Mobile home parks are no different than any type of real estate business. Finding deals takes the most amount of effort. In frothy markets, patience and discipline yields lasting results. The majority of parks are owned by mom-and-pop operators, leading to lucrative opportunities. This comes with some headaches though. Deals can take years or fall apart in moments. However, a full deal pipeline can compensate for any deals that go sideways.
Here are four ways I've looked for deals in the past year:
- Online: There are two websites that have the bulk of the mobile home park listings: loopnet.com and mobilehomeparkstore.com. It is quite difficult to find an opportunity on these sites. Every newbie uses this as their starting place. Consider looking online to practice valuation and get a feel for what is on the market. What is the going price per pad in the Charlotte market? etc.
- Brokers: Keep a line of communication open with several mobile home park specific brokers. The nuisances of the business can trip up people not familiar with the industry. In general, brokers want to know if you know what you're doing and if you can close. They want to get paid. I can't blame them. There are two types of brokers: local and national players. When starting out, you will likely find more success with smaller, local players. The national players have large list of buyers and usually go after larger deals (over 100 pads) that will be difficult to be competitive in. Even brokers often times overprice in hot markets. Remember no deal is better than a bad deal. I've had mediocre success with this option.
- Cold Calls: Pick up the phone. Create your own deal pipeline. Mobile home parks were built from the 1950s-1980s, meaning many of the original owners or their family members still own the property. Typically, they are older and don't use much technology. Phone calls are very effective, but the hit rate is quite low. Follow-up is king! This has been my most successful way to source deals but takes the most amount of work.
- Direct Mail - As with cold calls, letters can be quite effective with this demographic. Craft the message for the audience and stand out. Owners often get multiple pieces of mail per month. Send several times over the course of a year, and you might receive an unexpected phone call in a few months time. There has been a few times when I have received a call several months after I've sent a mailer. Be consistent.
Think of your business as a brand. Nike doesn't put out one commercial and go away. Well, neither should your business. You should be constantly generating leads. You never know when the next lead might come through. Hit all avenues.
When I first got started, someone told me it would take about a year before I would get up and running. He was right. I closed my first deal in the same month a year later.
As always, feel free to reach out.