In Defense of Mobile Homes

#1

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The quiet story of trailer parks over the last two decades is their reinvention as “mobile home communities” by investors who saw a lucrative opportunity in providing housing to low-income Americans.

The billionaire investor and real estate mogul Sam Zell recently said of his investment fund that owns mobile home communities—some of which advertise amenities like pools and tennis clubs—that he doesn’t “know of any stock or property I’m involved in that has a better prospect.”

Since 2003, Warren Buffett has owned Clayton Homes, which builds houses destined for trailer parks across the country. At 1400 square feet, many of the homes don’t look like they were delivered on the back of a truck.

Franke Rolfe, a Stanford graduate who teaches people how to profit in the mobile home industry, buys dilapidated trailer parks, cleans them up, and rents mobile homes to the working poor. A 2014 New York Times Magazine article reported that he and a partner earned a 25% return on their investment.

Fremont Mobile Home For $166K?
#2

We were talking about mobile homes in a thread started by @ptiemann. Just tonight I ran into this informative article about mobile homes. There is a lot of money to be made in buying poorly run mobile home parks, kick out the deadbeats, fix them up and slowly increase the rent. Pretty much the same playbook of MFH.

It’s not evil preying on the poor though. You do provide a better product and safer environment for them to enjoy their houses. The fact that both Sam Zell and Warren Buffett are in it tells you something. I need to read up on the Rolfe guy. Did not know him before the article.

#3

Aaah, maybe that’s where some of the prefab home models that I have posted that are fairly cheap could come into play… why waste the time trying to fix some of these when you could have a brand new spanking home that should last for a long time???

#4

Very interesting read on Franke Rolfe, the guy running the Mobile Home U

Rolfe, who lives in a small town one hour south of St. Louis, has always looked older than his years, he says, so much so that when he was in his 20s, people mistook him for someone twice his age. Back then, he imagined he would earn an M.B.A. and maybe work at an investment bank. But his brother told him business schools wanted their students to have at least a year of practical experience, and so he went into the billboard business, buying first one billboard, and then a few more, until a decade later he was up to 300 when another company bought him out for $5.8 million. At 35, he had to decide what to do with the rest of his life.

Before Rolfe bought a trailer park, he had visited only one, the Glenhaven Mobile Home Park in Dallas, when an out-of-town billboard client asked him to deliver a message to its manager. Rolfe says: “Invariably, the guy would open the door just wearing his underwear, totally hung over — ‘What do you want?’ ” Yet four months after selling his billboard company, Rolfe bought Glenhaven, a grim, junked-up, half-filled park, for $400,000. “The first thing I did was get a concealed-handgun license,” Rolfe says. “Because I was afraid I would get assaulted.”

#5

I also looked up some posts on Bigger Pocket about the Mobile Home U. Looks like people who went had very good things to say about Rolfe. Looks like the guy is legit. Will I buy a movie home park? I don’t see it in myself yet. But that gives me another vector to explore…

#6

Before the tech explosion, when the Defense Industry dominated the South Bay, I had family that worked for Raytheon and lived in a mobile home park in Sunnyvale for many years. :expressionless:

My grandmother, after living in the avenues in SF, Greenbrae, Lucas Valley (an Eichler no less!) and Marinwood ended up in a mobile home park in Novato. The park overlooks the Bay and the old officer’s quarters on Hamilton Field. The panoramic views are to die for. Wildlife abounds.

I stayed over with a friend on a trip to Washington some years back at his mother’s triple wide in Bend, Oregon. She was in a forested retirement park with half to one acre lots and plenty of amenities.

I don’t care for them much. But, they aren’t all bad. Don’t ever say “never”.

As my generation is hitting retirement age with no visible means of support for most, I can see moving to a mobile home park after cashing out their only savings - their current SFH residence - as their saving grace. And, there are more people in or approaching this situation than ever in U.S. history.

#7

Mobile home parks have huge cap rates and huge management headaches. …more like buying business than real estate. .like buying a marina…hard to compare caps with other real estate…But caps can be in the 20s

#8

I think if you have the right managers who are living in the parks themselves, it can be pretty hands off. But it has to be out of California I guess. Even Franke Rolfe himself doesn’t dare touch California.

#9

Most old engineers I know end up in trailer parks. One too many get rich schemes took them down…lol

#10

Those engineers were flipping houses? Flipping can be risky

#11

Divorce, businesses besides engineering , illness…Old engineers I know ending up losing a lot of their networth…You never know your fate…I actually have no problem living in a trailer park…The worst cas scenario doesn’t bother me…I new a wealthy guy who retired and bought Lazy M marina…Lived in a trailer next to the launch ramp…Collected the ramp fees in cash and drank with his buddies all day…Not a bad retirement…Died at 85 with a 60 year old wife who took over the business…

#12

Agreed…same thing with me, the idea of returning to Chinatown. My buddies and even family members think I am crazy. Why not right?

#13

I have an old engineer living in one my old 1 bedroom apartments…Lost most of his money in the 2008-9 stock market crash…I now a lot of guys in their 70s that happened to…Stocks are too volatile for old people.

Ask yourself if your stock portfolio drops 50% what would you do? Can happen any time. And has happened a few times in my lifetime.

#14

Why would otherwise smart individuals not understand the risk/reward of holding mostly/all equities at an old age? One word: greed

#15

I think people that were comfortable with stock investing their whole life become complacent… Not so much greed but lack of planning. Hanera has huge stock exposure and is not young.
Traditionally they say you take your age and subtract 100. So a 65 year old should have 35% of assests in stocks. I have way less than that.

#16

I don’t get why mobile homes aren’t pushed as a solution for affordable housing. Instead, people want to build brand new luxury condos/apartments and designate a percent of them as affordable units. That’s idiotic that a brand new, luxury place should be affordable.

#17

Mobile homes take lots of land and have a stigma. Cities don’t zone for them. They are traditionally in rural areas where housing affordability isn’t as much as an issue. But I think they are a great solution for temporary housing like after the Santa Rosa fire

#18

Well, at least with high rises you would be able to maximize the number of units by going vertical.

#19