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January 1st, 2014

Memo From Frank & Dave

If you haven’t done it already, it’s the time for laying out those New Year’s Resolutions. We do extensive goals on all levels at this time of year – both business and personal. We look at goals as a roadmap that gets us from where we are to where we want to be, as long as we stick with the map. They also allow us to see where we have deviated from the plan, and to what degree, so we can make adjustments to get back on track. It’s very hard to get anywhere without a written, detailed plan, and all successful business endeavors share a strict adherence to goals. If you have not made your goals for the year, then there is still plenty of time. Take out a sheet of paper – or our laptop – and start today.

How Conrad Hilton’s Story Relates To Buying Really Small Parks

If you ever want to see Conrad Hilton’s first hotel, it’s called the Mobley Hotel and it’s located in Cisco, Texas. These days it’s the Chamber of Commerce building. The hotel is not much to look at, and it never was much of a money maker. But it launched Hilton’s career. However, the important chapter of the story is not this hotel itself, but how it altered Hilton’s business model. And this story has an interesting relationship to the concept of buying a tiny mobile home park.

How the Mobley Hotel was like a small mobile home park

The hotel is not very big. You might be able to live off of it, but not well. It’s very similar to a park of 10 to 20 lots in size. You have all the headaches of owning a much larger park, but at the end of the day the numbers don’t seem to really compensate you for the trouble. Hilton lived off this hotel with his parents, but it was only on a subsistence level. If the Hilton family was ever going to have a more comfortable existence, something had to change.

The quote that changed it all

Hlton’s mother sensed his waning enthusiasm, and frustration, that he could never accomplish much with this small hotel. So she told him “if you want to launch big ships, you have to go where the water is deep”. In other words, if you want to make big money, you have to get involved with a bigger metropolitan area and a bigger hotel. It also meant that he’d have to take greater risk, as deep water is a lot easier to drown in than shallow. After his mother urged him to go after bigger hotels in bigger markets, he took the gamble and the rest is hotel history. The same is true with mobile home parks. If you want financial security and the ability to make a million dollars, you can’t do that with a 15 space park. You’ve got to go where the water’s deep. There’s no comparison between the financial potential of a small park in a small town and a 100 space park in a big city – yet it take about the same amount of time and energy to manage both.

Conclusion

There’s nothing wrong with small parks. I’ve owned a 15 space park, and Dave’s owned a 10 space. But if you want to really create wealth, you’ve got to “launch a big ship” and “go where the water’s deep”. If you need to test the waters with a small park, then that’s fine. But once you’ve learned the ropes, move on up to a larger park in a larger market. And that will allow you to build your own legend like Hilton.

Can Affordable Housing Lift It’s Image Higher In 2014?

“8-Mile” staring rapper Eminem was probably the highest grossing movie in history to feature scenes in a mobile home park. However, the image of affordable housing has come a long way in recent years, mostly as a result of the continuing decline of the American economy, coupled with a realization by the media that mobile home parks offer a safe, practical alternative to the American dream of home ownership. 2013 saw positive articles on mobile home parks in USA Today, the BBC News and the Wall Street Journal. Additionally, there were complimentary articles in Dwell Magazine and even Town & Country. So what will 2014 hold? We think that the positive press will continue – maybe even accelerate – as the media finds mobile home parks to be a novel topic that interests readers and plays into the big topic of how America is changing in light of lower incomes and higher unemployment.

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.

We Are Introducing A New Program In January
Which Was Built 100% On Popular Demand

We have kept a running list of requests from those who have attended Boot Camp on what we could provide going forward to improve the odds of finding the “dream” park. Some of the requests seemed impossible, but we wrote them down, all the same. Then, about a year ago, Brandon started to think about how we could bring the best of the requests to life. As a result, beginning in February, we will be bringing out a new program derived from these 20 requests, which is designed to give you an advantage over the competition, and to accelerate your search for the perfect park to meet your goals. We will be unveiling this permanent addition to our arsenal in the weeks ahead, beginning with a webinar on what the program is and how to use it effectively, so watch for the announcements.

Kurt Kelley Is The Only Resource You Need For Insurance

We use Kurt Kelley for everything -- from quick estimates on parks we're buying to random questions on how to mitigate risk and, of course, carrying the insurance on every park we own. That's not only our opinion, but that of most of the larger park operators. If you need insurance -- even just pricing on a park you're buying -- then call Kurt. If you want high prices, sloppy service, restricted coverage and low levels of expertise -- then call somebody else.

If You Missed The Frank & Dave Christmas Show,
It’s Now Available To Watch Online

Sure, Christmas is over, but it’s never too late to have some laughs and hear some interesting mobile home park concepts. From a list of who’s naughty and nice in the industry, to some trailer park-style Christmas tunes, you’ll learn a lot and have a good time. This year’s show features not only Frank & Dave, but a bunch of guest starts that stopped by to give their opinions, too. So don’t miss out on this once-a-year entertainment bonanza. You’ve still got some eggnog left over, so pour a glass and watch the show -- you know you really want to.

Watch The 2013 Frank & Dave Christmas Show

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.

Filling Your Vacant Lots Just Got Easier With The Legacy Park Finance Program

Legacy Mobile Homes

Most mobile home park operators have vacant lots to fill in their parks. They know they have the demand to fill the homes, and they know that they can get enough in rent to cover the costs. But the problem is financing – nobody carries the paper on the homes so you have to come out of pocket 100%, right? Well, that’s not the case anymore. Legacy Homes has brought out a new Park Finance Program that allows you to buy homes to fill your lots directly from Legacy, and they’ll finance 70% of the cost of the home including installation. We think that this will be a game changer for many operators, as they have been dreaming of a dependable financing source for their home purchases. And the Legacy product is outstanding as a home – nice floor plans, attractive colors, and great low pricing. We have been customers of this program from day one, and are excited that Legacy is now offering this program to all park owners, large and small. If you are interested in it, call Mark Ledet at Legacy at (786) 785- 9827, or contact us for a reference. We’re one of their largest customers.

The 2014 Summit On Affordable Housing Will Give You A Clearer Picture On What Will Be Changing In The Mobile Home Park Industry In The New Year

If you are fine-tuning your business plan for 2014, then you don’t want to miss the 2014 Summit on Affordable Housing. This is something that we held in Anaheim, California years ago, and that we’re bringing back as an annual event going forward. It’s going to be a virtual convention. You can watch it live and ask questions live, or watch it recorded at your own pace. It will be 6 hours in length, and feature lectures by many industry experts.

The purpose of the Summit is to make predictions for what will happen in the New Year, to point out what the opportunities are to harness these market forces, and concepts for making more money with mobile home park investments. Each lecture will be followed by a question and answer period in which you can ask the speaker any question you like.

Watch for the formal announcement of the Summit in the next few weeks.

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

Mobile Home Park Stocks

Equity Lifestyle Properties - 70.27

Sun Communities - 74.03

UMH Properties - 13.26


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