Mobile Home Park Mastery: Episode 282

Building A Firewall

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Owning a mobile home park is a noble calling, but you must protect yourself from the residents you are trying to help. While 99% of park customers are wonderful people, there is that 1% that want to take advantage of your role as the owner to try to borrow money, harass you, get out of rules violations, get your manager fired – basically try to drive you nuts. The solution is to build a firewall between your customers and you. In this Mobile Home Park Mastery podcast, we’ll go through the simple steps to do just that.

Episode 282: Building A Firewall Transcript

Just as our nation believes in the separation of church and state, you need a clean split between you and the Mobile Home Park. Yeah. This is Frank Rolfe with the Mobile Home Park Mastery Podcast. We're gonna talk about building a firewall between yourself and your residents, between yourself and the folks in the field, because it just doesn't work when you have this completely open line of communication at any time that any resident or any manager can reach out to you. It can do nothing but really cause you a lot of stress and a lot of problems. So what am I even talking about? Why would you need a firewall, a barrier of some type between you and your customers? Well, the main problem is that even though 99% or more of your residents are great people, there's always a tiny, little fringe, 1% or a 10th of a percent or a hundredth of a percent that is really just there to try and get things from you. So if they know that you are the owner, they will try and borrow money from you, they will try and terrorize you in such a manner that they think somehow they will gain advantage and will no longer have to follow the policies of paying rent or following the rules and that just isn't going to work.

So what can you do to create a firewall that gives you a happy life, allows you to pursue your noble pursuit of improving the lives of your residents and keeps the bad people at bay? Well, the first thing to do is, always buy your Mobile Home Park in an LLC. It sounds simple, it's really a lending law. Most banks, they want you to have that park in its own entity. I leave up to your accountant and your attorney which entity that should be, but buying a park in your personal name that hasn't been in vogue in probably 30 or 40 years. We live in a very litigious America today. It's just not a great idea, but there's many, many reasons beyond just the liability that you would wanna always maintain your park ownership in the form of an entity, so that would be step number one. Step number two is, commit yourself from the beginning that you're gonna use systems that are fair, systems that run basically just on math and facts and are never tainted by anyone's personal opinion. We've all long advocated a collections policy called no pay, no stay. They don't pay the rent, you evict them. If they do pay the rent, they're fine, no play, no stay, which means if they play by the park rules, they're fine, and if they don't, then they'll have to go.

So you set boundaries and you stick with those boundaries, but only under your boundary rule as long as people meet those minimum criteria, then you have no problem at all, because what happens a lot of parks are when the owner starts doing selective things, when they start playing favorites with the residents, that's where it all goes bad. Talk to any Mom and Pop who owned a park for 30 or 40 years, and then sold it and ask them what was the worst thing they ever did, it was when they started to play favorites among the residents. Also, it's probably a good idea when you buy a Mobile Home Park to get a second cell phone. That cell phone can be used across any of the properties you buy, but it is separate from your own personal line. Now, why would you need to do that? Well, here's the deal, when it comes to be about 10 o'clock at night or whatever time you think is appropriate, just put that phone on silent or turn that phone off, there's nothing that can happen in that park that can't wait till the next day.

But you probably can't take your normal cell phone and do that 'cause you're concerned a family member may call with an emergency, something to that effect. So instead of having your Mobile Home Park communication system tied to your own personal cell phone, separate the two. It does not cost very much money to have that second phone line, and what will happen is, if you give out your personal phone number, I promise you that New Year's Eve, you'll get a call from drunk residents who are locked out of their home wanting you to come let them in, you'll get a call at 4:00 in the morning from someone who's car won't start wanting to know if you can come and give them a jump off your battery. So often it's a good idea to have a second phone system just to keep your sanity. Also, once you do that, once you've got whatever the phone is, your dedicated phone for the Mobile Home Park business, never screw up and accidentally call a resident or a manager using your other cell number or even worse, your home line. Even if you're talking to a manager and you say, Well, only the manager has that number. When you fire the manager, which the odds are you will at some point, just to bother you, they'll freely give it out. Or if a resident comes in and threatens or yells at them about that rent increase you're doing, then they'll give it out, again, in defense. So don't ever give anyone your normal phone number, that defeats the entire purpose.

Also, never give out your last name to anyone, there's no reason you need to do that. When you're at a property, just go by your first name, it's just your first name from the management company, there's no reason for you to volunteer your last name. They cannot do an internet search of you just based on your first name, and why do you need the second? There's no law that says you have to when meeting people say, Hi, I'm Frank Rolfe, but instead, I can say I'm Frank from the management company. Nobody cares. It's all fine. Now, if you're gonna go with that also, don't print out business cards and have your full name on 'em to hand out. Again, bad idea, now, people can find you on the Internet, they can find you on Facebook or wherever they may look. So just when you're in the park, when you see people in the park, always just be your first name from the management company, that keeps it the best. More importantly, don't talk to residents, there's no reason for you as the owner to have to talk to the residents. Here's the hierarchy. Residents talk to the manager. Manager talks to you, you talk to the manager. Manager talks to the residents. You've gotta have some kind of structure. It cannot be unstructured.

Here's what happens if it's unstructured, when the manager tells the resident, Hey, here's the deal, you can no longer have that tire in your yard, the resident, then we'll try and do a good cop, bad cop, and they'll call you as the owner and say, Hey, I can have the tire in my yard, right? You don't wanna have that happen. It takes away all the power of the manager when they have that back channel back to the owner, particularly if you're dumb enough to contradict your manager, pretty soon you'll have mass anarchy. A safer thing, just don't talk to the residents. It's absolutely unnecessary. It's not good business. Can you imagine an executive, it hurts talking to somebody who wants to call in 'cause they had a flat tire? No, you have to have structure. That's what the manager is there for, the manager is your agent, the manager is the person who works with the residents, not you. Now, that being said, you've gotta have a safeguard because you need the information from the residents. Let's say the manager is doing something wrong, you want to know that, that's why you have to have a help line. A help line can be your refrigerator magnet that says just simply need help? And then has a phone number and an email address that they can reach out to someone and go around the manager in case there are a problem.

I know you've seen this every day, if you drive down the highway on the back of 18-wheelers, it often says, How is my driving? And then an 800 number or an email. They're not hoping you're gonna call to say, Oh yeah, what a great driver, they know what's gonna happen is If that driver is doing something bad, people will call and report it. If the driver is falling asleep at the wheel, weaving around, people will call in and say, Hi, I'm calling you from my cell, I'm behind this giant 18-wheeler and he keeps waffling between the lanes. So you want that kind of information flow. But that's the best way to get it, not from going around and voluntarily talking to your residents and handing out your phone number, but letting it come to you in an organized fashion through the help line. It's always important in the Mobile Home Park business, you've got to keep structure, the residents typically cannot function in a non-structured environment, so whether it's no pay, no stay, or no play, no stay, or simply the Robert's Rules of Order of how they talk to you or the manager, it must go through a formal bureaucracy or it never works at all.

And best yet, always play by the rules and make sure you're doing everything in a 100% compliance with the law. When you do your leases with your residents, make sure your leases are correct, when you do your utility billing, make sure you've met all the laws, when you do your collections and everything you do, make sure you are 100% in line with that state standards. How do you know what they are? Go to your state mobile home association and ask them. Don't like their answer? Or are you unclear of it? Well, then hire an attorney in that state who can give you a better visibility. But the key is to stem all possible problems with the residents to begin with, because the worst thing you can have happen with the residents is when they feel some form of grievance that you've done something wrong and they are correct. It's one thing if you have that one in 100 residents to think that everything you do is bad because they just generally hate you because you're a landlord and because you charge them rent, far worse is when you actually have done things that are bad. So always be sure as the ultimate safeguard as far as building the firewall, that people have nothing to complain about, that they don't have anything that they can do to file a litigation.

On top of that, when the media calls, which they invariably do these days, we live in a crazy America, an America in which landlords are villainized as horrible, horrible people, and all residents are angels. When they come calling you, again, you wanna make sure that you've done everything by the book, that there is nothing you can be criticized about. There's no greater feeling in the world than hanging your head high, knowing that you have done everything perfect. The bottom line to it all is that you can have a happy life, you can own many, many mobile home parks and never have any issues, but you've got to separate that nice, friendly, personable you and that landlord you. Now, maybe in another world, maybe 50 years ago, things were different, we all know that Fred and Ethel on the Lucy Show, always fraternized with Lucy and Ricky. But things have just changed, there's so much litigation in America today, there's so much grief, so much just foul play that goes on, you've got to maintain that firewall in order to have a happy Mobile Home Park owning career. This is Frank Rolfe with The Mobile Home Park Mastery Podcast. I hope you enjoyed this. Talk to you again soon.