I first learned about investing in mobile home parks through my friend Kate. We both loved learning about real estate investing and decided that this could be a great strategy to partner up and work together. We booked a three-day course in California to learn how to buy ourselves a mobile home park.
When I first shared with my friends and family that this was our grand plan, I understandably received a lot of raised eyebrows. This is a great opportunity to address the following topics:
- Common questions around investing in mobile home parks
- Our strategy for finding a deal
- Recap on our experience of looking for a park and if we succeeded
- Challenges when investing in mobile home parks
Commonly Asked Questions
“Why do you want to buy a mobile home park?!”
Of course, this is always the first question! My strategy has morphed as I continue to research, listen to podcasts and chat with friends already in the industry.
Six months ago I was focused on single-family investment properties, then I moved on to multi-family and now I have settled on mobile home parks! If you find the right deal and manage mobile home parks correctly, there are opportunities for major cash flow and less hassle of managing renters in single and multi-family homes.
Right now there is an affordable housing crisis in America. Mobile homes are a great solution for those who have low annual incomes. More and more, Baby Boomers are retiring every day and will need affordable housing. I love the idea of focusing on this asset class and putting all of my energy toward creating a beautiful community where people are proud to live.
“Are you going to purchase these parks by yourself?”
Nope! I will be partnering with my friend, Kate Stephens. When I started my blog almost two years ago, Kate and I realized that we had a common interest in real estate and have been chatting ever since about podcasts and all of our investing dreams.
Last summer Kate quit her corporate job and jumped head first into real estate investing with the goal of financial freedom and flexibility with her family (great minds think alike). A few months ago Kate called me about the latest Bigger Pockets podcast focused on buying mobile home parks and told me I HAD to listen in. We were both so inspired by this strategy and have been planning our world domination ever since!
“What do you want to do with these parks?”
Our vision is to create homes, not houses. We want to change the perception of “trailer parks” and build exceptional communities for our tenants to exceed their life goals. Also, the real estate market is dominated by men. I love men, I’m married to one, however, I think the lack of female presence in this space gives us a unique perspective. We are two moms who want to create safe, beautiful spaces for families and hard-working individuals.
“And you learned all of this at a 3 day ‘boot camp’??”
Yes, ma’am! It was my duty to go to Newport Beach and take this course…part of the gig I guess. ;P
Frank Rolf and Dave Reynolds started the Mobile Home University course. Combined, they own over 300 mobile home parks, so if I was going to learn something, it was going to be from the experts! Here were some of the main topics we covered:
- How to find a mobile home park to buy
- Evaluating a mobile home park
- How to negotiate
- Due diligence when evaluating a park
- How to operate a mobile home park
During the course, I was able to spend more quality time with Kate to discuss our strategy. We alsohung out with 100 other people who share the same interest!
On Saturday we visited multiple mobile home parks. While it was really helpful to see each park up close, I know the ones we will be buying will not look anything like the ones in Orange County. Most of them didn’t even look like mobile homes!
“After taking the course, what are your next steps?”
Find our first deal!
At this time we are scouring mobilehomeparkstore.com, Craigslist and Loopnet.com. It takes some time to find the right deal that fits our criteria. While you can find deals online, most are found through cold calling and sending out postcards and flyers. There are over 45K parks in America. We are working on narrowing our focus so that we can begin calling and sending direct mail.
Strategy for Finding Our First Mobile Home Park Deal
1 | Look for Deals Online
We spent a lot of time analyzing deals found on the mobilehomeparkstore.com and loopnet.com. When there is a deal that fits our criteria, we contact the broker or owner to get more information. We quickly learned that the best opportunities are not found online. When there was a good deal on these sites, they were generally scooped up by more experienced investors with better financing opportunities.
2 | Look for Off-Market Deals
Analyzing deals through these websites is a great way to connect with sellers, however, we are only scraping the surface of reaching mobile home park owners.
On average, there are less than 500 parks for sale online out of the 44,000 parks within the United States. In order to reach a larger group of owners, Kate and I are working on a direct mail campaign.
How to Create a Direct Mailing List:
- Narrow Down List of States to Focus: We are open to purchasing parks in any state with the exception of the west coast and southeast states (saturated/expensive markets and hurricane issues). For this first round of mailers, we focused on 5-6 states around Ohio since I will be within the area.
- Find High Population Metro Areas: Find all metro areas that have a population over 100,000 within our select states. Eliminate any parks that did not fall within the select metro areas. We used bestplaces.net to find information for metro areas
- Identify Cities with Walmart Stores: Walmart and McDonalds do intense market research to determine the location of each store. If a city was good enough for them, it was good enough for us.
- Focus on Smaller Mobile Home Parks: Our goal was to find parks with less than 100 lots since we are new to this investing strategy
This brought our list down to 2,000 parks, perfect for our first direct mail campaign.
Designing Our Direct Mail Postcard:
First, we set up a google phone number that connected to our cell phones & created a business email. I designed the postcard using Vistaprint and utilized their mailing services to add postage and the address.
Direct Mail Campaign Strategy
Our strategy for the direct mail campaign is to set ourselves apart from our competition. We were able to see some sample postcards at Mobile Home University. While they had great information, the overall look was a little boring. If everyone that attended the seminar created postcards that mirrored the examples we were given, what would set us apart from the pack?
Here is one example from the course:
We decided to give our postcards a little more style. We highlighted that we are mothers who want to create beautiful communities for the residents and added our pictures for a personal touch.
Our mailers went out and we got 12-15 calls from park owners, I would definitely consider this mailer campaign a success!
Three Mobile Home Park Opportunities & Our Experience
Mobile Home Park 1 – Iowa
Our first exciting opportunity came from a smaller mobile home park in Iowa. The mobile home park had less than 40 lots and it checked all of the boxes. When we moved from Denver to Toledo, I was able to stop at the park on the long drive to Ohio.
We received the signed agreement for the park in Iowa. Unfortunately, within a few days the owner called me and asked if we could cancel the contract because he wanted to sell it to his son-in-law instead. With this particular park, the owner built the park on his own and would have remained living in there once it was sold to us.
We don’t want to force anyone to sell us their park and in this situation, we could have run into issues down the road with the previous owner continuing to live within the park if he sold it to us under pressure.
If we had been further down the road with our due diligence, we may not have been as understanding with tearing up the contract! The owner agreed to pay our attorney fees and knows where to reach us if he changes his mind. We believe that it is important to keep positive relationships with park owners for any potential deals down the road.
Mobile Home Park 2 – Circleville, OH
We loved the location of this park and the potential to improve management and stability within the park. This park was within the Columbus, Ohio metro area and the park that Kate and I were the most excited about.
In the beginning, we had a great rapport with the owners, but as we got closer to sending the P.A. (purchase agreement), they became less available for our calls. We sent the P.A. and have had radio silence from the sellers.
We have reached out multiple times and let them know that we will be redirecting our funds and if they are interested in our offer they can reach out to us. This was particularly frustrating but it is all part of the gig.
Mobile Home Park 3 – Pennsylvania
This park needed a lot of work but has loads of potential. It was by far the best-looking home in the park. Most of the others were in rough shape and a third of the park needed trailers brought in. Everything seemed to check out until we did some more due diligence.
When analyzing a mobile home park, we call the local police station, the city, previous owners (if available), and previous and current tenants and gather as much information as possible.
During this process, we found out that the current owner, who also owned the land surrounding the park, had allegations of sexual misconduct with tenants. We also learned that he sold a parcel of land next to the park to some sort of sewage facility and there were complaints of bad odors.
The course we took actually addressed this specific issue – you can fix up a park but you can’t fix a smell if it is in a bad location. We ended up passing on this deal because of the sewage plant and neighbor with sexual misconduct.
Challenges with Purchasing a Mobile Home Park
- Finding a deal takes time, effort, and money
- Investing in a mobile home park can take more capital than other investment strategies
- In most cases, you will have to manage the park remotely
- Mobile home parks are rarely built anymore due to zoning issues, so the pool of opportunity is not growing
We spent about 5 months working on our mobile home park strategy, finding deals, and visiting parks. After the three deals fell through I needed a break and in all honesty, a win. We ended up finding a great property to fix and flip in a nearby neighborhood and I put my mobile home park dreams on hold.
I am grateful for how much I learned during this process and may end up owning a park in the future, but not right now.