Mobile Home Park Investing in 2026: Why Manufactured Housing Is Making a Comeback

Nathan Jameson (00:00)
Yeah, well I think, you know, I told somebody the other day we we collected a hundred and one percent in COVID ⁓ of rent. That’s and you know, people say, well, how is that even possible? Well, we did a great job collecting from our existing communities, and then we bought some communities that had aged receivables, and we went and collected those. And, you know, I I one of the reasons I really like this space is because it is a little niche and you can separate yourself as a high quality operator.

Dylan Silver (01:56)
Hey folks, welcome back to the show. Today we’re joined by Nathan Jameson, the founder of ARX Capital, a vertically integrated real estate investment firm focused on manufactured housing, RV parks, self storage, and land development. Nathan, thanks for taking the time today.

Nathan Jameson (02:11)
Thanks for having me, Dylan. I’m glad to be here.

Dylan Silver (02:13)
what are you seeing as ⁓ the biggest opportunity in manufactured housing these days?

Nathan Jameson (02:20)
There’s a moment I think that we’re living in right now where, like in the multifamily world where people were very aggressive, maybe less experienced buyers and operators were aggressive in the kind of early two thousands, twenty one, twenty two, twenty three, and then got hit with the interest rate shift. And they you they just hadn’t been through a recession. They thought everything was always up and to the right. They weren’t investing a lot of their own capital. ⁓ those folks are frozen out. They’re out of the market. And so

could people are continuing to sell these assets. And and I say people, you know, we still have a lot of I’ll call them mom and pops with the greatest affection ⁓ who are owning and operating mobile home parks. And there’s less competition, frankly, to buy those properties today ⁓ than there was a few years ago. And we’re seeing pricing begin to to make more sense. I mean, frankly, we were on the sidelines during that period when everybody was buying.

Because they were buying at prices we just couldn’t make any sense of. So I would say the opportunities, there’s a little more rationality to the market at the moment. And then kind of under that, Dylan, ⁓ there’s a moment where I think really good operators are gonna get paid what they deserve to operate well. And by that I mean buying a value add property, one that needs capital improvements, needs expertise in filling home sites and renting and selling homes.

⁓ we’re gonna get paid to do that again where there was a period of time where you had to kinda like pay for the upside. Now we get to create the upside, harvest it and share that with our investors. Now

Dylan Silver (03:50)
When we talk about ⁓ identifying opportunities, you mentioned mom and pop owners. Is that what you’re looking for, a mom and pop owner? Are you looking for a degree of distress? Is there a a spectrum of what makes a good deal?

Nathan Jameson (04:03)
Well, we love distress and I don’t wish that on anyone, but frankly, we haven’t seen a lot of distress in this industry. And I think that’s largely because ⁓ as a less mature industry, the even the the the players who were not as sophisticated, not as experienced, they’ve been able to kind of like raise rents ⁓ and raise rent their way out of extreme difficulty. They’ve probably in the for the most part preserved the equity, whereas in multifamily world

Where it was a lot easier to build new supply and the you know it’s a higher and more expensive product, ⁓ those folks, you know, really, really got burned. So mom and pop are not distressed in the traditional sense that we think about distress, you know, like over their skis with leverage. ⁓ they’re distressed from a lifestyle perspective. ⁓ most of them have owned the property for a number of years. ⁓ they’re they’re getting older, as we all do, but what’s involved in

taking care of the property, fixing it up, replacing homes, frankly, they’re not able or willing to do. And the the ability to do it has to do in large part with the fact that they’re relying on the property for their income. And they’re not generally well capitalized. So when these improvements like ⁓ their water system or their at the asphalt, ⁓ the sewer system, when those things, you know, fall into disrepair over time, they don’t have the capital backstop.

to go fix those things. As a result, the quality of the property deteriorates over time. People will leave, people will will the home will become obsolete. The tenant will leave, and they don’t have the capital to replace the home. So the cash flow begins to be reduced and they’re not investing in the property. That’s where we can help them, frankly, you know, ride off into the sunset with their retirement, deliver a very credible transaction at a fair price. And then we can do what’s right by the residents.

by again increasing the pride of ownership, increasing the quality of the property, and benefiting for all of us will benefit from that.

Dylan Silver (06:05)
Is there any kind of overlap that you’re seeing between ⁓ mobile home, you know, modular, manufactured, tiny homes? Are are there some similarities between these spaces or are they really entirely different?

Nathan Jameson (07:07)
Yeah, great question. And you’re right to point out that there are similarities. ⁓ I I I wanna make clear, like all modular homes are manufactured, but not all manufactured homes are modular. And I would like to differentiate them even further by saying that most manufactured homes that we’re talking about, what many people would call a quote mobile home, ⁓ is not permanently ⁓ fixed to the ground. It’s not a permanent foundation. Most modular homes

are And the biggest thing there is that as a result, the modular home tends to qualify for traditional mortgage financing because it’s permanently affixed to the ground. Whereas unfortunately, our residents are forced to pay a a a ridiculously high rate for their home loan. And you can’t call it a mortgage because it’s not a mortgage for real estate. It’s a loan on their their home, which trades via a title like your car might, and it would be classified as a

chattel loan for which they’re gonna you know even a seven hundred and sixty credit score is gonna pay nine to eleven percent for that home loan. Now I’m hopeful, Dylan, that the latest ⁓ the the the act that was just passed by Congress, the Road to Housing Act, is going to move manufactured housing, move mobile homes closer to kind of a traditional mortgage rate because they’re removing it’s they’re allowing in the factory the permanent chassis to be removed. So the thing that allows this thing

to kind of be picked up again and moved won’t have to be included in the package. And, you know, this is evolving right now, but our hope is that lenders will begin to see that as is really what it is. It’s, you know, permanent housing. I mean 99% of homes, mobile homes, never leave the site that they’re placed on. And so we want lenders to view it that way. We want them to pass the benefit of that through to our customer.

Dylan Silver (08:58)
You know, back end question here. I’m looking at some of the these concerns that a lender might have about this home being movable. What are they thinking is going to happen? That this person is going to go fly away with this mobile home and you know it they’ll be hiding it somewhere?

Nathan Jameson (09:13)
That y you know, you’re you’re spot on there. It seems ridiculous to even talk about it. You know, if of course you could r even write a loan that would make, you know, any movement or effort to move the home a default or, you know, ⁓ a a tripping of covenant. ⁓ but you know, the the next layer of this really is, well, why is it as expensive as it is? Well, yes, there’s this kind of maybe illegitimate concern about it being moved, but even after that, it has to do with

Why are our loans, if you own a single family home, I own a single family home, why are our loans as cheap as they are? Well, it’s because we have government agencies, Fanny and Freddie, who are sitting and buying these mortgage backs, these mortgages that have been generated by lenders. And there’s not a great secondary market now for these home loans, these mobile home loans. If the agencies, who by the way, have a mandate to serve the need for affordable housing, serve the customers we’re serving, if they’ll do what I think they should do.

and step in and create a market so that the local bank who makes a mobile home loan can get you know can sell that loan quickly and make another one, then the agencies buying those loans will create more liquidity and bring pricing down for our customers.

Dylan Silver (10:23)
Something we talked about in the green room is this idea, and you mentioned it at the top, they’re not really making any more mobile home parks, but ⁓ historically it seems like a lot of these parks were around the same time period that they were created. Do you know, was there a push at some point in time in US history for mobile home parks? Did the sentiment shift? What was the cause of that?

Nathan Jameson (10:44)
Yeah, well, there was a need for housing, and there was you know you know, we were not as highly regulated as as a country and at an individual state and local level in the from the fifties to the seventies is probably kind of that window where there was this big push. And frankly, you know, the the regulation to ensure these homes were of of ⁓ reputable quality wasn’t there ⁓ early on. So I think HUD, Housing and Urban Development, was established in the early seventies.

And that’s where we actually get this term manufactured housing. Prior to that, it you know, there was kind of a term of art, a mobile home. well, yeah, the idea is we talked about a home, a mobile home is not really mobile. That would be an RV, right? That would be a separate code and it would be built to the transportation code, ⁓ which is recreational vehicles. Manufactured housing, which came into being in the seventies under HUD regulation. I mean, today’s manufactured home, if you’re inside of it, you would not know that you were in a quote mobile home.

Right. Wow, this is this is really nice. And I told you that you’re actually in a single section, somebody single wide or a multi section or double wide home. Like, wow, had you not walked in from the front porch, you would not have known that based on being there. And they’re built to an energy standard that’s as good as anything you’re gonna get in the field. And because it’s built in a factory, the environment in which it’s constructed is more controlled. So like

You know, builders being mindful of like, did they leave your OSB sitting out in a rainstorm and is their mold growing because it wasn’t built in a controlled environment? And there’s all these kinds of things that happen with a site built home that you don’t have to worry about with the manufactured home.

Dylan Silver (13:00)
Just gonna speak to that point. You know, there’s this sentiment, I and I think a lot of us may have this falsely that the build quality is lower. And we we have this term mobile home, which I understand is somewhat antiquated because the homes that are being sold now are manufactured homes, I believe. And so when we look at longevity and expected, you know, ⁓ a habitable period of a manufactured home.

It can be as long as a stick belt home. Is this accurate these days?

Nathan Jameson (13:29)
Absolutely. Absolutely. And the thing I would say there is like what stick built home doesn’t demand an occasional renovation or a new roof or you know, the way we live in society’s changing so you’re gonna redo the the bathroom or the kitchen. ⁓ same goes for a manufactured home with today’s quality.

Dylan Silver (13:47)
Now, when we look at the affordable housing issue as a whole, there’s so many ways to tackle this. One of the ways is is, you know, mobile home parks, but they’re they’re not making any more of them. We’ve seen tiny homes, and this is maybe more viable in places where there’s abundant land. Where do you see, you know, mobile home parks, manufactured housing, tiny homes, modular homes, where do you see this ultimately leading to over the next year, two year, three years?

Nathan Jameson (14:13)
Well,

I would love to say that I think we’re gonna as a nation tackle the massive shortage of housing that we have. ⁓ and I would love to say that just as a human, because I think we need to be able to meet this need for for people who need more affordable housing. ⁓ as an investor and as operator of manufactured housing, I don’t think there’s a prayer that we get even close to that. And the primary reason is I spend a fair bit of my time sitting in local

municipalities and their zoning hearing boards and their planning boards and I I like to say, you know, everybody wants affordable housing. Everyone is for more affordable housing in concept. No one wants it built near them. In fact, if there is affordable housing near them, they’d like to see it go away. And so you talk about we’re not building any more mobile home parks. Well that’s true. But we’re also reducing the number that exists because in many cases, you know, if I don’t get to that mom and pop before, you know, another developer say.

And they haven’t done a good job of maintaining the property, there may be a higher and better use in the kind of economic concept where someone says, you know what, rents are too low. The amount of capital improvements necessary to make this a high quality mobile home park is too great. We’re just gonna clear all the homes out and we’re gonna turn it into a data center. We’re gonna turn it into an Amazon distribution center. And so, you know, the reality is we have a re declining amount of supply and we have an increasing amount of demand. I mean.

W in what product in the history of the world has there has that been the case? And it can only exist when you have government regulation that prohibits increased supply. And so that’s that’s what we have right now.

Dylan Silver (15:50)
You know, what’s e confounding about this is you mentioned everyone is aware of it, but do you want it in your backyard? And the answer seems to be unilaterally no. Especially at places you know, I’m in North Jersey, you’re in Pennsylvania. It’s not like you have new subdivisions sprouting out of the ground like you might have in in the Sunbelt. But even in the Sunbelt, that that does seem to be an issue as well.

You’re also an active in the RV park space. One of the interesting things that I’ve seen, and I don’t have much experience in this, but it from from a podcast alumni I’ve I’ve heard, there is like h very high end Lux RV park. So the sentiment that people have tied to RVs is drastically different than mobile homes.

Nathan Jameson (16:32)
Well, you’re spot on there, and I it even say tiny homes go with that. You know, people have, I think, this perspective that frankly, I think it’s a little oversold. That tiny homes are the best thing ever. ⁓ and and there is this perception that they’re much nicer than ⁓ a mobile home. the reality is that most in most places you can’t build a tiny home. I I’m in, you know, Philadelphia suburbs. Most municipalities in Pennsylvania actually regulate the minimum size of home.

They won’t let you build a home that’s less than a thousand square feet. You’re like, well, who decided that that was the right number? I mean, if you go back fifty years, the average new home that was built, I think, was like thirteen hundred square feet. Today it’s twenty five hundred square feet. Well, did people just get fatter? I mean, did or did we decide that we all just needed this extra space? And I think, frankly, the younger generation is pounding the table about like, don’t make me buy something I don’t want. Like, I want to live in a tiny home. I want to live

in more efficient square footage that costs me less, but I can build some equity. I don’t I just don’t see how we solve the problem in any way that makes a dent ⁓ in in the near term. Yeah. Like I I do some development work, Dylan, and the last big project I was working on, we built, we got we got approved for almost 300 apartments and 209, 55 and over kind of patio homes. Took us six years to get the right to build. Six years of

Planning meetings, engineering, meeting with DEP, and by the way, two million dollars to get the right just to begin putting a shovel in the ground. And so when you have that level of of regulatory ⁓ roadblock, it’s really hard to put a debt into the problem. You know

Dylan Silver (18:53)
Very challenging and and there there’s some some almost feels like band-aids on on on these problems. You know, you could have more ⁓ renters, you know, you could have more, you know, A-class luxury ⁓ apartment complexes with two pools and a gym and everyone becomes a renter. That’s one solution that’s certainly we’re seeing. ⁓ you could also have more condos for sale, but condos don’t appreciate the same way as where you own the underlying land.

And you know, you mentioned a a great thing that a great point that I had no idea about, which is there’s minimum square footage for in some of these areas. So if someone even had ⁓ you know, the ability to qualify for a home, buying the land, buying, you know, getting a a new build on there or a tiny home on there, that it wouldn’t, you know, pass the the local ordinance or the local code because it’s too small. And so what do you do in these circumstances? You kind of have to throw your hands up in there and say, you know, I don’t know what what the solution is.

But we can only control kind of our our backyard and even then it’s challenging.

Nathan Jameson (19:52)
Yeah, you know, I do enjoy the conversation, you know, theoretically, but as a practical matter, ⁓ I’ve not had a lot of success convincing municipalities that, you know, my way of viewing the world is right. And so we kinda deal with the hand that we’re dealt. And ⁓ we try to do right. I mean, I feel the image I got in my head as you were talking was, you know, the story of that boy who’s, you know, throwing starfish back into the ocean one at a time. Someone told him he wasn’t making a difference to all the starfish. He won’t made a difference to that one. ⁓

And and that’s I mean, the truth is that’s that’s what we can do. You know, we we buy a property, we improve it, and we can make a difference to that property, we can make a difference to each one of our residents there so that th they live in a safe, secure, attractive location, hopefully convenient to where their work is and their kids and grandkids. And by the way, you know, even so the land rent plus if they have a loan for their home, they should still be able to be, depending on the market we’re in here, under fifteen hundred dollars a month for those two.

And like what what market that is a kind of a major even secondary MSA can you have like a monthly housing cost under fifteen hundred bucks?

Dylan Silver (21:00)
Very, very, very rare. I saw ⁓ a community that was being built by one of the national corporate builders in the east part of San Antonio where these were tiny homes out the door, out of the door, tax everything, hundred and thirty-five thousand dollars. And these were two story homes with a garage. It was mind blowing to me. And so I’m wearing my realtor hat, I’m thinking like this has gotta be the cheapest subdivision in the country, or very close to it. And that’s like a pilot community in Texas where land is fairly cheap.

You’re not gonna it’s not it’s not possible to see that in North Jersey or or yes.

Nathan Jameson (21:33)
I wanna ask you that like a you know, you they give you the shell and you complete it on your own?

Dylan Silver (21:37)
Yeah, base I mean, you walk in, you you can’t believe it. I mean, some people can say potentially ⁓ net not have the best experience about the build quality in some of the corporate builders. But I mean for for my money’s worth, if you’re getting the land, you’re getting a home, the the lights turn on, like hey, that’s a pathway to homeownership if there ever was one. I did wanna pivot here though, Nathan, and ask you about, you know, ⁓ financing these deals. Cause when I’m talking to podcast guests, that’s one of the biggest challenges that they face is

you know, their capital stack is only so deep and then they want to expand and that can be be challenging. When you’re looking at additional deals, ⁓ give us an idea without giving away all of the gold here, what the financing looks like.

Nathan Jameson (22:19)
Yes, so the you know, the gold standard financing, like like in the multifamily world for mobile home parks is agency financing. So ⁓ Fannie Mae, Freddie Mack ⁓ are significant lenders ⁓ as part of their duty to serve and addressing the affordable housing need. ⁓ and so ⁓ maybe, you know, maybe it’s maybe it’s a well kept secret, maybe it’s not a secret at all, but manufactured housing, mobile home parks have been the top performing loan category for the agencies for the last sixty years. And

You know, multifamily gets all the attention, but their best loan performance in terms of, you know, payment and lack of default and so on, has come from from manufactured housing. And I think that’s, you know, ’cause you have this nice balance of like you got typically a resident who owns the home and rents the land and and the landowner is motivated to pay the ⁓ the loan and the and the homeowners are motivated to pay their rent. And and you know, that that cycle seems to be kind of a virtuous cycle there that has worked to make the financing available here.

⁓ I would say that in the last three to four years, ⁓ the CMBS market has been ⁓ I think the the bigger players in the C MBS market have come into the manufactured housing space. And that’s driven costs down, frankly, ⁓ in a positive way. It’s ⁓ spreads have come in and ⁓ there’s been significant demand from the investor pools for manufactured housing backed loans. so we see that. And then you have the traditional kind of

banking relationships ⁓ that would tend to be say 25 year amortization, maybe you can negotiate some interest only, probably comes with personal recourse. ⁓ so those would be kind of the three traditional kind of mortgages. And then, you know, we’re in a world where because we’re adding value, ⁓ and we’re doing that over a fairly rapid period, there are times when we’re looking at it’s kind of bridge financing. And when we look at bridge financing ⁓ where we believe we can we can drive revenue higher

Through a combination of filling vacant sites and getting rents to market after making improvements, ⁓ you know, we wanna do that quickly and we wanna be able to then take that bridge financing out. So, ⁓ we you know, we we’ve been successful doing that, but we wanna be careful about not being over levered whenever we do that.

Dylan Silver (24:33)
It are hold times in this space similar to to a multifamily where you see, you know, three, five, maybe seven years, or are these typically longer term holds?

Nathan Jameson (24:42)
Would

love to make them longer term holds. ⁓ we’re set up, we’re we’re on our third fund right now, and our our funds are kind of outlined as being seven to ten year kind of hold periods. ⁓ the reality is, ⁓ you know, as an investor myself, once once I’ve gotten kind of a return of principal, ⁓ which we we try to target in four to five years through refinancings, maybe a selective sale within the fund. ⁓ then you know, we just want to continue to to operate the properties and continue to do well.

⁓ over the next, you know, five to ten years. So ⁓ we’ve positioned these as longer term. We’d prefer to have a higher kind of multiple on invested capital than some like shiny IRR. I I think kind of you look at what what what are the hallmarks of the mistakes of like twenty one to twenty four. You know, shiny IRR. I was on a call with a prospective investor ⁓ earlier today and he had, you know, he’d fallen for some of that and he said something to me. He said, you know what?

I would take a few less points on the deal if I knew that my downside was more protected. ⁓ and that’s really our investment approach is we’re we’re not trying to hit some, you know, sexy IRR, ⁓ particularly since that’s so easily managed by a general partner who’s focused on speed, but then they stick the investor with the reinvestment problem. Right. So a a sixteen or an eighteen IRR over twelve months is not as good as a twelve over five years. Right.

Dylan Silver (26:08)
Right. And and the the risk that comes with that in the multifamily space, right? It’s variable rate debt and no one had any problems with that until they did. And then you had COVID. And so you had, you know, people potentially, you know, not working, and then you have a moratorium on rents, and then you have the cost of builds going up, and then you’ve got the time frame that it takes from commitment, you know, land acquisition to opening that could be years, right? That’s right. And so what do you do? It it’s it’s very challenging. Now, one of the things that’s

I I’d say great about the spaces that you’re in is that while that can have an impact, it’s a little bit different, right?

Nathan Jameson (26:45)
Yeah, well I think, you know, I told somebody the other day we we collected a hundred and one percent in COVID ⁓ of rent. That’s and you know, people say, well, how is that even possible? Well, we did a great job collecting from our existing communities, and then we bought some communities that had aged receivables, and we went and collected those. And, you know, I I one of the reasons I really like this space is because it is a little niche and you can separate yourself as a high quality operator.

you know, somebody, you know, ⁓ somebody years and years ago told me.

about a property he owned. He’s no don’t you don’t have to worry about that. It manages itself. Well you know what I learned? I learned nothing manages itself. You’ve got to be super focused on driving return every day if you’re going to be successful. And the return benefits everybody. You know, I want my residents to be proud that they live in a community that we’re operating and managing because when there’s a pothole, we take care of it. When there’s a a water leak, we take care of it. When there’s a sewer problem, we take care of it. And sometimes they complain that rent went up, but when they

see that we’re creating a community that can be sustainable in the long term and won’t be turned to another use because it was poorly managed. I think ultimately they they appreciate that.

Dylan Silver (27:53)
We are coming up on time here, Nathan. Any new projects, activities that you’re working on or anything you’d like to mention directly to our audience?

Nathan Jameson (28:00)
Well, we are about to close our fundraise for our third fund. ⁓ ARX fund III like our first two is managing, is buying and and operating manufactured housing. We’re also including RV parks and we may have a self storage deal in there, another value kind of a value add concept. ⁓ you know, one thing I’d say on the RV and it there’s an important differentiation ’cause there’s kind of two schools of RV. One is like I’m in the

the you know, the what is it, Jelly Stones or the KOAs, and I want to get you to pull off and spend a night in my spot for $70 or something. ⁓ we don’t like that business. We like the business that’s RV as more of like ⁓ a home where that’s our second home. It’s at a lake, there’s a pool, it’s in the mountains, and we go there every weekend in the summers and we pay in February for the entire year. ⁓ it acts more like housing and less like hotel.

And I frankly I think our thesis has been proven right this year. As fuel costs have gone up, people who are operating RV as hotel have really seen their performance go down because people aren’t getting in their RV and driving every weekend because it’ll cost of fuel. Whereas these kind of second home RV communities, if you will, people are just getting in their sedan and driving to the RV that’s sitting on the spot and has been since before Memorial Day and will be until after Labor Day. So we like we like that business, but

our our third fund’s a thirty million dollar fund. ⁓ we’ve raised basically twenty eight, twenty nine million bucks. So there’s a little room left there. We’ll close that up. ⁓ and then next year we’ll probably start a second fun or fourth fund. And you know, they kinda run on annual cycles.

Dylan Silver (29:36)
Nathan, thank you so much for your time today. Thanks for joining us.

Nathan Jameson (29:39)
Dylan, great to be with you. Great host.