Mobile Home Parks: A Fast and Inexpensive Path to Cohousing

It’s been my experience that people who love communal living still want to maintain a level of independence in their household. My wife Brynn is one of them. Eight years ago, before we were married, I rented a two-bedroom house by the beach with seven friends. We built queen-size bunk beds in the garage and our friend Mac lived in the driveway in an RV. When Brynn moved in with us she lasted six strong months before needing a less populated and more controllable space. We now live in a flat in San Francisco with Mac, and I often think about living again with more people and how I could balance that with Brynn’s desire for privacy.

I own and operate a real estate investment business. Because I’ve spent most of my life happily living in group environments, I can’t help but keep one eye open for buildings and land that would provide housing for people who want communal living while maintaining ownership of their space. Two years ago, Brynn and I started working with a type of real estate that could provide a solution to the lack of community housing in this country: mobile home parks.

Key Ingredients

Mobile home and RV parks have similar physical structure to cohousing communities. In each, residents own their own homes, share common ground, and have plenty of opportunities for daily interaction. People live closely together while each maintaining their own space in their own home.

I don’t love the formality of the term Intentional Community, but in this case it fits as there is a glaring difference between most mobile home parks and cohousing projects. The lack of intention can be seen when you enter a mobile home park where the land is neglected, the homes are in disrepair, and a welcoming community is nowhere to be seen.

My hope, and a hypothesis that we’re testing now in Dayton, Ohio, is that if we give the land attention, fix up the homes, and help create a vision for the community, we can transform a distressed mobile home park into a vibrant mobile home neighborhood that is physically similar to a cohousing community and 10 times more affordable.

Last year a prominent cohousing developer told me that a typical cohousing community takes about seven years to create, from idea conception to moving in. The seven years of struggle, frustration, and ultimate elation creates strong group bonds that help form the foundation of the community.

With parks, the land is already zoned and approved for multiple dwellings, the infrastructure is already in place, and the homes are pre-fabricated. A community formed within a mobile home or RV park could be ready for habitation within a few months. While mobile home parks offer a quicker and more affordable option, the group may miss the bonding that happens during the longer formation process of a cohousing community. Personally, I’d rather bond over a sunset BBQ or planting a garden than a date with the city planner!

Jumping Financial Hurdles

Buying an entire mobile home park may seem impossible to somebody who doesn’t have mountains of cash. Here is a secret: it is possible. Mobile home parks are famously difficult to finance through a bank. Sellers know that many buyers don’t have enough cash to buy the park without financing, and that many banks refuse to loan on parks. Enter Seller Financing.

Seller financing (also called owner financing or seller carry) is common in the mobile home park industry. It works like this:
Buyer talks to Seller.
Seller thinks that Buyer is an honest person with a good business plan.
Seller accepts a down payment on the park and lets the buyer pay the rest of the purchase price over the next number of years in monthly payments with interest. Seller also shows the buyer how home warranty companies compare their plans so buyer may have an insight of how warranties work and which one they have to choose.

People can buy parks from Sellers with as little as 10 percent down, sometimes less. Pick your location, find some smaller or poorly run parks, and call the owners. You’ll be surprised how many are willing to sell their park to you and carry the financing. Small parks and poorly run parks often don’t make money, and sometimes the owner is paying each month to keep the park afloat. These Sellers are highly motivated. Find them.

Banks will finance parks too, but it is a dreary process. If you can find seller financing, that’s the preferred way to go.

Do I Have to Buy the Cow?

There are two types of residents in mobile home parks: lot renters and house renters. Lot renters own their own homes and pay the park owner to keep their home in the park and hook up to utilities. House renters rent mobile homes. Both of these options are less expensive than apartments and offer the benefits of having a yard, no shared walls, and a house you can drive up to. For friends who are craving community, but don’t have the time or money to purchase a park, buying or renting mobile homes on adjacent lots would be one of the cheapest and fastest ways I can think of to begin a community.

Those with more money could buy a small park and move in all their friends. That’s what the billionaire founder/CEO of Zappos, Tony Hsieh, did in Las Vegas. He was lonely in his penthouse apartment so he purchased an RV park and invited his friends to move in. Here are the two options that I see:

● Rental: Find the closest RV or mobile home park to where you and your friends want to live. Each person rents a space. Put out picnic tables, potted trees, and a good vibe. Seed the feelings of community within the park as you live right next to your best friends.

● Purchase: Buy a small park. Use the existing homes at the park or bring in the caliber of homes you desire, from $5,000 fixer-uppers to $120,000 triple-wide ranch homes. Alter the landscape how you see fit.

Community Creation

My wife and I currently own and manage mobile home parks in three states. I don’t think the way that we’re building community in our parks is necessarily the best or most effective. We buy existing parks, host BBQs, fix up vacant homes, and try to create the best neighborhood with the ingredients that we’re given. That is a top-down approach, where the change happens from the property owner.

The ground-up transition happens as the old residents move out and new residents move in. We look for people who will be good neighbors, with clean records, good communication skills, and the ability to afford living in the park. Because we aren’t starting with a group of like-minded individuals, it usually takes two years for us to turn a neglected park back into a full and vibrant community.

Buying or renting a nearly empty park with an existing group of friends, you could make this transition in months instead of years. Compare that to the seven years is takes to form a group, buy land, and plan, permit, and build new homes and infrastructure in a traditional cohousing community. Not only is the time reduced, the costs are cut dramatically compared to building a community on raw land.

Identifying Your Future Community

There are two types of mobile home park communities:

Lifestyle Communities: These parks are clean and expensive and have nice amenities, like pools and clubhouses. Think of the perfect place to retire with your friends where you ride golf carts around have short white picket fences. That is a lifestyle community.

Affordable Housing: Most parks fall into this category. The price to live here is about the same as a Class B or C apartment building. People live in these parks because they don’t have to share walls with neighbors, they can drive right up to their house, and they have a yard.

Lifestyle communities don’t need your help. The social scene is good and people are happy to live there. If you want to create a strong and positive community where one doesn’t already exist, let’s assume that you’re going to buy an affordable housing park.

To find an affordable RV or mobile home park you can either work with an agent or DIY. For those who have never bought property before, the real estate agent is almost always paid for by the person who sells the property, not the buyer. Even if you’re planning on doing all of the hunting yourself it won’t hurt to have an agent look for you as well. A good agent will use her network to uncover properties that you might not find on your own.

Ready to start looking? Go to www.mobilehomeparkstore.com and start to get yourself acquainted with the parks in your area. This will give you an idea of the parks that are for sale in your state, near your town, and in the price range you’re looking for.

Whether you decide to use an agent or look for yourself, you need to know what you’re looking for. Most of these principles apply to houses, apartment buildings, and other forms of real estate. Grab a glass of water, we’re about to get into the gritty details.

Utilities

With parks, there is much more land and more infrastructure than single homes or apartment buildings and you should be aware of how everything in your park works. Here is a very brief introduction to park utilities.

Water: If the water is provided by the city it will either be billed directly to the park residents or there will be one large bill to the whole park. If the water is directly billed then each lot will have a separate bill from the city and the city is responsible for maintaining the water lines. If there is just one meter for the whole park, or if you have a well, you are responsible for maintaining your own lines and fixing leaks. Direct billed is preferable from a maintenance standpoint, but it means that your park will be somewhat urban. If you prefer to have a remote park, you will be on a well. Be sure to talk to everybody you can about the well, from the EPA to the park maintenance man. Wells are great and cheap, until they aren’t. Know the age and condition of your well and water lines.

Sewage: Everyone’s favorite topic! City sewer is preferred. If the water is direct billed and city sewer is included in the bill then you will not be responsible for maintaining the sewer lines either. Whew! Septic tanks are the second best option for sewage, and the best option for rural parks. Almost everyone who lives in the country has septic tanks and many people know how to maintain them. Much less desirable are Lagoons and Wastewater Treatment Plants. Avoid these at all costs, they are one of the only things that can single-handedly destroy your dream if something goes wrong.

Trees: Trees are beautiful and give a park some character. The tree roots are bad for water and sewer lines and septic leach fields. Tree limbs can also break and fall, crushing homes and cars. I love trees; just make sure that you have some time and money set aside for them.

Roads: Pay close attention to the roads in your park because they are expensive to re-pave. Most people do not re-pave the roads in their affordable living parks. They patch potholes, keep the drains cleared, and keep the roads in decent working condition. Other than that, a road is there so that we know where to drive. It doesn’t have to be pretty. Most people pave roads only when they refinance their bank loan or list their park for sale.

Electricity and Gas: Try to get these utilities directly billed to each house. If there is one meter for the whole park then you are responsible for the electrical lines and gas lines. You do not want to be responsible for the gas lines. The electric lines are less of a problem, but can still be scary. If you’re responsible for their maintenance, make sure you know the age of the lines and condition and budget for their repair and replacement. Keep a friendly relationship with your local electrician too!

If you understand how the utilities work at your mobile home park you will be much better off than I was when I purchased my first park. A major utility problem is one of the few things that can shut down your park. A minor utility problem can still be expensive and usually involves sewage or explosions, or, god forbid, both. Lagoon (large open settling pond for sewage) can become flooded or contaminated, gas lines can leak and be shut down, well water can contain illegal levels of Uranium, electric lines can fray and spark. Know your utilities. The replacement costs, if they aren’t in your budget, will be an unwelcome surprise.

Management

When you buy your park it is very likely that people will be living there. If there is nobody living there, you can start your community from scratch but beware, a park with no people may have infrastructure issues or worse. If people are living there you are now responsible for providing them a safe place to live and in return, they pay you rent. Don’t worry! You don’t have to call yourself a “landlord” or feel bad that you are exploiting your position. Just treat people fairly and be strict about your park rules.

If you clean up your park and create good bonds with the new and existing residents you will begin to attract more people who care about their homes and neighborhoods. This is a good first step toward building community in your park.

There is a lot to learn about park management, much more than can be covered in this article. If you find yourself in the position where you own a park and want to better the neighborhood, please give me a call and we can discuss different places you can go to learn the trade.

Go Get ’Em!

We’ve covered some of the basics you will need to evaluate a mobile home or RV park. In addition to what is listed, you can do research online, talk to local real estate professionals, call manufactured housing dealers, and start to visit some local parks to imagine what it would be like to create your community using mobile home and RV parks as a foundation. Parks will require less work, less time, and less risk than building your community from scratch.

Today, mobile home parks house six percent of the US population. When people like us realize the potential that mobile home parks have for inexpensive community living, I believe the concept will become one of the most popular forms of communal housing available.

William Noel owns and operates mobile home parks throughout the country and is a lifelong community builder. Will invites you to contact him at Noel [at] ElkhornGroup.org to learn more about using mobile home parks to achieve your communal housing dreams.