Molson Hart

MH is a misnomer; once a home is set it rarely moves from the location. Certainly an off-the-beaten-path investment, the fundamentals of the asset class are extremely strong.

Unlike other RE asset classes, supply is largely static; less than 200 MHP have been built in the last 10 years. The chief pillar supporting barriers to supply is stigmatized NIMBY (essentially NIMBY-on-steroids), with opposition virtually ubiquitous nationwide.

Fierce and relentless local opposition on local legislative bodies tends to be highly effective! Likewise, more traditional developments – apartments etc. – are usually far more profitable (and far, far easier) for developers to get done.

The average MH price is 1/4th the average price an existing single-family (including land cost). Often, Credit scores need be no higher than 550 to buy MH (even if their credit records include a bankruptcy or home foreclosure).

Rents are almost always cheaper than other forms of housing. With the ranks of poor growing and Baby Boomers retiring in droves, demand is extremely high. Likewise, in a recession, demand would increase further.

Over the past few decades – and intensifying in 2016 – MHP have increasingly gone from “mom and pop” to large, multi-state players. Big-time names like Brookfield, Carlyle, Apollo (as well as pension & sovereign funds) have invested. PE firms now own more than 100k MH sites.