SREI 013 Making it big with Mobile Home Park investing with Jefferson Lilly

On this episode of House Flip Masters Holly is joined by guest Jefferson Lilly. Jefferson is a mobile home park investor who currently owns 13 properties in 8 states and counting! 

Jefferson says that the decade before he began his real estate investment business he worked in the high-tech business and was par of the .com world and was in it from the time of the boom to the bust. Having gone through that time Jefferson says that he became more interested in investment with the stock market and shortly after decided to diversify and take his investments into real estate. When he was looking into real estate he kept seeing mobile homes, a unique multi family niche that was showing a great return on investment and he knew he needed to get into this part of the business; although initially he was wanting to buy apartment buildings in his home of San Francisco, California.  Jefferson said that it took him about 1 year to learn the mobile home real estate space and land his first deal. After his first deal Jefferson decided that this was where he wanted to be and continued to make his living in this very unique real estate space. 

Holly asks Jefferson if while he was learning about mobile home real estate if he was working a corporate job or if he quit his job to pursue real estate full-time. Jefferson says that for about a year, during the time he was learning about the business, he overlapped having a corporate job and doing real estate. Jefferson says that he transitioned full-time into mobile home park investing over the course of a few years so that he could make sure that his plan was going to work out while he was still making money from his corporate job. 

Holly asks Jefferson why he become interested in mobile home park investing. Jefferson says that most people are repulsed by the idea of mobile home parks so there is a not a lot of people working in this area, therefore there is less competition. Jefferson says that a lot of mobile home parks get a bad reputation because of the 1% that news and media like to showcase. Secondly, he likes this niche of real estate because it is the only area of real estate that is actually shrinking - other forms of homes and retail space, etc. is expanding. Mobile home parks have had a lot of changes in zoning against them making it impossible to build more mobile home parks - he estimates that 1% of parks get plowed over and a new strip mall is built on-top of where the park once stood. Jefferson says that while the parks are shrinking the demand to live in the parks is growing and that intersection of two elements mean that space rent goes up and in turn means more profits. Jefferson also mentions that in mobile home parks you only own the land and usually don’t own the homes and if he does he likes to put them on rent to own agreements. As a landlord he has a lower maintenance cost, all home repairs are the responsibility of the tenants which also makes for a better park because the tenant starts to become proud of their home and they will take better care of it which is why he wants tenants to own their own home. Lastly, when tenants become owners they are unlikely to move because of the cost to move the home from one area to another. If a tenant gets a job in another state or another city they are more likely to sell the mobile home and buy a new one rather than moving their existing home. Jefferson says that mobile home parks are a compelling niche because the cash flow is constant. 

Holly asks Jefferson to share a story about one of his first deals with listeners and Jefferson recalls that when he had his first park he was buying homes to bring into the park and then when he went into the DMV in Oklahoma to get titles on the homes put into his name the woman at the DMV looked him over and exclaimed “you own more than one mobile home?!,” making Jefferson feel like a big shot. 

Holly asks Jefferson how he ended up owning properties in 8 different