£ ~$80 M Value? The UK-Worth Mobile Home Park Story

Shine Star

£ ~$80 M value? Sounds outrageous, but  This UK mobile home park deal might just change how you view real estate — especially in high-value markets  like the US, UK, Canada and Australia. Curious?   Let’s uncover the story.   #PropertyInvestment  #RealEstateDeals  #MobileHomePark   #UKRealEstate  #USRealEstate  #CanadaRealEstate  #AustraliaRealEstate   #HighValueProperty  #HiddenOpportunity  #InvestmentStory   #£80MDeal  #GlobalPropertyMarket  #RealEstateSecrets    Watch now to uncover what’s really behind this £80 M valuation!

Transcript

00:00My friend Justin Donald wanted to travel the world with his wife.

00:03Small problem, she had a job.

00:04She was a teacher and her boss was like,

00:06yeah, no, we're not going to give you off the whole year to do that.

00:08So he was like, how do I replace her $30,000, $40,000, $50,000 income

00:12with something passive, inter-mobile home parks?

00:17So he started dragging his family, not to vacations, but to parks just like this,

00:21trying to figure out how could we invest in this asset class

00:24where the properties aren't massively expensive, but cash flow $60,000.

00:29That's how he became called the mobile home park king.

00:32So he went and took a course on them, one like this,

00:35which I always recommend doing.

00:36And then he started going around and talking to any investor

00:39that he could find that owned these properties.

00:41He'd pick up the phone and he'd say, hey, can I talk to the owner?

00:44I'm thinking about owning one too.

00:46He'd do it in small locations.

00:48The dog gets what I'm trying to do here.

00:50And then he would run around and say, could I come by?

00:52Could I visit your site?

00:54After doing this for a few months,

00:55kind of slowly gathering up his knowledge on the subject matter,

00:58he pulled the trigger on a mobile home park just like this.

01:06All right.

01:07So the deal is we were trying to buy a mobile home park in Austin, Texas.

01:10And then the market said, go pound sand.

01:13There are none available.

01:14Literally none available.

01:16Look at this.

01:16Look at this graph.

01:17Basically what it's showing you is that there are all of zero parks available in Austin.

01:22So I was like, oh, I don't want to drive all the way to clean.

01:25Look where clean is.

01:26It's way too far away.

01:27So how do we break down mobile home park investing?

01:29Because what you really need to do it is buy it in a secondary market typically.

01:33But we're going to play one here in Austin.

01:35This mobile home park was bought in 2012 for 2.7 million bucks, right?

01:42That same mobile home park after listening to my friend, Justin.

01:45Probably like $146 times $2,000 per lot is $292,000 times 12 times 0.7.

01:56We'll just say it's 30% expense ratio.

01:58And then the last one here sold at like a three cap.

02:02So if it's really a three cap, that's $81 million.

02:07Oh my God.

02:09So there's probably no way that this 30 acres located where it is isn't worth somewhere between

02:16$20 to $80 million bucks.

02:19Yep.

02:19Okay.

02:21Awesome.

02:22That was really helpful.

02:23The mobile home park.

02:23Do you want me to pretend like I'm calculating this when we do our call or are we doing our

02:27call?

02:28You just did the call.

02:29You just nailed the call.

02:29Oh, I did?

02:30No.

02:31I was talking to Justin.

02:33He thinks this is worth anywhere from $20 to $80 million.

02:36So you went from 2012, $2.7 million to $20 to $80 million, huge variance because, you

02:43know, I called them and oddly they wouldn't tell me all of their profits and personal financials.

02:48I have no idea why it seems super weird.

02:50Anyway, so I think this is a really interesting asset class and that's why we're going to talk

02:54more about it.

02:54People are going to need more and more housing that is reasonably priced.

03:03Mobile home parks, well, this shows you that I'm not very safe.

03:06The reason we're going to mobile home parks is because the increasing costs of home mean

03:12that more and more people are going to need places to live reasonably.

03:16And we think that mobile home parks are an interesting way to invest.

03:20These mobile homes are probably some of the more expensive ones.

03:24in Austin because, uh, they're located right off the freeway, almost right by downtown.

03:29The crazy part is there's no mobile homes for sale anywhere.

03:32And that is because of this phenomenon I was talking to you guys about, which is one, it's

03:36a moated business, meaning people do not like to have mobile home parks in their neighborhoods.

03:42That's not that nice, but that's true.

03:44It's the whole, like not in my backyard phenomenon.

03:46And so anyway, they don't build a ton more of these, which means that you have a loaded

03:51market around your business when you own a mobile home park.

03:53Also, interestingly enough, the homes are mobile, uh, but they actually don't really

03:59move anywhere.

04:00People stay in these for a long time.

04:02As you can tell, they got like rose bushes going on.

04:04We've got fencing built around this.

04:06These mobile home owners end up staying in the same location for quite a long time.

04:11Um, this mobile home park was bought for $2.7 million in 2012.

04:16And it's now we think worth anywhere from 20 to $80 million.

04:19Big variance because we don't exactly know their financials since they didn't want to

04:22cop that up for us.

04:23But a lot of it's based on land costs.

04:25Like, look at this one.

04:26I mean, covered in, you know, plants and everything from people living here for a long time.

04:33So one of the first things that I would want to do if I was buying a mobile home park is

04:37I would want to learn from the masters.

04:38I already told you about how Justin took that course, but you want to come and get your hands

04:43dirty.

04:43You want to feel what this feels like.

04:45I would never buy a mobile home park by myself, never having done it before with no other

04:49people in the game, because you're going to have to do some door knocking.

04:54You're going to have to actually go and see what's happening inside of units, just like

04:58this one.

05:04So the reasons why I like mobile home park investing are a couple fold.

05:08One is constrained resource.

05:10We talked about the fact that there are only about 45,000 mobile home parks in the country.

05:15That's why a lot of these big private equity firms like these guys, these guys, these guys

05:19are all buying these mobile home parks.

05:21The other part that's interesting about it is they're a constrained resource for a couple

05:26of reasons.

05:26One is it's hard to get permits for them in city centers.

05:30And also because if you think about it, this is 30 acres, this thing that we're on.

05:34And on 30 acres, they only have 146 sites.

05:38Typically multifamilies, you know, you could have 146 sites on one acre or less.

05:45And so what they call on real estate is the best use case for the land, meaning the highest

05:49return for the least amount of money is not typically mobile home parks.

05:53The benefit here for us little guys is that we can actually get into this asset class without

05:58a ton of hard infrastructure costs.

06:01Like, I mean, check this out.

06:03This is not expensive to build or buy.

06:05You can buy mobile home parks for, or mobile homes themselves for 30,000, 40,000, all the

06:10way up to a couple hundred thousand dollars.

06:12But that's definitely a lot cheaper than a house.

06:15The other part that's cool about mobile home parks is if they are not park owned homes,

06:20then you, as the owner of the mobile home park, are not responsible for taking care of them.

06:25Something's broken, don't call me.

06:27Call the plumber.

06:28And so that's a huge benefit.

06:29Now, park owned homes are great too.

06:32That means you can rent them out to people, but a lot of stuff going wrong means a lot

06:34of maintenance.

06:40Texas is one of the best places to invest in mobile home parks, in my opinion.

06:43One, it's got the most of them, something like 5,100 plus mobile home parks.

06:47Also, the state is growing rapidly.

06:50And so fast growth in a state leads to fast lot rents, meaning that you can charge people

06:56more.

06:56I was looking up some statistics here, and basically, the population of Texas has grown

07:01from 11 million to more than 30 million today.

07:05That's good for lot rents.

07:07The other thing that's interesting is the average apartment rents in Texas are $1,200

07:11per month.

07:12There's no question that demand for mobile home parks would be high because that's pretty

07:16expensive.

07:16I bet this mobile home park we're in right here charges anywhere from a grand to two

07:21grand per month.

07:21This is a pretty nice facility.

07:24Oh, hey.

07:25One other thing I forgot to tell you.

07:26Texas has great protective rights for landowners.

07:30So that means that you have fights in case you have to do the sad things of evictions and

07:35moving people out.

07:36A lot of states, it's damn hard to evict.

07:39We own some property in D.C.

07:40And some of our friends who own property there had people that they couldn't evict out of

07:44their house for more than a year.

07:46So they're stuck paying all the costs.

07:48That is not Texas.

07:49And they just strengthened this law.

07:54So the question becomes, how do you find a deal, right?

07:57How do you find one of these mobile home parks?

07:59There's lots of different sites to do it.

08:01You can go on one like LoopNet.

08:03You can look at them at typical real estate sites.

08:06I think the actual key here, though, is that I would go to a site like this one and I would

08:10find a realtor who specifically knows how to do mobile park investing.

08:16You don't want somebody who's a typical realtor who goes from selling houses in Travis Heights.

08:21Am I getting a bit?

08:21Oh, my f*** mess.

08:23Oh, Jesus.

08:24Are they all over me?

08:28Oh, God.

08:29And don't tell me that investing isn't hard because it may or may not have sat on a pile

08:35of ants, had ants in my pants, and now I have ant bites all over me in places where nobody

08:42should have ant bites.

08:44That's a true story.

08:45You want to invest in passive income sources?

08:48Be prepared.

08:50Oh, very itchy now.

08:51But what I would probably do is I would go with a realtor that specializes in mobile home

08:56parks and RV parks.

08:57You can find many of them.

08:58Here are some examples.

09:00And I would get somebody who buys these things all day long because the truth of the matter

09:03is, is every type of asset class has a specific specialty to it.

09:08And so here's a couple of ways that I would look at it are things like cap rate.

09:11You want to look at value added services.

09:13You want to know number of mobile home park owned homes as opposed to leased.

09:17You want to know what their vacancy is.

09:20You also want to think about the land cost overall.

09:24Because this isn't the best use case, eventually there may be another reason to own a mobile home

09:28park.

09:28One note of warning there is if you want to sell the mobile home park as something else,

09:34you have to find a way to move people to another location.

09:38There's lots of rules and regulations surrounding that.

09:40So don't think that you can just kick everybody out.

09:42One other thing to think about is 49 or so of the 51 states in the U.S. have a mobile home

09:54park association.

09:57Texas has one and one of the strongest, which basically means they help strengthen rules

10:02and regulations surrounding mobile home parks.

10:04If you're an owner, I think it's a really good thing for you to join to learn about exactly

10:08this.

10:08How do people run these things?

10:13The last thing that I would say is with mobile home parks, if you're going to invest in them

10:18for the very first time, you want to make sure that you're not investing in hopes and dreams.

10:22You're investing in realities.

10:24And what does that mean?

10:25That means that if a mobile home park is only 30 or 40% occupied, it's a pass.

10:29Let's be honest.

10:30This is your first deal.

10:31You don't know a damn thing about what you're doing.

10:33And so you need to make sure that you're not taking huge risks so you can have that second

10:37opportunity to do an even bigger deal.

10:40Okay.

10:41All I'll say to wrap up here is you're going to look at a ton of mobile home parks and you're

10:48going to get intimidated.

10:49And then people are going to tell you on the internet that there's no way that you can do

10:52this.

10:52And then you're going to go out and you're going to lose some deals.

10:55And then you're going to spend a bunch of time up front looking at homes, obsessing about

10:59mobile home parks, and nothing's going to have happened.

11:02And you're going to feel like your time is wasted.

11:03And that's what happens when you do deals.

11:05But the difference between deals and everything else is once you execute on a good deal, I've

11:11seen very little else that can replace your income and that can create generational wealth.

11:17That's how you become this Warren Buffett of cashflow investing and get to travel the

11:22world while owning a mobile home park that cashes checks.

11:27All right.

11:28I'm off.

11:28I got some mobile home parks to look at.

11:32I got some mobile home parks.

11:33I got some mobile home parks.

11:34I got some mobile home parks.

11:35I got some mobile home parks.

11:36I got some mobile home parks.

11:37I got some mobile home parks.

11:38I got some mobile home parks.

11:39I got some mobile home parks.

11:40I got some mobile home parks.

11:41I got some mobile home parks.

11:42I got some mobile home parks.

11:43I got some mobile parks.

11:44I got some mobile parks.

11:45I got some mobile parks.

11:46I got some mobile parks.

11:47I got some mobile parks.

11:48I got some mobile parks.

11:49I got some mobile parks.

11:50I got some mobile parks.

11:51I got some mobile parks.

11:52I got some mobile parks.

11:53I got some mobile parks.

11:54I got some mobile parks.

11:55I got some mobile parks.

Category

Transcript

Be the first to comment

Recommended