| This country has experienced unprecedented gains in | | | | of that, demand is currently low because so much |
| housing prices over the past five years. With some | | | | money has recently been made in the single-family |
| regional markets expanding at a phenomenal 25% | | | | housing sector. Why would anyone want to move their |
| annual average, the investors who got in early have | | | | investment funds into a mobile home park? |
| created tremendous wealth. However, in my opinion, | | | | Affordable housing will always be required in this |
| this wild roller coaster ride is about to stop on the way | | | | country. The average American must have shelter, its |
| up and the people still in the car are going to come | | | | a basic need. When the housing crisis hits and interest |
| crashing down off the tracks. | | | | rates rise, foreclosures will be at an all-time high and |
| I recently saw an alarming statistic. The hype and | | | | many people are going to be forced out of their |
| pandemonium of the real estate boom has created a | | | | current home. A destroyed credit rating will drive these |
| stampede into the industry. More people than ever | | | | people into the rental market or into some type of |
| before are buying real estate strictly for investment | | | | owner financed property. Not ready to give up on the |
| purposes. Unfortunately, the majority are doing so with | | | | American dream of home ownership, they will begin to |
| limited or no knowledge whatsoever concerning the | | | | look strongly at the manufactured housing alternative. |
| pros and cons of owning rental property. | | | | Large living space and low pricing will be very |
| Twenty-three percent, almost one-quarter, of all | | | | attractive. I believe the demand will be tremendous and |
| homes purchased in this country in 2004 were | | | | large lending institutions will begin to get back into the |
| investment properties! Not owner-occupied, but pure | | | | manufactured housing game. The interest rates for |
| rental homes. | | | | these loans will be higher than traditional mortgage |
| Since the average buyer doesnt understand the | | | | rates and one or more large lenders will figure out how |
| inherent risks and potential cash-flow problems with | | | | to turn a profit. |
| this property class, many are feeding cash into their | | | | The mobile home buyer certainly needs a piece of |
| investment every month. For those of us who make a | | | | land to place the home on. Parks provide the |
| living in the real estate business, negative cash-flow is | | | | infrastructure and amenities to accommodate this |
| the cancer of our industry and can lead to a slow | | | | need at a very reasonable cost. As home sales begin |
| financial death. However, the new and uneducated | | | | to increase, the demand for suitable mobile home park |
| investor doesnt see this as a problem since he is used | | | | lots will heat up. The investors who own these parks |
| to contributing monthly to his investment portfolio via his | | | | will be in an ideal position as they can increase rents |
| weekly paycheck. His only rescue from this negative | | | | and still fill their empty lots. Unlike traditional housing |
| cash-flow dilemma is an increase in value of the | | | | projects, development barriers will be high and I feel |
| underlying property. In the simplest term, he is a | | | | this will create a huge shortage in available lots to |
| speculator. | | | | place mobile homes. |
| Professional speculators have made a ton of money | | | | You couldnt ask for a better situation as a park owner. |
| in real estate and other industries for centuries. These | | | | High demand, coupled with low supply creates a |
| superstars arent your ordinary people. They | | | | financial windfall for the astute investor. Cash flows will |
| understand supply and demand relationships, market | | | | be tremendous and values will sky rocket, much like |
| timing, growth patterns, and economic cycles. I dare | | | | the feeding frenzy going on right now in the |
| say the overwhelming majority of people buying real | | | | single-family home market. Cap rates will drop on this |
| estate today as an investment doesnt fit into the | | | | asset class and the large REITs will probably start |
| professional category. As a matter of fact, the | | | | paying unbelievable prices for the large, well-kept |
| uneducated investor is often the customer who ends | | | | parks. |
| up lining the pocket of the professional speculator. | | | | Ive been in the business several years now and its a |
| If you have been fortunate enough to experience the | | | | great time to buy. While the masses of park owners |
| thrilling ride of the housing roller coaster, I encourage | | | | are crying, sell, sell, sell, some of us are quietly acquiring |
| you to contemplate getting off and moving on to a | | | | turn around parks. Most of the parks are initially at a |
| more predictable, long-term investment. Find a real | | | | break even or small positive cash flow position, but by |
| estate vehicle that will provide income as well as | | | | implementing our system we are able to steadily |
| capital appreciation. Manufactured housing communities | | | | increase cash flow and quickly increase value. But, |
| are in an asset class that can deliver both of these | | | | even better than that, we are positioning ourselves to |
| benefits. | | | | benefit from the potential flood of customers into our |
| Mobile home parks have slowly become the | | | | market. |
| step-children of the real estate investing community. | | | | I urge you to take a long look at the mobile home park |
| Due to the collapse of the mobile home financing | | | | investment. But, dont wait too long. The secret is |
| industry over the past five years, many of the parks in | | | | starting to get out of the bag as West Coast |
| this country have become neglected, highly vacated, | | | | investors are becoming educated about this |
| and undesirable wastelands. Politicians are fighting to | | | | investment and its benefits. Investors from California |
| get rid of them due to the element of society they | | | | and Arizona have purchased several parks in the |
| often accommodate and the eye sore the property | | | | Southeast in the past 12 months. Who knows, there |
| becomes in the path of growth and development. | | | | may come a time when a good, solid mobile home |
| Eliminating a mobile home park frees up valuable land | | | | park will be purchased for more than the asking pricea |
| needed for the current surge in the construction of | | | | bidding war. Hey, its happening in several single-family |
| stick-built housing. | | | | home markets throughout the country right now. |
| So, you have an investment class that local | | | | Wouldnt you like to be the seller taking that check to |
| governments are trying to force into extinction. On top | | | | the bank? |