Unless you self manage your mobile home park, the onsite park manager you hire is vital to its success. A very important decision you must make is how to compensate your manager. It is very customary to pay your manager a straight salary (ie $10/mo per lot) plus free lot rent. While this is perfectly fine I want to suggest trying an incentive based compensation which is aligned with your park’s needs.
What is the hardest thing about what you do? Someone from an investor forum asked me that a while ago. I could not answer that question then. When you manage real estate properties where hundreds of people live, you run into a variety of issues ranging from a leaking water line to someone not liking a neighbor’s cat. With a good operation plan and management system in place, most of issues are very manageable. I really could not pick one thing. Then, one day, I got a call from my manager that helped realize my answer: the hardest thing for me is seeing some people acting irresponsibly to those around them, and eventually to themselves. Read more…
I first took up golf at the age of 22. Not because I thought it would be fun, but because I started a job in sales and my manager told me I needed to start playing. Wow…this really sucked; I was always into hard core athletics like martial arts, and golf seemed like an old man’s sport. Many years have passed since then. Not only have I continued to play golf, I love golf.
My friend, Rick, says that golf is a game of life. He’s right. So much about who we are and what we need to be successful in life can be described through the game of golf. Read more…
One of the biggest traps when evaluating mobile home parks is correctly evaluating the upside potential of a park. I love reading broker listings on a park which reads “40% occupancy – huge upside in filling vacancies [empty lots]…..”. If you are an apartment investor this may be true, but if you are a mobile home park investor then watch out.
Here’s one big reason Jae and I love mobile home parks. Jae and I just finished a 3-state, multi-day roadtrip in the Midwest checking up on our parks as well as visiting several other potential properties, including parks and single family homes. Recently we also spent several days looking at multi-family properties with another investment group.
Do you want to know what both of us were thinking after these exercises?
The numbers are in for our mobile home park in Milwaukee, Wisconsin. We took over this distressed property a year ago and executed our turnaround plan. We are very pleased with its performance – both operationally and financially. The mobile home park has improved significantly. Residents, local officials, police officers all agree that it is now a better place to live. It has been an extremely rewarding experience to improve quality of life and help people become home owners. Financially, we were able to return 19% cash-on-cash return, while increasing investors’ equity by 64% in just 12 months. Not only did we help improve people’s lives, we were very profitable. Read more…
My wife Amy bought me a 7 Year Pen. It supposedly has enough ink in its cartridge to last 7 years. To be exact, it can write for 2 meters a day for 7 years (5,110 meters, more than 3 miles)! Who cares? After all, it’s a just a pen. Nobody has a second thought about buying, using, and throwing away a pen. Actually, that is exactly the point.
In part 1, I wrote that we were attracted to mobile home parks because of profitability and stability. Howard and I, however, needed more from an investment (or any business venture). If we were going to invest significant amount of time, energy, and passion into a venture, it needed to do more than just making money. It needed to be meaningful. In this post, I will talk about the potential benefits to the society we saw in mobile home parks investment. These were the other reasons that helped to create our company St Paul Group.
We found a 200-space mobile home park near a major city in the Midwest. At a first glance it looked like a turn-around deal with a lot of upside. Our goal is to create double-digit cash-on-cash return for our investors for 3 to 4 years then return their investment through a sale or a refinance. This mobile home park seemed to fit the bill. Upon more investigation, however, we decided not to invest. We will step through our decision process in this post.
For Real Estate investors, getting focused and finding your core focus or niche can be very difficult. Seasoned investors have the wherewithal to tackle a variety of disparate ventures. But for the newer investor this may results in confusion, apprehension and often leads one to quit prematurely.
For my partner and I, the task of identifying the best fit niche was one of our first goals. The key is to find the niche that is best suited for you investment objectives and takes into consideration your strengths and weaknesses.
This may sound difficult, but the exercise was rather straightforward. The following videos show how Jae and I identified mobile home parks are our primary investment niche. After you watch the two videos, it will seem like our choice was obvious. Read more…
