobile home park, potentially capitalizing on value appreciation.

8. Buy Heavy Value Add, Stabilize, and Refinance/Sell:

Investors purchase a mobile home park that requires significant improvements, stabilize it by making necessary renovations, and then choose to either refinance or sell the property.

At Keel Team Mobile Home Park Investments, we usually invest using a combination of different methods with our mobile home park investments, typically involving the Buying, Renovating, Holding Long-Term, and Refinancing our assets with Agency Debt (Fannie Mae/Freddie Mac). We only ever sell our properties if we lose trust in the market or if we are presented with a Godfather offer, as the famous investor Sam Zell would say. Check out our eBook on the “Top 20 Things I’ve Learned from Investing in Mobile Home Parks” by Andrew Keel for more potentially valuable insights!

Mobile Home Park Investing 101: Turning Around Your Asset

How to Potentially Turn Around a Mobile Home Park

1. Fill Vacant Lots & Homes: 

Increasing occupancy by filling vacant lots and homes is a fundamental way to boost a mobile home park’s value and revenue.

2. Repair, Rent, and Sell Park-Owned Homes: 

Renovating and renting out park-owned homes can increase income, and selling them can reduce management responsibilities and improve the park’s appeal.

3. Boost NOI by Increasing Rent and Reducing Expenses: 

Improving the net operating income (NOI) can be achieved by gradually increasing rents to market rates and reducing expenses, such as implementing utility bill-back systems and sub-metering homes.

4. Address Other Mismanagement and Deferred Maintenance: 

Correcting mismanagement issues and addressing deferred maintenance can significantly improve the park’s operation and appeal to tenants.

5. Improve Property Condition and General Aesthetics: 

Enhancing the overall appearance and condition of the mobile home park can attract higher-quality tenants and justify rent increases.

Mobile Home Park Investing 101: Turning Around Your Asset

Conclusion

Investing in mobile home parks presents a range of methods and strategies for potentially turning around investments. Whether it’s through immediate improvements, long-term holding, or creative financing options, there are multiple paths to likely revitalizing a mobile home park. Each strategy carries its own set of risks and potential rewards, and success often depends on market conditions, the specific property, and the investor’s expertise. As with any real estate investment, thorough due diligence, market research, and a well-thought-out plan are crucial for maximizing the chances of a successful turnaround in a mobile home park investment

At Keel Team Mobile Home Park Investments, we’re dedicated to enhancing communities while potentially maximizing investor returns. Our focus is on improving residents’ lives while delivering strong profits to our partners. Get in touch using the contact details below to learn more about our investment approach and strategy.

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Interested in learning more about mobile home park investing? Get in touch with us today to find out more.

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 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.