Realtors live for Christmas. Park owners live for tax refund time – one of the best moments of the year to sell or rent park-owned mobile homes. Potential tenants have money burning a hole in their pockets, and most park owners are happy to take advantage of that. However, to take advantage of that, you need to have your homes ready to sell, and be running the ads full force, right now. The checks are arriving, and the time to strike is this very moment. We try to make sure that every park has ample signage out front, signs in the windows, a referral letter sent to residents, and ads placed in the largest metro newspaper and Craigslist. If you have homes to sell or rent, then this is your time to shine.
Memo From Frank & Dave
A Farewell To Lonnie?
CREonline, a real estate website that has long promoted Lonnie Scruggs’ book (or is it novel?), has recently removed the forum that Lonnie used to moderate and put up the following comment:
“We want to express our sincere appreciation to Lonnie Scruggs and Tony Colella for their many, many years of contributions to this Mobile Homes Forum and to the CRE Online website.”
We’re not sure if this suggestion that Lonnie has retired is actually true, but since we’ve not heard anything from him in a long time, we’ll have to take their word for it. So what is the legacy of Lonnie Scruggs?
The concept of making money buying and selling mobile homes
Lonnie was an early pioneer of the concept of buying and selling mobile homes for profit. And, to that end, most park owners owe him a debt of gratitude, because every home that one of his readers brought into a park made the park owner probably $20,000 in added value to their community. In fact, Lonnie was so early in his promotion of this concept, that it became known as “Lonnie deals”, in the same way that a copy machine became known as a Xerox machine, no matter who made it. To this day, Lonnie dealers are a sought after way for park owners to fill vacant lots and save themselves thousands in having to bring in their own homes.
A cheap way to spread the word
One of the hallmarks of Lonnie’s work was a cheap price. The book is still sold for around $30. Due to the low price, many people bought a copy as an impulse purchase, and later bought a mobile home or two after reading it. It definitely was the first main-stream product to promote this niche. Could Lonnie have charged more? We’ll never know, but by making the book in the realm of something you’d find at Barnes & Noble, it definitely opened the idea up to more of a mass market than it would have been at a higher price.
The introduction of a lower price point to invest in the affordable housing sector
Mobile home parks have long required significant capital to buy and operate. But mobile homes, under Lonnie’s tutelage, could be bought for maybe $1,000. As a result, people who felt excluded from mainstream mobile home park investing suddenly had a lower cost outlet. Many mobile home park owners, in fact, began as Lonnie dealers and eventually advanced into park ownership.
But there were flaws
We’ve been very vocal over the years in trying to point out the flaws – and the solutions – to Lonnie’s original business model. I, in fact, asked Lonnie about two of the biggest problems at an industry trade show about a decade ago. I was standing next to Lonnie, about to go on stage, and said “Lonnie, how come your book never addressed the cost to renovate the home or what happens when the buyer trashes the place and runs off?” And Lonnie said to me “that isn’t how it worked back in the 70’s when I wrote the book”. And maybe that’s true – the quality of the homes and customers has deteriorated significantly in many markets over the past 40 years. We are so enthusiastic about trying to correct these problems – because the more Lonnie dealers out there the more homes we all get in our parks – that we even built an entire website devoted to analyzing the solutions to flaws in Lonnie’s business model, which is www.MobileHomer.com. If you’ve not ever visited the site, you should check it out.
But all things must come to an end
The challenges to Lonnie’s business model continue, most notably with the development of the SAFE Act. In the future, we see a hybrid of Lonnie’s original model grafted onto all sorts of updated fixes. Like any pioneer, there can be no question that Lonnie was fairly advanced in his thinking at that time. But the original model, as addressed in the original book, cannot go on without serious revision. And apparently, Lonnie is no longer working on that new solution, having chosen retirement instead. So here’s to Lonnie, wherever you are today.
Mobile Home Park Home Study Course
Our Home Study Course is not like anything you have ever listened to or read before. We do not fill it with a bunch of fluff on how your are going to make a million bucks with no money down. We tell you the whole story... the good, the bad, and the sometimes ugly.
Click Here for more information.
Scenes From The Louisville Mobile Home Show
We attended the Manufactured Housing Show in Louisville, Kentucky on January 23rd and 24th. To save you the time and trouble of showing up, here are the highlights from the show.
Interesting Piece Of Mobile Home History Uncovered In Brussels
One of our fellow park owners sent us this photo of an exhibit they found in a museum in Brussels. It’s a Ford Model TT, an early type of RV. Since the mobile home and RV industries shared a common history until the 1950s, this prototype would rank as one of the earliest mobile homes in history. What’s interesting is that I’ve never seen one of these in a U.S. museum. Of course, there’s probably one in our park in Muskogee with a family of 5 in it.
"Introduction To Mobile Home Park Investing" Bus Tour
We are starting a new educational series on mobile home parks for 2013, which will feature a three to four-hour discussion and tour of mobile home parks in a luxury bus. We are hoping that those people who are curious about the industry will take advantage of this to see if it fits in with their goals and expectations, and to learn some basics about the real world of affordable housing. This is NOT a replacement for our Boot Camp (which is 24 total hours+), but a chance for people who have been kicking the concept around of mobile home park investing to see if they want to take it to the next level. It is also ideal for bankers, appraisers, or anyone else who needs a general, correct view of how the business works. We will be doing several of these a year, always in a different location to keep it fair. The cost is only $99 per ticket or $149 for 2 tickets, and we will stop and have lunch together. Of course, anyone who has been to boot camp can come along for free, assuming that there’s an empty seat on the bus. The first event will be in Dallas, Texas on Saturday, February 16th at 9 AM.
Call Kristi at (855) 879-2738 or Click Here For More Info.
A Mobile Home Park Story
Someone in the office recently made note of one of the worst mobile home park names in the U.S. they found this while doing a comp on another park we own. The park is owned by the Roach family, and is called “Roach Court”. Now, you would think that somebody, at some time, would have thought that this was not an appropriate time to include your family moniker. We can only hope that Orkin Estates is just down the street.
Model Railroad Mobile Homes Accurately Reflect The Real Thing
I found these three toy mobile homes advertised on eBay. I was impressed with their accuracy and detail. Of course, to make them truly authentic, I assume the interiors have tiny pizza boxes, beer cans and NASCAR posters, not to mention a big fuzzy blanket of a rebel flag on the king size bed. And, like the real thing, the miniature tenants are late on their rent.
The Market Report
Equity Lifestyle Properties - 70.27
Sun Communities - 74.03
UMH Properties - 13.26