On this episode of The Impatient Investor, Andrew discusses seven reasons you should not invest in MHPs, but also addresses eight excellent reasons why you should. Most importantly, the fact that they thrive in any economy, but especially in a recession.
“If you’re looking for a shiny investment, look to an asset class that shines even in dark times.”
It’s no secret that we talk about affordable housing all of the time in the commercial real estate space. So here is seven reasons not to invest in mobile home parks. Do the following describe your investing habits?
You like a little danger when it comes to investing. You consider Wall Street, your personal Las Vegas, and Robinhood your favorite craps table. You’re consistently looking for the next big thing. You’re looking for trendy short-term investments, not long-term trends. You have a short investment window, you want to hit a home run. You don’t want to methodically load the bases, even though it will win you the game because you don’t have the patience for long-term investments. You can’t be bothered to learn about new asset segment. You’re more interested in impressing your Wall Street buddies than impressing your portfolio. You like to stick with Wall Street because it’s familiar to you. You aren’t interested in private investments because you have no experience, and you have no interest in educating yourself. Your friends, family, and neighbors are all into Wall Street and Bitcoin right now, and you’d rather go with the flow.
If the proceeding seven investment attitudes describe your investment attitudes or philosophy, then those are the seven reasons why you shouldn’t buy or invest in mobile home parks.
For the open-minded investor, although there are many reasons to invest in MHPs. The following reason is the only reason you need to invest in mobile home parks. They thrive in any economy, but especially in a recession. According to a recent businessinsider.com article, mobile home parks were the top-performing real estate class in 2020, as stated by Greenstreet Data. Mobile home parks had a 12% increase in commercial property value, when a majority of the other commercial real estate assets struggled in 2020. While multifamily saw decreased rents and occupancy in 2020, mobile home parks saw increases; the only segment besides industrial that saw increases.
Now, here are the top reasons to invest in mobile home parks. You want to invest in an asset that has always delivered consistent, constant cash flow and appreciation to its investors. You don’t mind playing the long game to reap cash flow and gains from long-term appreciation. Not having the experience of investing in mobile home parks or private markets doesn’t bother you because you’ve educated yourself. You know MHPs are a rock-solid investment, and it’s just a matter of latching on with an MHP funder sponsor with experience and track record of success, to profit passively from a solid asset class. You are a contrarian, you don’t go with the crowd who plays a high-risk game of chicken with their portfolios. You don’t like high risk, just high-risk adjusted returns that consistently beat the market, but at lower risk. You like tangible assets that you can touch and feel, especially assets with solid returns and long-term capital preservation, where it would be impossible to lose your entire investment. You feel good about filling a housing void by providing affordable housing to an under-supplied segment that offers residents the pride of ownership without the cost of single-family residents. The lagging supply because of restrictive zoning laws and ordinances preventing the development of new parks and constant demand gives you the reassurance that your investment will always deliver. Unlike other investors, you should shun Wall Street volatility. You seek illiquid assets shielded from herd behavior, media bias, and investor fickleness.
There are seven reasons you should not invest in MHPs, but there are eight excellent reasons you should. If you’re looking for a shiny investment, look to an asset class that shines even in dark times, and if you’re looking for more information, go to www.stoptradinghours.com.