Investing In Mobile Home Parks by Dave Reynolds>
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How To Take Advantage Of Today's Real Estate Market:
Investing In Mobile Home Parks

Thu 07/30/09 10:03:28 pm
by Dave Reynolds

Prices are finally becoming attractive again

There are many reasons to buy a mobile home park. For one, there are virtually no new ones that can ever be built, effectively capping supply. Another is that you can raise and raise the rent, and nobody can afford the $3,000 or so to move out, so they have to put up with it. Or maybe it’s the fact that mobile home parks are sold on higher cap rates than any other form of real estate.

 
Well, I’m going to add one more reason: there are too many on the market right now, and the seller’s are getting desperate.
 
Ten years ago, there were big, well-heeled buyers for almost every park — especially Affordable Residential Communities and Hometown. And the smaller parks that they wouldn’t buy had 100 buyers standing in line. As a result, sellers got spoiled and thought that there would always be a huge number of buyers if they ever wanted to sell.
 
Well, they were wrong. Those days are over, for now. And parks are stacking up like unsold merchandise — stacked to the roof. What happened? Where did all the buyers go?
 
A lot of the buying fever over the last decade was in the form of lucky California, Florida and Arizona investors who sold a property for a huge windfall, and needed a 1031 exchange. These buyers flooded the market and, for some reason, Mobile Home Park Investingmobile home parks became one of their targets of choice. They made perfect buyers — they had wads of cash and a short fuse on a 1031 time limit. However, with the decline of California, Florida and Arizona real estate values, these buyers have gone the way of the buffalo. Without selling their coastal property, they have no cash for a 1031 replacement. Things were so crazy five years ago that you would have a school teacher sell her house in California for a $500,000 profit, and immediately plunk that down on a $2,500,000 1031 replacement, without ever having owned commercial real estate before. Today, that same school teacher would have just a “For Sale” sign in her yard and a stack of flyers on her kitchen counter.
 
So who’s going to fill the gap and start buying all of these parks? Nobody until the prices become attractive. Really attractive. And we are already seeing that. Some parks have had their asking prices reduced by 50% or more. And a lot of sellers are offering to carry paper at very attractive terms.
 
Every day we are seeing more parks stack up. And more desperate sellers. And even lower prices and more attractive terms. This has become one of the best buying opportunities in a decade.
 
So if you are looking at buying a mobile home park, your timing couldn’t be better. Don’t get so aggressive that you scrimp on your due diligence, however. There are still a lot of landmines in bad mobile home park deals. But if you put in the time and effort to find a good park to buy, you may be able to steal it. And there is no better way to make money in mobile home parks than buying a park for pennies on the dollar.
 
For the past decade, Dave Reynolds has been involved in most aspects of the manufactured housing industry, from buying and selling mobile home parks to running  the industry's most popular website for buyers and sellers of Mobile Home Parks, www.MobileHomeParkStore.com.  Mr. Reynolds has authored several books and cd's on investing in and operating Mobile Homes and Mobile Home Parks.  If you are looking to buy or turnaround a mobile home or park, he is available for consultation at 800-950-1364
 
 
 
by Edward Hicks

The new edition consists of 107 pages and includes all information necessary for making an application (with a qualified mortgagee) to HUD multi-family staff for FHA 207m m/h land lease community loans or FHA 221(d)4 apartment loans using HUD code home units.

Contains FHA regulations, and forms needed for an application. Also includes construction cost estimator which is organized for major cities, by lot sizes.

Includes forms, base costs, high cost percentages for many areas of the US, MAP regulations, plus charts, graphs, & forms.

Published by Consultants Resource Group, Inc.

 
 Print Version Click Here


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