Episode #217 Mobile Home Flipping and Investing with Jonathan Tuttle

On this segment of HyperFast Wealth, host Dan Lesniak interviews Jonathan Tuttle, the Head of Acquisitions for Midwest Park Capital, an investment fund focused solely on purchasing mobile home parks for accredited investors. Jonathan has closed over $2B in real estate and has a new course coming out that covers how to flip mobile homes like a pro!

 

Episode Highlights: 

  • Even as a kid, Jonathan was an entrepreneur, selling flowers from his yard to his neighbors.
  • During the crash of 2008, Jonathan’s dad’s mobile home park was his only performing asset.
  • Many people out there hear mobile homes and immediately go to typical stereotypes.
  • Mobile home parks had a 12% increase in value this year while many real estate classes were crushed by COVID.
  • 60 million Americans need affordable housing with only about 12 million mobile homes existing.
  • Craigslist, Facebook Marketplace, and word of mouth are the best way for real estate flippers to find mobile home deals.
  • People can use credit cards or go through local credit unions to buy mobile homes because they tend to move quickly.
  • Ideally, Jonathan can buy a mobile home and keep it in the park in which he bought it.
  • Cities don’t like mobile home parks because of the stigma and the lower taxes.
  • Right now, there are about 100k new mobile homes produced every year.
  • For mobile homes manufactured after 1985, it costs anywhere from $2k-4k to renovate and flip.
  • Besides the few parks that house millionaires and billionaires, most mobile parks consist of affordable housing.
  • Mobile homes can range anywhere from $5k-10k all the way up to $5M depending on the market.
  • Jonathan has a course for those who aren’t accredited investors and can’t partake in his fund.
  • Through his course, Mobile Home Wealth Academy, Jonathan teaches people how to flip and eventually get their own park.
  • Mobile homes have been the top-performing real estate class for the last 50 years.
  • 70% of retiring baby boomers do not have the financial capability to pay for an assisted-living home.
  • Mobile homes hit a 6 or greater cap rate if they are in the midwest, around a 4 cap rate on the coasts.
  • Fannie and Freddie typically want around 33-35% down with a year’s reserve in the bank.
  • In Jonathan’s fund for accredited investors, the minimum investment is $50k which would never be enough to buy a park on its own.
  • Wall Street has become huge in the mobile home park space and Jonathan does not see that changing anytime soon.
  • Investing in Jonathan’s fund means you don’t have to do the work that comes with traditional investing.
  • Jonathan advises real estate investors to take in as much education as they possibly can and use mentors to help them take action.
  • The last downturn in 2008 was the biggest challenge that Jonathan has faced in his career.
  • 5-10 years from now, Jonathan hopes to have closed 1-2 funds and expanded his assets to all over the world.
  • The current state of big cities all over the country has Jonathan looking to position himself well in the future.

 

3 Key Points:

  1. Typical stereotypes that surround mobile homes actually benefit investors because there is a lot less competition.
  2. Investing in mobile home parks allows investors to provide affordable housing without the responsibility of renovation.
  3. Jonathan’s fund requires a minimum investment of $50k and an 8-10 year hold to allow for better operational efficiencies and increased rents.

 

Tweetable Quotes:

  • “If you’re flipping mobile homes, it’s the easiest and cheapest form to get started with. You don’t need a lot of capital.” – Jonathan Tuttle
  • “It just provides that quality place of living. You don’t have to put a lot of money into it…less is more, basically, in most markets.” – Jonathan Tuttle
  • “You have the best tax depreciation schedules…you have the higher cap rate, and you have the most stable real estate for the last 50 years and the most stable for the last decade.” – Jonathan Tuttle
  • “We do all the heavy lifting for them and all they do is collect a check.” – Jonathan Tuttle

 

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