Welcome to the first official podcast, hosted by Jefferson Lilly, joined by his partner Brad Johnson. Today they will talk about why it is such a compelling business to be in the mobile home park industry – as they call it, the 'macro'. In subsequent podcasts, they will talk about how they actually operate parks by providing specific 'micro' examples. The purpose of this podcast is to cover why someone should consider investing in something as crazy as mobile home parks?
Key Takeaways:
[01:33] Investing in real estate – mobile home parks
[02:29] A key factor that makes mobile home parks better than investing in other types of real estate or asset classes
[03:14] The competitive advantage of investing in mobile home parks
[05:01] Supply is fixed and in fact shrinking ~ 1% a year
[06:18] Why shrinking supply is not indicative of a dead or dying business
[06:58] Tenants are typically sticky to their properties
[07:55] The tenants are not mobile – under 1% leave every year
[09:32] Lower tenant turnover + lower expenses = great combination
[11:10] Fixed low costs coupled with lower tenant turnover and low capital cost translates to very high cash on cash yields
[12:08] Another key element that makes mobile home parks a neat business
[13:40] 60-75 % of mobile home parks are owned by mom & pops
[14:00] What are the benefits of having sellers who are mom & pops?
[16:49] The higher depreciation rate associated with a mobile home park
[18:51] Jefferson and Brad are, on average, depreciating ~ 80% of their purchase price over 15 years
Mentioned in This Episode:
www.mobilehomeparkinvestors.net
To connect on LinkedIn, search for "mobile home park investors group"
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