Nothing against trailers parks or the business model, but this liquidity party is getting seriously out of hand. When hedge funds are starting to invest in Trailer Parks you know that all other asset classes have been driven to the moon.
Dan Weissman, who previously worked at Goldman Sachs and a private hedge fund, now owns five mobile home parks. “The greatest part of the business is that we go to sleep at night not ever worrying about demand for our product. It’s the best decision I’ve ever made,” he tells Bloomberg Markets.
If you watch the video, the talking head asks “Should I buy a distressed trailer park for $280,000, is that a good investment?” (WTF?) Yes, she should buy one. Unbelievable. I can’t wait until this FED induced liquidity party meets its disastrous end so we can all go back to productive economic endeavors as opposed to speculating in trailers parks.
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The Next Hottest Hedge Fund Investment? Yep, Trailer Parks Google
Breakout: You won’t believe this hot new investment ‘vehicle’
Some of Wall Street and Silicon Valley’s best minds are packing it all in for greener pastures. And they’ve found those pastures in…trailer parks.
“Trailer parks have unusual economics,” says Anthony Effinger, the author of an article on the topic forBloomberg Markets. “It’s a supply and demand curve that’s super attractive to investors.”
There certainly is demand for trailer homes—they’re often the cheapest form of housing which means a lot in an economy with ever-growing wage disparity. The supply of designated trailer parks is also quite low because, “nobody wants a trailer park in their town or county,” says Effinger.
Dan Weissman, who previously worked at Goldman Sachs and a private hedge fund, now owns five mobile home parks. “The greatest part of the business is that we go to sleep at night not ever worrying about demand for our product. It’s the best decision I’ve ever made,” he tells Bloomberg Markets.
“What’s at work here,” says Effinger, “is the shrinking middle class.” People with bad credit and criminal histories are often unable to rent or buy homes, and are forced into trailer parks—where owners are usually willing to overlook credit and criminal activity.
It’s not all a walk in the park. Investors go into these parks and often have to fix decrepit homes, deal with criminals, and in some cases even meth labs.
“There are so many people crowding into technology,” says Effinger. “They’re all super bright, everybody’s making a new app for the iPhone and in New York there are super-talented MBAs scrambling for a limited number of financial jobs…what these guys wanted was something where they didn’t have to bump up against those folks.”
They’re willing to enter a hairy industry to avoid that competition.
So should you look to invest in mobile homes? “I suspect you’d need a lot of patience and a lot of time to deal with some of this stuff,” says Effinger.