Passive Mobile Home Park Investing

Top Risks: Mobile Home Parks In Tertiary Markets

10 snips
Oct 8, 2024
A deep dive into the risks of investing in mobile home parks located in small, tertiary markets. Topics include low population and reduced demand, long commutes and limited amenities, and the challenge of selling homes in tiny towns. They also cover scarce contractors, higher infill and utility costs, and limited financing and transportation options.
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INSIGHT

Population Limits Tenant Demand

  • Tertiary markets have smaller populations, which shrinks the top of the tenant funnel.
  • Lower population directly reduces ongoing demand for affordable housing in those areas.
ANECDOTE

Single-Employer Vulnerability

  • Andrew Keel described a park where one meat plant employed 80% of tenants.
  • During COVID that park had the worst collections because the single employer faltered.
ADVICE

Test Local Marketing Before Infill

  • Do research local marketing channels before infilling homes; Facebook Marketplace may not work.
  • Test ads and use local methods like bandit signs or the town classifieds when digital leads are weak.
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