The Multifamily Real Estate Experiment Podcast
“Multifamily Real Estate Investing for the Career Professional.” Join Shelon "Hutch The Marine Investor" Hutchinson who talks to military veterans and real estate professionals about the results of their journey and multifamily real estate experiments. Each week, Hutch discusses Multifamily Real Estate Investing for Career Professionals and military veterans to help you build wealth and financial independence. Questions about Multifamily real estate investing are systematically dissected as your host works through observations and data to answer the week's question.
The Multifamily Real Estate Experiment Podcast
MFREE 119 Trailer # 5 with Cory Harelson: What’s the Rookie Mistake That Can Sink Your Park Deal?
When Cory Harelson and his team took over their first mobile home park, they didn’t do anything flashy—they simply showed up, walked the property, talked to residents, and solved small problems that had been ignored. The feedback? “You guys actually care.”
But this episode isn’t just about feel-good moments. Cory also shares one of the most common mistakes investors make when moving from apartments to mobile home parks: miscalculating value by capitalizing income from park-owned homes. That rent is tied to personal property, not real property—and banks won’t recognize it when underwriting a deal.
If you’re chasing deals without understanding this difference, you might be overvaluing your investment and setting yourself up for trouble. The numbers matter—but so does doing right by the people living in these communities.
#MobileHomeParks #UnderwritingMatters #ImpactInvesting
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hutch@hsquaredcapital.com
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What is that mistake and how can investor avoid it? Yeah. And this is actually a
Speaker 2:So if you were, if you're coming from, and there's actually quite a few people, like looking parks have gotten more popular right now. So I actually get this question a lot, but it's an underwriting mistake. Mobile home parks are different from apartments in the, in an apartment you own the whole thing and you're just renting each space. Correct. Pretty simple. So all of the rent. Counts towards that bottom line. And remember I said earlier where there's, it's technically you divide by a cap rate, but it's the same thing if you call it a multiple on the income. You can take all of that rent and multiply it by that to come up with the value, divided by the cap rate to come up with the value. So you're capitalizing the rent, is what that's called. Okay. Okay. With a mobile home park, usually when you buy a park, I like to have it where the resident owns the home and we own the land. Cause then they're an owner. We're an owner. We're both in the same boat that we want the community to be nicer. We're both invested. but you'll oftentimes have it where instead of them owning the home, the park owner owns the home and they will rent the home to a resident. And the mistake you can make is using that multiple, capitalizing that part of the income, because what that is actually personal property, not real property. Like I said, that's personal property, but it's a big consequence if you get it wrong. That's the thing. So that, that's personal property. It's actually titled through the DMV. That thing can go away. So the bank. If you were gonna go get a loan, the bank will not consider that part of the income as part of the property value as far as your loan to value or anything else. It will just ignore it.