Mobile Home Park Investing: Why the Cash Flow Beats Single-Family Rentals

William Parmer
man. Well, yeah. So it’s I think it’s important to dream big. because if you dream big and you shoot out there and you get get only a quarter of the way there, you’ll look back and say, wow, that was great. I’m gonna do that again. Now, not saying it’s not gonna be hard and you’re not gonna have your challenges. Every business is just problems that you’re solving. And I would say the opportunities that I would like to have accomplished or do in the next twelve months is I would like to own another one to two mobile home parks, be bringing in about $10,000 to $15,000 net after every everything’s paid for. That would be mortgage taxes, insurance, property management, all that good stuff. and me bringing that in to reinvest into another park.

Michelle Tack
Hi, I’m Michelle Tack. I am the podcast leader today for Real Estate Pros. We have a wonderful operator, William Parmer who is with us today. a little bit of background on William and why we believe he’s a great guest today and in the future, I assume, is that William really understands the market that he’s in. he’s in primarily in southern

William Parmer
I am.

Michelle Tack
Virginia, but it has done a number of single family residences and is now looking at and at also owns a mobile park and is looking to expand those as well from the income and the total ROI that exists with mobile parks. So with that, William, as you make more of a transition from single family residence into mobile homes. can you tell me a little bit about those people that may not be aware of that area, that entity, you know, what you do and what markets you serve.

William Parmer
Absolutely. Well, I want to start off by saying thank you very much for having me. Looking forward to adding some value to your listeners and just kind of inspire them. so I deal primarily out of Southwest Virginia right now. It’s where I reside. So I’m in the the Appalachian Mountains. And I actually got my start by buying single family homes like most people. It’s an excellent way to break into the real estate market. it’s really a lot simpler than it sounds. I got started by listening to a podcast and it kind of just took off from there. But as far as the asset class that I really like, which is mobile home parks, that is just single wides and or double wides on a parcel of land that has either septics or wells, typically three or more units is considered a park in the state of Virginia. And there’s a mix, either you can collect lot rent and trailer rent if you own the trailers or the mobile homes, as some people call them.

Or you don’t own anything except the dirt and you collect the lot rent. And you may have some mix of that, which is kind of how my park is structured currently. And so there are disadvantages and advantages to each one. one has more operating expenses, one has much less, although one has more income and one has much less income. and then you can you’ll have to take a look at the area and the market you’re in as to and the park specifically on which one you decide you want to go with.

So yeah.

Michelle Tack
Understood. What it’s very interesting, William, that like a lot of folks that are listening at and you have you’re demonstrating this as of today, you started in one area of real estate and are morphing to another area. Why mobile parks versus staying with single family residences?

William Parmer
So I love single family residences. there’s really nothing wrong with them. I ended up getting into mobile home parks kind of on a fluke. it was it was almost an accident that I ended up with a mobile home park. But the reason that I like them is because you have multiple units. think of like an apartment complex. You have multiple doors. So if one person leaves, you’re not rushing to try to fill that vacancy quite as much. It’s not as much of a sense of urgency. Now you should. try to rush to fill that because that’s loss in rents the longer it goes unrented. so they’re similar to multifamily in that way. however there’s a uniqueness with mobile home parks. Again, like I’ve said, they could own the unit and you could collect the lot rent. and I like mobile home parks because depending on the structure, and each each park is different. So you’ll want to structure it differently based on the park, you could end up with massive amounts of actual cash flow

After everything is said and done, depending on how you buy it, what you pay for it, the loan terms that you have. But if you buy it outright and it’s a well-run, very efficient park, they just produce money. and hopefully you’re a good operator or anybody listening wants to get into this and you actually put money back in the park and you create a good living environment for your tenants that want to stay there because your average tenant stays in a mobile home park about twelve years.

So if you add that to single family, you have a little bit more people coming and going. Now you might change your single family like maybe a B or an A property, something like that, where you’ll get somebody that’ll stay five, six, maybe fifteen years, but that will vary a little bit. Mobile home parks are really interesting because they’re on the lower income portion of rentals for the most part, and you can’t really live much cheaper. unless you want to do a cardboard box underneath the bridge. And I’m not trying to be mean, but that is literally the case. and so that’s kind of the attraction for me and that’s how I ended up in mobile home.

Michelle Tack
That makes sense. That’s really great data that you just provided about the mobile mobile parks industry and just the homes themselves. As you, you know, sort of go from, you know, your SFRs to the mobile home, and you already have a park today, you know, there’s always something that as you grow and expand, right? There’s problems. and those problems are for everyone. I don’t care who you are, how successful or or what, those exist, right? So can you talk about a time when you were in a situation in your real estate? if it can be recent, great, but just you know, if not, not, where a deal started going south or a situation started going south, and you had a pivot really quickly to salvage it.

Or if you were not able to salvage it, it became really a great learning lesson for you that you put in your kit to be you know, the executive that you are today with real estate. I’d love to hear about maybe a situation like that.

William Parmer
Yeah, well, here’s a goodie. it’s a it was actually a duplex. So this was right, I think I had owned my mobile home park at this point. But I was gonna buy a duplex in a neighboring county. and I was using private money to purchase. This was the same private money that ironically had helped me purchase the mobile home park, and we had a really good relationship. And so I went in to buy this house, I wanna say for a hundred and twenty five thousand, something of that nature. And when it was all said and done, I had a certain amount of capital tied up in the mobile home park or another property at the time. And I just realized I was going to be really tight for about 30 days if I went ahead with this purchase when it came to calculating the closing costs. I was basically gonna have only about everybody’s been at this point, about maybe $5,000 in in the account for all the business together. And I was like, Sure, that’s just too lean. I don’t like that. It’s uncomfortable. I no way. And so

Instead of walking on the deal, I thought about walking on it, of course. And what I ended up doing is I went to the seller who I happen to know. He was another investor, smart guy, had 57 something properties, really, really, really smart guy. And we actually met at a Lowe’s in aisle twelve at Lowe’s, which is kind of funny. But we I went to him and I said, hey man, I’d like to buy this property, however, I’m really gonna be really very, very tight. And it’s tighter than I’m liking for about 30 to 40 days. And everything would have to work out absolutely perfect for me to be in the green on this. And I’m just not comfortable. So I’m gonna pass. And he said, Well, how much money do you actually need? And I was like, $10,000 would be about it. And then I would be comfortable with that. Ten thousand dollars on top of the five that already has. So 15 grand. And so he looked at me and said

Well, why don’t we why don’t I give you a ten thousand dollar note at closing and I’ll take a secondary on this property, or we don’t have to collateralize at all. And you just pay me X amount, ten thousand bucks. You can use that at closing, take care of the stuff, float it for thirty to sixty days. And then if you need to extend something, we’ll rework it. I’ll just hack on another percent or two to pay for the the interest payments. And I thought about it and I was like, you know. why not? There’s no reason why not. We’re doing this in a contract. It’s not on a handshake. I’m a big proponent of anytime you do real estate, you do it via contract. You do not do this stuff via handshake and a good old boy agreement. so we ended up going and closing that property and I got paid at closing seven thousand bucks. So used three thousand of that ten. got paid a closing and ended up using the money that I had available to do renovations really quickly and turn around and did a refinance and pulled all of my money equity back out. So it was a residential property. So they wanted six months of seasoning. I held it just long enough and I got all my money back out and I was in at zero dollars and paid private money, paid off that ten thousand dollar note and just moved right along.

Michelle Tack
I think William that what that goes to is sometimes you gotta jump on an opportunity. you know, you’ve got to check your your mind, you gotta check your, you know, am I being, you know, too close to this deal? You gotta check all those things, but at the end of the day, you you made a decision, you know, basically very quickly. And it it in this case it turned out. so that’s out admirable. Help me understand what you if I talked to you, if we, you know, talked to you and interviewed a year from now. What would you like to see happen relative to the opportunities? And I’ll let you define opportunity as you wish. yeah, if we you know, if we fast forwarded, what would that look like for you?

William Parmer
man. Well, yeah. So it’s I think it’s important to dream big. because if you dream big and you shoot out there and you get get only a quarter of the way there, you’ll look back and say, wow, that was great. I’m gonna do that again. Now, not saying it’s not gonna be hard and you’re not gonna have your challenges. Every business is just problems that you’re solving. And I would say the opportunities that I would like to have accomplished or do in the next twelve months is I would like to own another one to two mobile home parks, be bringing in about $10,000 to $15,000 net after every everything’s paid for. That would be mortgage taxes, insurance, property management, all that good stuff. and me bringing that in to reinvest into another park.

and then longer term, 24, 36 months, I’d like to own 33% of the mobile home parks in the area in which I live. And the reason being is not because I want to be Grant Cardone and have massive amounts of money floating all around my ears every time I go to sleep. It is more because this is the area where I’m from. And I see I’m I’m right next to two colleges, right? Within there’s two colleges within 15 minutes of each other. They’re Virginia Tech College and Radford University. And the because of the colleges, the rent is really, really expensive in the area. Like I’m from the area and we’re blessed to be able to buy buy a home and live in the area, but it’s very hard for people that literally grew up here. because you have this massive influx of so much money with Virginia Tech and Radford University that the rent is going sky high. And the same thing for mobile home parks, like lot rent, not even the single wide, it can be 900 bucks a month. It is absolutely outlandish because your sp your median income or your low income is still like $32,000 a year, 32 to 38. So it’s really low. And if you calculate that and then you add trailer rent on top of that, they’re paying as much as a two, a three bedroom, two-bath apartment in this area. And normally I’d say, well, that’s fine because they can get the apartment, but they can’t because their credit is not good enough. Yeah. They came from this area. And a lot of them are really good tenants. They’re just, they’re not very good with their money. And I don’t like that the rents are being jacked up and I want to buy a majority of these parks and improve what is there.

Maybe bring in some new single wides, pave the roads, improve the utilities, make it a good environment to live in. And then my theory, which will I’ll let you know in twenty-four to thirty-six months, is that if I own these parks and I operate them really well and I kept keep the rent, the trailer rent, lot rent, whatever it is, at a reasonable number that it still cash flows well for the park. But it is a reasonable number for somebody to be able to afford. I will get my pick of all of the tenants and I can cherry pick the good tenants that I want in my park and then I can not deal with the other tenants. so it’s I have good tenants on my park. I got like one problem child, and we me and my property manager are working on that, and they’re probably gonna be leaving at some point of their own accord. But that’s kind of that’s my theory and that’s what I would like.

Michelle Tack
I love I love that vision and that goal. It’s admirable and also assists you. So it’s it’s a win win win as they call they say. Before we close, can you talk about how your network may be able to help you in that regard as you go through the next twelve months? I’d love to hear about that as well, William.

William Parmer
Absolutely. Well, my my network is actually pretty large. Me and my wife were actually speaking about this the other evening. because I I’m a host on a podcast as well, and I’m associated with Master Passive Income. And so I’m my network may be able to help me in private money financing to be able to purchase these. ideally what the kind of stuff I would be looking for for park specific because they’re unique. Banks will take them locally in my area, but they have very specific criteria that I need to meet. so private money to help me purchase these and hold them for a minimum of 18 months is what I’m specifically looking for today. and those price ranges vary very widely. meaning I can find parks as low as two hundred thousand dollars and then I literally could buy five different parks combined for five point seven million. If I have the right backing. so there’s there’s a wide array, and there’s 158 parks within four counties of where I live. Wow. And I can drive to all of them. There’s a lot of them. And the South has a lot, but this area has a lot particularly. And some of them are run really well, but a vast majority are not. So I’m looking to utilize my network to help me buy these and provide an opportunity for my network also to get in. and and make a little bit of interest as well and maybe help me buy these things. and you never know what your network is capable of unless you ask and tell them what you’re doing. so I’m looking forward to using my

Michelle Tack
True. Look, you’ve been a wonderful guest, William. before we conclude, could you provide for those that may want to invest with you, may have a mobile home, park that they’d like to talk to you about, what have you, can you provide your contact information for the folks that are listening?

William Parmer
Absolutely. Instagram is probably a pretty good one. I’m trying to get a little bit more active on there. So I’m spending a little bit more time. I’m not a big social media guy, but that’s probably the best way because I’m making more of an effort in that arena. It’s @william.c.parmer, P A R M E R, just like Farmer, but with a P. And I’m the only one of those, so I’ll be pretty easy to find. and I’ll share a couple of real estate deals that I’ve got going on. I shared about a 11 unit apartment complex that I might make an offer on. so yeah, that’s a great way to find me.

Michelle Tack
wonderful. continued success. To those are that are listening today or subscribers, please continue to tune in to a variety of different types of content that we have. If you found value out out of this today and those that may not have subscribed as of yet and found found value, we’d love to have you come back. William, good luck in the future and appreciate your time.

William Parmer
I really appreciate you having me on. Thank you so much.

Thanks, Quentin.