Globalist-associated corporations are depriving Americans of cheap housing

The hunt for yield has pushed private equity firms and professional
investors into new segments of the real estate market. In recent
years, sophisticated investors have snapped up multi-family units
and single-family homes. Now, corporate landlords are targeting the
most cost-effective segment of the real estate market: mobile home
parks (https://yhoo.it/3Q3VuNO).
Manufactured homes or mobile homes are considered the most affordable
non-subsidized housing option in America. That's because the owners
own only the prefabricated unit and not the land under the home. The
land is usually leased from the landlord of a trailer park.
The average monthly rent for a mobile home in 2021 was $593. That's
significantly lower than the average one-bedroom condo rental rate of
$1,450. The mobile park rental also often includes utilities and
insurance.
Rents typically rise 4% to 6% annually and renters have the flexibility
to move their housing unit to another park. These factors make the
manufactured home highly attractive to low-income households.
As of 2020, nearly 22 million Americans lived in mobile homes. That's
6.7% of the total population or about one in 15 people across the
country. However, the economic inefficiencies that make these
manufactured homes affordable also make them attractive to
professional investors.
Factors such as below-market rents and disrepair make mobile home
parks attractive for investors seeking to add value. The typical
mobile home park lot costs $10,000, which means 80 lots would be
worth $800,000 on average.
Put simply, the entry price for these parks is much lower than
multi-family apartments and condo buildings across the country.
Professional investors can also raise rents significantly to improve
the valuation of the property. Attracting tenants with higher incomes
or improving the park's amenities and infrastructure are other
value-add strategies that make this asset class appealing.
The fact that moving a typical mobile home costs between $3,000 to
$10,000 also means that most tenants are unable to afford the move.
This gives landlords immense pricing power.
Meanwhile, the yield is much higher. The capitalization rate (the
ratio of net operating income to market price) could be as high
as 9%, according to real estate partners Dave Reynolds and Frank
Rolfe, who together are the fifth-largest owner of mobile home parks
in the U.S.
The largest mobile park landlord is real estate veteran Sam Zell.
Zell's Equity LifeStyle Properties (ELS) owns 165,000 units across
the country and the asset is a key element of his $5.4 billion fortune.
In recent years, larger investors such as Singapore's sovereign
wealth fund GIC and private equity firms such as The Carlyle Group,
Brookfield, Blackstone, and Apollo have also added exposure to this
asset class.
Even Warren Buffett is involved. His firm's subsidiary, Clayton
Homes, is the largest manufacturer of mobile homes in the U.S., and
also operates two of the biggest mobile home lenders, 21st Mortgage
Corp. and Vanderbilt Mortgage.
Retail investors looking for exposure to mobile home parks have
plenty of options. Acquiring a park is, perhaps, the most
straightforward way to access this asset class. However,
publicly-listed stocks and real estate investment trusts offer
exposure too.
Sam Zell's Equity LifeStyle Properties is listed on the New York
Stock Exchange under the ticker ELS. Sun Communities Inc. (SUI)
owns 146,000 units across the U.S. and some in Canada, while
Legacy Housing Corp. (LEGH) builds, sells, and finances manufactured
homes. Retail and institutional investors could see more upside from
this segment as the economic inefficiencies are ironed out.