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4 Unexpected Things I’ve Learned From Buying My First Mobile Home Park
In the past month, I jumped into commercial real estate investing. I am now the proud co-owner of a 100+ lot mobile home community. The journey to this point of my career has been a fun, profitable, and challenging one, for sure. Some things I have planned for, while other surprises are counterintuitive and have completely caught me by surprise.
Below is a list of 4 positive, unexpected things I recently learned while owning my first mobile home park.
4 Unexpected Things I’ve Learned From Buying My First Mobile Home Park
Commercial real estate investors can be flaky, too.
Owners, sellers, and investors of residential real estate can be greedy and ignorant, and they can mismanage and neglect their properties. So it goes without saying that commercial real estate owners, sellers and investors can be the same way. For my entire residential real estate investing career, I have incorrectly assumed and acted as if commercial real estate investors belong on a pedestal, that commercial investors are almighty and all-knowing.
I was blown away to discover that owners of commercial real estate properties are people too, with many of the same flaws and faults as the rest of us. Over the past 10 months, I have called on hundreds of commercial property owners and sellers. While some owners have all their facts and finances in order, there are many owners/sellers that are confused, unsophisticated, vulnerable and motivated to ditch their unwanted and problem-filled commercial properties. Oftentimes the reason for the property being mismanaged is due directly to the owner’s neglect, ignorance or incompetence.
Park residents will not mind volunteering.
Soon after purchasing the mobile home community, I set out to make sure I knew who every resident was and that they knew me. In this mobile home park, there has been a lack of authority and lack of community togetherness for as long as I am aware. My goal over the coming year is to unite all park residents to help improve the community together and increase the standard of living.
Within the first two weeks, we had our park’s first resident community meeting. During this meeting residents got to know one another and socialized in a safe environment. More importantly, we discussed working together to improve the community, add new rules, fix what was broken, improve safety, and clean up the park for all residents to enjoy. Towards the end of the meeting, I was approached by a few residents asking if they could volunteer to help clean up the common areas and start a nighttime neighborhood community watch program.
The outpouring of help so far has been unreal. Many of these residents have just been waiting for an opportunity like this to shine and start improving their neighborhood.
Seller held financing is a common concession.
Mobile home park financing is on the tougher side to obtain. Mobile home park sellers understand the fact that for a reasonable price and quick sale, some degree of seller held financing may be asked for. Unlike other forms of real estate investing where owner financing and seller carry-backs are a rare luxury, mobile home parks may often include some form of seller held note structuring for a balance of the seller’s equity.
Past related experience can become invaluable.
Over the past decade, I’ve spent most of my time investing in individual mobile homes inside pre-existing mobile home parks and individual mobile homes attached to private land. During this time I have helped parks by purchasing and fixing their used homes, adding used mobile homes to their empty lots, and buying and selling more mobile homes than I can remember. All this time I was unknowingly developing invaluable experience that would become crucial while owning my first mobile home community.
In the short time owning this park we have begun adding clean, inexpensive, and nice used mobile homes to my vacant lots, while at the same time cleaning and repairing existing vacant homes currently on the property. Foot traffic and potential buyers coming through the park have also increased dramatically as a direct reflection of our efforts. There is still much to do; however, many of the same things I have been doing for years, I am continuing to do in my own mobile home park.
While there is so much more to know, investing in complete mobile home parks versus investing in the individual mobile homes, I would be much more confused, scared, and inadequate if I did not have such extensive experience dealing with individual mobile homes, mobile home buyers, and mobile home sellers.
In conclusion this business is not magic; no real estate investing niche is. Real estate investments take hard work, discipline, a clear executable plan, and the willingness to follow through daily to the end.
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