How Mobile-Home Parks Became Real Estate’s Trendiest Investment

• Mobile home park values ​​are increasing faster than any other type of real estate.
• There is a growing internet obsession to buy the parks for residual income.
• The reality is much more difficult than it may appear on the internet.

In 2014, as a student in Wake Forest University’s prestigious MBA program, Ryan Narus got his nose to the grindstone with dreams of owning his own business. Three years later, he was helping people move into RVs and RVs at La Costa, a trailer park south of Atlanta, and collecting rent.

It was all part of a master plan – Narus bought into a general partnership of the park, the proceeds of which he reinvested into his business. And as the park’s manager, living in a free double-wide, he made another $35,000 a year, enough to keep him content for about a year while he increased his investments.

Five years later, Narus lives outside the park with his family and owns interests in 26 properties. He makes a six-figure income and helps others follow his path using the tool that helped him get where he is: the internet.

“Like any broke millennial, I had to scrape together two pennies to make ends meet,” Narus said of his early years in the business. “I taught myself with all the resources at my disposal, all of which were online.”

Narus accepted this online advice and developed a platform itself. As an influencer, he hosts the popular Mobile Home Park In Real Life podcast, which has been downloaded around 100,000 times and has more than 5,000 followers on his LinkedIn page.

Internet interest in mobile home investing has exploded, especially during the pandemic, as Americans seek residual income with funds. Legions of LinkedIn and Facebook users have joined groups aimed at sharing knowledge of success in the industry; Tens of thousands of listeners tune in to podcasts and YouTube videos to learn how to get started; and hundreds of thousands more follow Instagram influencers who endorse the parks as a route to financial freedom without working too hard.

At first glance, the RV industry has some favorable tailwinds. About 22 million Americans, or about 6.5% of the U.S. population, live in mobile homes, according to the Mobile Home Institute, and the value of the lots the homes are parked on is growing faster than any other real estate value in the country, according to Green Street Advisors in recent years. Site rents are increasing by an average of 3.5% each year, MHI data shows.

Rising online interest in RV parks is met by a pressing problem with all types of US real estate: a lack of supply. Much of the existing portfolio of 43,000 parks has already been purchased by institutional buyers such as Equity Lifestyle Properties, a firm founded by real estate mogul Sam Zell.

In addition, business is being distorted by the power of social media. The perception of what it takes to be in business is often far from reality for people looking for easy profits online, Narus said.

“On the surface, it’s the story of: making millions, having money passively, owning multi-family properties in a hidden gem that nobody talks about,” he said. “It’s just the culture of social media, I think. Click, like, comment, share, the works – I think there is a huge market for delusions and pipe dreams.”

Those who invest

The obsession with investing in trailer parks has been brewing for two decades, and real estate markets are both bullish and bearish.

A photo of Ryan Narus’ living room while he was a manager at a trailer park south of Atlanta in 2017.

Courtesy of Ryan Narus

Some of the earliest content creators on the subject were investors Frank Rolfe and Dave Reynolds, a duo who say they are the fifth-largest mobile home park investors in the country. Their educational product is designed to appeal to the masses: Get into an investment favored by billionaires like Warren Buffett.

A centerpiece in Rolfe and Reynolds’ media empire is Mobile Park 10/20 Investment System, a book that describes how to get into the business. They run the Mobile Home University, which charges participants for a detailed guide to profiting in the industry.

“Affordable housing is the hottest arena in commercial real estate right now,” the duo said on the Mobile Home University website. “With over 20% of Americans trying to live on $20,000 or less a year, demand for mobile homes has never been higher — and the big winners are the owners of the mobile home parks where these customers live.”

An internet heap followed, and the space became diverse and nuanced, with investors stepping in for many reasons.

Jefferson Lilly, a Wharton graduate who started his career in technology and bought his first trailer park in 2007, says he pioneered the industry’s first podcast — “Mobile Home Park Investors” — eight years ago, primarily as a networking Opportunity.

“It gave us a way to really reach out to other investors,” Lilly said. “Almost with that very first episode, we had someone email us or sometimes call us and say, ‘Hey, I’ve been listening to your podcast. Sounds like you know what you’re doing. I’m a high-net valuable investor. I’d like to know a little more about your funds.'”

Lilly said up to half of the $40 million he’s raised to invest in mobile homes was directly impacted by his podcast. He is also the admin of the Mobile Home Park Investors LinkedIn page, which has 6,550 members.

Overall, Lilly has found that millennials are drawn to this form of investing because of its entrepreneurial nature. And trailer park investing is more accessible to a generation notorious for its lack of wealth because it only takes a few thousand dollars to get started, he said.

“Just the fame of doing something unsexy means you’re an independent thinker,” Lilly said. “You certainly don’t follow the crowd when you’re in the RV park space, or you certainly weren’t if you started 10 years ago.”

Current internet trends are fueling the obsession

The online hype around investing in caravan parks has exploded with platforms like Instagram and YouTube where influencers are thriving. One of them is Brandon Turner, a self-proclaimed “niche celebrity” personality with an Instagram following of 250,000.

Mother and child in front of a caravan.

Culture RF/David Jakle/Getty Images

Along with videos of his trailer park investments and snippets of his BiggerPockets podcast, his Instagram grid is filled with pictures of his family, his home in Hawaii, his coffee brand, and how-to and inspirational real estate investing videos. Investing in trailer parks is a way to break free from a 9-to-5 job, live your dream life and make your money work for you, even far from home, is his mantra.

“He had a pretty big impact on space,” Andrew Keel, a trailer park investor and podcast host, said of Turner. “He’s a seasoned investor who also has that lifestyle — that millennial preferred lifestyle of freedom.”

From meme librarian Amanda Brennan’s point of view, this looks a lot like a passive income craze, or the idea that smart investing can do minimal work while making your money work for you – a concept whose popularity has exploded during the pandemic . People are rethinking their relationship to money and jobs and just what they need to support themselves, she said.

Indeed, the nomadic, nature-loving, minimalist, and affordable aesthetic that has defined Americana since the days of westward expansion has been reinvented during the pandemic, as the popularity of #vanlife and #tinyhomes among younger Millennials and Gen Z took to social media grows.

Benjamin Rondel/Getty Images

“It’s the idea of ​​being surrounded by all the things you need to be happy,” Brennan said. “This suits mobile homes because you are more easily surrounded by and have access to these places in nature.”

In fact, as cities like Austin, Texas discourage middle-class millennials from owning homes, mobile homes have developed a cultural cache. That speaks to the social motivation behind investing in the space, because passive income is about financial freedom, she said.

The harsher reality

Millennials seeking nirvana could be in for a rude awakening.

Narus said the often sugarcoated way investing is portrayed on social media can leave out nagging realities that come with owning real estate.

First, the parks and houses need constant maintenance. Second, when you buy an RV site, you are buying a business, which of course involves a costly administrative effort.

After all, a company fundamental to addressing the affordable housing crisis is often associated with poverty issues, so is not without its associated hardships. Residents often have to go through traumatic experiences, which also affects the business.

“It angers me that the mobile home and affordable housing space has been branded as an easy way, a passive way to make money,” Narus said, mostly because this type of branding is viewed as a way to get rich the backs of poor people, he added.

He emphasizes in his social media posts that the parks aren’t just a place to park your money. It’s taken him almost a decade to get to where he is and break the $100,000 income barrier.

Successful people in the industry have hearts and are passionate about affordable housing, he said.

“What gets my blood boiling is the fact that people think they can come in, think it’s a passive investment and they’re going to make all this money and they don’t have to do anything,” he said. “You’re basically glorifying being a slumlord” if you’re just collecting the rent, he said.