Why Mobile Home Parks Are an Underrated Affordable Housing Investment

Cory Harelson (00:00)
what’s cool is like when you add a home and you get a resident in there paying rent, your cashflow goes up, which is neat. But what’s really cool is that there’s a multiple on that. So the value of your property goes

way, way up. So the way the math works out in a lot of the markets we’re at, we’re bringing new residents in at $550, $600, somewhere in there of rent. And if at $550 of rent, if it’s a tenant owned home, it doesn’t really add much or any expenses.

Q Edmonds (01:59)
Hello, everyone. Welcome to the Real Estate Pros podcast. I am your host, Q Edmonds, and I’m excited to be here today. I have another fantastic guest, and we are going to talk about mobile home parks. this is, I love talking this. I love this topic because I think it is an asset class that is really kind of underappreciated. I really do. And I think it adds so much value. And so I’m excited for the

experts, somebody expert to talk about it, to walk us through what their profession is, again, so that we can learn from their experience. And so I’m so excited to introduce you all to Mr. Harelson, Mr. Cory how you doing today,

Cory Harelson (02:41)
I’m doing fantastic, excited to chat about some parks with you.

Q Edmonds (02:45)
Absolutely. I love it, man. I love it. So listen, Mr. Cory, I’m going type. I like to dive right in. Right. So I would love for you to tell the people what’s your main focus these days. If you don’t mind, give us a little bit of an origin story, kind of how you got into the space that you’re in. Love the origin story. And then also tell them what part of the world you’re in, man. People love to know what people are geographically. So Mr. Cory, sir, you have the floor.

Cory Harelson (03:08)
Yeah, absolutely. Well, thank you. ⁓ So I invest in mobile home parks and I’m based out of Boise, Idaho, although most of our investing right now we’re targeting Kentucky, Tennessee, Ohio, that kind of area over there. ⁓ So 10 years ago, 2015, gosh, almost 11 years ago, I was working 60 to 80 hour weeks as a structural engineer, designing buildings so that they don’t fall down. ⁓ It was a fun…

Q Edmonds (03:18)
Gotcha.

Cory Harelson (03:34)
got to work on some really cool projects with some cool people, but just felt like I had no control over my time. I had had my first kid about a year prior, so he was about a year old, and I felt like I was just not getting to see him. And ⁓ there was a week in particular where I did not see him awake for the whole week. I would go to work before he woke up. By the time I came home, he was already asleep. I did not see him awake the whole week. ⁓ And then it was finally Sunday, and I was still in the office working on some deadline that I thought was important. And…

Q Edmonds (03:57)
Yeah.

Cory Harelson (04:04)
It was maybe 5 p.m. ish and I was like, screw this. I’m to go home and put my kid to bed. So I go home and I went to go take my son from my wife to go give him his bath and put him to bed. And he did the thing like when you first hand him over to an uncle, like the stranger danger thing, he started screaming and crying and clawing and trying to get back to mom. like he didn’t even know me. it broke my heart. ⁓ So that up until that point, had I was I had

Q Edmonds (04:09)
Yeah.

Cory Harelson (04:33)
just put some money in a 401k and that was it. Like I had never thought about investing. It was like, I’ll think about that when I’m 65. But that was the moment when I was like, I knew something had to change. I can’t do this until I’m 65. I want to be there for my family. there’s more, even though I loved my career, there’s more to life outside of that. So then shortly after that, somebody gave me the little purple book, Rich Dad Poor Dad, and my mind kind of exploded. And I was like, oh my gosh, like assets that pay you. Why didn’t I think of that on my own? It’s not that complicated.

But so then anyway, my wife and I, we got really intentional about saving and we decided we were going to invest in real estate. And so we, we set up buy box. We said, we’re to go buy a duplex, three-plex or four-plex because you have to pick some direction. So we just picked that. I’m a nerd. I built a pro forma. figured out how to build a pro forma. My first iteration of my pro forma spreadsheet. I started analyzing deals, ⁓ analyzing a bunch of deals and I got discouraged. ⁓

most of them, even back then didn’t seem like, and this was, was just looking at listed deals. So I know I could have driven for dollars and actually dug up deals, but anyway, most of them did not seem like they were gonna cashflow and the rent was barely gonna cover the mortgage. And I was kind of a little discouraged. And then I stumbled across a mobile home park for sale on Craigslist ⁓ of all places. And so I punched those in my spreadsheet and the numbers looked way better. And it was like, interesting. then I kind of dove down that rabbit hole and have never come out.

So that’s how I first got into mobile home parks. We bought our first park in 2016. was a little 12 lot mobile home park, about a 10 minute bike ride from my house.

Q Edmonds (06:59)
Wow. Wow. Thank you, sir. Thank you, Mr. Cory, for taking us on a journey, man, letting us know where you are, how you got there. As you was talking, I was actively listening. So I’m going to say some thanks back to you, make a comment, ask you a question. And so in Idaho, but the target market, Kentucky, Tennessee, 11 years ago, man, you was a structural engineer working 60 to 80 hours a week, right?

Man, went a stretch where you didn’t even see your kid awake for a week. Then you talked about that feeling of holding him and having a feeling that he didn’t even recognize who he was. And so he was like, man, it has to be a change. so got together with your wife, y’all talked about, you know, sitting in a bar box, looked on Craigslist, found a mobile home park on Craigslist. 2016, you bought your first mobile home park.

Cory Harelson (07:34)
Yeah.

Q Edmonds (07:55)
Is that a good summarization of what you said, So I’m gonna love asking you this, because I often say destiny has no wasted moments, right? Meaning as we go through life, we’re borrowing from the moments. We’re building momentum to where we are now. And we reinforce our mindset. We reinforce our why. We know why we do what we do. We know who we are. We know, you know.

Cory Harelson (07:56)
Yes, yes, yeah, you got it.

Mmm.

Q Edmonds (08:22)
One of my mentors says, you know who you are, you know what to do. So it’s like, you know who you are now. So I would love to know, throughout the journey, what has the moments taught you about yourself? What has it revealed to you? Has it revealed discipline, resilience, structure? Like what has the moments reinforced in the quarry that we see today?

Cory Harelson (08:34)
Hmm.

That’s a good, that’s a deep question. ⁓ I would say, well, I would say there’s been some very challenging moments and those have definitely, like as far as learning goes, like those have taught me the most. And I think that the thing that I’ve kind of just looking back, I put two and two together is that when, no matter how bad something seems, ⁓

Q Edmonds (08:47)
Alright.

Cory Harelson (09:11)
and how far away something looks like where you want to be if you break it down into steps and just focus on like, let’s take the next step, let’s take the next. It’s like the, do you eat an elephant? Like one bite at a time. I don’t know anybody who’s actually eaten an elephant, but it’s, yeah, you made me a little chocolate. But it’s like the one step at a time. so I’ve done some, so I’ve run,

Q Edmonds (09:21)
I’m out of time. Yeah.

A little chocolate one maybe, Mr. Cory. I’ll eat the little chocolate one. Yeah, little chocolate ones, yeah.

Cory Harelson (09:39)
back when I was a little younger and had healthier knees, I used to run some ultra marathons. I ran, one of the ones I ran was a a hundred mile race. and one of the things like I got to the, was a mile, it was a marathon to go. So it would have been like mile 74 aid station. And I remember like, could barely walk and I was like, there’s, have to go a marathon right now. I can’t like, I couldn’t, my mind just couldn’t, I was like, I was just going to quit. And it was like, well,

But the next aid station is not that far away. I can just walk to that aid station, right? And so I just, it was the middle of the night. So I just took a cup of coffee, just started walking and sure enough, then you just go the next and the next and the next and you get there. And so I think ⁓ similar stuff with like my job, with real estate, with all of it, there’s always these like bumps that you hit and it’s sometimes difficult to see like, how do I get from here to there? But you can see like, well, I can do this, take this one more step. So I think that’s. ⁓

one of my big lessons learned.

Q Edmonds (10:32)
Yeah.

Mr. Cory, you want to hear something totally amazing? You’re my second person today. My second person today, when I asked them that question, they used a marathon analogy. They ran marathons as well. They used the same analogy and just like the retrospective thinking about how they just took just the one step at a time and just the preparation state. And I told them one of my favorite books. I had no idea this would be one of my favorite books.

Cory Harelson (11:11)
Yeah, I do.

Hahaha

Q Edmonds (11:37)
I don’t even know how I heard about it, but this is a book called My Year of Running Dangerously. And it was, yeah, my year when, oh man, it’s a phenomenal book. And it was a gentleman, he was, I think like a news correspondence, kind of later in his age, maybe early sixties, I believe. And his daughter was about to start running marathons. And he used to run marathons back in the day. So she was asking him pointers.

Cory Harelson (11:42)
right, do.

Mmm.

Q Edmonds (12:07)
He thought it would be an amazing opportunity to bond with his daughter. So he was like, you know what? As you train, I’m going to train. And so he went and dust off his old shoes. And he started talking about the way he had to prepare to run the marathon. there’s daily running that he would have to do, know, daily miles. And he was like, matter what it was doing outside, rain, snow, ice.

Cory Harelson (12:15)
that’s cool.

Mmm.

Yep.

Q Edmonds (12:36)
If he wanted to complete the marathon, he had to stay on a training course. So he was out running on ice. He would talk about how his knees be burning and how, you know, like, he’d be thinking about how much further he got to go, but just, it was just like this one foot in front of the other mindset. But more importantly for him, it was the bonding with his daughter. He felt like he didn’t want to let his daughter down and to show her that if you can do it, I can do it, we can do it. And so I just loved that.

Cory Harelson (12:40)
Yep.

Hmm.

Q Edmonds (13:04)
that analogy of the marathon, like just one foot in front of the other, like one bite at a time, one run at a time, one training session at a time. And you get past that and then you can go to the next and go to the next. And so thank you for that reflective answer. I really, really appreciate that. And I know you said it was a deep question and I like asking that question because I believe at the heart of any business, there’s the business owner.

Strategies may change, ⁓ the market may change, but the person in the middle, and I love how you got the man in the arena back there, the person in the middle, like you are the one key component to all of it. And so, you know, sometimes you have to look back and remind yourself where I came from. What’s my why now? You know what? I got past that. I’ll definitely get past this. And so again, man, I appreciate you answering that question. I really do. Yeah. Yeah.

Cory Harelson (13:33)
Hmm.

Yeah, no, that’s great.

I wrote that book recommendation down. I’ll check that out.

Q Edmonds (14:02)
Yes, man, please share my year

running dangerously. I think you would love it. So let me ask you this. What’s the next real goal for you, sir? What are you looking to solve or scale next?

Cory Harelson (14:10)
Hmm.

Right. the, I mean, the, the BHAG. we’ve, after we bought that first park, my wife and I did, you know, five years of kind of buying and selling and refinancing our own parks. And then around 2021, I had some friends and family come and say, Hey, take our money and do this too. So, um, I partnered with my brother-in-law and we started our business freedom investing group.

⁓ to basically help other people. The whole initial concept was, this is really cool. What if we could help kind of our friends and buddies and families ⁓ come along and do this too, right? And get all these benefits from real estate that I was seeing and my brother-in-law was seeing in his own real estate on his end. So now our goal, then you fast forward a little bit more and you really start to dig in. Once we started buying more parks in more places, ⁓ you really start to realize that the…

there’s this whole affordable housing crisis angle. Like the whole country, the housing is insanely expensive everywhere in the country right now. And you have this product, which are these mobile home parks that are the most affordable form of housing out there. They don’t rely on, and in fact, you can’t even really get like section eight or, or light tech or anything else, which are great programs on their own. need to do everything for the housing, but these things just work on their own. Like two parents.

work, you know, working, could go work fast food and be able to afford to live in one of these communities. They can have a yard, they can park by their door. Really, really good from that perspective. And yet, so many of these communities were built, they were all built in the 50s, 60s and 70s. So many of them are still owned by the first or second generation owner who owned them. Maybe they passed them on to their kids.

The mortgage has been paid off for decades. haven’t really had an incentive. Like the cashflow is just good enough. They haven’t really had an incentive to invest back into them and to do the maintenance, fix the roads, trim the trees back, fill in the empty lots. there’s so many, if you just drive around and look, if you could just drive around and look wherever you are at Mobile Home Parks, you’ll probably find some that look really nice and a bunch of others that are really, really run down.

So where the real opportunity there is, is that you’ve got this thing that’s the most affordable form of housing in an affordable housing crisis in crazy demand. And yet there’s vacancy. It turns out it’s really hard to fill vacancy in a mobile home park because you can’t just, most people don’t bring their homes in. So typically the way it works is we own the land, the resident owns the home. So they’re an owner, we’re an owner. We have a vested interest in the community, right? And so it’s a really good thing from that perspective. ⁓

Q Edmonds (17:18)
Yeah.

Cory Harelson (17:23)
But it’s so, so it’s, you don’t have very much success just advertising a lot and getting people to bring their home in. There’s not that many people that do that happens. It’s called an organic move in, but usually the way that you fill an empty lot is first you have to go clean up the park and actually make it nice enough that people would want to move in there. ⁓ pave the roads, trim back the trees. Then you have to go find a home. it’s, you know, you, you can, you can get through a bunch of paperwork and get a retailer’s license in order to get the use of new homes. It’s not that easy to get a new home. There’s a bunch of.

kind of bureaucratic stuff you have to do to get the new homes. If it’s used homes, you have to actually go find and have a source them. have to hunt them down, buy them. You have to pay a license mover to move them, install them. That’s 10 grand. You’ve got to get them set up. You got to get utilities hooked up steps. If it’s a used home, now maybe you need to renovate it. Then now you need to solve it. So after all of that, now you’re basically like a used car salesman, sourcer kind of person. Then you’re a home flipper. Then you have to be your own real estate agent to actually sell it. And it takes money to do all of that.

So it’s a lot of work and a lot of money. there’s, because of that’s where the opportunity is though, because there’s all these parks where there’s vacancy in this super high demand product. So it’s vacancy, but it’s not due to lack of demand. And so what’s really cool about parks is every one of those homes that you bring on, A, you’re adding another affordable home that a family can have that needs. So you’re helping the affordable housing crisis. All the economists say you need to add supply. Well, every single home that we add is another home. it’s by filling in those empty lots, we’re adding supply. And then the other piece to it is,

that the way mobile home parks are valued, the really cool thing is that the way mobile home parks are valued is it’s on something called like a cap rate, which is basically a multiple, like all commercial, everything more than a four unit house is valued with this cap rate concept, which is basically just a multiple on your income. So

what’s cool is like when you add a home and you get a resident in there paying rent, your cashflow goes up, which is neat. But what’s really cool is that there’s a multiple on that. So the value of your property goes

way, way up. So the way the math works out in a lot of the markets we’re at, we’re bringing new residents in at $550, $600, somewhere in there of rent. And if at $550 of rent, if it’s a tenant owned home, it doesn’t really add much or any expenses.

⁓ So all of that or most of that typically drops to the bottom line and when you apply the cap rate it adds about $90,000 of equity. So for every 11 empty lots you fill you’ve added a million dollars in value to the property. it’s like once I kind of put the dots together on that it’s like wow there’s this big problem, there’s an answer and we can make good returns for people. So that’s where I got really excited once that all clicked.

Q Edmonds (20:00)
Yeah, man, I think you’ve got everybody excited about mobile home parks. I think the way you just explained that thing, a lot ⁓ of what’s going on, it’s like, man, this makes sense. ⁓ Man, thank you. Thank you for walking us through that, educating us, getting us all kind of excited about the idea of this. ⁓ man, listen, I love everything you’re talking about. And I want to get your perspective on this, on this word relationship. When it comes to relationship in business, what is your perspective?

Cory Harelson (20:25)
Mmm.

Q Edmonds (20:30)
when it comes to relationships. Have they served you well? What is your philosophy on it? Talk to me about relationships, Mr.

Cory Harelson (20:37)
Yes, relationships. ⁓ I think the whole thing, relationships is the whole thing ⁓ because like everything is related. So like from like, how do we go find deals? Well, I have relationships with brokers who like to work with us because we do what we say we’re going to do. you know, I built relationships with several brokers who send us off market deals first. There’s how you get your deals. I have relationships with

my business partner and my employees, that’s how we actually are able to manage all of this and run it. have relationships with the onsite managers and the onsite managers do a good job of being a good onsite. Every property that we have has a manager onsite and their job is only successful because they build good relationships with all of the residents. And so ⁓ the whole thing is, I never would have gotten…

I never would been able to do anything if it wasn’t for, because so many people have helped me along the way. It’s crazy. I mean, when I first had that crazy idea, I saw that mobile home park on Craigslist and I was like, I don’t know what I’m doing. I can’t do this. I only knew one person in the world, our real estate agent had had some rental properties. So I took him out for a beer and I was like, Matt, I’m thinking of doing something crazy. I need you to talk me out of it. And I need you to tell me why I’m thinking of buying a mobile home park. And he was like, no, I know guys who own those. They’re great.

And so then he helped me figure out how to send letters and get so much has just been like like like Giving and other people giving in relationships. It’s all just building relationships

Q Edmonds (22:07)
Love it. So eloquently said, sir, in such, such great clarity on relationships and building them and how they are so important to what it is that we do in this space in a space called business and real estate. ⁓ I appreciate you so much, man. Listen, if someone wanted to reach out to you, connect with you, collaborate with you, learn more about what you’re doing, how can they get in contact with you,

Cory Harelson (22:32)
Yeah, absolutely. we’ve got, so one of my goals is to help other people, like I said, invest in the space. And so I’ve actually got a little kind of video talking through a little bit more about how this works and I’ll link to book a call directly with me if you want at passivemhp.com. ⁓ So that’d be a really good place to go. I’m also really active on LinkedIn. So if anyone wants to ⁓ find me on there, ⁓ that’s the other spot to get ahold of me.

Q Edmonds (22:58)
Mr. Cory, sir, let me say three things to you, man. First, thank you for your time. I believe time is our most precious commodity. So I thank you for giving us some of your time today. Secondly, thank you for your story. Thank you for your narrative. I believe stories have a way of getting to the heart of people and planting seeds. And I believe your narrative, what you’re proficient at, the way you talked about it, has planted seeds in somebody that literally can course correct them and spark ideas that maybe they didn’t have before. And so…

I greatly appreciate that. And lastly, man, thank you for your mindset, the way you think, and bringing that mindset to this platform. I really appreciate you coming to the court.

Cory Harelson (23:36)
Hey, thank you very much for having me, Quentin. This has been fun.

Q Edmonds (23:38)
Absolutely. Well, listen, you all heard Mr. Cory. Get in contact with him. Get the video. Book with him so he can tell you all about how to do this. But definitely make sure you are subscribed here because I promise you we’re going to continue to bring up amazing people just like Mr. Cory. So, sir, I say thank you again. And everyone else, listen, you’ll have a fantastic day.