Todd is an investor in the Bay Area that focuses on investing in Mobile home parks. In this episode, Todd will tell us how to start investing in mobile home parks and how they can be a better asset class compared to real estate investments.
Todd recounted how he got into the business of mobile homes and parks. He began investing in real estate acquiring single-family homes while working in corporate finance mostly for Silicon Valley companies. He shares that at the time he was trying to make a transition out of working in corporate finance and single-family homes investing is not the way to get there faster. So he started to learn more about syndications and looked into different asset classes including the mobile home park space that interested him.
Managing mobile homes and parks is one of the most difficult when investing in this space according to Todd. It’s difficult to manage because you can’t hire a professional apartment or single-family home property managers to manage mobile homes and parks. Since mobile homes and parks aren’t the typical real estate investment, it’s just not part of most property manager’s business. He also said that finding these property managers who will be a great fit for this space allows the investor to have boots on the ground and enjoy other advantages of investing in mobile homes.
As someone who first invested in single-family homes when starting in real estate, Todd discussed its pros and cons based on his experience. Single-family homes are inexpensive. So it’s an easy entry point for somebody who wants to quickly dive in and figure out what investing is like. It allows one to have that first-hand experience of owning a property, deal with managers, etc. On the flip side, single-family homes aren’t easy to scale. Mobile homes, on the other hand are easier to scale. They are also better than single-family homes in terms of the returns and because of its recession resistance.
Todd shared the things that he did to know more about the business when he decided to invest in mobile home parks. Aside from the usual things such as reading books, going to meetups, and listening to podcasts, he pointed out two noteworthy resources that immensely helped him grow in his mobile home investing journey. One is the mobile home boot camp by Frank Rolfe who is the fifth largest operator of mobile home parks. Another resource that he cited is for people to be connected to a consulting company specializing in mobile homes. This acted as a mentor, guiding him in every step of the process. They taught him what things to look for in a property, what questions to ask, and many more, to give confidence in his first few investments.
When considering for properties to invest in, Todd sees to it that he’s looking for properties in places where his mentor/consulting company already had a property management presence and had already managed parks in that area. For properties specifically, he would be interested in parks that ideally has 50 spaces. Too few spaces would be difficult to scale while too many spaces have a higher price point. Using these criteria as a filter, he then looks for value add plays; one that is not fully stabilized but he can still add value and which would give his investors better returns.
Mobile home parks investing is considered an advanced strategy in real estate investing. Some people do actually jump right into something like this even as a beginner. But for Todd, he advises starting small first. You can either start in basic investments as he did with single-family homes. Or you can also start in the syndication world and be a passive investor just to get your feet wet and understand the business, specifically mobile home parks, before being comfortable diving by yourself. Nevertheless, educating oneself through books, podcasts, seminars, and attending meetups is important as a new investor.
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