“The upside to mobile home park investment increases as the mobile home park industry hits an all time low. As communities fight to keep mobile home parks from developing within their boundaries, existing parks have become more valuable because of the barriers to entry. The current economy and lending restrictions will surely produce a comeback for mobile home parks if the following suggestions are taken to heart…” —Chris Shaheen, Associate Broker for Saurage Commercial Real Estate
Question: Ray, what factors indicate the climate, good or bad, for investing in mobile home parks?
In my view, the worst that can happen for mobile home parks has already occurred:
— Low rates and easy money for traditional housing
— An industry-wide meltdown of “chattel” lenders for single and multi-section homes without land [“Chattel” is tangible personal property with titled ownership, other than land, buildings, etc.]
— A resulting decrease of production levels to a fifty year low
— With a decline in single-wides to 10% of total floors produced
That’s what the manufactured housing industry has experienced over the past few years, so a case can be made that the industry must be at the bottom with nowhere to go but up.
Understand, however, that all of the above happened in the midst of the greatest housing boom ever. The industry brought most, if not all, of the problems on itself, and the finance issues above are the key to both the problem and the cure.
To survive, mobile home producers and retailers have been forced to focus on the land/home finance model using multi-section homes and completely abandon sales of single-wides in land-lease parks.
Realize that this is not due to a lack of demand for single-wides or parks, but a result of the lender backlash due to the industry’s demonstrated lack of integrity in single-wide finance. To read this article in its entirety click HERE.
Chris Shaheen is a graduate of Louisiana State University where he obtained a Bachelor of Science in Business Management. Shaheen obtained the Louisiana Real Estate Sales License in 1995 where he began work as a consultant with Saurage Company Inc. as a specialist in development, land valuation, and financing.
Saurage Company, Inc dba Saurage Commercial Real Estate was founded in Baton Rouge in 1991 with the purpose of providing exceptional real estate services with an emphasis on commercial property and property management. Saurage Commercial Real Estate offers to its clients a full range of real estate services including brokerage, investment advising, development consulting, REO disposition specialists, asset management, fee based consulting, tenant representation, and buyer representation. The staff of professionals includes combined experience of 50 years, as well as CCIM Designees and Candidates and recipients of Master of Business Administration.