For as much investing as I’ve done, I haven’t plumbed the depths of the mobile home market as much as other people have. Some of my students have, but it’s a niche I’ve never really been a part of. That’s exactly why I bring in experts like Mike Ayala. He’s a pro in the affordable housing and mobile home department of real estate. From his extensive experience with the subject, he’s gotten plenty of tips for how other people can break into this unique and profitable market.
Mike and his team love large turnaround projects. They will determine a project’s stability and level of debt before attracting investors. These investors will buy in using an LLC, and all costs will be split 80/20. Investors get an eight percent preferred return, and Mike’s team takes its asset management and property management fees after that. This is a great way to attract investors before you end up paying yourself.
Pricing and deal structuring will vary across states. Mike recommends looking into areas where your company can grow its presence significantly. States like Arizona, California, and Nevada tend to have large retirement communities and higher prices that make it difficult to scale affordable housing projects. States like North Carolina are more in the ballpark, but viability can vary widely by town and county. Mike recommends investment in middle America, where affordable housing is the most in need.
Timing and Having a Mission
No asset class in real estate is immune to the ebbs and flows of the economy. The big advantage to mobile home parks, however, is the fact that they seem to improve in viability during times of recession. When the economy hits a downturn, people look for more affordable places to live. Mobile homes occupy the affordable housing market. They will, therefore, tend to do well as people operate on tighter budgets. This niche serves a specific need, and it’s one that many people will be appreciative of.
It’s important to stay strong through times of trouble because there are no guarantees. A point that Mike and I agree on is that having a view of your mission is so fundamental to staying grounded and motivated in the real estate game. Is real estate smart and highly profitable? Absolutely. Is it also a great way to help people? Absolutely.
Mike and I share the mission of helping others and have seen the returns on that. Mike does coaching to plenty of people looking to invest in mobile home parks. This is on top of the goodness he brings to communities by delivering affordable housing. I have also done affordable housing projects to help immigrants and refugees. These were some of the most rewarding projects I got to be a part of, and I believe that you can make your business your ministry if you work hard enough. It just requires a little hard work and some expert coaching from generous people like Mike.