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November 1st, 2012

Memo From Frank & Dave

Our Certified Community Manager course is finally here! This course has taken longer than any prior endeavor to produce. One of the reasons? This was built for our own internal use, and we had about 20 chefs in the kitchen. But we think the final product was worth waiting for. The new Certified Community Manager course will allow you to remotely train your manager, and then empower them to do a better job with a non-stop series of continuing education and motivational seminars. The purpose is to not only get the manager off on the right foot, but to spur them on to do the best job that they can do. It’s also to keep you from having to drive or fly out, check into a hotel, train the manager for two days, go home, miss your kid’s soccer game, get your spouse mad, and then be terrified that the new manager will quit or get fired and you’ll have to go out there again. Since the manager is, by far, the most important person on your team in the field, putting extra emphasis on their training and morale will pay huge dividends in better park performance and profitability.

How I Came To Appreciate Managers And Why You Should, Too

Of the many things I’ve learned from hanging around Dave, one of the most important is the relative importance of mobile home park managers. As you know from my earlier books, I have always held the manager in the same regard as a chimp in the zoo. However, I have learned that my low opinion of the species – however accurate it may be in some parks and areas of America – is still a poor attitude on my part, that actually is bad for business. My consistent negativity on this subject is simply not productive and needs to be conquered by all park owners. In addition, I have learned that not all managers are created equal and, with proper training, a marginal manager can be made great. I have also learned that geography has a huge part in the performance of the manager and the residents, in general.

As long as you have to have them, you might as well give it your best shot

When I invented the name of “greeter” to describe the warm body you pay to be on-site, yet is devoid of any real manager duties, the failing of my concept is that you can never truly eliminate the position. So as long as you are stuck with managers, why not do your best to make them as good as they can be? One of my favorite slogans from the civil war is “the best chance you have at success is to put your bayonet on and run screaming at the enemy”. In other words, give 110% to anything you do, and the odds are more in your favor. But I was too resigned to the fact that my old managers were morons and, rather than try to work through their weaknesses, I just assumed the worst and moved on.

Proper training in essential

One problem I always had with my managers was that I disliked every minute of the personal interaction with them. I wanted them to know what to do, but I hated to be the one doing it. I remember one time when I was having lunch with my new manager at Pancho’s Mexican Buffet in Oklahoma City, and all I wanted to do was get up and walk out. I hated the food, hated the whole process, and just wanted to go home. I knew that, here I was wasting a couple days with this person who would probably not work out and I’d be firing in 60 days, and I was missing out on lots of things at home that were of much more interest. Because of the poor training interaction, my managers had no idea exactly what I wanted them to do. To fill that gap, I’d do almost everything myself. I still don’t want to train managers, but I’m more aware of the necessity of the process. You cannot expect people to do things that they were never trained to do. If you dislike the training process as much as I do, you can soon just train your managers with our new Certified Community Manager Training Program, and stay at home. Or you can go spend a day at Pancho’s – the choice is yours. But it is imperative that you teach the manager exactly what you want done. You cannot skip the training process and expect good results.

Keeping the manager focused and motivated is equally important

McDonald’s spends a lot of time and energy in motivating their employees. All of the most successful businesses in the U.S. do so. But mobile home park owners have a different approach: ignore the manager and give them not one motivational accolade. This results in a manager who thinks “it doesn’t matter what I do, nobody cares”. This is not good for your business. I was as guilty as anyone of making no attempt to spur morale. I would call managers that were doing poorly constantly, and ignore the ones that didn’t have a crisis. I now know that you are making a bad decision if you do not keep your manager’s spirits high. By keeping the manager in good spirits, you will get better performance and a more positive attitude, and that will filter down through your entire park. If you can’t spend the time to keep your manager pumped up, then let the Certified Community Manager Program do it for you. But you need to be doing it, one way or the other.

The impact of geography

One of the biggest lessons I’ve learned from Dave is the difference in how managers (and tenants) perform in different parts of America. What doesn’t work in Oklahoma works all day in Wisconsin . My original portfolio was only in four states: Texas, Oklahoma, Missouri and Louisiana. Our current portfolio is in 17 states. I now have seen first-hand the importance of location, location, location. What I’ve found out is that managers in certain parts of America actually work quite well, and are almost of a different species than the others. When I talked poorly of managers in the past, it was based on my experiences in just those select areas. What I’ve found is that those assertions were not true based on a larger footprint, any more than you can say that the U.S. is 100% flat because you’ve only been to Kansas.

Conclusion

Training and motivating managers is difficult, but absolutely essential. Treating them like lesser members of your team is stupid and counter-productive. If you want to make your park as profitable as possible, then you need to appreciate the role of the manager and put in the effort accordingly.

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See What The Industry Looked Like In The 1950’s

I recently found a copy of the 1953 movie “The Long, Long Trailer” starring Lucy and Ricky Ricardo. I had heard of this movie, but had never actually seen it. I was amazed at the wealth of information it can give you on the early years of the mobile home park industry in the 1950s. From the depiction of those early mobile home parks (called trailer parks in the movie) as well as the class of customer and the style of mobile homes (see people wearing dinner jackets in their trailers), this movie is probably the most interesting mobile home park-related film of all time. You can buy it for around $10 on Amazon, or for $5 if you are lucky enough to find it at Walmart like I did. You can really understand the history of our asset class by seeing what the original intent was in the 1950s, and then think through how we got from there to here – and where the industry could head again with proper direction. It’s a must see for any park owner.



long long trailer

True Thanksgiving Wishes

This is the month that we all give thanks for all the many blessings that we have enjoyed over the past year. Here is our list of things we are thankful for in 2012:

  • The investors in our family of Funds.
  • Our clients (who are more like friends).
  • Our families.
  • The accelerating demand for affordable housing.
  • A bunch of insanely great mobile home park deals purchased.
  • Low interest rates.
  • A stable government (not that it can’t be improved on).
  • Proactive efforts to keep terrorism out of the U.S.
  • The winding down of wars in the Middle East (and hoping it stays that way).
  • The return of conduit lending.
  • The Legacy and Clayton home programs for park owners.
  • Starbucks (that’s from Dave) to stay awake while driving to parks.
  • The Loco Taco (that’s from Frank) to stay awake while driving to parks.

We’d like to give a sincere thanks to everyone who is reading this newsletter, as you interest in this industry keeps us pumped up and able to work half the night every night. So go enjoy that extra scoop of cranberries on us!


A Mobile Home Park Story

About 25 years ago, I bought a large oil painting of a man in a suit dated 1923, from an antique store that had flooded. They were literally taking everything in the store and throwing it into a dumpster. I saw the painting hanging high up the wall above the flood line, and asked if I could buy it. We negotiated a price of $20, including the frame. Today, that painting hangs on the wall of my office. But I always wondered who the painting was of. There’s a brass plaque that says “Frank Kirchman”. So I Googled it up recently, and it turns out that he was the founder of one of the first banks in Wahoo, Nebraska. Then I looked up his 1923 address on Google maps, and he lived not far from the parks we have in Wahoo. Was this coincidence, or something else (oh well, it is just a few days after Halloween, right)?



mobile home park owner photo

The Market Report

Mobile Home Park Stocks

Equity Lifestyle Properties - 70.27

Sun Communities - 74.03

UMH Properties - 13.26


Parks For Sale

Aliquippa, PA

Price: $350,000
Lots: 47
Occupancy: 42.5%
Lot Rent: $245
View Full Listing

Claremore, OK

Price: $1,030,000
Lots: 41
Occupancy: 99.0%
Lot Rent: $165
View Full Listing

Evansville, IN

Price: $1,495,000
Lots: 120
Occupancy: 75.0%
Lot Rent: $195
View Full Listing

Declo, ID

Price: $650,000
Lots: 23
Occupancy: 100%
Lot Rent: $150s
View Full Listing

Sanford, ME

Price: $1,150,000
Lots: 40
Occupancy: 97.5%
Lot Rent: $280
View Full Listing



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Updates From Our Sponsors

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