Mobile home park business plan
You should never build a mobile home you should never build a you should never build a mobile home ask us all the time why, since we're one of the largest mobile home park owners in the u. They'll call us with raw land that they want to sell us to build a new park on. As a result, you'll have to build a new park way out in the county, where nobody can block your project. If that's not bad enough, you'll have to worry constantly about whether or not the systems are working, and then spend a bunch of money fixing every can't fill lots without buying the you thought the private water and sewer was expensive, wait until you see the price tag on filling the park with mobile homes. Here's the reality: you cannot fill a mobile home lot today unless you buy the home and bring it in yourself. It will cost you around $25,000 to fill a lot, assuming a mix of new and repo homes. Getting a loan to build the park in the first place is just as impossible. If you can find a banker today that will finance your construction of a new mobile home park, then you are the lebron james of bank dog and pony projects are you build a new mobile home park, you will embark on an odyssey of risk like no other. Since banks won't make loans on parks that are not "stabilized" (80%+ occupancy), you will be on your own until you hit that number. It's like no-man's land in world war i: if you can't make it to the next trench at 80% occupancy, you're going to get just can't make money with perhaps the most important reason that you will not want to build a new mobile home park is that you can't make any money with it. When you take into account the interest carry of filling up a mobile home park from scratch, the return on the project is zero or negative. With hundreds of mobile home parks available - already built and at stabilized occupancy - at 10% going-in rates of return, why would you even consider building one? The affordable housing industry is a great business model, but the real estate construction business model is not. Just ask the folks who built new parks in louisiana to cater to fema and see how that turned rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. He is currently ranked, with his partner dave reynolds, as the 5th largest mobile home park owner in the u. Along the way, frank began writing about the industry, and his books, coupled with those of his partner dave reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real you should never build a mobile home you should never build a you should never build a mobile home ask us all the time why, since we're one of the largest mobile home park owners in the u. Along the way, frank began writing about the industry, and his books, coupled with those of his partner dave reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real lars tunbjork for the new york times.
Don’t get too hung up on appearances,” frank rolfe reminded us as our tour bus made its way to the first of several trailer parks we would visit on a bright saturday afternoon in southern california. It was day 2 of mobile home university, an intensive, three-day course on how to strike it rich in the trailer-park business. All of them, though, had somehow come to see the lowly mobile home as their vehicle to financial freedom. Students nodded appreciatively: they learned early in the course that one of the best things about investing in trailer parks is that ambitious landlords can raise the rent year after year without losing tenants. The typical resident is more likely to endure the increase than pay a trucking company the $3,000 it can easily cost to move even a single-wide trailer to another park. Raising rents by 30 percent might sound steep for trailer-park tenants, who at green lantern earn $40,000 on average, but the manager explained why that isn’t the case, as if he were reading from the 500-page instruction manual rolfe distributed on the first day. He and his business partner, dave reynolds, started buying trailer parks together shortly after the subprime meltdown. Using their own money and millions more from outsider investors — including many who have been through mobile home university — they have been buying about two dozen parks a year. By catering to those living on the economic margins, their parks generated more than $30 million in revenue last year. More than half of that was ue reading the main the most striking aspect of their business is how happy their tenants seem to be. Louis to spend some time in a couple of parks that he and reynolds own. A few, like linda wright, a former walmart employee who has lived in the jeffco estates trailer park in arnold, mo. Wright, who was the park manager when rolfe and reynolds took over early last spring, said the rutted roads in the park flooded every time it rained. When rolfe and reynolds bought the park, they repaved the streets and fixed the drainage system. You get with the program in my park,” wright, a slight, white-haired woman, told me with her arms crossed. Continue reading the main ue reading the main a business that’s trying to squeeze every dime out of the working poor still offer them a pretty good deal? To the extent that hers is a genuine and representative sentiment, the people involved with mobile home u.
Instructors, enrollees, alumni investors — may represent the best thing going in affordable housing at a time when the nation’s need for low-cost places to live has never been mobile home as we know it appeared at the start of the automobile era as a pricey, wood-paneled plaything of the very wealthy — a way for them to travel in comfort on long trips before motels lined the roads. After the war, small trailer parks popped up on college campuses to accommodate the influx of former soldiers under the g. It wasn’t until the ’50s that the mobile home became a low-cost residence that, despite its name, almost never moved once it was delivered to one of the thousands of trailer parks that were sprouting up around the are 8. Some are a lone trailer on an individual’s property, while others might be parked on native american reservations, but an estimated 12 million people, rolfe says, live in an actual trailer park. That number is not likely to grow, we learned in southern california, given restrictive zoning laws and the prohibitive cost of building a new park in the boonies, meaning supply is static even as demand for cheap places to live is high. It’s just an absolutely great time to be in the mobile-home business, with all the people who have been displaced from their homes because of foreclosures or they’ve lost a job or what have you,” says stu silver, who runs a rival trailer-park seminar called sam (“special advanced mentoring”) 2003, warren buffett paid $1. Billion to buy clayton homes, one of the country’s largest manufacturers of mobile homes. Zell is chairman of equity lifestyle properties, which he took public in the early 1990s, when the company was called manufactured home communities. With nearly 140,000 lots scattered across more than 370 communities, equity lifestyle is the mobile-home industry’s largest landlord. Given that at various times zell has owned more office space, as well as more apartment buildings, than any other entrepreneur in the united states, it’s indicative of the riches to be made on this down-at-the-heels edge of the housing market that a mogul like zell is so heavily invested in trailer parks. Not that the marketing departments at either zell’s or buffett’s company would describe one of its properties as a “trailer park. Clayton builds and provides the financing for “manufactured homes” — grand things compared with the typical trailer — that end up in “manufactured-home communities” like the ones owned and operated by equity lifestyle. If you’ve never experienced the manufactured-home-community way of life, you don’t know really what a nice lifestyle it can be,” chrissy jackson, an industry consultant, told me. If nothing else, the look and feel of the communities she was talking about are several notches above the trailer park most of us rolfe rolls his eyes when he hears this kind of talk. He tells people he’s in the “mobile home” or “trailer park” business because that’s how customers talk. When rolfe and reynolds buy a park with a pool, they usually shut it down to rid themselves of the operating expense and the liability. In their view, the root systems of trees are a threat to the sewer lines that crisscross any park.
Rolfe, who is 52 and has a degree in economics from stanford, can come off at times as a caricature of the coldhearted capitalist, during his mobile home university courses, he also gives voice to left-wing critiques about the profound fissures in our economy. It wasn’t the creative side of the ad business that moved him but simply the camaraderie he felt working side by side with his fellow employees. He was the first one in the office each day and usually didn’t leave until ordered to go home. But his brother told him business schools wanted their students to have at least a year of practical experience, and so he went into the billboard business, buying first one billboard, and then a few more, until a decade later he was up to 300 when another company bought him out for $5. At 35, he had to decide what to do with the rest of his rolfe bought a trailer park, he had visited only one, the glenhaven mobile home park in dallas, when an out-of-town billboard client asked him to deliver a message to its manager. Yet four months after selling his billboard company, rolfe bought glenhaven, a grim, junked-up, half-filled park, for $400,000. Rolfe had a couple of million dollars in the bank and a newborn daughter at home. Trailer parks are his world, and after nearly two decades in the business, he can entertain his students with a near-endless repertoire of tales. For a relatively nominal salary — these days, around $12,000 a year for the typical park plus a rent-free trailer — he could hire a manager and the day-to-day problems would be someone else’s. That freed rolfe to roam the country in search of poorly managed parks to be bought on the cheap. Rolfe had acquired two dozen parks when he reversed course, feeling emboldened by a spike in real estate prices that had potential buyers willing to purchase his properties for much more than he thought they were worth. By 2007, he had sold his entire portfolio, earning about as much on his trailer parks, he says, as he did from the sale of his billboard ue reading the main verify you're not a robot by clicking the d email address. Please try again are already subscribed to this all new york times was still winding down his business in 2006 when he met dave reynolds at an industry conference. The two competitors agreed over lunch that they could do a much better job teaching people the nuts and bolts of the trailer-park business than the pair who had asked them to serve as guest speakers. Reynolds had been born into the business; his parents owned a mobile-home court in colorado. I was the middle-class kid suddenly having to live among the poor,” he said about the few months he had to live in his parents’ park as a kid. He bought his first park in 1993, when he was first, rolfe and reynolds both taught the curriculum they created.
But then a couple of years ago, reynolds calculated the hours he was devoting to teaching a three-day course six times a year during boom times for the trailer-park industry. By that point, the two of them were searching the country for parks to buy. It’s as if he carries a map in his head based on trailer parks he has bought or at least contemplated buying and that gives him a fascinating, if perhaps narrow, view of his fellow citizens. Trailer-park residents living in the north, he told everyone, are rock-solid citizens compared with their counterparts in the south. In texas, for instance, 5 to 6 percent of their tenants are delinquent each month paying the rent, compared with less than 2 percent of those living in parks in wisconsin, north dakota or minnesota. Avoids buying any parks in new york and california; both states are too “tenant friendly,” he said — too much in the way of time and money are required to evict someone who is behind on the rent. On the other hand, rolfe said, you can always have your tenants pay for water, which is a trailer-park owner’s largest doesn’t offer much practical advice about overcoming any embarrassment in associating yourself with the trailer-park business. At first i was like, ‘no way am i buying a freaking trailer park,’ ” said lilly, a clean-cut, 46-year-old ivy leaguer who lives in san francisco. But when he discovered the price of apartment buildings and compared them with the cost of trailer parks, he found himself reconsidering. What difference did it make, lilly asked himself, whether he bought a trailer park or an apartment building when he wasn’t going to live in either one? Of the first parks rolfe and reynolds bought together was the holiday manufactured home community in pontoon beach, ill. It was there at this predominantly white, 217-lot park that i lived as rolfe and reynolds’s guest for the better part of a week last summer. A trailer is still a trailer, even with the vinyl siding and pitched roofs that are now common, and all but the priciest parks include the familiar truman-era rectangular metal mobile homes and wooden ones that are also decades old. To maximize the number of homes that can fit in a park, trailers are arranged so passers-by generally see the sides of people’s rectangular boxes (spaced 15 to 20 feet apart) rather than their front , people make the effort to personalize their homes at pontoon beach. Everywhere i looked, i saw handsome wooden decks thick with potted plants, american flags, chimes and wooden birds whose wings twirl with the wind. The residents had planted shrubs and rose bushes and small flower beds bordered by rocks. Heard the occasional complaint during my time at pontoon beach — kids riding their bikes in the street, potholes patched instead of streets repaved — but they sounded like what you might hear at the monthly meeting of a suburban homeowner’s association.
Now 76 and retired, watz pays $285 a month in lot rent and spends her days reading murder mysteries and tending to her plants. The trailer trash, redneck jokes i’ve been hearing since the day i moved in,” she ’s some nobility in the rolfe-reynolds business model. The parks they take over tend to be in lousy shape, and they spend hundreds of thousands of dollars fixing them up. In that way, they’re the trailer-park equivalent of the developer who buys abandoned properties in the bronx and converts them into livable places that are, at least, clean and safe. The practice helps rid their parks of bad seeds and ne’er-do-wells — though that’s little consolation to the newly laid-off tenant who now has to simultaneously think about finding a new job and a new place to live, while facing the possibility that he’s about to lose whatever equity he has in his home. If their trailer parks can be viewed as part of the new safety net, it’s a fragile trailer park also seems a bad deal for the manager. Rolfe confesses to feeling some guilt that he owns the largest house in his hometown while his customers are making do in cramped quarters. Tell us what you to make $100,000 a year cash flow with one mobile home park investment. 100k a year cash flow with one mhp to make $100,000 a year cash flow with one mobile home park the national economy in free fall, and millions of jobs being cut across all industry segments, many people are trying to formulate a plan to replace their income if they get laid off. For many people, the answer may be in a good old fashioned trailer type of park you'll make an immediate $100,000 in cash flow with a mobile home park, you'll need to find a park that has around 80 lots. A park with 80 lots is going to cost around $800,000 and will require about $160,000 down (although in select cases, you may be able to get away with $80,000 down). Park will need to have city water and city sewer services, and be in a market of at least 100,000 the deal must be will need to buy the park with seller financing. Let's go over raising revenue home park residents are at a great disadvantage when it comes to raising rents. So unless they have $3,000 in cash burning a whole in their pocket, they really have no way to move out if they don't like the new rent parks you can find for sale are under-market in their rent. That $50 rent increase is going to get you half way to your $100,000 per year some parks, you will also find vacant park-owned mobile homes. Often you can accomplish this with finding and fixing leaks in the system, or leaks in mobile homes. In many parks, the manager that is getting paid $30,000 per year can be replaced for 1/3 of that.
Rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. Along the way, frank began writing about the industry, and his books, coupled with those of his partner dave reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real estate.