Building Mobile Home / RV Parks (LIVE Q&A)
A live Q&A session from a real estate investing podcast covering land investing strategies, with particular focus on mobile home parks, RV park development, and creative land use strategies. The hosts and guests discuss seller financing, subdividing, and the economics of placing mobile homes on rural lots. Several community members share their own experiences with niche land development plays.
Summary
The session opens with the hosts Daniel and Ron addressing community questions about land investing. An early question about Louisiana being a non-disclosure state leads to a discussion about LandPortal's accuracy in such states, with the hosts suggesting their data is reasonably reliable and that a general rule of thumb is properties sell for around 10% under listing price across most markets.
The discussion moves to seller financing for subdivide deals, where the hosts recommend structuring notes with a clause allowing early payoff as parcels are sold, and refer listeners to community member Dylan Roos who has experience with this structure. The topic of double-close contract duration in slower markets is addressed, with the recommendation of 120 business days to give adequate time while still honoring commitments to sellers.
A large portion of the session involves a conversation with guest John Johnson, a real estate investor currently based in Colombia who focuses on mobile home parks and RV parks. Daniel explains a growing trend of placing single mobile homes on small rural lots, noting that investors are obtaining mobile home dealer licenses to buy directly from manufacturers at wholesale prices, improving margins. The hosts walk through example economics: buying land for $50K, placing a $100K mobile home, and selling the combined asset for $225K-$250K. A key driver is that mobile homes qualify for FHA lending, making them accessible to buyers in markets with severe affordable housing shortages.
The conversation delves into why mobile home park owners prefer tenants to own their homes rather than renting them from the park. Key reasons discussed include: lenders underwrite based on lot rent and view owned mobile homes as liabilities, tenant-owned homes attract higher quality tenants who maintain properties better, and park owners avoid maintenance responsibilities. Lease-to-own durations of 1-4 years are mentioned as typical.
Community member Vemma shares a sophisticated development strategy involving purchasing large parcels of 50-70 acres, getting them permitted as RV parks, then condo-izing and selling individual lots. He references Firefly Resorts as a high-end example where pads sell for $200K each. He notes that Texas counties, particularly around Austin (Bastrop and Travis Counties), have tightened regulations requiring more spacing between pads and higher-quality infrastructure, making smaller, denser parks economically difficult. He also discusses a longer-term 3-5 year investment strategy with investors, acquiring land, getting it entitled, and then selling individual lots.
Andrew Short's strategy of finding large parcels with minimal road frontage and building roads to unlock subdivide potential is highlighted as an example of niche specialization, with one example cited of buying land for $450K, spending $400K on a road, and selling subdivided parcels for $1.8-1.9M. The hosts close by emphasizing the value of having multiple tools available when evaluating land, including timbering, mobile home placement, road development, and traditional flipping.
Key Insights
- The hosts claim that across most markets, properties tend to sell for approximately 10% under listing price regardless of days on market, based on their internal data study.
- Daniel argues that investors placing single mobile homes on rural lots are getting mobile home dealer licenses to bypass distributors and buy directly from manufacturers, significantly improving margins on the mobile home component of the deal.
- The hosts present example economics for the single mobile home strategy: land purchased for $50K, $100K mobile home added, sold for $225K-$250K — with the FHA-qualifying nature of the asset cited as a primary demand driver.
- John Johnson and the hosts argue that mobile home park lenders underwrite deals based primarily on lot rent income and treat mobile homes as liabilities rather than assets, which is why park owners are advised to transition to tenant-owned home models.
- Vemma argues that small-scale mobile home or RV placements (fewer than 20 pads) are economically difficult because infrastructure and utility setup costs don't pencil out at small scale, suggesting a minimum of around 20 pads for viability.
- Vemma describes a development model where large parcels (50-70 acres) are purchased, permitted as RV parks, then condo-ized and sold as individual lots, citing strong Texas demand for lot ownership over lot rental, particularly for secondary/luxury homes.
- The hosts reference Andrew Short's strategy of deliberately acquiring large parcels with minimal road frontage at a discount, then building roads to enable subdivision — one cited example involved $450K land purchase, $400K road build, and $1.8-1.9M in sales proceeds.
- Vemma notes that Texas counties near Austin have tightened RV and mobile home park regulations to require larger pad spacing and higher-quality roads, effectively pushing the market toward higher-end park development and making dense low-cost parks economically unviable.
Topics
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