Hey there,
My firm is starting to get more and more into MH and RV Parks. Our capital partners are pushing us to do more so we're leaning in. Would love people's opinions on what the better platforms for comps are in this space. We're institutional enough that we'd pay for good data.
Thanks!
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Look up JLT market reports. They are good. Also, part of why the space is inefficient is because there is nothing like costar or Yardi. Good old fashion phone calls and pretending you need to rent or buy a home / RV is how you comp. Easiest way is go to google maps and type in mobile home park (in the location you are searching). Than call each number for comps and pretend you need to buy or rent. Some owners will figure you out pretty fast, others you’ll get loads of info.
Would love if you could expand on the fee structure your firm is changing to make MH profitable (for the firm)? I love the space and think it’s absolutely amazing for the private individual, but it’s so hard to scale as an operator. On top of that, the fees are small due to low rents and small deal sizes. So I’m curious what types of fees is your firm charges to make it profitable for the firm itself? If you can share this info of course.
JLT only covers MHC not RV parks. Found that out the hard way a few weeks ago working on a deal and had to underwrite both. The bigger concern for RV is whether it’s a Type 1, 2 or 3. Type 1 is yearly leases, type 2 is usually 1 month to 6 months ish, and type 3 is the daily to weekly leases. Thanks to NIMBYism making it so hard to build new parks, we’ve focused less on rent levels as long as they’re substantially below nearby class C multi and more on which type of park it is with a strong preference for type 1 with a small amount of type 2 leases (in all fairness we’ve been able to do this on deals so far since when we go looking for comps we’re challenged to even find 2-4 comps that would even compete for RV). Like Pudding said you’re really just going to have to call people for the RV rental info or see what you can find online and be comfortable with having 1-2 comps at most.
The other two are right, JLT market reports (formerly called Turzer reports) are the gold standard for MH. The reports are pretty accurate, but they only cover larger communities, so if you're looking at deals that are sub 100-sites, as the other poster said, you'll need to get on the phone and start making calls.
For RV, there are a handful of sites with pretty good databases of RV parks that are searchable, but they don't have rent information. Websites and phone calls are your best bet.
At the end of the day, this is a difficult sector to expect to just come in, cut a check, and boom you have deal flow. Fragmented ownership (though changing rapidly), limited data, and less institutional operators make it difficult to scale.
But tell your capital partners it's overbought and there isn't any room for new capital. /s
REPEthrowaway why do you think the space is overbought? My from limited perspective, I would actually consider it to still have some room to run, especially in the lower quality parks. Much of this is drive by limited ability to build new supply. Additionally, being the lowest rent in the market will keep demand high. If you have a full TOH community, tenants can sell their homes to the next person keeping the landlords cash flow stable. From this perspective, I actually believe MHPs should trade on tighter cap rates than traditional apartments. And while that is happening in institutional level parks, it isn’t happen on non-institutional parks yet.
Sorry pudding, I spend too much time on Reddit I guess. /s was meant to be sarcasm; that I don't want more capital entering the space. It's difficult enough to buy deals lately as it is.
I agree with your comments on runway however. It's only a matter of time before more Core money enters the MH space. NMU and HTA are already basically there, but given the fundamentals and rapidly improving product quality, there should be more.
Do agencies finance RV parks as well? It was my understanding while they finance MHP's they do not finance RV parks.
Fannie will finance RV parks via a Fannie LOC but you’re limited to about 15% of overall value so if you own MHC and some RV you can put them on the line but if it’s all or majority RV you’re fairly limited to CMBS/ LifeCo debt
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