With a focus on capital preservation and risk-adjusted return. While helping to solve the affordable housing crisis in America.
Midwest Park Capital is a private real estate investment firm providing select and approved accredited investors with exclusive access to high-yield investments in the Mobile Home Park vertical. Our fundamental strategy is to assemble a diversified portfolio of low-risk, high cash-flow mobile home park assets with the goal of delivering capital preservation, consistent quarterly cash-on-cash income paired with equity growth. We achieve this objective by acquiring, then adding-value or repositioning under-valued, mismanaged, sub-performing, or improperly capitalized income-producing assets. Investing passively allows you to get the cash flow and tax benefits of owning real estate, without the headaches of being a landlord.
“Owners of mobile-home parks have trounced the broader market thanks to soaring house prices & nimbyism. One of the best-performing investments since last decade’s housing crash, mobile home parks.
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Why Invest In Mobile Home Parks?
Why invest in mobile home parks in 2023? According to Manufactured Housing Institute, In towns across the country, workers are struggling to make ends meet – and the high cost of housing is a big part of the problem.
Manufactured housing is already a major part of the solution. More than 22 million people in the U.S. live in manufactured housing (about 1 in 15 Americans) — homes that are built to a federal standard in factories and typically placed on land that the homeowner owns or on rented lots in communities of manufactured homes. In many parts of the U.S., homes like these are the least expensive kind of housing available without a government subsidy.
Although some existing mobile home parks have expanded, only approximately over 310 plus new mobile home parks have been built in the last two decades. And institutional ownership is tiny — 15% to 20% of the overall investment-grade market is owned by REITS, with only to 2% to 3% owned by other institutional owners.
Approximately 5,000-6,000 manufactured housing communities in the U.S. are institutional quality. Residents typically own their mobile homes but rent the property from park owners. And because the structures themselves aren't really all that mobile, most homeowners tend to sell rather than move them, money managers say. That contributes to the stability of the cash flow of mobile home parks. There are still a lot of mom and pop owners meaning it’s an industry ripe for disruption and acquisition.
Earn better and safer returns by investing in mobile home parks. Investors who diversify into commercial real estate outperform those who don’t.
Direct commercial real estate has outperformed the S&P by more than 60% since 2000. Using the “20% rule” where 20% of your portfolio is invested in alternatives like commercial real estate helps earn greater returns and reduce volatility.
Investors who invested using the 20% rule have earned about twice as much as investors who used a more traditional allocation.
Incredibly High Demand In The Market For Affordable Housing and Very Low Supply
A worker earning the average wage does not have many other housing choices, with the national mobile home park lot rent at $375-425 range per month in a majority of the country. In comparison, the average rent on a one-bedroom apartment was $892 a month in 2017. Families have even fewer choices. A two-bedroom apartment was $1,103, according to the Fair Market Rents kept by the U.S. Department of Housing and Urban Development.
The problem is getting worse. The cost of housing continues to rise faster than wages. Between 2000 and 2015, the number of people living below the federal poverty line soared from 33.8 million to 47.7 million. Housing costs are rising in part because of simple supply and demand with only approximately 44,000 mobile home parks. Mobile home parks are the only affordable housing solution that is non-subsidized in America.
Historically mobile home parks have been one of the safest of all commercial real estate investments
Mobile home parks tend to do even better during economic downturns as they provide the only form of non subsidized low-income housing. Mobile home living has always been an affordable option for people who can’t pay the high costs of conventional apartments and rental homes. Additionally, many baby boomers live on a fixed income with little savings and look to mobile home parks as an affordable housing option during retirement. Demand for manufactured homes began to increase in 2013 when the first wave of baby boomers began retirement.
Important trends show a surge in the population aging into retirement increases the demand for affordable housing. The age 55-plus cohort in the U.S. will swell by nearly 1.7 million people in 2020, and through 2025, another 7.6 million will reach this milestone. As these residents retire, some will consider purchasing manufactured homes in age-restricted communities, boosting mobile home park demand even more. With phenomenal supply and demand economics, mobile home parks are expected to produce the best risk-adjusted return of any property type. For 5 decades, mobile home parks have outperformed other real estate sectors. With the highest long-term same-store NOI growth projections of any property type, mobile home parks are well-positioned to outperform for the foreseeable future.
Why Mobile Home Parks Are Smart Investments
Strong and Increasing Demand
As middle and lower-class families continue to be pressured financially, growing demand for inexpensive housing makes mobile home parks the most attractive housing option for those hovering near the poverty line or for the average American earner which currently is around $33k per year. Mobile homes will continue to be the best option for those unable to pay the high costs of conventional homes. Mobile home parks are typically 1/3 the cost of a single-family house or 1/2 that of an equivalent apartment building in the same community.
Artificially Constrained Supply
Due to increasingly burdensome zoning regulations, few mobile home parks are being built with approximately 310 plus new parks developed in the past 20 years. These government regulations artificially constrain the supply of mobile home parks. In addition, profit margins for mobile home park developers are often inferior to those in the apartment industry.
Low Tenant Turnover
The cost of moving a mobile home is roughly $5,000-$10,000. This is a very high cost for most of the residents in a mobile home park. Mobile home parks in which you rent the land to the homeowners have a much lower turnover ratio as compared to apartments as the average mobile home tenant stays 14 years in the same community. In most cases, once the home is moved into a park, that home will stay for decades. When residents decide to move, they simply resell the home which remains in the park and the new homeowner becomes a tenant.
Access To Exclusive And Off-Market Deals
Through Midwest Park Capital Fund, investors can participate in purchasing at a steep discount to the prices one must pay to own mobile home parks through a publicly-traded REIT. These off-market deals are purchased directly from owners who have not maximized the NOI of their investment. Acquisitions are negotiated based on the current NOI, which can be increased shortly after closing on the property.
Recession Resilient
Mobile home parks outperformed other real estate sectors during the most recent recession and were the top-performing real estate in 2020. Mobile home parks increased in value by 12% when a majority of other real estate asset classes went down in value during Covid. Demand for our product which we are the only affordable housing option actually increases as the economy tightens. The unique, favorable economics of mobile home parks produce superior risk-adjusted returns for investors.
Warren Buffet Considered Greatest Investor Of All Time
Warren Buffett is the largest owner of mobile home manufacturing and financing in the United States.
““Trailer parks are the best real estate investment that has ever existed. They have a decent yield, high barriers to entry, solid demographics, a tenant base that remains with you for life, and tiny cap-ex requirements. ”
Attractive Safe Returns, Equity Multiple, Tax Benefits With Complete Transparency
Next Raise is $50 Million. Minimum Investment is $250,000.
If you are looking to find rudimentary information about mobile home parks and have no plans of being a serious investor… we are not the choice. You can Google it.
Being in the industry for over 15 years, being at almost every mobile home park industry trade shows, events, and meetings nationwide, along with extensive industry relationships built by trust over time, we have exclusive access to a good pipeline of off market deals.
Mobile home parks are the rarest and lowest supply of any real estate, and operationally and ownership wise is equivilent to self storage 8-10 years ago. Simple technology advances including online rent payments, a website (yes, even that basic), online marketing, better property management (not the mom and pop friend who is currently managing the park) reducing needless overspending, while optimizing the quality of life for our residents and having a deep domain expertise of the industry, along with our stewardship allows us to maximize returns.
We Partnered with the Recognized Global Leader in Fund Administration with $180 Billion in Current AUA
We partnered with NAV Consulting a recognized global leader in Fund administration with $180 Billion in current AUA. Mathematically-Focused System derived from rigorous research of the fundamental principles that drive the Private Equity industry. Which provides our clients with a comprehensive, independent Fund Administration, reporting and analytics, investor services, and superior back office support.
Why Work With Midwest Park Capital?
Midwest Park Capital
“Our approach is founded with an unparalleled commitment to excellence, integrity, and creativity to our investors and the communities we acquire. Leveraging a strong network of industry partners along with operational partners, we are here to help be a solution to the affordable housing crisis in America,” says Jonathan Tuttle, the Fund Manager at Midwest Park Capital. “Mobile home parks have been the safest of all commercial real estate investments over the past 50 years, meaning they are incredibly resilient during economic downturns.”
Most Downloaded Mobile Home Park Investing Podcast Most Likely In History
Jonathan Tuttle was the #4 Most Downloaded Podcast on Best Real Estate Investing Advice Ever Podcast out of 3,222 episodes and over 40 million downloads. No other mobile home park or mobile home thought leader was in their top 40 lists, making this one, if not in the top #1-3 most downloaded (probably) mobile home park investing podcasts ever.
Amortization
Tenants pay down the debt which increases your equity, creating long-term wealth.
Cash Flow
Tenants pay monthly rent which covers all expenses and provides profit to the owners.
Leverage
You can leverage real estate, allowing for the purchase of property with only typically 1/3 of equity raised.
Stability
Real estate is less volatile and has historically outperformed the S&P 500.
Tax Benefits
Depreciation is a free tax write-off that allows you to keep more profits in your pocket.
Appreciation
Real estate appreciates in value over time.