We are seeing as many great deals – maybe more – than we did at this time last year. We have 28 deals under contract at this moment. How is it possible that all the new entrants to the industry have not depleted the supply of good parks to buy at great prices? There are several reasons. First of all, we have a new, solid avenue of deals coming on line right now, and that’s a huge spike in “real-estate owned” or “REO” deals, which are basically foreclosures on borrowers who defaulted on their mortgage. This has increased the pool of parks for sale by a significant amount. Secondly, there are simply not enough buyers in this sector – including the new entrants – to create a seller’s market. Finally, most of the new entrants (from the Carlyle Group on down) like to buy “perfect” parks while we prefer to buy broken parks and fix them. One interesting trend, we have noticed, is the increase in older moms & pops wanting to finally sell after all these years. Some of these folks are people we have been talking to for literally a decade. This is an occurrence that we predicted years ago: the aging of the owners of the parks would lead to an escalation in the desire to sell out and retire. This should make the deals even more attractive and plentiful in the future. What a great moment in mobile home park history!
Memo From Frank & Dave
Why Old Mobile Homes Don’t Die
One of the strangest urban legends out there is that mobile homes have a shelf life. There are some people who are convinced that mobile homes have a finite lifespan until they eventually decompose and you have to put them in the trash can. Of course, the truth is that mobile homes can last indefinitely with routine maintenance. Here’s why mobile homes never die.
Then you cover that in a metal casing
If the materials alone aren’t long-lasting enough, you seal the deal when you encase it in metal. Remember that the older homes – prior to the late 1990s – are metal sided and metal roofed. This makes them potentially longer lasting than the new models. What else can you think of that’s cased in metal and used as a dwelling? Airstream trailers. And most of those are still on the road 60 years later, which is a whole lot more wear and tear than a mobile home that sits in one comfortable spot.
They are no different than single-family – only better on longevity
People always point out that single-family homes are built differently than mobile homes, and that’s why they have longer longevity. Really? What’s the difference? A pier and beam foundation on a single-family home is technically no different than a mobile home up on cinder blocks. And homes on slab foundations have all kinds of foundation issues that render them less likely to survive than a mobile home, unless corrective action is taken. The bottom line is that stick-built homes really have no competitive advantage over mobile homes when it comes to longevity.
But watch out for water
That is, except for water. Moisture is the kryptonite to a mobile home. That’s because the floors, walls and roof trusses are built to minimum standards by HUD, to keep the cost down. So when you put water intrusion in a mobile home, it is much less forgiving than a single-family home on a slab. Concrete does not rot. And the more framing you have, the more that can rot and still keep standing. So if you want to win a longevity award with a mobile home, the key is to keep it dry. There can be no roof leaks, window leaks, leaking pipes, leaking water heaters – it has to be the Sahara desert on the inside.
Contrary to urban legend, mobile homes don’t wear out. They are not disposable. We have plenty of homes in our parks from the 1950’s and 1960’s to prove this (even a few from the 1940’s). There is no scientific – or common sense -- evidence that suggests otherwise. There is no reason to believe that a mobile home park filled with old homes is a time bomb waiting to happen. In fact, those same homes will be there fifty years from now, and in fine shape.
How Refuse Specialists Has Saved Us Thousands Of Dollars, And Why You Are Crazy If You Do Not Get A Free Consultation On Their Services
We got a call from a guy named Jack Johnson about six months ago. He was pitching a new concept to us: a company that would re-negotiate our trash contracts for a part of the amount saved. We are suckers for 100% performance driven concepts, so we gave them our blessing, assuming that it probably would not amount to much. To date, this relationship has saves us tens of thousands of dollars, and resulted in ten times more in additional property value. How do they accomplish this? We still don’t have a clue, other than they really know trash well. If you want them to look at your park or parks, give Jack a call at (817) 525-3241. You have nothing to lose and everything to gain. And it paid off big in our case. Check out this video about their services.
Things You Hear At Mobile Insurance
Kurt Kelley and his staff share various different sound bites you might hear at their office. If you're looking for an insurance agent for your property, make sure to call Kurt's office at 800-458-4320.
How The Internet Has Proven The Correct Name For The Industry
Anyone who has ever surfed the internet, or used Google, knows that what you put in the blank and push “go” is going to determine what pops up on your computer screen. And the study of what is the best way to capture the traffic on the internet is called “Search Engine Optimization” or “SEO”. Since all business today is geared towards the internet, the common terms for every object are already set in stone. Just as “Xerox” became the verb for making a copy, the SEO ranking proves what the name of our industry is, in the opinion of the American consumer. So here are the stats:
Trailer Park - 8,100 Monthly Searches
Mobile Home Park - 1,600 Monthly Searches
Manufactured Home Community - 50 Monthly Searches
Land Lease Community - 20 Monthly Searches
As a result, you can see that the industry can forget about re-inventing itself as “manufactured” or “land lease community”. “Trailer park” and “mobile home park” are the clear winners, and there really is nothing more to talk about. If you are trying to sell a mobile home – or your whole park – you must use the verbiage your customers use. And that course of action is clear.
New Parks for Sale on MobileHomeParkStore.com
Here’s A Mobile Home Park Song For Your Listening Enjoyment
It’s never going to be at the top of the charts, but here’s a mobile home song we found on Youtube that’s not too bad.
Renz And Associates Has Become Our Official Phase 1 Expert
We have used many different Phase I providers over the years. But some recent events have changed our opinion on who the best Phase I provider is, and we want to spotlight some “beyond the call of duty assignments” that have saved the day on some deals recently. One of the most important occurred on a property we were buying in Indiana. The park already had a Phase I that had been done when the owner purchased it and financed it with a well-known bank. However, at the final hours when the deal was to close and be financed by a new lender, a Phase I issue popped up that we had never seen before. A disgruntled former manager of the park had called the EPA and claimed that the park was operating an illegal landfill, in which entire trailers were demolished and buried near a barn. Although the report was suspicious, it had to be substantiated before the deal could close. So Mike Renz immediately went to the subject area and, using a device that he developed, was able to do immediate boring and testing to prove that the claim was a lie. There’s probably no other Phase I provider in America who could do that work, or do it that fast, or do such a good job of it. As a result, we are now using Renz and Associates as our exclusive Phase I provider, and we suggest you look into using them, as well. You can contact Renz at (614) 538-0451.
Join Legacy Housing At There Annual Park Show
Security Mortgage Group Is Our Banking VIP
We did a lot of conduit loans -- and regular bank loans -- in 2013. A common feature of those loans was Security Mortgage Group. If you are buying or financing a mobile home park, let Security Mortgage Group get you the loan. They'll get you better terms than you'll ever be able to find on your own. That's why the win the industry mortgage broker award virtually every year from MHI. If you have any loans you need help on, you can reach Anthony or Gerry at (585) 423-0230.
The Market Report
Equity Lifestyle Properties - 81.87
Sun Communities - 84.68
UMH Properties - 15.65