The mobile home was originally billed as a modern progression of the stick-built home. Then, back in the 1970s, it lost its way. Maybe it was the oversight of HUD or changing demographics, but the mobile home lost its identity and began just trying to look like a cheap imitation of traditional housing. That’s why it’s refreshing to go to the Louisville Mobile Home Show every February, where you can see that the mobile home is now on the rebound and is rapidly catching up with other housing types. It’s remarkable how much advancement has occurred in just the last few years, when top interior designers were engaged to create the “look” of the best of housing. This year, there were even some signs of improvements on the exteriors, which remain the weak spot to the design. If there is to be a new golden age of the mobile home, it will have to come from forward thinking designs that don’t try to copy other housing types but to fully take advantage of what makes the mobile home unique. The current progression of improvement would suggest that, within a few years, the mobile home may once again command the respect of the average American consumer, and open new channels of customers for affordable housing. It reminds us of the Ford Mustang which was a classic in the 1960’s, lost its edge in the 1970’s, and now has begun to recapture its magic. We are definitely already looking forward to next year’s show, and we hope you enjoy our coverage of this year’s.
Memo From Frank & Dave
Lessons Learned From The Louisville Home Show
The annual Louisville Mobile Home Show is like going to fashion week in New York City – while there’s not a lot to be learned from any single product, the overall lessons learned are from the macro viewing of an overwhelming number of similar designs. And this year’s show was no different. The latest in mobile home construction and decoration trends became readily apparent after walking around and through about 50 new homes from a variety of manufacturers.
Vinyl flooring reigns supreme
The first observation from this year’s show is that vinyl flooring – with the appearance of hardwood – has replaced carpet as the flooring of choice in all rooms except the bedrooms (and those may change to vinyl by next year). When I got in the business, you carpeted the home throughout, except for the kitchen and bathrooms. But today’s design looks much better, and is much smarter from a wear and tear standpoint than carpet ever was. The only difference between homes was what color of “wood” flooring. You have to love a win/win, and to make the homes look better and at a much lower cost of operation, then that’s a great thing. No more carpet in the living room and hallways to replace, no more dog urine smells to worry about in between residents. Terrific design improvement.
Greater focus on window treatments
Another major improvement this year was a greater focus on interior window treatments. Each window had full-length drapes and a cornice on the top, color matched to the rest of the unit. Why nobody did this earlier, I don’t know, as you can buy drapes and cornices at a fairly low cost, and it has a dramatic impact. I’m just glad it’s becoming a standard part of design, as it makes the homes look much more finished out. This is another lesson learned for updating the POH that you may already own – you can buy drapery “kits” on-line or at Walmart, and the result is huge bang for the buck.
Kitchen islands are all the rage
After years of absence, the kitchen island is back in full force. The old days in which the kitchen was just a few cabinets and appliances in the corner of the living room appear to be over. The island gives a more substantial kitchen appearance, and also serves as a functional dining table that is low maintenance. Some people may complain that by installing the kitchen island you are “shrinking” the visual size of the unit, but it looked good to me. Again, this is something you can add to an existing POH pretty easily, if it would update and improve the unit.
Irregular interior spaces are on the rebound
Last year there was a general trend to install two door openings and a separating wall between the kitchen and living room. But this year that trend went to the next level, with entire angular rooms popping up in the corner of the kitchen. Most of these were for washer/dryer connections. I think the goal was to break up the “box” appearance of the interior space. Not sure, however, if this is a keeper or not.
Grey is this year’s big color
Grey has become the go-to color for mobile home design in 2017. And I kind of like it. Grey is a very soothing color, and that’s why most hospitals use it throughout. The shades of grey (and there were not 50 shades of grey, if you’re looking for that punchline) were extremely tasteful and looked completely appropriate. Warm grey was found in the “wood” on the floors, the painted walls, the cabinets – everywhere. You could use these same colors in an POH in your inventory that you are renovating and it’s probably a good idea. When I look through Architectural Digest, I see that same grey. Nobody is going to complain.
Accent walls are still in vogue
Accent walls are still a part of 2017 design, but in a more muted way. Last year you could find a tan house with a green accent wall. This year it’s just a slightly darker shade of the color on the rest of the walls. I like the new concept better. It’s more tasteful and makes the room look larger. And the accent wall was missing from about half the homes, so I think it’s on the way out. Again, if you have a POH that is in rehab and needs some punch, then the accent wall might be a good idea. But keep it muted and in the same color palette.
Cabinetry is key
There was a huge amount of improvement in cabinetry this year. In the past, all cabinetry looked like it came out of the el-cheapo section of Home Depot. Now they are putting in much nicer units that are taller and much more “upscale” looking. They also are getting away from the “straight across” banks of cabinets in favor of staggered looks that suggest that it’s not just an inexpensive unit from Home Depot. The cabinets are also no longer painted white, but are of the same wood look as the flooring.
Window boxes and methods to break up the “ends” of the home
Probably the thing I liked the best about this year’s show was found only on a single Clayton home – a white flower box under the window on the end of the home. In most of our parks, you only see that one view of the home as you drive down the street: the end of the home. The flower box gives this single elevation some class and color, and creates a much nicer streetscape. I can imagine a long row of these with a few flowers in them and I think the net effect is a half point lower cap rate on my appraisal. I talked to someone at Clayton and they think they could be made for around $200 each, although they may already be available in white vinyl on-line. Beyond the window boxes, I also liked the end-of-home coach lights and differentiation in color patters – anything to give this one, most visible spot a little life.
The coolest new item at the show
The storm shelter stairs was the most interesting new invention at the show. For around $5,000 the consumer can get stairs on their home that double as a tornado shelter. I was amazed at the thickness of the steel plating on this shelter – I think it could possibly withstand an atomic bomb. While we would not install such an item ourselves due to the cost, it’s the perfect suggestion for the resident that is concerned about where to hide in the event of a tornado, and inside the stair shelter is pretty roomy and has built in seating. These are produced by a company called Survive-A-Storm Shelters.
The Louisville Mobile Home Show features about fifty homes inside a nice, heated building. It can rain, snow or sleet outside and nobody cares (unlike Tunica). You can get a good idea of the latest in mobile home design from this one outing. If you’re nearby next year, you might come by and see for yourself. Or you can just let me do it for you and save yourself a whole lot of time and money.
You Can Still Buy The The 2017 Affordable Housing Summit Recordings
Yesterday we held the 2017 Affordable Housing Summit, our annual review of all the new regulations, opportunities and pitfalls in each sector of the MH industry. It’s 12 speakers plus Q&A with no topic taboo. If you can’t get at least ten good ideas from the Summit, then you must not have been listening. The bad news is that you just missed it. But the good news is that you can still buy the recording of the event. To order the recordings, Click Here.
How Financing Changed The Demographics And Success Of Mobile Home Retailing
The 1954 Spartan is considered the first true mobile home. You can find one in the MH Museum in Elkhart, Indiana, and actually walk through it. It features an aluminum body and hardwood interior. But what the Spartan also featured was what seemed, at the time, very attractive financing. And the difference between the 1954 financing and the modern mobile home banking terms is an interesting piece of the demographic puzzle regarding the financial strength of the MH consumer.
Bigger down-payments resulted in higher demographic customers
The 1954 Spartan cost around $2,000, which equates to around $18,000 in today’s dollars – not that far off the current cost of a mobile home. But the Spartan required a 25% down payment to obtain financing. That means the consumer had to write a check for around $4,500 -- between two to four times as much as the amount on the modern loan. As a result, the demographics of the 1954 customer were much higher, as they simply had to have more cash to make a purchase.
Shorter amortizations created faster equity
The Spartan offered a 5 year amortization vs. the 10 to 15 year that is common today. That means that the home is paid off three times faster. And, as a result, each payment contains more principal going toward the loan. This put the consumer in the position to already have significant “skin in the game” almost immediately. Within two years, they have 50% of the home sales price paid off (remember the 25% down on the front end). This made the consumer a stakeholder in the asset much faster and this would greatly influence their decision to never miss a mortgage payment, or else lose their equity.
Lower default rates in both notes and lot leases
Since consumers had more to lose, they would fight harder not to default. And they also, within five years, no longer had to make a home payment at all, which means that they only had to pay lot rent. One the home payment was completed, there was not place on earth that they could live more affordably, and default was not even an option.
Higher re-sale value due to supply and demand
Since there was such a high bar in terms of cash needed to finance a new home, it made the used home market much more brisk. With few defaults, there were no repo lists to peruse. Based on simple laws of supply and demand, these factors created upward pressure on used home prices, and mobile home parks were not a place for those who had financial pressures, but rather those who could afford a single family home but choose the alternative lifestyle. It’s important to note that in 1954, a stick-built house averaged only $10,950 – not that much more than the Spartan at a 5-to-1 ratio. Today, that ratio is 10-to-1.
Lower loan losses
Because of the strong supply and demand pressures on the used home market, and the fast pay-down of principal on the 5-year note, loan losses on defaulted mobile home mortgages were negligible. That’s why the industry was able to run for decades without financial interruption.
In many ways, the direction of the manufacturing and lending on mobile homes was the direct result of easier financing terms. The way that mobile homes were financed in the 1950s maintained higher demographics and lower defaults. However, times change and affordable housing became the catchword of the industry for the past 30 years. But it was not always that way.
A Primer On Mobile Home Park Offices
It is our policy that every mobile home park must have an on-site manager. So much happens at a park at nights and weekends that traditional 9 to 5 office hours – coupled with offsite management -- do not really work. So if every park has to have an on-site manager, where do you put them? There are several key questions to answer before you can decide.
What’s required by law?
Some states and municipalities may have laws regarding mobile home park offices. This is particularly true if you obtain a dealer’s license to sell homes. So in some states and cities, you don’t really have a choice of what the proper park office will look like: it’s mandated by law. That being said, there are loopholes in almost all of these regulations, and the most common is to simply bring in a small portable building and declare that the office. Talk to your state MHA about the office requirements and see what the options are.
How many homes do you own?
If you don’t own any mobile homes in your park, then the office is really nothing more than a place to drop off the rent. But if you own a significant number of homes, or plan on bringing in homes to fill vacant lots, then the office will be pretty active until you get those sold off and don’t bring in any more. Since most people don’t like having an endless variety of people inside their homes, you are probably going to have to use someplace other than the manager’s mobile home.
Is your manager full time or part time?
In smaller parks in which the manager is part time, you are probably just wasting money having an office that is not simply their home. They will not be in the office enough hours to even justify heating or cooling a separate structure. Only full-time managers warrant a separate space – and even then, not always.
Do you already have a structure that can serve as an office?
One key component is if you already have a structure that can serve as an office. It didn’t have to start off with that intent. We have retrofitted laundry buildings, small apartments, tool sheds, storage units, and even above-ground storm shelters into park offices. So if you already have a structure that is in decent shape, that may be your future office – particularly if it has no other economic use and can’t make any money.
Why not just use the manager’s home?
In many parks, the natural choice is the manager’s own home. After all, some parks have absolutely nothing going on except rent collection on the 1st to the 5th. You can simply put a sign in their yard that says “Office” and you’re good to go. Most managers actually prefer this arrangement as it is the least obtrusive into their lives and schedules – if someone is late they simply watch TV or read a book and are much happier than they would be sitting in a regular office. It’s really a win/win situation, as it’s the park’s least expensive option and also the one the manager prefers.
But never activate the entire clubhouse just for the office space
One place you never want to put a manager – unless you have a giant park that is 4-star or higher – is inside the clubhouse building. Heating and cooling a 3,000 sq. ft. structure is easily going to average $800 per month when you include water & sewer and repair & maintenance. That roughly $10,000 of expense will reduce your property’s value by $100,000 at a 10% cap rate when you go to sell or refinance down the road. Instead, set aside just a small amount of space – like 100 sq. ft. – and heat and cool only that area. It might just be a closet with a separate access door from the outside.
Every mobile home park office should be the product of careful consideration and awareness of rules and regulations. No two parks are exactly alike – and neither is their ideal office arrangement.
Why Mobile Insurance Is The Best Protection At Affordable Prices
Whether you are simply in need of an insurance quote or you have the unfortunate, yet common task, of filing a claim, Mobile Insurance is ready and waiting to take your call. We’ve used Mobile Insurance for over a decade, and their superior service is known throughout the industry. Kurt, the owner of Mobile Insurance, is a top resource for any park insurance question, and they provide free quotes on parks that you are acquiring. That’s why around 2,000 park owners in the U.S. are Mobile Insurance customers.
Mobile Insurance can help you engineer the policy you need to cover all your concerns, and their prices are unbelievably low. Being able to contact them when you need them is just as important. We recommend that every park buyer call them first, as we know of no other group that has the same expertise, quality of service, and low prices. Call them at 800-458-4320 or email [email protected]
Congressman Peter Welch Of Vermont Is Named The MHU Person Of The Year
We announced at the 2017 Affordable Housing Summit yesterday that our 2017 MHU Person of the Year is Congressman Peter Welch of Vermont. Congressman Welch was the instrumental force in the passage H.R. 3700, which gives Section 8 recipients the ability to use their vouchers to buy mobile homes instead of simply renting apartments. We believe that this change in HUD policy, which was signed into law and takes effect by mid-year, will be a game changer for the MH industry and opens up a market of over 2,000,000 potential customers who have never before had the opportunity to become homeowners. We personally believe that this will be a game changer for many properties, and it all ties back to Congressman Welch and his introduction of H.R. 3700.
The Next Mobile Home Park Boot Camp Is In Orange County, CA On February 24th - 26th
The Mobile Home Park Boot Camp is the three-day immersion experience that shows you how to identify, evaluate, negotiate, perform due diligence on, re-negotiate, finance, turn-around and operate mobile home parks – both in the classroom and out in the field inside real mobile home parks. Our next Boot Camp is in Orange County, California on February 24th to 26th. And don’t forget to bring the family, as this year’s hotel is on the ocean and is just minutes from Disneyland.
For more information, visit the Mobile Home Park Boot Camp info page.
Why A Lack Of Self-Confidence Is Continually Hurting Our Industry
Probably the greatest enemy to the growth of the mobile home park industry into a mainstream form of real estate investment is … our industry itself. From proud beginnings in the 1940s as a better form of housing with a chic attitude, the industry has seemed to lose its way and has become more reactive than proactive. Why do so few people have confidence in this industry, and what can we all do to fix that?
Many owners don’t believe in their product
I can’t figure out why every community owner is not proud of their investment. Mobile home parks beat Class B and C apartments every time. Consumers put a huge value in having no neighbors knocking on their walls and ceilings, having a yard, parking by their front door, and having the ability to buy their home. Even if the Class B or C apartment was the same price as the mobile home monthly, they would choose the mobile home. But some community owners think that the only reason that somebody would live in their property is if the price is incredibly cheap. As a result, they set their lot rents and home rents so low that they make no sense at all – for example, lot rents of $125 per month and home rents of $295 per month when apartments are at $900 per month. These prices are reflective of their complete lack of confidence in their product – which is sad.
Many owners don’t maintain their property to a high enough standard
Some community owners have seemingly lost interest in their business altogether. They let the condition of their property dwindle to an embarrassing state of affairs. Broken windows on the clubhouse, graffiti on the stop signs, dead trees, non-running cars, no skirting, trash everywhere – these are caused by the owner’s lack of interest or confidence in the finished product. This decline did not happen overnight, but the good news is that it can be fixed quickly once the owner has pride in their property. The saddest examples are when the residents demonstrate pride of ownership, but the common areas are what are dragging it down.
The industry never talks or fights back
The folks at MHI – the industry lobby group – are nice people, but what’s with the concept of silence is golden? Negative articles on the industry are met with “no comment”. Positive news opportunities are met with “no comment”. I’ve never seen anything like it. Back when I owned my billboard company in the 1980s and early 1990s, our industry lobby was the OAAA and they prided themselves in aggressively attacking any group that spoke out against us, and to do constant public awareness campaigns on the benefits of billboards to the community at large. Right now, we’re the only people that will even talk to the media – such as the 2014 New York Times article, Bloomberg, etc. – and that’s pathetic. When you refuse to talk it looks to the public like an admission of guilt, and when you refuse to promote your product it looks like you are embarrassed by it.
Bringing pride and confidence back to the industry
So how can you instill pride and confidence back into the MH industry – and not take decades to do it? Here are some ideas:
- Get HUD to enact H.R. 3700 and start letting people use Section 8 vouchers to buy homes. This will result in the government having to finally produce a Fair Market Rent (FMR) report on mobile home park lot and home rents and, we believe, that will set market rates significantly higher than they currently are. No longer will park owners choose rents in a vacuum, but with the implied support of HUD, just like a Kelly Blue Book of park rents (and exactly how the apartment industry has been doing it for decades).
- Continue the trend of new professional buyers to take over the reign from the moms and pops which will, in turn, infuse higher rents and better rules enforcement and common area maintenance.
- New loans on these newly purchased properties will inject even greater scrutiny over property condition to meet lender requirements.
- Let mobile home design continue to improve and attract new, more upscale customers. Meanwhile, the new lending programs, such as CASH, will allow park owners to fill vacant lots with nice new homes, which will change the demographics of all parks’ tenant bases.
These things are already occurring, so basically to instill the sense of pride in the industry that it deserves, we just need to let the consolidation of the industry continue from moms and pops to professional investors. However, there’s still the issue of having no industry lobby support. That’s why we will continue to talk to the media, rather than be silent, as even one positive story will improve the perception of this sector. We are also working on some new initiatives, such as making a database of owners who have pride in their properties giving tours on video, which can be used for a public relations effort. We’re even entering a film into the Telluride Film Festival called “The Truth About Trailer Parks” to try to educate the public. But everyone needs to be active regarding promoting the industry. Give people honest answers and take advantage of every public relations opportunity.
We have a great industry and offer an amazing product at a low price – the definition of the late Steve Job’s concept of an “insanely great” value. Our real estate sector needs more pride in what we do. In many cases, the thing that is holding us back is simply … ourselves. Let’s end that nonsense in 2017.
A Story About Dave DiMarco
The best corporate lawyer we have ever used is Dave DiMarco at Woods Oviatt Gilman, LLP. We have used him on virtually all of our conduit loans, as well as traditional bank loans. What we love about Dave DiMarco is that he knows what we are trying to accomplish (get the loan closed quickly and inexpensively) and he can quarterback the situation and push it to the goal line without us having to bug him or worry about our progress. Here’s a story that illustrates why we use Dave Dimarco.
A few years ago we bought a mobile home park and, after turning it around, went to refinance it into conduit debt. Everything looked great until the lender’s counsel found a minor problem with the title: a city street that fed into the park actually belonged to the park and not the city. On top of that there was around 16 square feet of land that the park owner had not obtained an easement for 40 years ago, and that made one side of the city’s road in jeopardy. Now, the whole situation was ridiculous, as the city itself was adamant that they owned the street. In fact, state law mandated that, under adverse possession, they had owned the street for decades. It even showed as the city’s street on the street map. However, the impossible-to-please lender would not move forward unless we could obtain a letter from a judge stating that the city owned the street – which could take months or years. So Dave DiMarco ran out and located the owner of the 16 square feet, initiated negotiations, and we bought the easement. It saved the day on that loan. No other attorney on earth would have taken that outside the box effort. We knew then that Dave Dimarco was our man.
If you need service like that, then consider using Dave DiMarco on your next transaction. You can reach him at (585) 987-2833. And, yes, he’s the brother of Anthony and Gerry DiMarco – the #1 mobile home park loan brokers in the U.S. This is a family that definitely shapes the industry.
How To Juggle A Day Job And Owning A Mobile Home Park
Most mobile home park owners have day jobs. Their mobile home park is an investment and hedge against an unstable world, but it must not detract from their profession. So how do these owners manage to successfully juggle their professional life and park ownership?
The first step is to acknowledge that the key to time management is to work smart. It’s shocking how much time you waste if you don’t know what you’re doing. Get educated. Understand what the drivers are to profitability. Know what to worry about and what to let go. One of the worst offenses that park owners make is to visit the property too frequently. Only go to the park when you can impart value add, not just to make sure it’s still there. If that’s all you want to accomplish, then mount a camera on a pole and look at the park whenever you want from your laptop.
Adhere to systems
There are basically four drivers to park performance: 1) collections 2) occupancy 3) water & sewer and 4) property condition. Then there are systems to ensure that these systems are in good working order, such as “no pay/no stay” on collections and “no play/no stay” on rules. You have to embrace the concept of rigidly following systems if you want to make your time really count.
One of the greatest developments of the past two decades has been the internet and smart phone. It’s amazing how much easier it is to juggle time today than in the past. Rather than drive your park, you can have the manager do it with an HD video camera and email it to you. Rather than inspect that paint job on a home, you can have the contractor text you a photo from their smart phone. Between email and voice mail, modern technology makes park management take a fraction of the amount of time that it did in the old days.
Avoid buying parks that are time killers
With all that being said, one of the worst things you can do, if you are juggling your time, is to buy parks that are “time killers”. These type of properties include those with private utilities, master-metered gas or electric, and lots of park-owned homes. When your tenants own their own homes, for example, you don’t have to mess with advertising, home clean out, home renovations, showings, and the like. One is simple and the other is a time disaster. Choose your parks wisely and you will gain huge time dividends.
Hire a good manager
The parks that we spend the least time on, out of our portfolio of over 250, are those that have the best manager. There’s no question that a good manager is an important key to minimizing park time requirements. They need to be your eyes and ears in the field, to save you from having to be there. They need to be able to resolve minor problems without your involvement, to proudly promote the property to potential residents, and to set the example for all other residents to follow. If you spend extra time selecting and training your manager, it will pay huge dividends in time reduction on operations.
You can definitely juggle a full time profession and ownership of a mobile home park – whether it’s one property or a portfolio. You just need to approach it the right way and make time a priority.
Why We Love Clayton’s CASH Program So Much
As many people know, we are the largest users of 21st Mortgage/Clayton Home’s CASH program in the U.S. We have around 1,000 homes in our parks under this initiative. So why are we such huge fans of CASH?
- It allows you to fill your vacant lots with no money out of pocket.
- You are not the home owner: the customer is the buyer and 21st is the lender.
- 21st Mortgage handles all the paperwork, so you do not have to be SAFE Act licensed.
- 21st does a terrific job of screening applicants, and has very low defaults.
We’re not alone in our excitement for this program, as the number of homes ordered under CASH has more than doubled this year from a variety of park owners, both large and small.
For more information on this program, call Candice Doolan at 800-955-0021 ext 1735 or email her at [email protected].
Dwell Magazine Is Warming To The MH Design Model
We could not help but notice this magazine on the rack at the airport. Here’s Dwell Magazine including mobile homes in their design admiration. Of course, they can’t say mobile home, so it’s titled “pre-fab” but the photo demonstrates what is basically a single-wide. This would be a great example of how our industry needs a major label change that has nothing to do with manufacturing or mobile – those are not terms that turn on consumers. Pre-fab is a crossover term because many single-family homes now use pre-fab components. The definition of pre-fab is not glamorous, but the word association is better than “manufactured”, since anything the industry can do to “feel” more mainstream is a plus in a world where our product has a decades-old stigma.
The Most Important Members Of Your Mobile Home Park “Team”
The Super bowl is this coming Sunday. It’s a battle of two top teams where every single player is vital to the overall success or failure. You mobile home park “team” is not as large or glamorous, but it will still have impact on your financial success and failure, or at least your mental state. So who are the top team members you need to focus on?
The property manager
The property manager is like your quarterback. You simply cannot win if this individual is weak. If you only had the time to properly select one team member, this would be the one. If the park is too small to hire from outside the property, then seek those residents with the nicest yard, home and car. These are the folks that have the most stable lifestyle and set a good example for the rest of the community. If you are hiring from outside and importing the manager into your community, then make sure you have selected someone who shares your morals and vision and will interact well with customers.
The roto-rooter plumber
Of all the repair and maintenance calls you will receive with your park, by far the most common is a clogged sewer line. This is a result of having a tenant base that cooks with a large amount of grease and pours it directly down the drain, coupled with having non-working garbage disposals. So you really need to select the right roto-rooter plumber. You need someone who is licensed and insured. And you need someone from a huge company with 24/7 service. Even though that one-man-shop guy Larry may seem like the perfect choice at Larry’s Plumbing, he’s not going to show up on Christmas Day or Thanksgiving, and those are the two most common days for clogs. In addition, Larry is going to be on a different job when you call, and you can’t wait when sewage is running down the street. Select a big company that can get the job done 24/7, even if it means paying a higher price (you’ll be happy to pay more when there’s a problem, believe me).
The evictions attorney
Filing evictions is a part of life when you own a mobile home park (or any type of housing). But in many courts, your park must be represented by an attorney (or it may just be more economical to do so). So how do you choose the correct attorney? You need to find a true “collections attorney”, which is someone who does nothing but evictions. Every market has a couple, and your best way of finding them is to call the other park owners and apartment complexes and see who they use. It will always boil down to one or two people that everyone uses. The key to using a collections attorney is simply one word: cost. A collections attorney has a flat rate per case of maybe $200, while a normal attorney might charge $2,000 for the exact same job.
Before you ever close on a mobile home park, you have to have a system to produce 100% accurate financial statements, as well as to properly record which customers paid and to pay the bills. If you do not have the capability of doing this yourself using QuickBooks and Excel, then you need to find someone else to do the job. One good source, in our experience, has been someone who has worked at an accounting office but is now retired or staying at home and want to learn some extra money on the side.
The municipal attorney
This may not be a team member that you ever need, but you need to be ready if you do. It is not uncommon to have a city declare that you can’t use your vacant lots. This is in violation of your rights as a property owner under that law known as “grandfathering”. When a city tries to deny your rights, the only solution is often to bring in a “municipal” lawyer – which is basically a lawyer that specializes in suing cities. You can find them by calling large law firms and asking if they have a municipal attorney. Every large market has a few. From this list of candidates, you are hoping to find one that has sued this exact city before (and hopefully won). This person will have no shortest learning curve, because they already know the city’s attorney and how the system works. We own over 250 mobile home parks, and we have never had to go to court to obtain our rights – the city always backs off when the municipal lawyer calls. Is that because our lawyer is so highly feared? No. It’s because the city does not have a shred of hope of winning in court, and they know that. Around seven states so far have taken mobile home park grandfathering cases to their Supreme Court, and the park owner has won every time. The score is 7 to 0. The most recent one was the State of Mississippi, and prior to that the State of Missouri. You can Google them up and read them. And so can the city that is fighting you.
The most important member on your team is, of course, yourself. So you need to make yourself the best park owner that you can be. Read constantly. Take notes of lessons learned. Stay on top of your park’s vital signs: collections, occupancy, water & sewer and property condition. Be enthusiastic about making the property the best it can be – and the most profitable. Be demanding of the other team members and yet don’t run them off. Join your state MHA and get active. Become an expert who can give the rest of your team good advice and support.
The Super Bowl features two terrific teams battling it out for a giant trophy. You need to create a great team of your own, and your success will be shown not with a giant trophy but greater net income and less stress.
Why Mike Renz Is The Only Name You Need For Phase I Environmental Reports
You can’t buy a mobile home park without doing a Phase I – you could lose everything if it turns out to have environmental pollution on it. So who do you choose to do the report? We choose Mike Renz. Mike is the consummate professional and his range of knowledge is unparalleled. Here’s an example. We were buying a mobile home park and it failed the Phase I. Most people would have given up, but Renz knew that something did not seem right. It seems that a disgruntled manager had called the EPA and claimed that the owner had been operating an illegal land fill at the back of the property, yet Renz saw no evidence of this on aerial photos. So he did some quick borings and found the claim was a lie and the EPA removed it from their database. Case closed and park purchased. That’s the reason that we refer so many people to Mike Renz. Have you ever seen the “Beard of Knowledge” character on the show Pawn Stars – the guy who is a walking encyclopedia of all trivia? Well, for environmental issues, Mike Renz is that guy.
You can contact Mike Renz at (614) 538-0451.
The MHU Investor’s Club Classified Ads
To advertise here, you must be a member of the MHU Investor’s Club which is a program available to our Mobile Home Park Boot Camp and Mobile Home Park Home Study Course customers. Contact us for more information.
Security Mortgage Group Is The Premier Loan Broker For Mobile Home Parks
We do a lot of conduit loans -- and regular bank loans -- every year. A common feature of those loans is Security Mortgage Group. If you are buying or financing a mobile home park, let Security Mortgage Group get you the loan. They build the loan package, they pitch the banks, and they bring you the best options. It saves a ton of time and energy, and the rates and terms they find are always better than what you can obtain on your own – they effectively more than pay for themselves. If you have any loans you need help on, you can reach Anthony or Gerry at (585) 423-0230. Tell them Frank & Dave sent you.
The Market Report
Equity Lifestyle Properties - $85.7272
Sun Communities - $88.295
UMH Properties - $16.955