People often think of real estate investing as buying and flipping houses or renting apartments. But there’s another option that can be just as lucrative: mobile home parks.
Derek Vickers joins me to talk about mobile home park investing. Investing in mobile home parks probably never even crossed your mind. But believe it or not, investing in mobile home parks could be a great way to build your portfolio and create passive income.
Tune in to the episode to find out how to start investing in mobile home parks!
Here are some power takeaways from today’s conversation:
- Search for trailer parks
- Provide affordable housing
- Look out for rent growth
- Underwrite conservatively
- Invest in capital improvements
Episode Highlights:
[05:33] Getting Into Trailer Park Investing
There are many benefits to investing in mobile home parks. Tenants tend to stay for good, and the expense ratio is lower than the standard multifamily. Here are some steps to get started: 1.) Find a list of mobile home parks. 2.) Drive out and talk to the owners. 3.) Search for deals and sellers.
[16:56] The Future of Vacant Lots
If you’re doing the infill yourself, it’s possible but hard. The demand for vacant lots will go up, but there’s also heavy demand for affordable housing. Consider bringing in homes or trailers.
[20:04] Offloading Mobile Homes
Some ways to offload mobile homes to tenants include 1.) Selling parking homes in complete disrepair for cheaper cost and giving free lot rent so they can fix the home. 2.) Investors coming in to fix up the house and sell it to an incoming tenant.
Look at the markets and find where there will be constant rent growth. Signs of rent growth are a lack of affordable housing and an influx of people moving into the area.
[27:38] Underwriting Deals
Underwrite in the deal for project management at cost, then live off the profit after management. Be conservative in underwriting, so you don’t underestimate the expenses.
[45:06] Financing Tips
They often work together with the local community and regional banks. Know the costs for rehabbing a park, then re-appraise the property. Don’t go cheap on capital improvements.
Notable quotes from the Episode:
[11:22] “What better way to learn the business than jump in headfirst?”
[38:06] “We’re paying them really, really well above what market would pay for this position because we want skill. We want reliability, and people that we don’t have to handhold, and people that can solve problems on their own, and make good decisions for the company.”
[48:29] “We would rather distribute the money and have more than have to come back to our investors and have to do a capital call.”
Resources Mentioned:
Connect with Wyatt Graves: LinkedIn | Website
The Mentee Podcast: Website | Apple | Spotify
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