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Mobile Home Parks The Bubble Proof Real Estate Investment
his country has were investment properties! Not
experienced unprecedented owner-occupied, but pure rental
gains in housing prices homes.
over the past five years. With
some regional markets expanding Since the average buyer doesn't
at a phenomenal 25% annual understand the inherent risks and
average, the investors who got in potential cash-flow problems with
early have created tremendous this property class, many are
wealth. However, in my opinion, feeding cash into their
this wild roller coaster ride is investment every month. For those
about to stop on the way up and of us who make a living in the
the people still in the car are real estate business, negative
going to come crashing down off cash-flow is the cancer of our
the tracks. industry and can lead to a slow
financial death. However, the new
I recently saw an alarming and uneducated investor doesn't
statistic. The hype and see this as a problem since he is
pandemonium of the real estate used to contributing monthly to
boom has created a stampede into his investment portfolio via his
the industry. More people than weekly paycheck. His only rescue
ever before are buying real from this negative cash-flow
estate strictly for investment dilemma is an increase in value
purposes. Unfortunately, the of the underlying property. In
majority are doing so with the simplest term, he is a
limited or no knowledge speculator.
whatsoever concerning the pros
and cons of owning rental Professional speculators have
property. Twenty-three percent, made a ton of money in real
almost one-quarter, of all homes estate and other industries for
purchased in this country in 2004 centuries. These superstars
aren't your ordinary people. They Due to the collapse of the mobile
understand supply and demand home financing industry over the
relationships, market timing, past five years, many of the
growth patterns, and economic parks in this country have become
cycles. I dare say the neglected, highly vacated, and
overwhelming majority of people undesirable wastelands.
buying real estate today as an Politicians are fighting to get
investment doesn't fit into the rid of them due to the element of
professional category. As a society they often accommodate
matter of fact, the uneducated and the eye sore the property
investor is often the customer becomes in the path of growth and
who ends up lining the pocket of development. Eliminating a mobile
the professional speculator. home park frees up valuable land
needed for the current surge in
If you have been fortunate enough the construction of stick-built
to experience the thrilling ride housing.
of the housing roller coaster, I
encourage you to contemplate So, you have an investment class
getting off and moving on to a that local governments are trying
more predictable, long-term to force into extinction. On top
investment. Find a real estate of that, demand is currently low
vehicle that will provide income because so much money has
as well as capital appreciation. recently been made in the
Manufactured housing communities single-family housing sector. Why
are in an asset class that can would anyone want to move their
deliver both of these benefits. investment funds into a mobile
home park?
Mobile home parks have slowly
become the "step-children" of the Affordable housing will always be
real estate investing community. required in this country. The
average American must have the home on. Parks provide the
shelter, it's a basic need. When infrastructure and amenities to
the housing crisis hits and accommodate this need at a very
interest rates rise, foreclosures reasonable cost. As home sales
will be at an all-time high and begin to increase, the demand for
many people are going to be suitable mobile home park lots
forced out of their current home. will heat up. The investors who
A destroyed credit rating will own these parks will be in an
drive these people into the ideal position as they can
rental market or into some type increase rents and still fill
of "owner financed" property. Not their empty lots. Unlike
ready to give up on the American traditional housing projects,
dream of home ownership, they development barriers will be high
will begin to look strongly at and I feel this will create a
the manufactured housing huge shortage in available lots
alternative. Large living space to place mobile homes.
and low pricing will be very
attractive. I believe the demand You couldn't ask for a better
will be tremendous and large situation as a park owner. High
lending institutions will begin demand, coupled with low supply
to get back into the manufactured creates a financial windfall for
housing "game". The interest the astute investor. Cash flows
rates for these loans will be will be tremendous and values
higher than traditional mortgage will sky rocket, much like the
rates and one or more large feeding frenzy going on right now
lenders will figure out how to in the single-family home market.
turn a profit. Cap rates will drop on this asset
class and the large REITs will
The mobile home buyer certainly probably start paying
needs a piece of land to place unbelievable prices for the
large, well-kept parks. secret is starting to get out of
the bag as West Coast investors
I've been in the business several are becoming educated about this
years now and it's a great time investment and its benefits.
to buy. While the masses of park Investors from California and
owners are crying, "sell, sell, Arizona have purchased several
sell", some of us are quietly parks in the Southeast in the
acquiring turn around parks. Most past 12 months. Who knows, there
of the parks are initially at a may come a time when a good,
break even or small positive cash solid mobile home park will be
flow position, but by purchased for more than the
implementing our system we are asking price...a bidding war.
able to steadily increase cash Hey, it's happening in several
flow and quickly increase value. single-family home markets
But, even better than that, we throughout the country right now.
are positioning ourselves to Wouldn't you like to be the
benefit from the potential flood seller taking that check to the
of customers into our market. bank?
I urge you to take a long look at Steve Case
the mobile home park investment.
But, don't wait too long. The
About the Author:
Steve is co-author of "Huge Profits in Mobile Homes and Mobile Home Parks", a how-to course on making money in the mobile home business. He is also author of "Tax Free Real Estate Investing", a guide on how to make money tax free in your Roth IRA using real estate. Both resources can be found at http://www.mobilehomeuniversity.com
Source: www.isnare.com
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