A Focus on Small, Rural Parks Unlikely to Get Corporate Attention
Operators of small communities in the midst of rehabilitating 30 properties in North Carolina and Illinois are improving affordable housing stock in rural communities.
And, in the near future, the pair may be looking to buy and replicate the process anywhere from North Dakota to Florida.
“For the next four to six months we’re working as hard as we can to get 50 homes per month because the demand is there,” Time Out Properties Co-owner Mike Bender said. “The primary reason to purchase communities in Robeson County is because of the tremendous demand for affordable housing caused by thousands of new jobs at the pork and poultry processing facilities.”
Time Out picked up all but two of the communities in late 2017 and the spring of 2018. Matt Ring owned the two Illinois properties at the time he and Bender, a former software developer, agreed to partner.
Most of the purchases come from individual owners of one or two properties.
“We didn’t go the traditional route, working through a broker. We researched and called around and made some offers,” Matt Ring said. “I think we picked up the first 16-20 parks that way.
“The big REITs are unlikely to go after communities like this because they’re the smaller rural parks,” he added.
Time Out Properties invested more than $13 million for improvements in its communities DURING the past 18 months
Low Occupancy Communities in Growing Markets
Time Out Properties used all variety of marketing to fill communities, including web, direct mail, TV, radio, and social media marketing, Bender said.
Most new residents in Robeson County have recently arrived for work, Bender said.
“Some of the parks were so bad we really had to bring down everything and start over,” Ring said. “Regardless, the direction and mission is to go out and identify communities that need to be rehabilitated and work toward keeping them in that affordable housing stock.”
At the time the pair began hunting for parks, Bender had lived in North Carolina for 25 years. His solid understanding of what markets could support a rehabbed community came into play. A third of the communities in the portfolio are up to near full if not full occupancy. Another 10 parks are 60% occupied. The remaining 10 are in full rehab mode with low occupancy.
Time Out’s communities provide manufactured homes for sale, and have park-owned rental homes that makes up about 25% of each community.
Ring and Bender said the Illinois parks generally are more stable than the ones recently purchased in North Carolina. Still, the two move back and forth between the locales to maintain and improve the entire portfolio.
“North Carolina has a tremendous amount of activity, and currently, we’re in Springfield Ill., working with community managers,” Bender said. “It’s important to get everything ready before ice and snow hits the Illinois market.”
Eaglewood Mobile Home Park Will Be ‘Feature Park’ in Portfolio
A focal point of the community rehab process right now is Eaglewood Mobile Home Park in Lumberton, N.C.
The company removed and replaced 30 homes. It also replaced or upgraded water utilities, sewer, electric power and roadways within the community.
“Eaglewood is in a wonderful school district that’s in high demand,” Bender said. “We rehabbed a park right near there and it sold out quickly. So, we know this one is going to work out too, but it’s a hurdle. At some point, this is going to be the feature park that we use to show improvement with before and after photos.”
New Manufactured Homes Arrive 10 or More at a Time
Time Out is buying new homes in sets of 10 or more at a time, primarily working with Clayton Homes and the company’s TRU product, an entry-level single-section home. They are fixing up homes that are in good shape and buying new homes to replace the really rundown dwellings.
TRU even is building a custom 14×76’ four-bedroom single-section home specifically for community infill with Time Out Properties.
All of Time Out Properties’ communities are parks intended for working-class families. And while they’re acquisition strategy will expand to other states, the type of park will remain the same — rural communities in growing markets where affordable housing is in high demand.
“In Robeson County, we removed about 100 manufactured homes. The ones that were really in disrepair and couldn’t be renovated,” Bender said.
Time Out instituted full-time security on some properties. It started community watch programs at others, all in an effort to maintain safe and friendly communities.
“We’re in the poorest county in the state so it can get a little rough at times, but we are confident we can make some nice safe places to live, and we don’t have much competition,” Bender said.