Finding a Partner to Buy Your Mobile Home Park
There’s a little-known way to invest that has proven to be one of the best chances for investors, especially during times of uncertainty. This strategy is often overlooked because of misconceptions and stereotypes; no one knew about it until recently. When investors find out that this strategy is the only one that can give them consistent returns without putting them at risk of losing money, they think twice. Mobile home park investing is the best way to invest that you’ve probably never realized.
Over the last ten years, several of the largest private equity firms in the country have been buying up mobile home parks at a breakneck speed because of their unique performance. People are starting to find out. People seeking a different approach to traditional investments are drawn to mobile home parks because they have many benefits. A mobile home park can be the perfect passive investment for busy professionals who want all the benefits without any work.
Where Can Investors Look?
Diversifying their portfolios is one way many investors try to protect themselves from market changes. But diversification doesn’t always help because the performance of most traditional investments is linked to the performance of the market. That strategy might add up to a bunch of different assets that don’t do well. Investors look to commodities, private companies, and real estate, among other things, to protect their investments from the market. This strategy allows you to avoid the volatility of Wall Street, but it’s not the only one. Some alternatives are seen as a way to protect against inflation, while others are seen as a way to make money.
People often call real estate the ultimate hedge because it can protect against inflation and bring in cash flow. The saying goes that more money has been made through real estate investments than any other type. But remember that corrections like the Great Recession of 2008 can affect most real estate.
A Beneficial Option
The biggest private equity firms in the U.S. know that mobile home parks are the one type of real estate that always does better than others, in good times and bad. Mobile home parks are not tied to the markets, the economy, or the performance of another real estate because of how they are set up. Because of this, they can handle a recession very well. These things can provide a steady cash flow during hard times and keep investment dollars from going down.
Why Buying a Mobile Home Park Is a Great Investment for Busy People
Mobile home parks (MHPs) are a good investment for people who want a passive, low-risk investment that can give them a steady flow of cash and peace of mind. Mobile home parks are the cheapest places to live, so they are in high demand. The number of people looking for affordable housing keeps going up, and it will go up even more when the next recession hits.
Not many new mobile home parks are being built, so the number of parks is decreasing. And when the economy is not doing well, supply goes down, even more, when demand goes up.
- High cash flow: Unlike other types of real estate, which go up and down with the market, mobile home parks tend to have a steady source of income.
- Low volatility: Investing in mobile home parks is a low-risk, recession-proof choice. Even when markets crash, they can still make a steady cash flow because they are always in high demand. And how well they do has nothing to do with the stock market, the economy, or other real estate types.
Investing in Mobile Home Parks in the Most Beneficial Way
You can invest in mobile home parks in two ways: you can buy a park yourself, or you can join forces with a mobile home park syndicator. You need knowledge, time, money, connections, and access to deals to buy parks that aren’t doing well and turn a profit. Some of these are common for busy professionals, but not all of them. People who want to invest in MHPs but don’t want to do all the work themselves can do so by teaming up with an experienced mobile home park syndicator.
A mobile home park syndicator also called a “sponsor,” is a company that lets people invest in mobile home parks without doing anything. The company is in charge of finding deals, doing all the work that needs to be done before and after closing, managing the property day-to-day, making improvements, and keeping track of how the investment is doing. The only thing the investor is required to do is give money. Working with an experienced syndicator lets an investor get all the benefits of mobile home parks without having to commit a lot of time and risks of owning one themselves. Plus you will already have a buyer when you are ready to sell your mobile home park.
Benefits of Getting a Partner for Your Mobile Home Park Investment
When investors work with an experienced syndicator, they get a lot of benefits that they might not get if they bought a park on their own, such as:
Deals
Syndicators have access to deals that most people never hear about. Less money is needed to invest. If you work with a syndicator, you don’t have to pay for the whole park yourself. Instead, you can buy shares of MHPs like you buy stocks.
Low Time Commitment
You already have too much to do to take care of all the duties of owning a mobile home park. A syndicator takes care of all your day-to-day tasks.
Less Risk
Investors can use the experience of the syndicator to avoid making costly mistakes. Most of the time, investors will make more money if they do nothing than if they buy a park on their own. Syndicators tend to buy bigger parks because they give better returns. Larger parks create economies of scale, leading to higher profits and a more stable cash flow.
Shared Profits
When the parks are sold at the end of the investment period, investors get a cut of the money made. Cash offers are generally made when you want to sell your mobile home park.
Tax Benefits
Investors can get the same tax benefits as depreciation from owning real estate. Mobile home park fund investments are great for retirement accounts because they don’t lose money during recessions and have a steady cash flow. These traits help meet minimum distribution requirements (if they exist) and give cash flow distributions the chance to increase returns by being re-invested in the parks.
Diversification
Like a mutual fund, a mobile home park fund spreads its investments over several parks instead of putting all of its money in one park. This means that there is less risk and that all the parks in the fund perform about the same.
Cash Offer Sale
When you partner with a syndicator, and you are ready to sell your mobile home park, they will make you a cash offer for your portion of the investment. This approach is easy and stress-free. Everything to sell your mobile home park will be taken care of for you.
Final Thoughts
Most investors find the easiest way to invest in mobile home parks is through a sophisticated syndicator and a passive investment. This type of investment usually gives a better return. It gives them all the benefits of owning a park without needing a lot of knowledge or time. The rewards of passive mobile home park investment are great for professionals who do not want to spend time actively managing a property.
Contact a professional at Houston Capital Home Buyers to find a partner to buy your mobile home park. We will make you a cash offer today!