Trailer cash: Home parks are on a roll in the hot housing market

Call it a trailer house (or house trailer) and show your age, or call it a mobile home and show some sensitivity, or call it a manufactured home and show that you keep up with changing times and perceptions.

Whatever you call trailer-mobile-manufactured homes, the places where they're parked are in high demand as investments.

Keith Wilson can show you the money.

Wilson, the only real estate broker I know in the state who specializes in manufactured home parks, just closed on another big deal.

A West Coast investor, Red River MHP LLC, paid $4.9 million for both Tri City Mobile Home Park, 200 Naomi Lane in Newcastle, and Council Road Mobile Home Park, 8159 NW 44th Circle in Bethany. The seller was Stonetown Capital in Denver.

Both are fully occupied with $400 monthly site rent. The Tri City purchase included 46 sites and 39 homes, with the other homes owned, or rented-to-own, by tenants. Council Road has 48 sites and 20 homes, with the other homes in tenants' hands similarly.

It came to $52,127 per site — $40,000 for the park sites and the rest for the park-owned homes, which ain't chicken feed, as they say.

"Tri City and Council Road represent two quality parks with quality locations in the OKC metro area. The price reflects that. There is tremendous buyer appetite for this type of product."

Who knew?

I didn't, and my affinity for trailer-mobile-manufactured homes goes way back.

Wilson did. He's been at this awhile now.

"The manufactured housing asset class has always flown under the radar and many are unaware of the demand all across the U.S.," he said Friday. "There are quite a few institutional multibillion-dollar portfolios (Warren Buffett, Sam Zell), and investors can be from all 50 states and Canada."

What's driving it is the same thing driving demand for site-built, single-family homes: historically low mortgage interest rates, and the same thing that drives demand for any income-producing property: a satisfying rate of return.

Site rents in the better parks in Oklahoma City and Tulsa "are fast approaching $500 a month," Wilson said. "That is just site rent, not the cost for the mobile home. The price in the Tri City/Council Road sale represents an insatiable investor interest."

He said most of the newest and best parks in Oklahoma are owned by two national institutional investors and longtime holders: Yes! Communities in Denver; and Westwind Enterprises in San Jose, California.

Surprised? If so, maybe because of the stigma, although that seems to be on the wane, according to Crystal Adkins of Mobile Home Living.

"Parks, in general, are solid investments both in good economic times and particularly favored in bad economies because they are generally below the rents of multifamily or single family homes," Wilson said.

And, he said, there's not as much churn with park tenants as stereotypes might suggest. Steady tenancy means steady income for park owners.

"A park tenant has made a large investment to get their home onto the park and will stay for a long time because of the cost to move," Wilson said. "They have a stake in being there, unlike an apartment tenant, whose average tenancy is only one year or less — and can leave in the middle of the night."

Real Estate Editor Richard Mize edits The Oklahoman’s Real Estate section, and covers housing, construction, commercial real estate, and related topics for the newspaper and Oklahoman.com. Contact him at rmize@oklahoman.com. Please support his work and that of other Oklahoman journalists by purchasing a subscription at http://subscribe.oklahoman.com.