Mobile Home Park Investing Video: Tips and Insights for Year 2020-Dan Ryu-Ep 8: The $230m MHP bet

Mobile Home Park Desktop is a weekly series of educational videos 🖥 that help beginners and professionals invest 💵 in mobile home parks.

Each week the Mobile Home Park Desktops features provides industry information and insights to help you make better decisions when it comes to investing in mobile home parks, growing your portfolio, or operating your management company.

Mobile Home Park Desktop also posts weekly content for beginners who want to know How to Invest in Mobile Home Parks. Check out our playlist to find videos that help those just starting their mobile home park journey buy their first mobile home park.

THIS WEEK’S EPISODE:
The Carlyle Group made headlines with a $230m purchase of four mobile home parks in Mesa, Arizona. In this week’s episode, we review the deal and analyze what their game plan might be going forward.

01:30 Aerial View of the mobile home parks in Mesa, AZ
02:00 Flashback to 2015: The Carlyle Group’s $150m purchase of Plaza Del Rey in Sunnyvale, CA
02:32 Carlyle Group’s 2019: $237m exit
03:30 Area Overview: Sunnyvale CA and Mesa AZ
04:07 How to calculate affordability
05:43 What do 3 bedroom rent averages tell us about affordability?
06:50 Plaza Del Rey Mobile Home Park Purchase Overview
08:15 Mesa AZ Mobile Home Parks Purchase Overivew
09:12 Purchase and Sales Metrics
11:29 Mesa AZ Pricing Sensitivity Analysis
12:49 Measuring how much lot rents can be raised
14:37 Factoring in Mobile Home financing into affordability
17:39 Recap: Reasons the deal will work

A LITTLE BIT ABOUT MOBILE HOME PARK INVESTING

In 2019 sales of mobile home parks increased by 20% as more investors, private equity groups, family offices, multifamily investors focused on apartments 🏢, and single family home 🏘 investors look to invest in affordable housing.

Why have mobile home parks aka trailer parks, land leased communities, manufactured housing communities or simply mhps garnered so much attention from investors?

👉 Mobile home parks provide the only unsubsidized form of affordable housing for millions of Americans. However, despite this great need, zoning and regulations make them near impossible to develop. Increasing demand and decreasing supply are why billionaire investors such as Sam Zell and Warren Buffett have made huge bets on the industry.

👉 The largest mobile home park investors, Sun Communities and ELS Communities, have reported tech stock like returns of 4,127% 🚀 and 1,186% 🚀 returns since 2009 – WSJ, 2020

RECESSIONS, COVID 19, & MOBILE HOME PARKS

A look back shows that both Sun Communities and ELS Communities showed same store NOI growth from 2000-2020, even during the 2007-2009. By contrast the rest of the REITs show negative growth during downturns.

As of April / May 2020, Sun Communities, ELS, and UMH, the three largest publicly traded REITs that own mobile home parks, all show strong year over year collections rates. Regarding rent deferral requests from residents, Sun reported less than 3% across it’s 136,000 occupied homesites, ELS 0.35% across its 150,000 occupied homesites, while UMH reported only 80 out of 19,000 residents asked for deferrals.

One further note: in 2009, 50% of all new Mobile Home residents were former single family home residents.

Mobile Home Parks have thus far showed remarkable resiliency during recessions, and in particular have proven to be strong performers in all economic situations when compared to other asset classes.

OTHER HELPFUL MOBILE HOME PARK INVESTING VIDEOS:

Mobile Home Park Investing for Beginners: https://www.youtube.com/watch?v=VB93pUNRy44

Mobile Home Park Investing with BiggerPockets:
https://www.youtube.com/watch?v=okIKbgEkIj0

Mobile Home Investing (not parks):
https://www.youtube.com/watch?v=pz7Onln5fNo

ALSO CHECK OUT MY CHANNEL FOR MORE CONTENT:

MHP Desktop: How to Invest in Mobile Home Park Video Series:

Episode 1: How to Find Deals

MHP Desktop: Mobile Home Park News and Industry Analysis:

Episode 7: “Large mobile home park investor experiences 30% unemployment among residents… how did that affect collections?”

Episode 6: “Review of mobile home park investing giant ELS… and why lot rents should always be higher than your mobile home rent.”

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