Mobile Home Park Mastery: Episode 143

Highlights From The New York Times Backstory

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In 2014 the New York Times brought out a huge story about Frank & Dave and their success in building one of the largest mobile home park portfolios in the U.S. They even declared that Frank & Dave are the “best thing going in affordable housing when the nation’s need for low-cost places to live has never been greater”. But what else did the writer, Gary Rivlin, find in his research about the industry. In this episode we’re going to review the discussion we had with Gary after the article came out, and share some quotes of his opinions on what we do and how we do it. Since the New York Times is known to not typically be pro-business, there are certain strengths to the mobile home park industry that converted even a self-professed antagonist to be a big fan of “trailer parks”.

Episode 143: Highlights From The New York Times Backstory Transcript

In 2013, we received a phone call from a writer with the New York Times named Gary Rivlin. He was writing an article, the mobile home park industry. I Googled up his name and I saw rapidly that he's very anti-business. His most recent book back then was called Broke USA, how payday lenders and pawn shops ruined America. And I looked at the list of his other contributions to the literary world and they were all very, very anti-business. So I said, "Hey, Gary, I'm looking you up right now on Google. It looks like you write nothing but negative articles on business." He said, "Yeah, that is kind of my forte." I said, "Well, if you're trying to get information that you can skew negative on the park industry, I have a better fresher idea for you. Why don't you actually learn more about what you're doing before you write that negative article and who knows, maybe it'll be more enlightening for your readership?"

He said, "Well, how would I do that?" I said, "Well, why don't you come out to our boot camp we have coming up in Florida? That would not be that far from Manhattan for you to get to. We'll give you a free ticket." And he said, "Okay, I'll come down and do that." So he came down to boot camp and then he says, "I want to go live in one of your mobile home parks for a week and see what it's really like." So we took an abandoned mobile home in a park of his choosing, we put in furniture from Rent-A-Center, and he lived in it for a week while walking around the neighborhood talking to people about their experience living in the mobile home park. Then the article came out in 2014, and we were absolutely amazed by all the information that it shared and all the unusual positions it took based on his past writings.

This is Frank Rolfe, the Mobile Home Park Mastery podcast series. We recently unearthed a transcription of an interview I did with Gary after the article came out, and I thought it'd be very interesting to show you real life how someone who's so anti-business and was so anti-mobile home park could suddenly flip around and become positive about the industry after they actually had experienced it.

So these are some of the transcripts that I wanted to read to you. So I talked to Gary on the front end about the fact that he always writes negative stuff and this is what he's tells me.

He says, "Yes, I was writing about the Poverty, Inc. industry where there's all these businesses that counter-intuitively make a lot of money when people have no money. So a pawnbroker, you go to a pawnbroker if you have no cash. You go to a payday lender for short term two week loans if you have no money but you just hope that in two weeks you do have it to pay it back.

"It wasn't a coincidence that my head was in that place and I approached you about attending one of Mobile Home U's weekends. Really what I was thinking about that really made me want to do this story was that all these people lost their homes after 2008. There were foreclosures, 11 million or something like that in that year. So I would just wondering, where do you end up? You lose your job unemployment had essentially doubled. Where do you end up if you can't afford your home, you can't afford your apartment? So that got me interested in trailer parks. It was just like, 'Hmm, if you want to talk about what is going on in this country, like a downward mobility through tough economic times?' I was just interested in the trailer park, to see it differently. "Mobile homes didn't really sit right to my construct of businesses that make a lot of money by people having no money. You need to have a few hundred dollars or whatever to pay for a park. Yes, I was just really interested in the, shall we say, linear edges of the economy."

So, here we can see Gary's position and then he proceeds on, "Well, you know better than I do, there're different kinds of players in the mobile home park industry. There's a mobile home equivalent of a slumlord. I would actually lump them in with a check cashier or with a payday lender. What those businesses are about, the slumlord version is we are going to give you as little service as we possibly can to get as much money as we can, and things like fixing leaks and that kind of stuff is just going to cost them money, so why do it if it's just going to get into your profits? I actually think there's something very corporate about the way you all approach the business that for better or for worse really makes it stand apart from other trailer parks."

So that tells you initially what happened here. Right? So he's very negative on the industry, and then we bring him to the boot camp and he learns that we don't talk about ever being a slumlord, it's a terrible idea. In fact the whole point of being a mobile home park owner is to operate with the focus of providing a really good value for the customer. A really good product. A nice product that you can get financing on from a large lender. So, he was a little initially taken back from his original preconceived notions by when he found out that it's really a more professional investment strategy than what he thought.

But then where he really turned the corner is when he went out and lived in the mobile home park for a week. So here were some of his thoughts from living in the mobile home park. "It was not scary in the least. It was a little bit lonely. I think it was very quiet. Weirdly, it was kind of nice. If I walked in the back I could have seen ducks on the Lake. No, it was a pretty peaceful place. The trailer next door just happened to have those three guys who were renting it. I don't think they were paying the rent, I think someone else was and they just put migrant workers up there. So they got up at 5:00 or some ridiculously early time to go to work. Plus I didn't sleep as late as I might've wanted. You know, each trailer is more or less on top of the next. My bedroom was a few feet away from, I guess, 15 feet away from theirs.

"I really enjoyed it. I did not know what to expect. I understood that a lot of the popular images of a trailer park, you get it from a movie where people are skinning squirrels and eating them, drinking beer, watching soap operas during the day, and cooking meth, and plotting to poison the wells of the drinking water. I knew that it was cliche, but I didn't know what to expect.

"Basically what I did for the next three days was just walk around. I met people and it was really interesting to get people's stories. The first thing I noticed walking around is that I see three quarters, at least definitely over half to maybe three quarters of the trailers were fixed up in some way, meaning they had bothered to build a little deck, or put a flower garden, or plant trees, or have chives, or put out a sign that says, 'Walt lives here,' and kind of put that thing out front. That really struck me.

"Okay, this is a community. People live here and really want to have that sense of home, which I think contradicts with what a lot of people might think of a trailer park. Then getting into people's trailers in one of two ways, I walked around and one of the first people I met was this retiree who'd been at Pontoon Beach, I think, since the late 1970s. She used to be a full-time worker. She worked at a clinic taking blood. The Dracula job, I think she called it. It was $285 a month for the dirt rent. She owned her unit straight out. She had a pretty new SUV, a little Honda SUV in front. She was just living the life as she knew it. She didn't have a big mortgage, she didn't have rent. She had a reasonably inexpensive small hut. It wasn't inexpensive to [inaudible 00:07:07], but it was small. She was the first person I talked to and she was almost, 'I was good,' in her view of us struggling to pay the mortgage on the rent every month, whereas she lived cheaply."

So then he goes on talking to another person in the park. "She was working in minimum wage at a bakery in town. Her boyfriend was working minimum wage, if not at Taco Bell, someplace like that, and she was pretty happy because they were paying 560 bucks a month. They had an older trailer than I did, but it was a big one. Again, it was three bedrooms, two baths, and they had a kid. She felt safer there than she would in a really rundown apartment. So another single mom with two kids, two teenagers, she was selling crud on eBay. It gave her enough room to do that and she was happy. Pretty much everyone I met was pretty happy. That is not only a compliment for you that they were happy with management, I think they were just sort of happy to keep their monthly rent really low so they wouldn't have to work as hard or struggle for money every month."

Another resident he talked to, "They had bought, I can't remember the exact numbers, but it was a 15 or 20 grand mobile home. They bought a trailer 10 or more years ago in Pontoon Beach. Again, they just didn't want to have to work as hard. He was a salesman. A year or two after he bought the place, suddenly he just started having these terrible back problems. Here's a guy who just flew and drove. He was a traveling salesman. He had to travel all the time for his work and suddenly he couldn't work. So for four years of fighting for disability and stuff, his wife, ironically enough, is a physical therapist, they had somehow survived that for years because they had such a relatively cheap monthly for their housing. Whereas if they'd been in the house they were living in a prior, it would have been a disaster. Right there they would have fallen behind on their mortgage and then their bank would have seized it and they would have desperately had to find someplace and didn't have any income at all. So that really struck with me because they were so fortuitous. They had made this decision earlier and it really turned out to save them a lot of heartache in their life."

So you can see what happened here is the Gary went from being so negative on the product to so positive initially, simply because the people were happy, they were satisfied, they were living life and enjoying it, and he couldn't make sense of that. He came into the park as a very negative anti-business person. He'd been doing articles on payday lenders and pawn shops, and how cruel they were and what an endless cycle it was when you borrow from a payday lender.

Now here he is in a product where you have a company that's appealing to customers, many of which don't have a lot of income who might use payday lenders and pawn shops, but they're offering this great product and the people are loving it. So it's very, very hard for him to write a negative article when all around him, every single person he met is very, very happy with the product. But he also in his time of living in the mobile home park became a big fan of the business model. I thought I would read you a couple of quotes from that. Here's what Gary said.

"What is so fascinating about your industry, and I didn't appreciate this walking in, which is another thing I learned is that there is a finite number of these things. In fact, arguably they are reducing because no municipality is going to have allowed more of them, and occasionally they are sold off and turned into a shopping center and all. So, talk about supply and demand. I mean, how are they going to always be worth something? In a capitalist economy there's always going to be winners and losers. There are like 10 million people on disability in this country, which means they are living on under a thousand dollars a month. There's always going to be a need for people to be someplace relatively safe and relatively comfortable. I'd be shocked this wasn't a good industry in 50 years. The only thing that you could change that is if suddenly there was a change in the heart with municipalities saying, 'You know something? What we really need in this country is more affordable houses, so we going to allow a lot more trailer parks,' but that's not going to happen and you know that."

He later went on to say, "Funny, as you pointed out, as I learned at your boot camp, you can get land that is outside an unincorporated area, but then it is prohibitive to put the utilities out there. So given that there is a finite number, I just have to say that this has to be a good industry. The only way to blow it is to not know what you're doing and pay too much for a trailer park because you heard someone like me say, 'Hey, there's a finite number, just own one and you're going to make money.' Well, if you pay the right price, that's true. I'd imagine this is going to be an interesting little niche for years to come and maybe even more so with the lifestyle choice people, the fancier, less affordable versions really take off like I think it could."

So here we have Gary Rivlin, a writer for the New York Times who was so very negative on business, hates all of it, very anti-capitalist, suddenly falling in love with the mobile home park business. I thought it was a very, very unusual transformation and worthy of talking about here on the podcast simply because you rarely see someone go to such diametric opposing extremes, that they come into a business as a true hater and they exited as a true believer and a true lover. It's very, very unusual, particularly for a guy like this who writes nothing but negative articles for a career.

Again, this is Frank Rolfe, the Mobile Home Park Mastery podcast series. Hope you enjoyed this. Talk to you again soon.