Picking a Market for Mobile Home Park Investing

by Christopher Levarek

"Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas."

— Paul Samuelson

“Are you kidding me?” said my three year old as we abruptly stopped at a red stoplight in our white Toyota 4Runner on the way to school. I caught myself mid-sentence in my reply , “I know right…”, and turned around laughing. “Who was this kid and where did he learn to say that?”, I asked myself. Well quite obviously, he learned it from me I’m sure. They are little sponges!

It’s interesting that kids copy us, even when at that age, they might even not know the true meaning behind the action or words. Let’s not “kid” ourselves though, many of us do this day in and day out when it comes to other adults, especially with investments! One big blunder I see is people investing in markets that don’t make sense simply because their neighbor or family is doing it. This does not serve you, so let’s fix it.

Today, we are looking at how to pick a market for the Mobile Home Park Investing. Now whether you are considering investing passively in a deal or actively looking to purchase a park, these steps will let you vet a deal and ultimately know if it’s a good market for your investment.

Picking a Market for Mobile Home Park Investing : In Three Simple Steps

Step 1 : Select a Region of Interest

Quite simply, take a pick of a region in the United States that you feel would be a good fit for Mobile Home Parks or which has mobile home parks of interest. So if you like the Raleigh, North Carolina region, well start there. Or if you are interested in Alabama, select that.

If you are vetting a passive investment offering, simply pick the location specified on the investment documents.

Step 2 : Take a Look at Economic Indicators for the Region/State

At this point, you will perform some due diligence on the location of choice. A good free resource for this is with bestplaces.net. Simply browse the map until you find your location of interest. Narrow down until you get to the city level or surrounding area.

From here, you can see a high level view of the economic indicators of the area to include population growth, median income, unemployment, median home price, etc.

Step 3 : Verify Some Key Rules of Thumb for “Good” Markets for Mobile Home Parks

Now that you have some of the data, simply verify that some of these rule of thumb “good” market indicators are being met :

  1. Population size should be over 55,000

    1. Typically means multiple employers, surrounding infrastructure and resources are in place. A good sign for performing mobile home park rentals.

  2. A Walmart or Lowes located in the city or nearby

    1. A Walmart or Lowes is a positive sign for growth and shopping tenants.

  3. Population Growth is positive

    1. A rising population growth is good for demand on rentals.

  4. Unemployment is better than National Average of 6%

    1. Jobs mean tenants can pay rent. (Note, this is not a strict rule of thumb. Within in 2% can be a great market)

  5. Median Home Price of $100,000 or higher

    1. Home prices higher than $100,000 mean less competition for Mobile Home Park Tenants. IF homes are priced lower than $100,000 or at minimum $75,000, houses are competing with mobile home park tenant demand.

  6. Not Too High Crime Rate

    1. Ensure crime rate isn’t too high. Compare to Natl. Avg. (Note, this is not a strict rule of thumb.)

  7. Median Household Income is $40,000 or higher

    1. Household income at this level means tenants are able to pay rent.

Step 4 : Compare with Other Markets and Select one!

Now perform steps 1-3 with other prospective markets or deals. Compare the markets. Perform additional due diligence by verifying with local agencies such as the county or city offices.

Select a Market!

In Final

Hopefully you now have a good method for vetting a mobile home park investment offering or even picking a market for mobile home park investing as an active investor. Of course, let me point out that there are other additional forms of performing due diligence and the above is a high level approach. It will however get you pointed in right direction for feeling more confident in your investment decision and thesis.

Remember, you also don’t have to do all the verification yourself. While it is important to perform some due diligence, you can always partner or passively invest with expert teams who specialize in these form of commercial assets. Either way, Happy Investing!






Chris LevarekValkere Investment Group