We get this question a lot guys. So, in this blog you’re going to get our reasons why we believe mobile homes will remain a good investment, regardless of whether the real estate market goes down.
The demand for affordable housing
Let’s be honest, the affordable housing crisis is not going anywhere anytime soon. And if the real estate market crashes that’s only going to increase the demand for affordable homes. That’s why it’s so important that we find homes at a great price so that we can resell them at an affordable price to our buyers.
If the real estate market went down, do you really think people are going to stay in the streets because they can’t afford single family homes? No way.
It’s going to be even more of a reason for them to need affordable housing. And that’s where mobile home investment comes in. You’re going to be a great asset to these people in need, regardless of where the market is.
Supply of mobile home parks are low
There’s already a scarcity mindset out here when it comes to mobile home parks. Regardless of the conditions of the real estate market there’s a lot of mobile home parks being bought out by investors and developers.
So, the scarcity of these homes is already a thing. There’s already a huge demand right now. If the real estate market drops, the demand is just going to continue to increase.
And it’s not like there’re new mobile home parks being built every day. The city does not actually desire mobile home communities being built. They make it really tough to get the permits and to build new developments.
So, there’s not a lot of supply already and there’s just not a lot of new developments coming up anyway.
Getting financing is tough
With mobile homes in parks financing is already very difficult to find. Most banks won’t lend on mobile homes in parks because they’re considered personal property and not real estate. They just don’t understand how to value them, and they don’t want to lend on personal property.
So, if the real estate market crashed this wouldn’t really have a ton of effect on the financing for mobile homes, because it’s already hard to find. But as a mobile home investor you’re going to be valuable to a lot of potential buyers out there because you’re going to be able to act as their bank.
They’re going to be able to bring you a down payment that’s reasonable and get approved by the park. Because there’s not too many places out there that they can get approved, you as an investor are going to bring a ton of value, regardless of the state of the real estate market.
If the real estate market crashes we don’t believe that it will affect us because we, as mobile home park investors, are not worried about long-term appreciation anyway. Nor are we worried about depreciation.
The homes that we like to invest in are going to hold their value for a reasonable amount of time. And so, it makes sense for us as investors to invest in them.
We, as mobile home park investors, are looking to generate quick cash profits or quick cash flow. And so, we are not looking for long-term appreciation with our deals. We just want to make some cash flow that’s comparable to apartment rent. We usually go even below apartment rent.
As long as the apartment rent is continuing to go up, we’re still going to be able to make a profit on these deals.
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