ARA’s National Manufactured Housing Group Executes Sale of View Vista Village in Montana

First Time Buyer Acquires All Age Community in Livingston, Montana

Livingston, Montana (November 17, 2014) — Atlanta-headquartered ARA, the largest privately held, full-service investment advisory brokerage firm in the nation focusing exclusively on the multihousing industry, is pleased to announce the sale of View Vista Village in Livingston, Montana. The community has 46 manufactured home sites and 30 apartment units.

ARA National Manufactured Housing Group’s Andrew Shih (based in Austin, TX), Todd Fletcher and Jon Shay (based in Denver, CO), represented the Seller, a private owner based in Colorado. The purchaser was a first time private buyer based in Montana that plans to continue having View Vista Village provide an attractive affordable housing option for the area.

“There was significant interest from in and out of state investors,” said Fletcher. “Since our platform brings both to the table, we were able to provide our client with some options,” added Fletcher.

“With our group’s combined experience brokering over $1B in deals, we were able to use that know-how of vetting investors to get comfortable with this first time buyer,” said Shih. “We also paid the Buyer’s broker, which was in our client’s best interest and helped him achieve his goal of selling this community to the best buyer.”

 

The apartment component was originally constructed in 1925 and the manufactured home community was added later. The property is an all age community with public utilities. The tenants of View Vista Village enjoy beautiful views as Livingston sits next to the Yellowstone River and is surrounded by three mountain ranges: the Crazy, Absaroka and Bridger mountains.

 

View Vista Village is conveniently located within walking distance of downtown Livingston, Montana, which is a more affordable place to live than nearby Bozeman, and is only an hour away from Yellowstone National park – home to Yellowstone Lake, the Old Faithful Geyser and the Yellowstone Caldera. Montana is known for its world class hunting and fly fishing; local businesses in Livingston lead guided elk and deer hunting trips, and the Yellowstone River, popular for its fly fishing, runs right through the center of town. Downtown Livingston offers entertainment and small town charm with many local cafes, restaurants and bars, and a growing art community. Accessing these amenities is easy, as the town’s infrastructure is bike and pedestrian friendly. In addition, the community is within walking distance of the local schools, two parks and the Livingston Golf Club. The unemployment rate in Montana is significantly lower than the national rate and is trending down. Major employers in the area include Livingston Healthcare, employing 250-499 people, Albertsons, employing 50-99 and the Livingston Enterprise, employing 20-49 – all of which are within ten minutes of the community.

To schedule an interview with an ARA executive or for more information about ARA, nationally please contact Lisa Robinson at lrobinson@ARAusa.com, 404.990.4900 or Amy Morris at amorris@ARAusa.com, 404.990.4902; locally, Allison Blount at ablount@arausa.com, 512.637.1229.

 

 

Why Mobile Home Parks Are Wowing Wall Street

It comes as no secret that mobile home parks are finally receiving the type of respect they deserved years ago. Because of the ridiculous stereotype that the media created for “trailer park” residents, many professional investors avoided the asset class altogether. Recently, however, even the largest private equity group in the U.S. – the Carlyle Group – has started to invest in mobile home parks. Few people realize that Warren Buffet is now the largest owner of mobile home manufacturing and financing, and that Sam Zell is the largest owner of mobile home parks. So why is Wall Street so impressed with the mobile home park business?

Steady Revenue

The word “mobile” in “mobile home” could not be farther from the truth. The actual statistic is that 98% of mobile homes never move from the spot that they are originally delivered. And how could they? It costs around $5,000 to move a mobile home (in some cases, more than they cost) and it is a risky business, in which there is no guarantee that the home can make the trip in one piece. As a result, the mobile home park occupancy never varies.

Recession Resistance

Mobile home parks focus on the lowest earning demographic group in the U.S. – those that earn from minimum wage to around $15 per hour. 60% of all new jobs created in the U.S. since the “Great Depression” of 2007 began are minimum wage. Affordable housing gets even more in demand during times of economic hardship. It’s the same concept that is propelling Dollar Tree and Dollar General past their rivals.

Ability to Push Rents Aggressively

Mobile home parks are the least expensive form of housing in the U.S. As a result, there is always room to push rents higher, as even a 100% increase in most markets maintains the status of being cheap. The average apartment rent in the U.S. is $1,030 per month. The average mobile home park lot rent is $250. Need I say more?

Low Operating Expense Ratio

Mobile home parks have an enviable expense ratio that runs typically 30% to 40% of gross. This is the lowest of all real estate sectors. One key driver to this is that mobile home parks are all about renting land, and land does not require any repair & maintenance, or expensive capital upgrades. There are no toilets to fix or roofs to replace with mobile home parks.

No Future Supply Competition

While you can develop a new apartment complex, retail center or self-storage facility virtually anywhere, there’s not a city in the U.S. that allows new mobile home park development, except in rare cases. Why? Nobody wants a mobile home park going up next to their house or business. That’s one benefit of the “stigma” that mobile home parks have been saddled with – the destruction of future competition. With supply and demand, having no future new supply always makes values high and rising.

Incredible Yields

The number one attraction for Wall Street investors to mobile home parks is simple: money. Mobile home parks have the highest returns of any form of real estate. Why is this? Probably because there are more sellers than buyers thanks to decades of the “stigma” scaring off widespread investor interest. Another reason is that most mom & pop owners are extremely unsophisticated and don’t know what the real value of their mobile home parks are. It is not uncommon to buy parks at 10% cap rates and cash-on-cash yields of 20%+.

Conclusion

Nothing has much changed in the mobile home park industry over the past 50 years. That is, except for the perception of the industry. Wall Street is suddenly waking up to the amazing advantages of investing in mobile home parks, and the rest of America cannot be far behind. If you’ve thought about buying a mobile home park in the past, you better hurry while prices are still low.

 

By Frank Rolfe

Frank Rolfe has been a manufactured home community owner for almost two decades, and currently ranks as part of the 10th largest community owner in the United States, with more than 13,000 lots in 20 states in the Great Plains and Midwest. His books and courses on community acquisitions and management are the top-selling ones in the industry. To learn more about Frank’s views on the manufactured home community industry visit www.MobileHomeUniversity.com.