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The Value of Vertical Integration in Mobile Home Park Syndications

The Value of Vertical Integration in Mobile Home Park Syndications

Investing in mobile home park syndications has gained significant traction in recent years, potentially offering lucrative opportunities for investors seeking historically stable returns in the commercial real estate market. However, not all mobile home park operators or deal sponsors are created equal. One crucial aspect that sets some General Partners apart from the rest is their approach to property management. Here’s why having a vertically integrated platform, where the operator handles property management in-house, is invaluable for investors and tenants alike.

1. Lower Expense Ratios

One of the primary advantages of a vertically integrated platform is the potential for lower expense ratios. When the operator handles property management internally, they have a direct incentive to seek multiple quotes for repair items, rather than simply opting for the first quote from third-party managers. This diligence in procurement often leads to cost savings, which can ultimately translate into higher returns for investors.

Third-party property managers, while convenient, may lack the same level of accountability and motivation to minimize expenses. By bringing property management in-house, operators can closely monitor costs and negotiate better deals, ultimately benefiting the bottom line.

2. Better Long-Term Mobile Home Park Property Management

A vertically integrated approach also usually facilitates better long-term property management strategies. When the operator has a vested interest in the success of the mobile home park beyond short-term gains, they are more likely to make decisions that prioritize the property’s sustained health and value.

This long-term perspective is particularly evident in capital expenditure expenses. Instead of focusing solely on immediate cost-cutting measures, vertically integrated operators invest in maintenance and upgrades that can enhance the property’s overall appeal and functionality. By proactively addressing maintenance issues and investing in property improvements, they can attract and retain tenants while preserving the asset’s value over time.

A prime example of this is the property management team acting fast to buy or broker the sale of tenant owned homes (TOH’s) in order to save them from being moved out of the mobile home park (further reducing occupancy). 

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By Andrew Keel
Investing in Mobile Home Park Syndications

3. Enhanced Tenant Retention and Customer Support

Tenants are the lifeblood of any mobile home park, and providing excellent customer support is essential for tenant satisfaction and retention. With a vertically integrated platform, operators have potentially greater control over the quality and timeliness of customer support services.

Ownership’s stronger incentives to provide timely and accurate support to tenants often result in higher levels of satisfaction and loyalty. Unlike third-party property managers who may be inclined to prioritize their own interests or lack the same level of accountability, vertically integrated operators are directly invested in maintaining positive tenant relationships. This commitment to superior customer support fosters a sense of trust and reliability among tenants, leading to higher retention rates and a more stable income stream for investors.

Invest in Mobile Home Park Syndications with Confidence

In conclusion, investors (limited partners) seeking passive investment opportunities in the mobile home park space should perhaps prioritize operators or deal sponsors with a vertically integrated platform for property management. By handling management responsibilities in-house, these operators can potentially achieve lower expense ratios, implement better long-term property management strategies, and provide enhanced customer support to tenants. Ultimately, investing with vertically integrated teams could offer greater transparency, accountability, and potential for sustainable returns.

At Keel Team Mobile Home Park Investments, we are committed to elevating the living standards within our mobile home communities while delivering potentially substantial returns to our limited partner investors. For further insights into our investment strategy or to connect with us, feel free to reach out using the provided details below.

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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

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