
The Mobile-Home Trap (2015) - simonebrunozzi
https://www.seattletimes.com/business/real-estate/the-mobile-home-trap-how-a-warren-buffett-empire-preys-on-the-poor/
======
hprotagonist
Resident Owned Communities ([https://rocusa.org/](https://rocusa.org/)) are by
far the more human option here.

"your home that you own depreciates like a car and you merely rent the land
under it and we can raise the rent whenever we want" is a crock, and needs to
end.

Resident cooperative ownership of the land is superior in every way, and
Buffett should honestly be ashamed of himself for playing this game.

~~~
ip26
_" your home that you own depreciates like a car [...]" is a crock_

I agree the organizational structure of it all can lead to some very bad
outcomes, but it's not some grand design that a mobile home depreciates. It's
a material good, it wears out. The only reason e.g. a SFH appreciates is
because the land is appreciating faster than the structure is depreciating.

~~~
DubiousPusher
The value is also affected by perception. Older mobile homes were built with
materials and processes that made them more difficult to update and maintain
than site built homes. I believe this is largely not the case anymore but the
idea that a mobile home has a shorter life span persists.

~~~
yardie
Older mobile homes turned to kindling during extreme weather. Newer ones are
built much better because now there are building codes they have to meet. But
reality is you pay for what you get.

Newer mobile homes are treated like custom homes. Including being cemented to
the floor, permanently. They cost more, mortgages are larger, so banks treat
those homes as permanent. Going so far as making sure the undercarriage is
completely dismantled and removed. If the owner defaults bank employees have
shown up to take possession only to find an empty lot!

------
burger_moon
Followup article [1] in response to berkshire's response [2]after the article
was published.

[1] [https://www.seattletimes.com/seattle-news/times-
watchdog/a-l...](https://www.seattletimes.com/seattle-news/times-
watchdog/a-look-at-berkshire-hathaways-response-to-mobile-home-investigation/)

[2] [https://www.omaha.com/clayton-homes-statement-on-mobile-
home...](https://www.omaha.com/clayton-homes-statement-on-mobile-home-buyer-
investigation/article_7052e0c4-da3b-11e4-8abd-5f0b53380837.html)

------
MoveMyMobile
I've been a real estate broker specializing in this property type for 5 years.
I've noticed the trend of large private equity companies like Blackrock buying
mom and pop parks and raising rents or redeveloping the property leaving the
tenants out in the cold. The cost to move a mobile home is on average $5k -
$20k forcing many tenants to abandon their homes. I have a small startup
called movemymobile.com that addresses this issue. We currently are finishing
up our MVP and should be done within two months.

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mercwear
John Oliver (love him or hate him does not matter!) did a video on this issue
a while back: [http://time.com/5565832/john-oliver-mobile-homes-last-
week-t...](http://time.com/5565832/john-oliver-mobile-homes-last-week-
tonight/)

The TL;DR is owning a mobile home but leasing the land (lot) underneath it is
a very bad idea and will most likely harm you financially.

More detail: Large funds are buying up mobile home parks and increasing the
monthly rent for the lot. Since a mobile home is not really mobile (watch the
video) the person living there is trapped. The fund wins even if the resident
leaves because they can take ownership of the home and lease it to someone
else.

~~~
fjsolwmv
There are a million ways poor people suffer for being poor. In my opinion
cataloging all million is less useful than working to acquire and protect
wealth, by fighting against (and seizing the resources of) the powerful forces
that array against them. Onesie twosie banning specific exploitations is not
scaleable, and the powerful forces will quickly move in to find other ways to
pick pockets to the bone.

~~~
MoveMyMobile
There are free market solutions to the problem with mobile home parks. Even
from an economic standpoint there is a huge inefficiency in the industry to
the benefit of the landlords.

------
alkonaut
Out of curiosity, when the fed rate is almost zero in the US what’s a really
good rate for a loan there? These subprime mortgages which offer double digit
interest rates even _with_ collateral seem pretty extreme. Being poor must be
expensive...

~~~
astura
Here's some historical data:
[http://www.freddiemac.com/pmms/pmms30.html](http://www.freddiemac.com/pmms/pmms30.html)

~~~
alkonaut
Ah. They are fixed long term, that explains the huge margins. Here we do
3-months mostly so the lenders risk in terms of future costs of their
borrowing is near zero. That’s why my rate is e.g 1.3%. I have part of my
mortgage fixed at a 2y interest rate but I wouldn’t want to fix it longer (and
I would hate to have pegged my rate pre-2008 to some interest rate based on
the expectation of inflation from back then)

------
duxup
Kind of a bummer to see this as I semi rural town with several mobile home
parks. They were good places where folks could buy an affordable place rather
than rent, and then move up if they could do so later.

~~~
zanny
Thats exactly the trap, though. You are renting and owning at the same time,
which is the worst of both worlds - you are more stuck than any average renter
because you have this depreciating house on top of land you don't own that is
incredibly expensive and time consuming to move and you have no power to ever
really move up and just sell the home because its contingent on finding a
buyer who is also willing to agree to the rental terms and the landlord has to
approve of the new renter before you can sell.

Almost every time it ends up being a rental park where the tenants paid
dramatically more into it and can be held partially liable when they leave for
huge sums of money they get no value out of. Its externalized costs of
constructing apartments if anything.

~~~
MoveMyMobile
Zanny,

I am working on a startup to change this. Although the cost to move is
extremely expensive, a knowledgeable tenant may find the competing park down
the street will cover the cost of the move. I know this does not change their
situation of being in a mobile home park but it gives tenants options and
forces mobile home parks to compete.

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test6554
Anyone living in a mom and pop mobile home park should seek to lock their
rents down contractually even if they end up paying a little more per month
now.

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martin_henk
Sounds like a good old japanese zaibatsu.

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stcredzero
It seems that this would apply to the Tiny House movement as well.

~~~
simonebrunozzi
Most of the time these are not in mobile home parks.

~~~
stcredzero
However, it would apply if the residents were renting the land.

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diebir
Sorry, what is mobile home? A trailer in trailer park?

~~~
PhasmaFelis
Sometimes, but in this context it means a smallish semi-permanent house that's
built at a factory, then transported to a site on a flatbed truck. They can be
moved, but they usually aren't.

------
jamestanderson
This was recently featured on Last Week Tonight with John Oliver [1] which
also does a good job of covering this issue.

[1]
[https://www.youtube.com/watch?v=jCC8fPQOaxU](https://www.youtube.com/watch?v=jCC8fPQOaxU)

------
idreyn
Is there any billionaire out there whose gains prove not to be ill-gotten if
we look close enough?

~~~
tanseydavid
> Is there any billionaire out there whose gains prove not to be ill-gotten if
> we look close enough?

This arbitrary and dangerous thinking.

But if you really feel like it by all means start looking closely at as many
billionaires as you can identify and prove that each of their gains were ill-
gotten.

Just please avoid the generalization.

~~~
max76
I think the question "Is there any billionaire out there whose gains prove not
to be ill-gotten" is a good question to ask.

There are over 2000 billionaires in the world, and rich people often pay extra
for privacy. Learning about all of them isn't a small feat. It's good and
proper to have public discussion about such questions before entering
research.

~~~
toomuchtodo
I would contribute towards crowdfunding for investigative journalism to dive
into the finances of billionaires, with the caveat that I'd expect any
whistleblower or other awards for finding wrongdoing would be invested back
into the enterprise.

