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Joan feds are here with mobile-home investing dotnet I'm going to fill out the whiteboard behind me I promise we're gonna get to it we're gonna cover a lot of information in a short period of time I want to talk about the changes of the market changes with regards to mobile home investing mobile homes on private land also mobile homes inside parks in the past year 2018 what's changed this video is for mobile home investors that are buying individual mobile homes and I'd like to say that first of all you know everything is still full steam ahead but there have been some changes that I want to make you're aware of because if you if you're thinking about these I want to let you know how they affect you and if you haven't thought of them I want you to be aware of them so you can know okay things are changing how do I adapt how do I still have a business how do I in fact grow my business and capitalize on these changes that are coming because the changes are gonna happen time will chug along and it will be 2019 2020 2021 eventually so we want to structure our businesses and know what we're getting into moving forward so with that said I filled out some of this I'm gonna fill out the rest with you and there's a five main changes that I want to talk about the knit up there is like a later half of this video where we talk more about duty to serve I kind of go into what I find interesting and some there's a couple reports I want to talk about we'll talk about that eventually but right now let's talk about number one and the thing that has sort of been changing with regards to individual mobile homes and that's that brand new mobile home sales are up mobile home sales manufactured homes brand new ones are are up in fact if we look back from 2013 new manufactured homes a shift from the factory new mobile home sales have been going up steadily year after year this is from a report let's go to the top real quick you can download this report in the description of this video 2017 updated in 2018 from the manufactured housing institute let's go over just a few things that I find real interesting not to get sidetracked from the original video topic there's over 22 million people across the country living in manufactured homes there's over 120 manufactured housing plants that's pretty awesome providing 40,000 jobs to US citizens into US people I mean that's that's great seventy thousand dollars the average sales price of a mobile home thirty thousand dollars median household income now there's over 37,000 landless communities mobile home parks 37,000 of them with thousands and thousands and thousands of individual lots and as mobile home investors we just want to own you know I some of those I mean handful of those would be great many handfuls would be great so that's kind of what we shoot for or own some of those parks potentially in the future and then if you're in a mobile home park the average annual site rent increase increases about 3% a year I thought that was very interesting we're gonna touch more on that a little bit later now it's believed there's no figure for this but it strongly believed that a large part over 50% over 50% of the new mobile homes that are being sold are being bought by mobile home park owners which is which is a very big change from previous in previous history mobile home park owners now have money they have the incentive they have the time to go ahead and fill up their parks to fill up vacant units inside of their park or I'm sorry vacant pads that they had empty or they're building new areas you know they it was a hundred unit Park now they're expanding it to 200 units they have to fill up those 200 units so a lot of mobile not a lot of mobile home parks some mobile home parks are buying up brand-new mobile homes and they're filling up their units that's a good thing because eventually in a couple years we'll go ahead and buy some of these newer units from people that are already living inside the park plus the parks look nicer they're a little bit bigger the homes are nicer the local you know community the local municipality is happier this Park is starting to look nice it gives mobile home parks a better a better name we can also take some of these older mobile homes that the park doesn't want if they say hey there's a 1980s home or 70s home that we don't like we want to get it out you know it doesn't it's not like the eyesore in the park well maybe that's a home that we could take and move somewhere else and we make everybody happy the parks happy they don't have to pay for the move we're happy we can move the home and facilitate this transaction to another park and then help this other well we'd want to sell the home once it's there or move it to a piece of land that we already own so brand-new mobile homes and you know more parks buying mobile homes that is a very good thing there's really no issue to that I did want to make a mention of that because that is substantially different sort of news but there's just more mobile homes now in parks we can go ahead and capitalize on this too if we want to buy new or used homes we can go ahead and bring these into parks because they're making more of an effort to fill up their Lots and again some of those Lots were eventually going to buy in the future or some of those homes the second thing I wanted to mention is that there are many more mobile home park sales in this fannie mae report put out in september of 2018 the support talks all about mobile home parks mobile home communities and the first thing it goes to mention is that transaction volume continues to rise last year was another banner year for mobile home communities and if we scroll down you can see that at a low point of 2008 2011 in the past decade there's been a steady increase a substantial increase year after year with regards to mobile homes park sales from one mobile home park seller to the mobile home park buyer and this report says is that senior mobile home community sales have dominated the sales market now majority of mobile home parks across the country are all age approved type of parks there's no age restrictions and of course those parks are selling in various areas around the country however currently this will eventually change for sure but the senior sales seem to dominate the market there has been much more of a spotlight in the last 24 months with news articles media articles just shining a light on mobile home parks not so much mobile homes plenty of people still turn their noses up to individual mobile homes but as far as the mobile home parks go there's wall street money coming in there's private equity trust there's real estate investment trusts there's a lot of money being poured into mobile home parks people that know what they're doing and they're buying mobile home parks and they have five or ten just regular like one person or there's big companies that are buying ten twenty a hundred parks across the country now I'm happy to report that most of the folks that are buying these mobile home parks they want to keep them as parks that's the whole point there's they give good returns for the people buying the parks they want to keep them as parks they don't want to demo demo them so they keep them as parks and they usually have a land lease model they want to be in the land rent business the lot rent business they don't want to be in the mobile home rental business or the repair business so a number of the people that are teaching how to buy and sell mobile home parks how to operate mobile home parks they're teaching to work with mobile home investors so I'm very happy to report that these mobile home park buyers the vast vast majority are still very mobile home investor friendly when we can come across and be free free help for mobile home park owners for mobile home sellers when we know how to talk to people what to bring to the table how to address different problems in the parks again we come across as free help now if you're coming across like a bully or a know-it-all to a park the park may not want to work with you no matter how much money or time that you have but when you know how to correctly talk to a park and when you know what you can bring to that part it has to be a symbiotic relationship if you're taking advantage of them or they're taking advantage of you that's not going to last long but I'm very happy this was a noticeable change and then I'm very very happy to again report that mold more the vast majority of parks are very investor friendly law currents are steadily chugging upwards that's always been the case for the past 16 years lot rents are increasing 5% a year $20 $40 a year the reason I wanted to mention this just to even shed some light to this because I think it's just so common that lot rents will increase they're still gonna stay well below market rents that's one of the benefits of being inside a park there's a lot of benefits if you're a resident being inside of a community versus like an apartment but the spread between apartment rents locally and mobile home parks there's usually a substantial spread there I mean even as that gets a little bit closer that spread is typically what we're gonna make when we sell mobile homes we'll talk about that a little bit later I want to interrupt this video really quickly and I have an extra bullet point do you see the three that were previously here I want to add one more and now as I was editing this video I thought of something that you absolutely will see and it can if you're not an experienced mobile home investor you can be thinking well do parks even want me is there too much competition should I run away and not even look you know in these directions of the parks that are doing some of the work themselves you you you have some of these mobile home park buyers that are buying parks and they want to keep their mobile home parks as a land lease community but in some of these communities in in hotspot areas metropolitan areas downtown areas coastal areas some mobile home park buyers some mobile home park owners know that if they buy some of the homes that are there there that are for sale by owner that are being abandoned that are being evicted if they're if the park is bringing in used units or new units that part can say hey I want to sell these homes for top dollar or I want to rent these homes out and so my you know thoughts or my question to you is you know can you still create profit there is the park going to be competition if they're doing the same thing as us and the answer lie most things in real estate is it depends now if there is a profit to be made and we can be a win-win asset to the community of course we want to do that we do want to stuck things in your favor to protect you so that you're not doing a silly or a skinny type of mobile home deal let's talk about this kind of logically so if a mobile home park some mobile home parks are buying and selling their own homes in most of the cases they still want to work with us we can still purchase homes that are for sale by owner that the mobile home park doesn't want and that there are title issues eviction issues some other issues we can be an asset for the community so most mobile home parks still want us even if they're buying their own homes even if they're bringing in used homes they'll still want us as basically free help which is kind of what we are the second thing is to realize are these homes actual competition across the country we could have a like if we just kind of close our eyes and envision a mobile home park are we talking about a mobile home park that is selling you know one one unit like they have one mobile home for sale by the park or do they literally have twenty homes that they're trying to get rid of are they selling some of these homes for cash or are they selling them for payments as well or will they rent these homes out also are they selling them for five hundred dollars five thousand dollars fifty thousand dollars you have to know the properties that you want to purchase the properties that you want to hold long term are you gonna sell them for cash are you gonna sell them for payments are they gonna be new homes are they going to be used homes so we want to make sure that you know is the park competition well are they selling the same types of properties as us are they the same amount of bedrooms are they larger are they smaller are they significantly you know much more attractive or much uglier and they need a lot more work but if the if the homes are comparable if the park has a home that looks identical to the one we're selling the park is probably going to fill their home first they can be more flexible with price they can lower their payments they can lower lot rent they can kind of steer people away from well hey I know you're here to look at Jon's property but by the way did you see our five homes that we have for sale so sometimes the parks are I don't want to say malicious but sometimes they're malicious and they'll kind of sort of steal people from your property to put into their own properties or they'll do it more of a kind of a just a way that they did it wasn't malicious but it was just kind of the park manager was talking to that potential buyer that was looking at your place but now they're gonna look at a parks home so if the park is does have a comparable home and they have like five other homes that they're selling that that are comparable to the one that you want to sell the park may sell their homes first and if that's the case we need to buy the mobile home in this community either we might not want to buy it or we may want to go ahead and account for two or three or four extra months of holding cost which if it takes three or four months to sell a mobile home in a park that's a phenomenal amount that's a long time we shoot for 30 days or less because we want people interested in our properties we know what we want to sell if you're selling them on payments they typically go quicker but it really does depend is the park manager friendly what's also what's their nearby inventory what's the application process as well you really want to stack things in your favor and it's not I don't want to say run away from a park that is buying and selling their own properties don't do that at all because it can be very fruitful but you do want to absolutely make sure you know what you're buying you know what the park has for sale not just right now but in the near future as well are they working on a bunch of homes that they're gonna have on the market in a couple months or in a month and right now there's nothing on the market but in a couple months they'll be you know the park will have a couple homes for sale so that's the next thing that consider is are they really actual competition with what you're selling versus what they're selling and also how they're selling and the qualifications and if they're willing to take payments or rent the home and then also can you create a value I mean do we run away and not do the deal do we not try to help people do we not try to make a name for ourselves many times it's just a normal situation just like there may be other sellers in the park there's gonna be some you know the mobile home park may have a couple homes that it's selling to and that's okay we just have to know what they're selling so it might be normal it may be some competition and you have to wait till these other home sells and then your home will sell maybe the park is gonna be malicious which you might not want to get involved in that Park if the manager is gonna be maliciously kind of stealing people or guiding people kind of away from your properties into their properties so there's a lot to know besides just you know is the park doing you know is the park buying and selling their own homes and if so you know is that a deal breaker because without with just that information you can't make a good decision you really have to know a lot of this other stuff and a bit more to make sure you know is this the path of least resistance is this a deal I want to do do I want to start a relationship with this community the answer may definitely be yes or the answer may be no I'm gonna hold off and I'm gonna come back to this community
ater and work on you know something else at a different community or in mobile home on land I hope that that made sense with regards to some parts kind of buying and selling their own homes and if they were competition if you have any questions or concerns let me know down below or email me personally now let's go back to the original video the third thing to touch on is that there are more cash buyers in high demand areas around the country now there's as mobile home investors investing in individual mobile homes on private land and mobile homes inside parks around the country we have a natural advantage with regards to well compared to single family home investors in most areas around the country there are not that many cash buyers and that's that's still the case now in rural areas there's not that many cash buyers in some city areas there's not that many cash buyers but in some areas where the supply of there's just a very small supply of single-family homes and there's a large amount of buyers there's people moving into different areas across the country metropolitan areas coastal areas high demand areas where where home prices are just going through the roof well that bleeds over into mobile homes as well people will start to look hey I need someplace to live I want to live in a mobile home so in metropolitan areas in some cities there's more people willing to put money you know cash money 20,000 30,000 50,000 or more there's some of these buyers in high demand areas there's still strategies to go ahead and dominate your local area to work with a number of parks to sort of outshine other other buyers and sellers but in some situations for these newer homes for these nicer homes we're gonna pay more going into the property and when we sell the home we're gonna pay more going out we buy it with a little bit more money we sell it for a little bit more money the total price the down payment the monthly payment we get more people interested these are nicer properties we're selling them for a much longer term instead of five years we're selling them for ten years on average or more worth of incoming payments if it's on land we're selling for more like twenty or thirty years if we're if we're holding payments as well another thing that we have an advantage about I said we sort of has a statistical advantage compared to single family home investors is that there's just not a lot of us investors doing this and that's true I will say now that evidence on this YouTube channel there are more people looking at mobile homes individual mobile homes inside parks some of them are fly-by-night investors some of them want to scam people some of them want to take advantage some of those will over repair over fix over improve not sell for enough they'll only do one or two deals there's just a lot of ways to to do something wrong to make a mistake to do a skinny deal to get a bad taste in your mouth when it comes to mobile homes so while I've seen a few more investors investing in mobile homes there's still a lot of properties compared to single-family homes there's not nearly as many investors most people still turn their noses up to mole to mobile homes and we only need when we're talking about mobile home parks we don't need 20 or 50 parks that we're working with we need two four six parks that were working with on a regular basis and there are a lot of mobile home parks in most areas around the country and many of them when we know what we're talking about our investor friendly so I did want to mention this but it's you know it don't let it in any way stop your business there are ways to sort of outshine to dominate the local competition to be a one-stop shop when it comes to dealing with sellers buyers park owners park managers movers realtor's brokers the more that we can do to help people the more opportunities that we have to help people and to close the deal and to be remembered and helps somebody in the future so I bring that up just to bring it up but there's more cash buyers and we can sell for cash too I sort of did mention that most of my strategy is to sell on payments but in some areas if you want to sell for cash and double or triple your money and just get out and take that money and reinvest it in some areas you have more of an opportunity and number five hits on the third advantage when it comes to investing in mobile homes there's not that many cash fires in most areas which means if there's not a lot of cash buyers it means people want to try to go to a bank if they can you know have to buy a mobile home but it's tough it's very very tough not impossible by any stretch of the imagination but it's very tough some mobile homes you can't finance at all because of the age because of the size the condition the foundation how many times it's been moved the down payment the the buyer has to qualify the park has to qualify the foundation has to qualify the age and the size if I didn't already mention that it's difficult to get a mobile home financed on land is a bit easier but in parks are especially difficult lenders don't necessarily know how to how to securitize their their money that they're that they're lending there's also not really a secondary market for mobile homes mobile mobile home notes so this duty to serve we're going to talk about this in just a minute but this is sort of the first step of making lending easier on newer mobile homes first when it comes to mobile homes on private land we're going to talk about that and then around 20 20 or 20 21 then we're gonna you're gonna there's gonna be start to be a more push to help mobile homes inside of parks with regards to this duty to serve that is not going to affect us nearly as much even in five years because it's gonna deal a lot with newer manufactured homes again we're gonna talk about that but that's not really an issue but I did want to bring it up to talk about on this video because it's important and these reports that were to talk about they kind of give some statistics that I thought were pretty interesting that I want to talk about as well so I hope that this all made sense mobile homes on private land are still in my opinion get'em as men you can while you can full steam ahead and the same with mobile homes in parks full steam ahead let's try to help as many parks as we can let's help as many sellers as we can let's get as many properties in your portfolio as prompt as we possibly can again the market is or not the market time is moving forward there'll be a next year at this same exact time and depending on what you do between now and then daily will determine where you are good or bad so I hope that this was really helpful I do want to jump into the duty to serve report Fannie Mae report put out in December 2018 talks all about the duty to serve market plan for manufactured housing let's talk on some of the highlights of this report the support you can find below in the description this one and the other one that we were looking at we're gonna bounce back and forth between them I just want to point out some of the highlights that I think are interesting about their support please feel free to go through it yourself maybe before bed when you can't fall asleep but this is interesting the Fannie Mae strategic priorities for the manufactured housing market in 2015 Fannie Mae began this process with regards to duty to serve and they have sort of four strategic priorities they want to analyze things they want to test and learn they want to partner with government entities with resident owners to bring more liquidity to mobile home communities mobile home owners you know that own the individual mobile homes and determine what securitization structures are appropriate for chattel mortgages or for personal property mortgages when lenders are lending on personal property you know how can they securitize their debt how can they securitize the money that they're lending because when banks lend on mobile homes in in parks if that person defaults they don't get the land the bank gets the mobile home and the bank is not necessarily in the mobile home business they're in the I want to make money with my money business so anything that's deemed risky and that's why there's just not a lot of mobile home loans out there there's a few banks nationwide which we'll talk about a little bit later but I like that this report says that we are you know we're still conducting the scaffolding to really research and enhance and develop loan criteria and that this is sort of in the early process of the of the you know moving forward things are only going to get clearer and clearer and in fact this is not in exact science the next year or two or three may prove to undercut our ability to achieve our goals or we may surpass our goals that this plan is a living document I thought that that was interesting these graphs we're gonna pass by those I found this interesting on page seven many mortgage lenders do not originate shadow loans or personal property loans mostly due to risk factors and the lower property value associated with these loans that makes sense the loan values are lower the risks are higher but I found this sort of more interesting a significant number of chattel borrowers the borrowers that were that were successfully borrowing money to buy a mobile home inside of a community or a mobile home that's just a mobile home not not the land many of them could qualify for just traditional single-family home type loans or a mobile home attached to land around the country there is a number of credit unions and banks that do have various programs to lend on mobile homes that are personal property but it is gonna be a tougher you know it's certainly tougher to find a bank or credit union that will lend on a mobile home but there are some nationwide ones Vanderbilt mortgage US Bank San Antonio Federal Credit Union 21st mortgage and triad financial services if you've been in this business for a while you've heard of some of these names and then this part I did not highlight down here but it goes on to say that 22% more than 22 percent of mobile homeowners live below the federally federal poverty line and so that's just interesting - or just to you know to actually hear those numbers the millions of people that are depending on mobile homes that live below the federal poverty line that that still want to be and deserve a nice beautiful you know play still it a safe place to live both the location and the actual mobile home itself on page 8 I wanted to point out here manufactured housing represents a significant percentage of all housing in rural area let's go over to that other report that we initially looked at and on page four we see that mobile home communities are prevalent in rural America apartment units apparently are not predominant or not the predominant rental type in rural America rather 66% the vast majority of renters occupy single-family homes 19% occupy apartments and 15% which doesn't seem like a lot to me occupy manufactured home rentals which when we're talking about you know rural America that's millions and millions and people the highest concentrations are in the east coast of manufactured or maybe of favorable counties that have manufactured homes or manufactured home communities but as you can see from this graph on page 4 there is a lot of mobile homes spread out the entire country and from personal experience if you have a car if you're in a location that's not an island and even if you work well on Hawaii I'm thank you for watching but there's very very very few mobile home communities there but everyone in the continental United States we can get in our car and we can drive 10 20 30 40 50 miles and we have dozens and dozens and dozens of more access to more communities on page five this report talks about the cost of average market rents in mobile home communities in certain areas versus apartment rents in lausanne and surprise surprise mobile home communities are have a lower cost of living than apartment rentals and that's one of the benefits and as individual mobile home investors that's where we make our spread sometimes we can charge above apartment right sometimes we charge below or and make the home more attractive but you can see right here they clearly a thousand almost a thousand dollars five hundred dollars three hundred two hundred dollar spread between what the rental communities are charging versus local apartment rents now I don't know if these are luxury apartments or basic apartments but it is interesting well I think it's pretty common sense if you've been in this business for a while that the mobile home communities are more affordable that's the whole point and there's other benefits of course you're living in your own property you can paint it you can do what you want you have a yard you have good neighbors you don't have people been you know banging on your walls so there's lot of other benefits when it comes to living inside of a mobile home community but I thought that that was interesting to note and then 38,000 existing mobile home communities around the country with only a handful of new communities being built or expanded upon let's scroll up to page two of the same report I think it's interesting to see that foreign investors continue to show very strong interest in mobile home communities for it investors represented almost 50 percent of buyers in 2017 Canadian company and the government of Singapore seem to be one of the two biggest buyers in mobile home communities you also have some other popular names like yes communities Blackstone lifestyle equity properties son communities in the cart The Carlyle Group I thought that was interesting let's scroll down to page three of the same report and it just says that few mobile home parks are being built 68% of the mobile home parks in existence were built around the 1980s oh I'm sorry no prior to the 1980s and that's actually mirrored in the duty to serve report if we scroll down to page 14 we see that well this is pretty cool to distribute the the distribution of lots with regards to mobile home communities but if we look even further down with this pot with this pie graph here we can see that many mobile home work communities were built right here in this red part 35% in the 1970s and then we have starting from the beginning you know prior to 1950s there weren't many during the 60s there were some during the 70s I'm sorry here are the 60s here the 50s here are the 70s the 80s there were it was dwindling the 90s there was still a healthy number of parks being built and then the 2000s and then currently there's just very very few parks being built and then right here we talk about the distribute the distribution of mobile homes by pad number a park that has just one to four units there's not that many parks that have 5 to 24 units that shoots up across the country must have been very popular to do that must have been very affordable to do that must have been reasonable to you know under 25 for some reason there was was easy in here 25 to 50 there's still quite a bit or there still there's obviously even more that's the peak 50 to 75 interesting so you have a lot of the folks that are a lot of the bigger mobile home park buyers I know they're looking for mobile home parks that are this hundred units plus and there's still a bunch of those yeah there's still a lot of 500 plus units there's still a lot of those Wow across the country there's more than 500 parks with spaces of 500 or more hmm that is impressive if we scroll up to page 11 we see that about 48% of the households that live in manufactured homes owned both the home and the land that it is placed on almost 50% of the of the homes around the country the person that lives in the mobile home owns the piece of land that the mobile home sits on I thought that was really cool about 30% rent the land that the mobile home sits on they actually own the mobile home but then they rent the land that the home sits on and then about 18% whether it's a mobile home on a little piece of private land or a mobile home in a park they are renting from either the the homeowner or the park owner or somebody there they're if they're renting the mobile home and they're rentin
the land the vast majority of mobile home parks around the country do not allow renting or do not rent out mobile homes but there are some mobile home parks that allow renting that rent out mobile homes themselves and then also individual mobile home investors can buy a piece of land can have a mobile home or two on it and can rent those homes out as well in 2013 only 14% of new manufactured homes were title as real property meaning that they had the land included so that the rest of the homes in 2013 they were chattel they were personal property that went into parks that went onto land and they stayed personal property I encourage you to check out their support and read it below or check out the report the link is below and it's got a bunch of graphs it's got a bunch of information I'll put up by Fannie Mae there'll be more to come on this and as it does I will go ahead and update you what they have done the one sort of last thing I want to mention is that they are purchasing conventional manufacturing home loans that's great I mean Fannie Mae is stepping up they they have to test they have to analyze and to do so they have to take action so in 2018 they purchased between nine thousand conventional manufacturing home loans now if you go on to read the rest of this a lot of them a lot of them the majority are mobile homes on private land because mobile homes and parks are difficult there they're not yet sure how they want to securitize that debt a lot of those mobile homes that they're buying they do have some lofty goals for buying many more loans in the future but that's gonna come around where is it around 20 20 20 20 to their their projected date for the chattel pilot program is gonna be you know past 2020 I hope that that all made sense I hope you found that as interesting as I did if you did then there may be something wrong with you thank you for watching this video for so long if you watched it all the way to the end I really appreciate that and I do hope that this video was helpful you probably have questions there's probably a couple things I forgot or maybe I talked too quickly about something or I didn't think about sort of an if/then scenario about something if you have a question about anything on the board excuse me about the duty to serve or anything with regards to that please don't hesitate to comment below or to reach out to me personally at support at mobile home investing dotnet also if you go to mobile home investing net there's a lot of free resources there and if again if you have any other questions feel free to reach out to me thank you so much for watching this have an amazing 2019 and beyond and yeah I was like a Buzz Lightyear kind of thing and if you I have any questions or if you have any ideas for future videos topics questions concerns this or that again feel free to reach out I'm just an email away thank you again so much for watching talk to you soon bye bye
