Mobile Home Parks 101.ORG
Brought to you By Gorial Realty LLC, Leaders in the Mobile Home Park Industry.
Learn more about Mobile Home Parks for sale.
When considering mobile home parks for sale it is essential to understand the industry where it has been, where it is, and where it is going. Mobile Home Parks have been the low income housing choice for America for decades. A fantastic alternative to renting as one could "own his or her own home". The industry has been, is, and will continue to bring to investors, a low risk, long term, income producing property investment. The industry owners are ma and pop operators as well as publicly held R.E.I.T (Real Estate Investment Trusts) and everything else in between. Syndications, Private Investment Groups and Non Profit Organizations including associations and even municipalities and schools own Mobile Home Communities.
There are two major factors that hurt this industry. Negative factor number one is interest rates, that is, low interest rates. When interest rates hit a low it has an adverse affect on mobile home communities. Tenants who have good credit scores and a few bucks in there pocket end up leaving parks for stick built homes as they are more affordable when the interest rates go low. The idea of a depreciating asset becomes a reality and the tenant that has options will ultimately exercise the options available to make the step forward to a stick built asset which has the ability to appreciate several times more than a mobile home found inside a mobile home park. On the flipside the interest rates being so low allow the buyer who is considering a mobile home park for sale can enjoy more flexibility in the ability to pay a premium for and investment vehicle that may have been out of reach in the days of higher rates.
The major industry killer is the loss of financing. Financing for mobile homes/manufactured homes inside a mobile home park is essential to the lively hood of a mobile home park. When the financing is no longer extant the industry suffers greatly. The mobile home park for sale which taunted the ability to fill 60 homes in one year can no longer do so, in fact, that same mobile home park for sale is lucky if it can achieve 6 new homes per year when financing no longer exists and on top of that the 6 homes it produced were typically homes purchased by the owner of the mobile home park and sold on contract or lease option to purchase with a minimum amount of money down.
Lets talk about what it means when there is no financing for mobile homes. There almost at anytime is a banking institution that is willing to loan on a mobile home inside a mobile home park even in the industry low points. The difference is the interests rates are higher than what one could expect if he or she was buying a stick built home on piece of land or even a mobile home on a lot that is also owned by the owner and not leased. At this point the bank perception to the mobile home is a depreciating asset like an automobile. People can still get loans for homes in parks but their credit has to be pretty shiny in order to obtain financing. So what do you have to understand when it comes to mobile home parks for sale in stormy mobile home park industry climates? You must understand that as a buyer you need to have a plan and a program to buy used mobile homes and sell them to gain traction and fill vacancies in your next purchase. If you think the vacancies will fill themselves you are dreaming. it takes time effort and money to accomplish this. There are rewards for your efforts if you approach this task seriously, in fact, this is another fantastic source of additional revenues if you know the ins and outs of r buying and selling mobile homes.
We hope you have a better understanding when it comes to mobile home parks for sale and considering buying mobile home parks when the park industry is in a slump. No one has the magical crystal ball which indicates when the interest rates will go back up or when there will be a nationwide lender for mobile homes but we know that nothing stays bad for ever and there is an ebb and a flow to almost everything. The investors that make out ahead are the ones that understand the market and make no radical moves.
Should you have any questions about this site or any site within the Gorial Realty Family of web sites feel free to call upon us for answers.
-Samer N. Gorial, and John P. Gorial of Gorial Realty LLC (866) 66 PARKS