Forget Ike and Katrina – The Perfect Storm is Brewing in Mobile Home Parks – Home industry

Like all forms of real estate, mobile home parks have had about a decade-long run of easy financing and low cap rates. However, those good old days are over. And the result can be some of the best yielding mobile home park deals since the first trailer rattled down the interstate.Here’s our weather forecast on the great mobile home park storm, and what the impact will be:New home sales Mobile home sales have been in a continual decline since 2000. From a peak of almost 400,000 units sold per year then, sales are down to under 100,000 today. And most of those sales are units that do not end up in parks. The good news is that, unlike the single family home industry, bad new home sales have been in every park owner’ and bank’s budgets for almost a decade. There is no collapse to worry about — it’s already been dead for a decade. And no sellers are trying to use numbers based on good sales that are not really there anymore, nor do you have to guess when the rebound will occur. This whole side of the industry has been dead and buried since before Bush was President.Financing Few banks want to make loans on mobile home parks. There were only about 20 that did it with any regularity, and that number has dwindled down to about 5. At the same time, there has been a “flight to quality” on the part of all banks when it comes to making loans. The net result is that only credit-worthy borrowers with 20% down can get a bank loan. This is a sharp contrast to the past decade when anyone who could fog a mirror and had 10% down was able to get credit. The effect will be a buyer’s market for those who qualify.Equally important, the death of financing will set in motion even greater seller financing availability. One of the attractive parts of mobile home park purchasing has been the existence of seller carry. Now, you should see even more of it. Most seller carry offers below market down payments [giving you greater leverage], as well as below-market interest rates and, perhaps most importantly, non-recourse.Cap rates This is where the opportunity goes from Category 1 to Category 5. Only a few years ago, cap rates on parks were around 6% to 8%. Due to the lack of qualified buyers, those rates have skyrocketed almost overnight to 8% to 12% or more. And that’s not even the whole story. Back when financing was easy, sellers get comfortable capping income that wasn’t really there. The home that just got pulled out, the asphalt repair that was capitalized and hidden from the actual profit and loss statement – they were never really scrutinized. Today, with greater scrutiny, the income and expenses are a lot more accurate and capable of being banked on. Even if the buyer is an unaware, the bank normally lends a second, conservative opinion and reduces down the price or kills the deal.Quantity of deals There have never, in the 12 year history of, been so many mobile home parks for sale at one time. This enormous supply/demand disaster has rendered many terrified sellers into a panic mode. Sellers are stating on their parks “make offer”, “must sell”, and “seller will carry”. This is the quintessential “buyer’s market”.It’s not as bad as it looks This is the key part of the perfect storm. Although sellers are freaking out and reducing prices, and banks are shriveling up and blowing away, the mobile home park business has not really been much affected. Sales of new homes have been terrible for a decade, and every park owner has already adjusted their business.Occupancy has remained stable at most parks for at least the last five years (many parks had a significant drop in occupancy at the start of the melt-down on new homes in about 2001). There is no reason to believe significant declines in occupancy lie ahead.Operating costs, although feeling constant minor upticks in water and tax rates, remain very predictable and not out of control. There is no 800 pound gorilla in the expense closet.And bank foreclosures on parks remain among the lowest of all classes of real estate. The decline in bank loans has not been due to problems with the mobile home park business model – only guilt by association with the rest of commercial real estate market.Once in a lifetime opportunity The perfect storm of this magnitude may not come around again. Or it may come back in a cycle twenty years from now. But if you are trying to invest and get a maximum return, the time is now.Put on your raincoat and hat, and head out into the storm, because it may not be this dark for long.

Career Change From Home Work – Review – Home industry

There is no better time to seek the truth concerning career change to from home work than in these uncertain economic times. The truth is that this is a viable and profitable industry that is accessible and doable for the average person. When researching the work at home industry many people are surprised to discover several realities that make this a practical career change option. The most common of these are listed below.1. The start up cost for a home based business can be very low.It is possible to start a home based business with only an internet connection and no money down. Working as an affiliate for an established business owner cost nothing to start. Some affiliate owners share a generous commission with their affiliates. Some up to 75%. Many work at home entrepreneurs make millions of dollars a year selling other people’s products.As an affiliate it is possible to run a profitable business with almost exclusively free tools and advertising. With the proper training an average person can be up and running a profitable business their first month. Not bad for the huge potential.There are also options available that cost from a few hundred dollars to several thousands of dollars depending on the program.2. The earning potential of a work at home business can be very rewarding.It is possible that an average person with average skills can start a home based business and become a millionaire in a short period of time. It happens all the time.Properly trained the work at home internet entrepreneur can replace their career income in their first few months. Once momentum is established in a home based business earnings hit a critical mass. By reinvesting a large percent of the earnings into advertising staggering incomes are being made.3. The freedom to work when you want with the people you choose is a luxury of the industry.Not all bosses are bad but I don’t personally know anyone who would not appreciate the opportunity to become their own boss. One of the great lines used in home based business opportunity promotions is “fire your boss.” That phrase is not an attempt to encourage ingratitude towards a current employer but encourage the entrepreneur spirit and an open mind to the possibilities. There can be a lot said about having the ability to set your own hours. To work when you want. If you are feeling like you need to sleep in, take a drive, spend time with the kids and the thousand other things we may love to do, a home based business gives the time freedom to do them.4. The tax advantages of owning a home based business are significant.It is possible to reap the tax benefits of a home based business by just setting up an office apace in your home. I have known a few people who started a home based business exclusively for the tax advantages. I would not encourage such use of a home based business but it does show the tax practicality available to the work at home entrepreneur. There is a list a mile long of the tax write off available when you run business from home. This gives you another reason to seriously consider a home based business.In conclusion there is an alternative career for anyone who wishes to pursue it. The possibilities are only limited to the time and effort put into it. With the freedom of a home based business you can work when you want with the people of your choice and set the income level you deserve. That is something everyone needs to know, there are options available.Considering a career change to from home work is a wise move. You deserve the best that life has to offer. With a work from home business opportunity you have a tool to set your family free from the restraints of a rigorous career and a limited salary. Take the first steps to that freedom today if you have not already done so.