Mobile Home Parks, The Latest Value Play
LOS ANGELES?Mobile home parks have fallen on the radar of multifamily investors. The residential asset class offers investors a strong value-add play. Gelt Inc. has launched Happy Home Communities to take advantage of these opportunities in the Western United States. To find out more about the new division, why this was a good time to launch and more about the mobile home asset class, we sat down with Ellie Davis, director of acquisitions and asset management at Happy Home Communities, for an exclusive interview.
GlobeSt.com: Why did you decide to launch this company?
Ellie Davis: Mobile home parks and RV resorts cater to a very low income demographic and often times, maintenance and upkeep on the properties are neglected by the ownership. By launching this company, we believe we can make a difference in the lives of the residents in our mobile home parks by providing a higher quality of life for them at a price that is lower than apartment living or purchasing a house. Gelt Inc. founders Keith Wasserman and Damian Langere have a passion for being innovators in the multifamily sector and we feel that interest can be expanded into this new, targeted niche. Through an infusion of capital, mobile home communities stand to see the most improvement though attention to detail and hands-on management.
GlobeSt.com: What is different about this type of property compared to traditional multifamily properties?
Davis: One of the unique features of a mobile home park is that the residents own the homes. In most multifamily investment properties, the landlord has to maintain the dwellings. Because of this, there is a pride of ownership that you do not see in other rental-driven investments.
GlobeSt.com: Are more investors seeking out this sector type? If so, why?
Davis: Yes. What is surprising is that there are more and more institutional investors entering this sector every year. The majority of them are attracted to the stable cash flow, higher capitalization rate than other property investments, and portfolio diversification.
GlobeSt.com: What is driving demand for growth in the mobile home market?
Davis: In a recent report by the Social Security Administration, it was noted that 38 percent of all wage earners make less than $20,000 per year. In markets, such as California, which have seen the cost of living continue its upward trajectory, the demand for mobile homes has increased as more Americans are looking for affordable housing.
GlobeSt.com: What markets are you looking at for more acquisitions?
Davis: We are looking for communities in several markets including California, the Southeast and the Midwest. Overall, we are looking at markets where the price of single-family homes is becoming too expensive for median income families.