Have you ever had a hobby that involves buying some type of specialty item? I collect antiques – and really specific ones at that. I’ll pick a niche that interests me, like civil war antiques, and then I’ll focus on that one area for months, until I’ve found all that I want and then I get bored and move on to the next. Any good antique “picker” knows that there is a formula to being able to process and identify the right antiques from a giant stack of junk. And this same technique works well with finding mobile home parks to buy.
Build a “sorter”
The first step to finding a mobile home park is knowing what “is” a deal from what “is not” a deal. You have to learn everything there is about the industry and how mobile home parks work, and then apply your goals to that knowledge. You can find all the basic industry information you need at MobileHomeUniversity.com. If, for example, you know that you have $50,000 to spend on a down-payment, and the average loan is 20% down, and the average cost per lot is $10,000, then you would be looking for a roughly 25 space park. If you also know that you want a park in Minnesota, now you have narrowed your “sorter” down to a 25 space park in Minnesota. Then you throw on all the other variables such as city water and sewer, no master-metered gas, etc. and you have built the machine that will allow you to pluck the gems out of the piles of “dirt”.
Build a “deal funnel”
Having a “sorter” is great, but it’s of no use if you do not pour raw product into it for it to sift. So you have to build a “deal funnel” that finds all the mobile home parks available at that moment on the market. You can build this funnel through the on-line listings at websites such as MobileHomeParkStore.com and Loopnet.com, as well as calling the many industry brokers shown on those sites and augmenting that with direct mail and cold calling park owners.
Process as much raw material through the deal funnel as you can
Once you have the sorter and the deal funnel in operation, your goal should be to pour as many deals as possible into it. Finding good mobile home parks is a volume business, and the more you dump into the sorter the better quality parks you will find. Most people who have trouble finding a good mobile home park to buy have failed to put a sufficient volume of raw material into the sorter.
Don’t lower your standards as an excuse for not following the correct methodology
The biggest mistake that many investors make is to simply drop their buying standards instead of following the methodology shown above. If you only put 10 deals into your deal funnel – instead of 100 – then you will have to violate your sorter to find one to buy. This is a recipe for disaster. You are much better off buying no mobile home park than a bad one. Once you have built your sorter and funnel, you owe it to yourself to work diligently to get the volume of deals necessary into that funnel. Don’t let yourself down and lower your standards.
If you like the show “Antique Pickers” then you’ll love the mobile home park business. Being able to spot a great mobile home park deal is more than just luck – it involves a lot of effort and a business-like methodology. So build your deal sorter and funnel, and watch your odds of success grow exponentially.