Categories: Podcast

111 – How To Invest In Mobile Home Parks with Andrew Keel

Synopsis

Andrew is the owner of the Keel Team and currently manages 14 manufactured housing communities across six states.

Andrew will give us an inside scoop on how to properly purchase and operate mobile home parks to maximize the profits on each asset. We’ll be able to see the costs associated with operating a mobile home park and the amount it effort it takes to get it turned around. We’ll also get tips on what to do if you want to purchase your own mobile home park.

Key points

Starting Out As An Investor

Andrew is a manufactured housing community investor. After a brief introduction of himself and what he does, he recounted the story of how he started in the business and learned along the way. He told about a guy he found on Youtube named Lonnie Scruggs and read his book “Deals on Wheels”, where he would buy mobile homes in parks and then sell them on contract for monthly payments to the end-user. Later on, he also learned that the real value in this asset class is built-in owning the land where the homes stand rather than the mobile homes. From then on he started raising capital to purchase mobile home parks and rent it out.

The Advantages Of The Mobile Homes And Parks

There are several reasons why Andrew loves this asset class. First is because mobile homes and parks are “partially”recession-resistant since the need and demand for affordable housing is off-the-charts. Investing in mobile homes doesn’t require as much effort as the other types since you don’t have to worry much about the maintenance of every little detail of the property. It’s more scalable.

Finding Lots To Purchase And Evaluating Deals

The methods of finding lots to purchase is pretty much the same as the other investment class. For Andrew, much of it involves cold calling owners of parks and mailing them letters. Going through brokers is also one of the main ways to learn about new deals. And then once he found them, Andrew evaluates if this is a good deal by going through his criteria. He noted that there is an evolving one but currently, they look for properties that have over 50 lots. They also go over some factors such as the age of homes, the metro area, the access to stores, good employment, sewer infrastructure, and more.

Establishing A New Management

One of the key steps in maintaining a good mobile home community is establishing new management. Usually, right after the acquisition, Andrew sends his employees on-site just to set up the management side of things, start new systems for depositing rents, handling violations, and so on. This happens in a period of 2-3 months. During this time, the team also makes sure that the tenants are taking care of their lots while facilitating the hiring of a good on-site manager. Afterward, the job will be easier as it can be managed remotely from that point on.

Gradual Steps For Investing In Mobile Homes

Andrew offered tips that are gradual steps for someone who wants to explore investing in mobile homes. The first of the three tips that he gave is to go over Lonnie Scruggs’ book “Deals on Wheels”. He encourages beginners to do a “Lonnie Deal” first before even looking into communities where one will walk through the process of finding a mobile home, fixing it, and reselling it. If you found the process appealing, he advised learning more by attending the MHU boot camp that he attended. Here you’ll learn a ton of information about the industry. Then the third tip that Andrew gave is to just start cold calling and building a broker network to try to acquire some of these properties.

Final Words About Mobile Homes

During the last part of the episode, Andrew talked about how profitable the mobile home parks industry is. He encouraged listeners that investing in this asset class is not complicated; it’s not rocket science. However, that doesn’t mean that it’s easy, especially much of its operation side. In the end, it’s follow-through that’s important to succeed in taking on mobile homes. This is also a lesson that Andrew learned from acquiring properties from operators that “took their off the gas and haven’t been managing the properties well”. It’s going to be more work than planned at first. But once everything is set up and stabilized, it’s a very nice asset to hold on to.

References

Books and Training

More from our guest

Ralph Miller

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