Brian Spear, Managing Principal & cofounder of Sunrise Capital Investors, a real estate investment company catering to accredited investors.
Why do asset classes that seem “boring” make some of the best investments? First, they’re often the safest—and no matter how fun or adventurous you may be personally, you likely don’t want to be so adventurous with your money. Many investors are looking for an opportunity that’s secure and stable, and “boring” investments often provide the most predictability, steadiest cashflow and even reasonable long-term growth.
At my company, we pride ourselves on investing in mobile home parks (MHPs) and parking garages—assets often overlooked because they seem “boring.” To us, boring is beautiful. Let me break down why and what investors should consider about these types of investments.
Fragmented Markets And Off-Market Deals
The markets for MHPs and parking garages are fragmented, with ownership generally spread across many small operators rather than concentrated among a few dominant players. This fragmentation creates opportunities for investors, especially in the form of off-market deals.
Off-market deals allow buyers to negotiate directly with property owners, sometimes securing assets well below market value. These transactions create what we call a margin of safety, enabling the buyer to “make money on the buy.”
Favorable Supply And Demand Imbalance
Both MHPs and parking garages are generally backed by strong demand. People will always need affordable housing and parking—these are basic needs that do not fluctuate widely with market cycles.
In the case of mobile home parks, demand is also likely to continue to rise due to the affordability crisis in housing. Similarly, the parking garage market size has experienced steady growth in recent years. According to The Business Research Company, part of this growth is attributable to a shortage of parking spaces in densely populated urban areas. I believe this lower supply only strengthens the fundamental demand drivers of existing assets. In short, the combination of shrinking supply and steady or increasing demand suggests continued strong supply-demand dynamics.
Simple And Predictable Business Models
One of the greatest advantages I see of MHPs and parking garages is their straightforward business model. These assets operate on a simple premise: People pay for a place to park or live.
In our property management company, we streamline operations by managing our mobile home parks as though they were parking garages since, in fact, residents are renting a patch of ground to park their homes on. This simplicity makes ground-rent-based revenue streams easy to understand and manage.
Cashflow Covered Land Plays
MHPs and parking garages also illustrate a solid investment strategy: that of cashflow-covered land plays.
A covered land play is an approach where investors purchase income-generating properties with the potential for long-term redevelopment. While the property produces steady cash flow in the short term, its underlying land value appreciates over time.
This strategy allows investors to enjoy consistent income while positioning themselves for future sale and/or development of the land for a different use. Think of an urban parking garage being converted to a multifamily development once population demand makes the economics of the land acquisition feasible for a developer.
Long-Term Investment Ownership
In my experience, owners often hold MHPs and parking garages long-term, as they tend to offer stability, predictable cash flow and growth over time. A long-term perspective means investors can potentially benefit from steady income streams and increasing land values.
As they say about land, “They’re not making any more of it.” Land in growth areas remains an attractive asset in itself, regardless of economic changes. By holding these covered land investments for 10 years or more, investors can ride out short-term market cycles and sell when the time is right, thus unlocking significant wealth-building potential.
The Risks Of Investing In MHPs And Parking Garages
Even though “boring” investments tend to be more stable than other investments, there are still risks to consider. For starters, many MHPs are decades old, meaning that utility infrastructure may be outdated or worn down, so repairs may be costly. Additionally, MHPs tend to have a negative stigma that can make investing difficult. Though strides have been made toward creating a more positive association, this stigma still exists—this can influence the demand for MHPs.
In the case of parking garages, if you’re just getting started, you may find it difficult to gather the most attractive financing options available in the marketplace. Since parking garages are a niche asset class, there are fewer lenders in the marketplace that understand its nuances (compared to multifamily, for example). Moreover, with the increase in ride-hailing services such as Uber or Lyft, some have suggested the possibility of a decline in car ownership. If car ownership significantly declines, commercial parking may not be the most attractive investment option.
Even with these risks in mind, with the right operator, I believe the potential benefits of investing in mobile home parks and parking garages remain strong. These asset classes offer unique opportunities for strong cash flow and operational upside—especially for investors willing to dig deeper, operate smartly and play the long game.
Considerations For Investors
One piece of advice I would give investors is that location is everything in real estate—it can influence demand, rental income potential and property value. So, before committing to an investment, it’s essential to examine the area the property is located in. For example, you might consider investments located in close proximity to urban amenities such as shopping centers, parks, hospitals or schools, as these amenities can foster population growth.
Furthermore, local market conditions can impact investments. Job opportunities, population trends and unemployment rates can all affect an investment’s performance, so it’s wise to research local economic trends when considering an investment.
Conclusion
“Boring” investments like mobile home parks and parking garages may not capture headlines, but they have delivered where it matters most for us. By adding these types of assets to your portfolio and following the advice outlined above, you can diversify your holdings and work toward protecting against recession risks. These investments embody the timeless truth that wealth is typically built steadily, not suddenly, and I believe this makes them a solid choice worth considering for investors.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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