8% Defaults vs Less Than 1%: Why I Prefer Mobile Home Parks

Recently, many investors were discussing reports that real estate investor Brandon Turner reportedly lost approximately $15 million on a single apartment investment.

Now, before we go any further, this article isn’t about Brandon Turner.

I don’t know all the facts surrounding that particular deal, and every experienced investor—including me—understands that losses are simply part of the business.

But the story does raise an important question that every investor should ask:

What risks are built into the asset class itself?

Too often, investors become focused on projected returns.

• They analyze the cap rate.
• They analyze the cash flow.
• They analyze the financing.
• They analyze the market.

But they fail to analyze the long-term sustainability of the asset itself.

After nearly 20 years in real estate, I’ve learned that some of the best investments aren’t necessarily the ones with the highest projected returns.

They’re the ones with the most durable business model.

And that’s why a statistic shared by mobile home park investor Frank Rolfe recently caught my attention.

At the time of his discussion, approximately 8% of apartment complexes were reportedly in loan default while less than 1% of mobile home parks were experiencing similar distress.

Whether those exact numbers fluctuate over time isn’t really the point.

The real lesson is understanding why certain asset classes tend to be more resilient than others.

Because when you’re investing for the long term, sustainability matters.

And one of the biggest drivers of sustainability is something many investors overlook:

Supply.

Great Investments Require More Than Demand

Many investors focus exclusively on demand.

• People need housing.
• People need storage.
• People need office space.
• People need retail.

While demand certainly matters, demand alone doesn’t guarantee a great investment.

You must also understand supply.

A strong investment opportunity often exists when:

• Demand is stable or growing
• Supply is limited
• Replacement is difficult
• Competition is constrained

When supply can rapidly increase, profits often decline.

When supply remains constrained, existing assets tend to maintain stronger occupancy, pricing power, and long-term value.

This is one of the most important lessons I’ve learned as an investor.

The Apartment Challenge

Apartments play an important role in housing, and there are certainly successful apartment investors.

However, apartments face a challenge that many investors underestimate:

New competition can be built relatively easily.

When rents rise, developers respond.

When financing becomes available, projects get approved.

When markets improve, construction increases.

The result is a cycle that repeats itself over and over:

• Strong rents attract development
• New supply enters the market
• Occupancy softens
• Rent growth slows
• Margins compress

Then the process starts all over again.

For apartment owners, one of the biggest risks isn’t necessarily a recession.

It’s oversupply.

A property can be performing well today and suddenly face hundreds of competing units opening nearby tomorrow.

Why Mobile Home Parks Are Different

Mobile home parks operate under a very different dynamic.

In most markets, building a new mobile home park is extremely difficult.

Many cities and counties simply won’t approve them.

In fact, the number of new parks being built each year remains very limited, while older parks continue to disappear through redevelopment and closures.

That creates something investors love:

Scarcity.

When an asset class is difficult to replicate, existing owners benefit.

Unlike apartments, most mobile home park owners don’t spend much time worrying about a brand-new competing park opening across the street.

The barriers to entry are simply too high.

The Business Model Matters

Beyond supply constraints, mobile home parks benefit from a unique operating structure.

In many communities, residents own their homes while the park owner owns the land underneath them.

This creates several advantages:

• Lower maintenance responsibilities
• Reduced repair costs
• Lower capital expenditures
• Strong resident retention
• More predictable operating expenses

When residents own their homes, moving becomes expensive and inconvenient.

As a result, turnover is often lower than traditional rental housing.

Lower turnover frequently leads to more stable cash flow and fewer surprises.

The Real Lesson

When investors read headlines about someone losing millions of dollars on a deal, the natural reaction is to focus on the person.

I think the better approach is to focus on the lesson.

The question isn’t whether Brandon Turner is a good investor.

The question is:

What can we learn from the situation?

For me, the lesson is that understanding the sustainability of an asset class is just as important as understanding the individual deal.

• I want investments where demand is strong.
• I want investments where supply is constrained.
• I want investments where competition is difficult to create.

And I want investments that continue solving a real problem for everyday Americans.

That’s one of the primary reasons I’ve become increasingly attracted to affordable housing assets such as mobile home parks and RV parks.

Not because they’re flashy.

Not because they’re trendy.

But because their long-term fundamentals make sense.

Why I Continue to Like Mobile Home Parks

Over the years I’ve invested in:

• Single-family rentals
• Fix and flips
• Owner-finance properties
• Land development
• Commercial projects
• Syndications
• Mortgage notes
• Mobile home parks
• RV parks

Every asset class has strengths and weaknesses.

But if I’m looking for long-term sustainability, affordable housing remains one of the sectors I find most attractive.

The United States continues to face a shortage of affordable housing.

At the same time, regulatory and zoning restrictions make it extremely difficult to create new mobile home park inventory.

That combination of strong demand and constrained supply creates a compelling long-term investment thesis.

Will every mobile home park be a great investment?

Of course not.

Good operators matter.

Due diligence matters.

Market selection matters.

But when evaluating opportunities, I prefer assets that have built-in protection against oversupply and provide an essential service that people genuinely need.

Because in investing, the best opportunities aren’t always the flashiest.

They’re often the most durable.

And durability is what creates wealth over the long run.

Want to Learn How We Analyze Deals Like This?

One of the biggest mistakes I see investors make is focusing on the deal before they understand the fundamentals behind the deal.

Every week, I host a live coaching and investor training call where we discuss real-world investing, analyze actual opportunities, review market trends, and answer questions from investors around the country.

We cover topics such as:

• Raising private capital
• Flipping houses
• Rental properties
• Owner financing
• Mobile home parks
• RV parks
• Notes
• Deal analysis
• Negotiation
• Business growth
• Building long-term wealth

Whether you’re just getting started or already investing at a high level, these weekly calls are designed to help you avoid costly mistakes and accelerate your learning curve.

If you’d like to learn how we evaluate opportunities, manage risk, and build sustainable wealth through real estate, I’d love to have you join us.

Reach out to me (brant@brantphillips.com) to learn more about joining my Weekly Coaching Call and Investor Training Program.