The database Entry no. 033
Own the dirt, rent the lot
Frank Rolfe built the largest privately owned billboard company in Dallas and sold it to a public company for $5.8 million in 1996. Four months later he bought Glenhaven Mobile Home Park in Dallas for $400,000. With partner Dave Reynolds he has ranked as high as the fifth largest owner of mobile home parks in America, with a portfolio reported near $1 billion.
Two of the least glamorous asset classes in America are billboards and trailer parks, and Frank Rolfe has been the largest private owner of both. He went into the billboard business in Dallas planning to gain experience before business school, built it into the largest privately owned outdoor company in the market, and sold to Universal Outdoor, now Clear Channel, for $5.8 million in 1996.
Four months later he spent $400,000 on Glenhaven Mobile Home Park in Dallas. By his own account he had no idea what he was doing: the park came with master-metered gas and electric, two of the worst problems a park owner can inherit, and a tenant base he describes without flattery. By 2007 he had bought and sold 24 parks, earning, he has said, roughly what the billboard sale earned him.
A billboard is a steel frame on leased land. A mobile home park is the land under homes nobody can move. Two businesses, one structure
Why the lot, not the house
The economics that make this the highest-scoring asset play in the database: residents typically own their homes, while the operator owns and rents the land beneath them. Moving a manufactured home costs thousands of dollars and often is not physically possible with an older unit, so turnover is close to nil and the operator carries no repair obligation for the structures. It is self-storage economics with people in it, which is precisely where the difficulty begins.
After meeting Dave Reynolds at an industry conference in 2006, the pair bought parks at roughly two dozen a year through and after the recession. In 2013 their parks generated $30 million in revenue with more than half of it profit. Their portfolio has since been described at 250-plus communities across 25 states and a valuation near $1 billion, and, per the familiar fourth stage, they also own Mobile Home University, which teaches the model through boot camps.
The part we will not leave out
This is the most ethically contested entry in the database, and pretending otherwise would violate the standard the rest of it is held to. The same mechanism that produces the returns, residents who cannot afford to move, means rent increases land on people with nowhere to go. Reynolds's operating company has been sued by residents of an Austin park over rent increases and eviction notices, and the industry's consolidation has drawn sustained criticism from housing advocates and national press.
We include the entry because it is documented, and because the mechanism is instructive whether you admire it or not: the most durable businesses in this ledger are the ones where leaving is expensive. In waste that is a matter of routes and reliability. Here it is a family's home. Anyone entering this asset class should know which of those two they are buying.
Common questions
How profitable are mobile home parks?
The documented figure: $30 million of revenue in 2013 with more than half as profit, across a portfolio since described near $1 billion. Margins are high because residents own the homes and the operator rents only the land, carrying no structural repair obligation.
Why do mobile home parks have such low turnover?
Because leaving is prohibitively expensive. Residents own the homes but not the land, and moving a manufactured home costs thousands and frequently cannot be done at all with an older unit. That is the source of both the sector's returns and the criticism it attracts.
Why are mobile home park investors controversial?
Because the return mechanism and the harm mechanism are the same thing. Residents who cannot move absorb rent increases they cannot escape, and operators in this space, including Reynolds's RV Horizons, have faced resident lawsuits over rent hikes and eviction notices, alongside sustained criticism from housing advocates.
Built by