If you’re thinking about buying a trailer park, you know that’s no small investment to be taken lightly. There are many pitfalls you could succumb to as you sift through the trailer parks up for sale. Don’t let your eagerness to sink your teeth into a trailer park investment throw you into a bad purchase decision.
In light of that, what we’re aiming to do today is showcase some of the best and worst case examples of buying a trailer park.
The worst examples of buying a trailer park
There is something to be learned from even the worst trailer park investments. Here we’ll be highlighting two investments to walk away from.
The kind a seasoned investor walks away from
Over at BiggerPockets, John Fedro writes about some bad mobile park deals he came across. Since 2002, Fedro spends his time investing in the manufactured housing business. If anyone knows what a bad mobile home park deal looks like, it’s definitely going to be this seasoned mobile home investor.
In one scenario, he came across a visibly appealing mobile home community. This community held 78 units, 40% of the lovely park was occupied already, and amenities included a clubhouse and pool. And to make things even better on the surface, the seller was in a hurry to sell. This seemed like a winning deal.
However, as things were, Fedro would need to place 50 new or used mobile homes on the empty lots. But despite the drawback, he was intrigued.
But things were not as they appeared. Eleven months before this park caught Fedro’s eye, flooding hit the area and all the mobile homes were moved off the property. As a result, the community was no longer bringing in income. The park was clear of all homes, but city utilities were available.
This turned out to be the type of deal Fedro did not want. Moral of the story? A bad trailer park may look like a good one long distance. It’s imperative that you make it a point to see the park before making a purchase. And do what you can to investigate the legitimacy of a listing before going to see it.
The kind you neglect
It doesn’t matter how good of a deal you get your hands on when it comes to buying a trailer park.
If you neglect your investment, it’s going to be a worst-case example of buying a trailer park. Unfortunately, the fault will be all yours due to basic neglect and care for your residents.
Such is the case with Syringa Mobile Home Park. In this story, the mobile home owners are at the mercy of the landowner’s care (or neglect) for their community. When the park changed in ownership in 1984, things began to go downhill. The streets fell apart, the swimming pool closed down due to neglect, and the community suffered from water and sewage problems.
Today the mobile home community is disgruntled and what was once a nice neighborhood is now a crumbling neighborhood with no future.
If you’re not going to take on the responsibilities that come with being a trailer park owner, then it’s not worth your time.
The best examples of buying a trailer park
On the other hand, we have some great examples of trailer park purchases. We hope these inspire you to chase those trailer park dreams.
Peter Heffernan’s first mobile home park
Featured as a real estate investor success story, you’ll find Peter Heffernan’s journey with his first mobile home park. While it wasn’t the best deal as far as trailer parks go, this first-time trailer park investor learned much. And his situation had some things going that outweighed the losing marks of his purchase.
In his favor, he was able to acquire a great seller mortgage that entailed significant savings in the long run. He found a responsible manager and quickly filled up many vacancies.
While it’s not an easy road, Heffernan is glad to have an investment that pays him what he made at his old job with the less active time involved.
John Fedro’s first mobile home park
In 2015, John Fedro became the owner of a 100+ lot trailer park. Despite some surprises along the way, he learned four positive things in his successful endeavor. He learned that investors can be in a hurry to sell a trailer park due to poor management skills that created problems. This can be a good thing for you if you’re aspiring to provide good park management.
He also found that making it a point to connect with residents after you’ve bought the place can help fortify a community. Residents are going to be as eager as you are to make the place better and you may find yourself with willing volunteers. The trailer park is their home too.
While he’d be the first to tell you that mobile home investing is no walk in the park, Fedro will also acknowledge it’s a rewarding journey.
Everyone makes mistakes that can be learned from
As we wrap up today’s article, we hope you’ve found some food for thought in both the best and worst case examples of buying a trailer park. Learning from the mistakes and victories of other investors can save you much pain along the way.
For more on trailer park investing, check out our podcast recommendations.
About Dan Paton
