This Arkansas Mobile Home Park Portfolio is a value-add opportunity with tremendous upside. The properties are well located in strong markets throughout Arkansas. The portfolio is 482 pads across 13 different mobile home parks. The core of the portfolio is located in Little Rock where 9 of the properties are within 15 minutes of each other.
This portfolio is well positioned and has incurred many of the expenses (paving, plumbing, submetering, evictions, etc) to reach financial stabilization. The parks are in a position to raise rents, fill vacant pads and unlock the immense upside in these properties.
The majority of the homes in the parks are tenant owned. The average lot rent across the properties is approximately $300 which is currently $60-$85 below market. The occupancy across the portfolio is 75% and the current park owned home inventory is 13% of the total lots. The current owners have had success in converting park owned homes rent to own homes. Most of the rent to own homes are grossing $750 a month with a deposit of $1,000 which suggests a strong market for the sale of new homes.
12 of the properties are on city water and sewer and are either billed directly to the resident or have metron meters on each of the homes. All 13 properties have paved roads. 7 have been fully paved in the last 6 months and the other 6 have had partial paving during that same time.
The demographics in Arkansas make it a perfect target for investment in Mobile Home Parks. Arkansas ranks 48th in median individual income making affordable housing a necessity. Additionally, the average age in the state remains below 40 with a growing population. The average 3 bedroom apartment rent is up almost 40% in the last 24 months and the median home price in Little Rock has surpassed $220,000. The median household income has stayed relatively stable in that same time period which has created an even greater demand for affordable housing.
Conclusion-Mobile home parks offer higher greater returns and stability than any other real estate sector. They are the only real estate segment that grows stronger as the economy weakens. There is tremendous upside to this investment opportunity by in filling the vacant pads, increasing rents to market, and implementing RUBS throughout the entire portfolio.
Location Summary
Little Rock - The capital city of Arkansas is also the state’s largest municipality, with over 202,000 people calling it home. The City of Little Rock employs over 2,500 employees in 14 departments. Little Rock has seen steady population growth of 3.7% since 2020. The median home price is $163,000 and the median household income is $46,406. The unemployment rate is 5.9%.
North Little Rock - a city in Pulaski County, Arkansas, United States, across the Arkansas River from Little Rock in the central part of the state. North Little Rock is located in the Little Rock Metro which has a population of 740K. The population has seen an increase of 7.2% since 2020. The median home price is $119,000 and the median household income is $40,305. The Little Rock metro unemployment rate is 4.9%.
Berryville - is a city in Carroll County, Arkansas, United States. Berryville is strategically located 45 miles for Rogers/Bentonville which are two of the fastest growing markets in Arkansas. Alternatively, Berryville continues to see capital investment from Tyson who continues to expand its footprint. The issue that Tyson continues to run into is a labor shortage due to no housing being available in Berryville and the surrounding markets. The unemployment rate in Berryville is 4.6% (U.S. avg. is 6.0%). Compared to the rest of the country, Berryville's cost of living is 23.9% lower than the U.S. average.
Mountain Home - is a city in, and the county seat of, Baxter County, Arkansas, United States, in the southern Ozark Mountains near the northern state border with Missouri. Mountain Home is primarily a retirement community which attracts snowbirds from the Midwest. The population growth, median income and median home price have all been increasing steadily over the past 10 years. The crime is exceptionally low. This market is anchored by all the largest retailers in the country.
Hot Springs - is a spa and resort town at the base of the Ouachita Mountains southwest of Little Rock. The area boasts 47 natural hot springs. This market has one of the most popular casinos and horse tracks in the state. Compared to the rest of the country, Hot Springs Metro Area's cost of living is 17.4% lower than the U.S. average. The Hot Springs Metro has a population of 100,000. The median home cost in Hot Springs Metro Area is $184,800.
Conway - is the county seat of Faulkner County. Located in the state's most populous Metropolitan Statistical Area, Central Arkansas. Although considered a suburb of Little Rock, Conway is unusual in that most of its residents do not commute out of the city to work. Conway has seen a population growth of 14.6% since 2020. The median home price is $179,000 and the median income is $47,126. The unemployment rate is 4.2%.
