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The Carlyle Group’s Latest Investment... Trailer Parks
Submitted by Mike Krieger of Liberty Blitzkrieg blog,
Earlier this month, I highlighted the fact that the Carlyle Group was the latest in a series of “smart money” private equity firms to decide it was time to exit the suddenly extremely crowded “buy-to rent” residential real estate trade. At the time I noted that:
As it sells apartments, Carlyle is focusing investments in areas such as senior housing, self-storage units and manufactured homes, where demand tends to be driven by life changes such as retirement or marriages, and isn’t so closely tied to changes in employment and gross domestic product, Stuckey said.
Well it appears Carlyle has already started to make its move. As the Wall Street Journal reported on Tuesday: Carlyle Jumps Into Niche Space - Private-Equity Firm Adds Trailer Parks to Its Diverse Portfolio. In case you can’t figure out what appears to be the key logic behind the shift in focus, try this line on for size:
Because the cost of relocating a home is expensive, residents are less likely to move away. “Our customers have no alternative shot at homeownership, nor do they [normally] even have the credit scores and quality to seek anything better,” Mr. Rolfe said. “They never leave the park they are in, and the revenues are unbelievably stable as a result.”
In neo-feudalistic America, always, always go long serfdom.
More from the WSJ:
Carlyle Group LP, a private-equity firm that has interests in everything from an oil refinery to a vitamin maker, is adding trailer parks to its portfolio.
The Washington-based company has struck a deal to acquire two Florida communities for a total of $30.8 million. The sellers are two entities managed by Shamrock Holdings LLC, a Paradise Valley, Ariz., owner and operator of communities, said owner Patrick O’Malley. The deal is expected to close this month.
Carlyle declined to comment. But analysts said the deal is evidence that big investors are betting that the demand for low-cost manufactured housing, the latest generation of trailers or mobile homes, will rise as other housing alternatives become too expensive for a number of Americans, especially senior citizens.
Landlords like the steady income stream—tenants tend to stay put, especially retirees—and the low maintenance costs. Also, the communities are easy to run and typically stay full and see rents increase during market downturns.
Because the cost of relocating a home is expensive, residents are less likely to move away. “Our customers have no alternative shot at homeownership, nor do they [normally] even have the credit scores and quality to seek anything better,” Mr. Rolfe said. “They never leave the park they are in, and the revenues are unbelievably stable as a result.”
One thing is quite clear. Carlyle knows full well what the future of America looks like…
Full article here.
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who is this carlyle guy anyway? everywhere he goes it stinks to high heaven.
these guys are very late to the game...these parks have always been known as cash cows....but they wil drive the people out when they raise the rents to cover their note.....
Jim grant is now fully affirmed to be 100% correct when he called our economic environment a house of mirrors. Its such a house of mirrors that these "smart money" investors think that people with no credit (or possibly income) create a STABLE source of income? Seriously? Its one of the oldest business sayings in the world. Do business with people who have money. These assclowns are so off their rocker, and the free gumbnit money is flowing so intensely for them, that the most obvious malinvestment of all time, is a "good decision."
Please...
Fiat going into hard assets...
TIN roofs.....ALUMINUM siding.....particle board LUMBER.....STEEL trailers.
"Packed like lemmings into shiny metal boxes
Contestants in a suicidal race"
Does the Carlyle group invest in anything that isn't heavily subsidized by .gov? Or would that be too foreign for the Bushes?
I bought some land 15 years ago and was required to take possession of a single wide trailer as part of the transaction. I put it up for sale and actually sold it four times but the first three didn't come up with the money ($10,000) to take possession. Had to fucking drive to the bank three times to meet the "buyer" only to be stiffed like a man with a runaway bride on wedding day. They can keep the trailer parks, good luck to them, I say. You are obviously dealing with high quality individuals. /sarc
They're not buying random trailer parks, they're buying retirement communities:
Village of Ponce de Leon in Melbourne Beach and Sun Valley Estates in Tarpon Springs, both cater to those 55 and older.
It's all about the .gov money stream.
In addition, residents also must pay a monthly rental fee to a landlord. Those fees averaged $391 a month in October, up 2.3% from a year ago, according to JLT, the highest level since the firm began tracking in 1996.
Who wants to bet there'll be a solid double digit jump in the near future?
Wonder if Barb Lahey sold Sunnyvale to them?
http://www.youtube.com/watch?v=Am0I57_lHfU
best of J-Rock @ Sunnyvale Trailer Park
http://www.youtube.com/watch?v=N68t7NvuTgQ
That would be breaking the laws of supply and command - Ricky
These Wall St. guys with all their book learning and stuff running Sunnyvale? What the fuck do they know about partying and growing good dope? - Ricky
Let Mr. Wall St. come to the crib and get his freak on. We will film those greasy SEC mo fos doing their trany shit, no what I'm sayin? - J-Roc
Well if they are old and on SS or disability, they got money. Long as they don't rent lots to young folks who have to work for a living they should be ok.
the ss and disability does not keep up with rents or inflation etc., i hed to remove many of people who all they got was 400.00ss and their rent alone was 500.00...now toss in obammycare , a bigger note to meet and you will have an exoudous by force....you pay you stay, you dont you wont...simple game
Bullish... The Carlyle Group can next invest in rental space under overpasses, soup kitchens and EBT cards dispensers (think PEZ... shoots them out)
sbm,
I was thinking along the same lines, but these aren't like apartments if the tenets own or are buying the trailers. You can evict tenants from an apartment, trailer park will have to go through foreclosure process and then pay for someone to remove the trailer or sell it to third party. How long will that take? Think people squatting in houses are gonna be hard to remove, just image dealing trailer park trash. No thank you.
Best business plan I've heard is to own the park (land) and the trailers. Sell trailer homes /sarc on owner contracts. You'll be collecting payments on the trailer plus the space rent. If someone defaults, repossess trailer and sell to someone else. Note that I said repossess, rather than foreclose, as the trailer is personal property, not real estate. YMMV, depending on your state.
jekyll.....you pay you stay you dont you wont....park them out on the nearist county road...the county comes and removes for free..lol...the world doesnt spin the same in a private (free market) world.....an empty lot is better than a non payer...with repos the park will work with a lender but the people will go....
i will be so arrogant as to hold myself out as the trailor park expert here......been in the biz for 30 yrs...although i tend to stay in the closet about it....
Small trailer on the walmart parking lot is the future!
Future? It's the here and now. Plus, a trailer is a luxury, most are living in their cars or a van if they are lucky.
sbm,
Thanks for the insight, it looks like the business model is probably better than I think, and clearly my limited experience in this area has affected my perception.
This will end badly like the massive apartment deal in New York City a few years ago. This NWO company will overpay for these trailer parks with plans of raising rents and creating efficiencies with their brilliance. I'm sure they will sell these back for a huge loss in a few years and somehow the taxpayers will pay for the loss in tax rebates.
I've seen quite a few spendthrifts kept above water by investing in trailer parks... I haven't ever known anyone to lose their ass on one.
It's true, they're a good revenue source, but revenue growth is hard - there's a ceiling on the rent people will pay for a trailer. You can't add pools and clubhouses hoping to drive up rents. It won't happen.
Sad portent for the way our economy is going.
Most likely they are not renting the trailer, they are renting the trailer space. Landlord has no interest in the trailer or what happens to it.
Easier that way. No repairs to pay for.
"there's a ceiling on the rent people will pay for a trailer"
And therein lies the problem for the taxpayers. Not just the Carlyles, also the small timers, think the rent that the people are able to pay is not enough, so they charge "market" rent and get the government to subsidize the rest of it.
Nope they won't be able to raise rents or drive people out. It was attempted in Virginia near where I live. The local government put a stop to the "action" and the trailer park is still there. Though poor, they make a lot of noise when threatened with expensive relocations. So, I hope they don't think it will be easy to flip a trailer park into something else.
And, it has to be a pretty desperate hedge fund that thinks trailer parks are the next big thing....
More useless paper-pushers. get long sharecropping and black markets...
As smlbizman points out, once useless middlemen get involved with anything, it becomes unprofitable in a hurry.VCs and PEs should not exist.
.
Fuck off, Lahey!
http://www.youtube.com/watch?v=Cy63HRhZiFw
Hmm, wonder if I can make a fortune doubling down on Tornado insurance?
You know the old joke.
How are a West Virginia tornado and a West Virginia divorce similar?
Someone's losing a trailer.
If the richest member of your family bought a house and you have to help take the wheels off of it, you might be a redneck.
-- Jeff Foxworthy
you are on to something.
http://www.youtube.com/watch?v=3LZclSpwY1M
tornado.gov mandated insurnace
Hey I saw your reply the other day, I agree thanks!
'Hmm, wonder if I can make a fortune doubling down on Tornado insurance?"
LOL !!!
As a former meteorologist.....that's not only FUNNY....but very truthy. It wouldn't be a bad idea. LOL !!!
Is there a cardboard box etf?
shipping container apartment buildings next
I actually like shipping containers as building materials. Strong as hell and fairly easy for a DIYer to build their own house with some basic metalworking/construction knowledge. I plan on building a cheap beach house with them at some point. What people tend to forget when they think 'container', is that they can be sided with pretty much any material so they will never look like you're living in what just came off a cargo ship.
Then part of the Port of Long Beach could be rezoned Multi-family....
As of August they have 148,357 *TEUs (Empties)
*TEUs: 20-foot equivalent units or 20-foot-long cargo container
nothing wrong with shipping containers, many guys have transformed them in remarkable and mulit-storey ways but they are climate dependant as the metal acts as a thermal bridge in cold weather and the dew point ends up inside the structure and produces mold in warm weather because the interior has to be insulated and vapour barriered and as such won't work in canada
That will be the next investment thesis. Go long corrogated.
corner the wax market and you control everything
waterproofing your corrugated
Go long Meow mix.
I actually burst out laughing at that one.
....and Plasma
Meow Mix is high end shit.
Mix with water and you get gravy.
I thought it was Gravy Train that did that.
http://www.youtube.com/watch?v=ZsKUYkKx4Rc
No - it's a REIT.
Nah. Who needs a trailor when an SUV will do.
During the Crash of 2008 may family and I were in a 20ft. pop-up camper in the woods.
True story. We've recovered and have a nice place in the country now......but that was some rough shit.
Our area has an old camp made up of street cars, the city set them up in the woods and turned them into cheap housing... The frames are still there as a reminder, or a blueprint.
I'm happy it worked out for you and your family.
The nagging feeling I have in the back of my head is your past situation for the entire country.
"I'm happy it worked out for you and your family.
The nagging feeling I have in the back of my head is your past situation for the entire country."
Thank you my friend. Could have just as easily been far worse. Thank God for friends and family. And thank God....well....just for being God.
And as far as your nagging feeling.....it's not a nagging feeling for me. I can't really watch the Terminator series much anymore. Particularly the first one.....where Sarah Conner is leaving her unborn son a message on tape while driving in Mexico looking for a safe haven. While she is stopped to get gas, a Mexican kid takes her picture and asks for 5 bucks. She knows the racket and agrees to pay him 4. Suddenly a gust of wind comes up and the boy says something in Spanish and runs away. She asks the old station attendent what the boy said.....and he said, "He says there's a storm coming." And she looks off towards where the thunderhead is growing and replies...."Yes....there is." And drives off.
As a former weatherman....trained to look at data and make a forecast....a prediction about the future....it's even more poignant and sad. I know what's coming and have even had a foretaste of it. And there is nothing I can do except prepare my immediate family for it first and foremost by teaching them the truth about the life and situation in the country we find ourselves in. That goes all the way from the wife and my five kids ages 16 down to 7. Teach them to sniff out bullshit most of all.....from anybody and everybody.....friends, government, media, business, even me and mommy.....cause we are wrong and full of shit sometimes.
Not to mention how to hunt, fish and raise farm animals. It's a learning process for this former city boy as well. But....we're doing it as a family who came out the other side, bruised, battered and scarred. But most importantly together.
We made it out of the Matrix. But there was a price to pay. There is a reason why there is a word called Bittersweet in the lexicon. I don't think until the day I die....that life will ever be considered sweet by me any more. But if the price for truth is the bitter.....well.....so be it. Let it be a reminder to never look back and mourn for what was lost. Including the idea of America. Let it be a motivation to form "a more perfect union" with my family and immediate circle of friends. If for nothing else....but to weather the storm that's coming.
Godspeed to you, my friend.....and to all of you who inhabit ZeroHedge.
his name was Jumbotron.
his name was Jumbotron.
his name, was Jumbotron.
Disable rich-text
ill read if you type. thats at the very least, an enlightening story.
easy to self publish nowdays.
The trailer park closest to my house is called a retirement village.
Take note FEMA.
One day the cornfields of iowa will be lined up end to end with trailers. Soylent green awaits.
Sad but true.
Ass Americana. Where are ya babe? Whoz yer daddy?
iit's Daddee and his name is Lon Phat Dong
Senior housing has to be the next bubble. Big box stores are being bulldozed all over town and these monstrosities take their place. Where is the money coming from to keep people in these?
Lol, After Obamacare we have Bush's magnanimity for the homeless.
"Come spend your last BUCK in my mobile home trailer park. What the Squid can do I can outdo!'
Go long food stamps.
sure thing, Mr. Sachs.
http://sweetvociferation.blogspot.com/2013/10/government-freezes-ebt-fun...
soo, yea, it was sure handy to have video to see how that would play out at the register...as opposed to a computer simulation.
Wall Street must be running out of high quality prostitutes if they're hitting the trailer parks up.
I guess they have never had to deal with a Ricky
Exactly. If you want any chance of collecting any rent, then you've got to give one of the yokels a free trailer and a long leash to turn people upside down and shake them... maybe even a cut of the rent he can collect. It takes a Ricky to beat a Ricky.
Who is this "Ricky" of whom you speak and how do I get in touch with him?
.
He's from the Sunnyvale Trailer Park (when he's not in jail).
http://www.youtube.com/watch?v=Jfq3c4Cf1Fs
Ricky is a generic term for guys who resemble the character on the show... it's also independently derived given, for whatever reason, kids named Ricky turn out to be shitasses (it's not a coincidence the show chose the name to represent this guy).
Hail Eris, praise Bob
time to short bbq grills(they come up missing) and go long on hair-brained ideas.
I lived in a double wide for about three years (non-tornado zone).
Loved that trailer; everything on one level, good insulation, cheap to fix, low buying price, low taxes.
Cheapest housing I've ever lived in and the nicest for the money.
I had good neighbors too.
all it needs is a jacked up 4x4 pick up parked outside and a Rotweiller chained to a deck post to say home sweet home
Location, Location, Location.
All depends on where you put the trailer.
Kid I sold it to towed it up to his family's farmland for him and his Bride to live in with their new baby.
Three bedroom/two bath, nice kitchen with a lot of storage space.
No Rotweiller's or 4 X 4's involved (or Gnomes or toilet flower pots).
The townhouse I owned for 8 years was much worse in all aspects.
HOA, neighbor's dogs, parking, two sets of stairs, and alternating arguing/fucking and constant baby crying through the walls on both sides.
UGH.
Shrinking our consumption footprint....
I cut the cable cord today, in fact, giving myself the equilvalent of a 1200 increase(after taxes).
What can I cut next?
Have you looked into OTA HD in your area?
I too cut my cable off last month along with the home phone option. I now use google voice and obi100 for free nation wide phone service and hulu/netflix for tv. Save about $90/month
Some trailer parks have satellite TV for ten bucks a month.
http://www.youtube.com/watch?v=3bHH_HVx3Lw
ok, that works in theory, but thats like throwing away your cell and expecting to stop getting a bill.
still need to call them.
i believe hedgeless_horsman has a lot of cheese to cut : /
Hillary ClitToon, the next DoubleWyde President.
“Our customers have no alternative shot at homeownership, nor do they [normally] even have the credit scores and quality to seek anything better”
A private equity firm's right to capitalize on a nation's abject poverty is the reason I got into this game.
This is a brilliant and ballsy move on the part of Carlyle. I live in the heartland where you can get a really nice new home for less than $200k, sometimes a lot less. You can't even buy a storage locker in a lot of towns for that amount. Assuming Carlyle aggressively and creatively markets to the right people in the right cities in the right developments, they will be a trendsetter and make a lot of money. Plus provide a lot of good housing at an affordable price.
The housing boom was driven because people enjoyed cheaper "rent" than what landlords wanted to charge... I don't see this changing... ever. And Carlyle won't be an exception... capital demands its rent and that demand comes with a premium.
I am astounded.
Its all about the bottom line with these vultures isnt it? Never mind the human cost, the violence, deprivation, social decline and a whole host of other problems these asset strippers at our expense cause, it still comes down to most they can make at our expense.
I wouldnt piss on one of these fuckers if they were on fire. They have destroyed what we in the western world knew as life. And they did it all for a touch of green. Trailer parks? Is there no level too low you gutter snipes wont stoop? Torture is to good for these fuckers, I am shocked we still stand by and allow this.
Fucking trailer parks????? God I hate you bastards.
Dude, if you travel outside the slums, you will see a lot of nice 'trailer parks'. Manufactured housing can be stick built 1000 miles away and assembled in a few days on site. These are good homes, not like a lot of the crap you see built on site with the cheapest labor the contractor can find.
Thats not what I'm talking about mate.
Its the fact that these vultures will monetize anything, including the lowest common denominator makes me sick. Nothing is sacred and nothing is beyond bounds to these swines, who coincidently, live off the rest of our backs. Its not just immoral, its sickening and the legislators allow it.
You aint even a number to these sick fucks, you are 'Game', is all this is.
I believe he's outraged by the motivation of these parasites. Carlyle believes this is a good investment because "those people" have no viable option of leaving their current living arrangement.
I live in the South and have never run across a "nice" trailer park.
Warren Buffett figured the same thing.
B-H has owned Clayton Homes since 2003. 35 mfg. locations. Boxes with removable axles that are identical construction-wise to stick built.
(unless you bought an older one with leaky poly pipe and particle board floors. Bad combination.)
Lol.
Then be a nice guy and let the Gypsies park on your lawn.
just take a look at who is the major holders of most companies. the major banks plus a few black rock type firms are pretty much monopolizing everything. they will determine who gets what. its a very dire situation
3rd president of US (1743 - 1826)
Entirely logical. Great ROI because at the end of the day, maintenence on dirt, asphalt, power feeds and sewer pipe is nil.
All you need are these guys:
http://images4.alphacoders.com/843/8438.jpg
I would move to that trailer park in a heartbeat!
In the old days ..you bought your space...so the trailer park In Aspen Colorado..they sell for $500,000 plus...but I used to sell Commercial Real estate..and a guy I worked with specialized in Trailer parks.....its a small and very wierd fraternity of buyers...they were all very strange guys...
There is synergy with their Booz investment. It is easier to monitor everyone in a MoHo.
Thanks for the grins WB7!
I remember that the local gas stations were good places for high school guys to work after school.
Ant that video had some cool old cars too, good shot of the Edsel in motion!
Re Carlyle buys Trailer Parks 'cause "They never leave the park they are in..."
Alternative headline: Uber Roach Buys Into Roach Motels....
This makes much sense...
After the middle class is drained of it's "wealth", we will have nowhere else to go.
Next thing you know they'll be buying freeway overpasses, and sewer tunnels...
http://en.wikipedia.org/wiki/Illinois_Tollway_oasis
In the time of chimpanzees, I was a monkey. With butane in my veins and I'm out to cut the junkie. Plastic eyeballs, spraypaint the vegetables, dogfood skulls with beefcake pantyhose. Kill the headlights, and put it in neutral, stock car flamin' with a loser in the cruise control. Baby's in Reno with the vitamin D, got a couple of couches, sleep on the loveseat. Someone keeps sayin' I'm insane to complain about, a shotgun wedding and a stain on my shirt. Don't believe everything that you breathe, get a parking violation with a maggot on your sleeve. So shave your face with some mace in the dark. Savin' all your food stamps and burnin' down the TRAILER PARK.
All that memorization just so I could emphasize the "trailer park". Well worth it.
The race to the bottom continues.
9/11, Carlyle, RedRum
Promotionary Offer: Rent NOW and get FREE Mullet Cuts for a year!
(Limit - 25 per trailer. Optional 'Blow' not incl.)
Carlyle: Rentier Queens of Double-Wide Hell
Good for them, they'll have a good idea of the up and coming available cannon fodder for their other business.
edit: Bonus... Trailer park rent payment (NSFW!)
Good luck with that Carlyle smart guys...
Is there something about her that disqualifies her for FSA $40k? If syph isn't still going around the UN, London & DC, it soon will be...
Who is the elitist with the double-wide? Kill that fucker!!
I read this as Carlyle anticipating a further crash and collapse of the housing market and people not be able to afford their McMansions, get laid off, obtain jobs with lower wages, and have to downgrade housing from the 'Burbs' to the T-Parks. As Energy prices rise, proper taxes rise, gas prices, food prices, those will also force people middle-class or even upper class people to downgrade to T-Parks. You guys have to look at the Macro picture and know/anticipate the Future dynamics of America and it's socio-economic make up like Carlyle Group.
I'm sure you'll see other evidence of NWO oriented Groups/Corperations/Businesses do similiar irregular or outside the box investment or buying strategies.
O-T- Anyone getting the new Xbox One!?!?
hey bevis, let's get on our bikes and go watch the tornado, where is it buthead. at the trailer park, dumb ass.
im starting an investment firm. tailored to a specific client base
its called
Under the Bridge Investmments..
its trademarked- just saying
That sounds a lot like my Investment Firm; The Bridge & Tunnel Posse Incorporated
"Where we meet everyone's needs in one place"
Son, did you ever smoke?
Oh, I remember one time, I quit smoking
I quit for three months
My wife left me
So did my children
She took my house and left
It was a mobile home!
Jerry Reed
Another Puff
Those people are scum of the Earth. And I don't mean the trailer park people. Although the trailer park boys have some problems they aren't beyond redemption. The same cannot be said for the financial sect.
I've always wondered why we don't harness the incredible power of tornadoes by putting suitably strong wind turbines around every mobile home park in the central USA, given these parks' irresistable allure to atmospheric cyclonic energy.
Noone would clean the shit off the fans.
Carlyle is a little late. There's a company that's been in the mobile home REIT business for years. UMH (United Mobile Home).
Ricky, Julian, and Bubbles are not amused.
Someone should point them toward all the inner cities Real Estate they can... SNAP up.
Then level the un-salvageable for Tax Credits, and turn it into green space. After the excess inventory is gone and crime reduced (for these dens of 'Hazards'), they get a more stable renting populace in the remaining areas.
It's called opportunity cost. And everyone has it. Your apartment landlord knows the same thing. They raise rent by just under what they think it'll cost you to move. And they know most people don't have the cash laying around to put down another two months and moving expenses.
You insurance company knows this. Your phone company knows this. Your bank knows this.
If you don't switch, they make bank off of you. In fact, they probably make 80% of their money off 20% of their customers. Imagine that. It's like a ratio or something.