Demand for increasing affordable housing has reached a new heights; we are addressing that.

Why we like the sector.

PROVEN ASSET CLASS: Mobile home park transaction volumes are up since 2013. JLL’s capital markets group published a report stating transaction volume for manufactured housing communities in 2020 was around $4.2 billion, which has come a long way from the 2013 transaction volume of $1.2 billion. As baby boomers continue to retire, in the amount of around 10,000 per day, a vast number of manufactured housing communities are starting to transact for the first time in decades. This is primarily due to the fact that many of the mobile home park properties are still owned by “mom-and-pop” solopreneurs who acquired these assets many years ago.

OPPORTUNITY: Nationwide, an estimated 20 million Americans live in 4.4 million mobile homes in 44,000 mobile home parks. It is estimated that ONLY 20% (8,800) of all mobile home parks are professionally owned and managed. These top tier parks tend to be large (150+ spaces), highly stabilized and in major metropolitan markets. Approximately 25% (11,000) of all parks are under 50 spaces in size, in rural or undesirable markets and owned by mom & pop operators. The “sweet spot” for opportunity is on the 24,000 remaining midsize parks located in growth trending tertiary markets, which when positioned correctly, offers substantial return value if knowing what to look for.

AVAILABLE AND AFFORDABLE DEMAND: According to Apartment Guide’s annual rent report, rent prices for a one-bedroom apartment now top $1,600 per month. Contrast that with mobile home park lot rents, the average lot and home rent nationally is near $975 per month. Mobile home park living is an unique affordable housing option - if available.

DURABILITY: Mobile home parks perform well regardless of the economic trends or cycles. According to Green Street Advisors, a global real estate research firm, between 2004 and 2018, operating income from mobile home parks rose by 87%. This income never declined, even during the Great Recession of 2008. Increases in housing prices in strong economies make it even harder for low-wage workers to afford housing. In a weak economy, job loss and wage reduction mean that more people need access to affordable housing. Mobile home parks can do well no matter which way the economic wind is blowing.

RETENTION: Mobile home park residents who own their own homes tend to remain in their homes longer. Over 90% of mobile homes are never moved after they are first installed. This is primarily due to the costs associated with moving the home (approximately $6,000). Also, around one-third of mobile home park residents are retired and not inclined to move as frequently as younger residents. These retired residents add to the economic stability of mobile home park investments with their fixed incomes (Social Security, pensions or SSI), and they typically do not experience disruptions in their income that could cause them to vacate their home.

INVESTOR RETURNS: Mobile home parks are generally acquired for higher capitalization rates than other investment types in the class. Given the highly fragmented nature of the asset class (less competition) on non-institutional size parks and the stigma associated, mobile home parks can generally be acquired for higher capitalization rates (net income/purchase price) on the income they produce. Mobile home parks also operate with higher profit margins. Mobile home parks typically operate on high margins (expense ratios around 30%-40%). Higher CAP rates and Higher operating margins mean better returns for investors.

MOBILE HOME APPRECIATION: Mobile homes still remain the most affordable housing option in the market, often selling for ⅓ the price of stick built homes. The value of mobile homes (no land) have increased faster than stick built homes during the same period.