Most apartment tenants dream of lower rent payments and detest increases. The same is true of those who live in mobile homes. One big difference; apartment dwellers can more easily move while mobile home buyers own their home. That makes comparison difficult, so what determines “fair” park rent?

One of the strange media fixations on the mobile home park industry is that “mobile” homes are anything but mobile. Between the high cost to move a home ($5,000+) and the dangers involved (the home can fall to pieces in transport) it makes about as much sense to move a mobile home as it does a stick-built one. Yet the media frequently fakes moral outrage that these dwelling units can’t just be hitched to the back of your minivan and hauled down the highway like a U-haul trailer. Let’s analyze why this argument is so absurd.

In many parts of America, you’ll find mobile home parks located next to sewage treatment plants, cattle feed lots, airport runways and railroad yards. These can create massive noises and odors on a daily basis. So what is the impact of these on mobile home park success in both operations and valuation?

Vice Media recently released a video to its American audience, attempting to play on their woke sensibilities with the worn-out theme that mobile home parks are nothing more than rich landlords beating up on the poor. Instead, this misguided reporter and story probably built one of the best videos ever on the benefits of mobile home park investing. Here’s what the video basically tells the viewer.

Sure, the U.S. is now officially in a recession. And this one will be more serious than the 2020 Covid dress rehearsal. But mobile home park owners are not worried about the decline of the economy. It’s the same phenomenon that “dollar stores” are currently experiencing: in times of financial decline, more customers look for less expensive options. That’s why dollar store sales are up over 70% while every other form of retail is in total decline. So why do mobile home parks do better when times are bad?

Once upon a time, a mobile home dealer named Jim Clayton, frustrated by look-alike mobile homes, decided he could do better and opened a little factory to produce innovative mobile homes. Or tried to, before learning how difficult that task would prove to be. Clayton became very successful, but his homes look just like the competition. Innovation is hard.

Six years ago, the transmission went out in my aging GMC Yukon. It had about a billion miles on it and The Blue Book Value was around $2.75. It made no sense to fix it as it was not worth the cost. So I moved on and found another used GMC Yukon. After six hard years and multiple crossings of the continent, the head gasket blew on my second GMC Yukon.

Many Americans were surprised when it was announced that Mark Cuban’s crypto bet that he’d been hawking for months had collapsed. But the bigger question would tie to one of Mark Cuban’s recent quoteas to what makes an investment have inherent value:

There’s one unique type of deal that is only perhaps found in the mobile home park sector: the “zero down”. We’ve done 12 of these over the past 25 years, but have also done deals with 2.5%, 5%, 10% as well as other low-down payment amounts. In fact, there’s a general assumption that “zero down” and other “low down” constructions can cure all ills with any mobile home park purchases. But is that really true? Let’s examine the facts.

There’s nothing more American than baseball, hot dogs, apple pie … and mobile homes? It’s true. There is no more “American” form of housing than the good old trailer park. How did that happen and why are so few people aware of this fact?

So what can you do to find a good investment “storm shelter” for this high-odds occurrence? One good option is buying a mobile home park.

In 1996 I ventured into the mobile home park business with my first buy being a dilapidated old mobile home park built in 1951 called Glenhaven. I knew nothing about what I was buying or how it operated.

The Wall Street Journal recently released an article touting a grassroots movement for rent control. It cites that U.S. rents are up 18% on average in some markets as the catalyst to a new world order in which rents are set by state government. So how realistic is the concept of rent control in the markets that have not embraced it over the past 100 years? There’s a lot more math to this issue than what the Wall Street Journal released to readers.

As an economics major from Stanford, the fist lesson learned is that markets move in cycles. But even an Uber driver summed up the main lesson in a recent cab ride:

There are around 44,000 mobile home parks in the U.S., with roughly 40,000 of those still owned by the original moms and pops. It is the challenge – and opportunity – of the current generation to bring these selectively back to life. Some qualify for investment and others don’t, but the trick is understanding what makes money and what’s hopeless and following established guidelines for making them successful again. The photo above is from the 1955 book titled “How to Build and Operate a Mobile Home Park” and, as virtually all mobile home parks in the U.S. were built between 1950 and 1970, the photo above represents the “before” shot for many of these investment projects. So how do you create the successful colorized “after” photos?

The sudden rise in inflation to levels not seen in 40 years has changed the playing field for successful investments. Americans have become accustomed to inflation rates of 1% to 2%, and therefore tolerated investment returns that were only mid-single digits in everything from stocks to bonds. Even those who ventured into real estate often did so with REIT dividends of around 4%.

One of the most common questions we get regarding buying mobile home parks is “can you make $100,000 per year on a single asset?” This is understandable as most investors are looking at alternative investing to do what the stock market fails at, and that’s to provide predictable and significant cash flow on a recurring basis. With the average dividend yielding around 2.5%, you would need $4 million in stocks to accomplish this. And to own $4 million in stocks you’d have to earn around $8 million pre-tax. That’s not much of a business model. So here’s why mobile home parks can hit this target, but based on complete science and not a “get rich quick” infomercial premise.

The Holiday season invariably includes mobile home fires. Not necessarily in your park. Maybe only once a decade, if ever. But there’s no question that fires occur in mobile home parks more frequently in winter than summer.

Amazon has become one of the gold standards for the modern stock market investor, who marvels at their retail dominance and future-thinking. But how does Amazon stock actually compare to an investment of the same amount in a mobile home park? Here’s how it stacks up.

We all know that Zell’s REIT Equity Lifestyle is the largest mobile home park owner in the U.S. with over 160,000 lots. But now he appears to be investing in the macro industry itself. Sam Zell has announced that he is buying MHVillage (the largest website selling mobile homes) and Datacomp (who supplies mobile home park market data) https://therealdeal.com/texas/2022/01/26/sam-zells-equity-lifestyle-properties-invests-147m-in-manufactured-homes/. What does this mean for the mobile home park industry?

The #1 American fear is public speaking, followed by snakes.

A recent article in Realtor.com is forcing those who criticized mobile homes as investments for consumers to eat their words

There are only around 44,000 mobile home parks in the U.S. – and that number is set in stone with roughly ten times more torn down each year than built new. Of that number, around 4,000 are owned by professional investors, leaving about 40,000 up for grabs. What are you doing to buy your fair share of these properties – and why bother?

There are two simple facts in the American economy right now. They are somewhat tied together, but not entirely.

Mark Cuban recently bought a mobile home park and a strip club in a town called Mustang, Texas