Paramount has struggled in recent years, suffering from declining revenue as more consumers abandon traditional pay-TV, and as its streaming services continue to lose money.  

The stock is in the red again this year, down nearly 13%. Buffett said the unfruitful Paramount bet made him think more deeply about what people prioritize in their leisure time. He previously said the streaming industry has too many players seeking viewer dollars, causing a stiff price war.

Warren Buffett’s Berkshire Hathaway bought around 63 million shares of Paramount in 2022 and then lost around 50% on that investment in only two years. Buffett admitted that where it all went wrong was in relaxing his standards regarding a “moat” – a wall that protects a good business from competition. Paramount had no “moat” and the competition destroyed it with shares plunging from $30 to around $13. We have always adhered to Buffett’s “moat” mantra and that’s why we’re in the mobile home park business.

Why there are virtually no new mobile home parks built in the U.S.

To develop property in the U.S. you have to have the correct zoning. And virtually every city in the U.S. has eradicated mobile home park zoning from its maps – starting in the 1970s. The reason? You already know the reason: nobody wants a mobile home park built near their home or business. You can’t blame them. A simple look at Zillow will show that a stick-built home next to a mobile home park is valued about 40% less than one a block away. American’s associate mobile home parks with crime and poverty and want nothing to do with them. But there’s an even bigger reason that nobody has heard about: they cost cities a ton of money. Mobile home parks often have large numbers of kids and kids cost large amounts of tuition (roughly $10,000 per child). Although mobile home parks pay their fair share of property tax, their high density of school-aged children means that the annual loss to the city between tax and tuition can exceed $1 million on a larger park. At a time when city budgets are in the red, there’s no way you’ll sell them on letting a new mobile home park be built.

And why this will never change

The only people who talk about the need for more affordable housing is the Federal Government. Besides being hugely unpopular throughout most of America, their ability to force cities to allow for more mobile home park is basically nonexistent. The only time the Federal Government has leverage is in blighted areas that require a ton of federal aid – effectively opportunity zones or worse. If you built mobile home parks in those areas you’d have no customers as nobody wants to live in that section of town – and everybody knows that. Marcia Fudge – the now resigned head of HUD under Biden – vowed to force cities to build more affordable housing for three straight years and, in the end, failed to get virtually a single unit built. That’s because zoning is a state’s rights issues and from there filters down to the rights of the individual county, city or town. And they have no interest in such concepts.

How this impacts mobile home park investing

When you own a mobile home park you own a piece of an endangered species and the rarity alone gives it lasting value. But when you look at the blessings of zero future new supply you start to understand why every major investment group in the U.S. has started to enter the mobile home park industry. There is not a single other sector that has no future supply option. It’s easier to get a permit to build a landfill than it is a new mobile home park. This means that your investment is safe and the value is always increasing as the demand for affordable housing in the U.S. skyrockets. It’s simply the laws of supply and demand and mobile home parks win this equation every time.

At least Buffett got it partially right

It’s worthwhile to note that Warren Buffett’s Berkshire Hathaway is also a player in the mobile home sector, only in the manufacturing and financing side of the homes themselves. While this part of the industry does not share the attractive “moat” option, the fact that mobile home parks are set in stone does allow for the homes that Buffett finances in mobile home parks to hold their value and have very little in losses in the rare occasions when those homes default and are foreclosed on.

If you are in an investment that has no “moat” right now you’re in real trouble

Maybe you believe in the fantasy of a “soft landing” but just about 100% of actual economists do not share that opinion. The only question is if it’s going to be a recession or a depression. In either case, abundant supply leads to misfortune. Just look at the self-storage sector, for example, which has declining rents and occupancy due to massive overbuilding during Covid – and the recession has not even started yet. Why do you think Buffett sold Paramount now? It’s because he knows that an economic downturn is imminent and he wanted to unload those 63 million shares while he still could. The “moat” is what will protect mobile home park investments when the recession hits and allow them to flourish when all other sectors tank.


Warren Buffett is correct that a “moat” is the most important attribute of any investment. He violated his own code and got burned by it. Mobile home parks are perfectly situated for the coming U.S. recession and will be one of the few success stories in the years ahead.

By Frank Rolfe

Frank Rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. He is currently ranked, with his partner Dave Reynolds, as the 5th largest mobile home park owner in the U.S., with around 20,000 lots spread out over 25 states. Along the way, Frank began writing about the industry, and his books, coupled with those of his partner Dave Reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real estate.