Filling vacant lots is mostly about buying new or used mobile homes and selling them. But there are some low odds shots you can also take to get the job done. In this Mobile Home Park Mastery podcast we’re going to review some of the attack plans available to fill lots that have only a tiny chance of working – but are worth the effort.
Episode 460: Low Odds Occupancy Shots You Have To Take Transcript
When you talk about trying to fill vacant lots in a mobile home park, of course, the discussion immediately goes towards bringing in new and used mobile homes, setting them up, rehabbing them if they're used, and then putting them on the market to sell. And that's how you're gonna fill, probably, 98% of every lot in your mobile home park. But there are also some low odds ways that you can fill vacant lots.
This is Frank Rolfe, with the Mobile Home Park Mastery Podcast. We're gonna talk about some of these low odds, lot of effort for very low response methods to fill vacant lots. But to quote the great Wayne Gretzky, "You miss a 100% of the shots you don't take." And in this case, if you remember that every lot that goes from vacant to occupied, might be worth, based on your cap rate, $50,000 to $100,000, it's definitely worth the effort to try these other methods, even though... I will be the first to admit... The odds of pulling these off are very, very small.
Now, the first one, is the old classic: Take a stack of flyers to all the local mobile home dealers. Because even though 99.9% of every mobile home those dealers sell every year, goes onto people's land, typically to farmers who have a sibling, or a daughter, or a son, moving to the old family farm. They buy the nice single or double-wide, and put it on their farm. That's what most dealers attract these days. But not everyone has land. And there are still people who wander into the Clayton sales office, out there on the corner of the old interstate, with cash in hand to buy a mobile home, but with nowhere to put it. And if you have a stack of flyers at that dealer, saying, "Yes, bring your home to my mobile home park," you will, on a very rare occasion, catch that very unique customer. And they will call and they will say, "I'm looking for a lot." And bingo, it was worth the effort of taking those flyers down and putting them at the dealer.
Now, speaking of dealers, there's another very low odds shot you can take. Because if you look around, most of those sales lots at most dealerships, you'll see they got a whole lot of new single-wides, they got new double-wides. But there, interspersed among all that new inventory, typically at the back, is an older used mobile home. And I mean, sometimes, really old. I'm not even talking a pitched roof; I'm talking a round roof. So why is it there? Because dealers used to take trade-ins on mobile homes just like car dealers do. And so, probably back in like 1998, some guy traded in his old 1988 round roof home, to buy that new pitched roof home. And since then, no one has ever wandered in to look at buying it. And it's just sitting there rotting, typically metal on metal. And it will never sell on their sales lot, because none, 0% of the customers wandering in, would ever want it.
But here's what your pitch is. You tell them, "Look, that thing's never gonna sell here hidden in your lot. Come over and put it on a vacant lot in my mobile home park. Go ahead and rehab it, put skirting on it, put a deck on it, and sell it out of my park. And instead of getting $4,000 or $5,000, you might get $30,000 or $40,000 for it." It's not a bad sales pitch. It's not a stupid idea for the dealer. And every once in a while, if you make that pitch, it works. Over the years, we've had many a dealer bring in that one, odd, old used home into a vacant lot, set it up, and sell it.
Now, here's another low odds pitch. This one's so low odds, you can't even do this unless you check the laws to make sure it's legal with your park. And that is to bring in, or run ads to bring in, RVs to take the spot of your vacant lots. To do this, you have to make sure that your city, or county, or small town, allows RVs in your mobile home park. And if the answer is, "Yeah, we do. We'll allow a few," then what you do is you put a sign out front that says, "RVs Welcome." You build a website for your RV park mobile home park. And you go out there and make sure you have SEO presence so that in any Google search of RVs in that area, your park turns up. And lo and behold, you rent it out there. And you will occasionally have people who call you, and contact you, and say, "Hey, I want to bring in an RV."
Now, I wouldn't do it on a daily basis. They'd have to stay at least monthly. But sometimes, those RV people are retiring, and they're gonna live in that RV forever. They might be in that RV, as long as you own that mobile home park. Their money is just as good as a mobile home. Now, don't get too many of them. If you have more than a handful of them, in most parks... Certainly more than 5%... A lot of lenders aren't gonna count those the same as a mobile home, when it comes to the absolute value of that occupied lot. But it's still a really, really good way to increase occupancy, and there's really no cost in it.
Another one, is to put a banner out on the fence saying, "Move here for free." What we're trying to do now, is we're trying to attract people with, what are called, organic moves. These are people who are unhappy in other people's mobile home parks. Driving down the road, they see your banner, they contact you and say, "Yeah. I'm unhappy where I am. but I would like to move my mobile home to your mobile home park because it's nicer, it has a better school district," whatever the case may be. And once again, it's a very, very low odds shot. But just every once in a while, somebody will reach out, and you can get the job done. Now, be careful on the organic side, you don't go into a major war with another neighboring park owner. There's no purpose to that. If you pull one home out of his park, he'll pull one out of your park. And what happened? You both spent $10,000 moving the mobile homes, and you accomplished nothing. But if you just in a very passive way, have a banner or something, saying, "Yeah. If you're unhappy, you can come here," typically most park owners will not see that as a declaration of war.
Also, another very low odds shot... And again, this only works, maybe, in parks that have extreme demand, is taking a lot that's so small you can't put a traditional mobile home on it, and putting a tiny home on it. Now, you'll have to probably get a HUD code tiny home. People don't much like those, as much as the ones you see on television. But nevertheless, it's doable. We've done it before in markets like Austin, places where there's a lot of demand. Otherwise, that lot will sit empty forever. In all likelihood, you can't really find a used or new traditional mobile home to fill it. But if it's an odd-shaped parcel, strange size, something that won't adapt to a mobile home, you might try a tiny home out, see if you can get that sold there.
Also, sometimes you will see FEMA homes. Nobody much likes them. They're 12 feet wide, much, much harder to sell than a traditional mobile home. But in certain instances, in certain amounts of demand, you can actually get those things sold. These are homes that were built by the federal government, by FEMA. They were meant to be what you bring in in form of an emergency, like a hurricane or a flood, to house people, sometimes on a temporary basis. But every once in a while, when those things get old, the government will go out and try and sell them, and they'll typically sell them fairly cheap. And if you buy one cheap, and you stick it in your park... Just because it's cheap, and for no other reason, you can sometimes get those sold. I wouldn't want to have a ton of them. They're a very, very hard sell. But nevertheless, even though they're only 12 feet wide, even though they're not very attractive from the outside, and the rooms are plenty small on the inside, you will occasionally have that customer come in, and that makes it all happen.
Now, we've got thousands and thousands of lots. And I can tell you that right now, typically, in a given year, doing everything I just described, we can, maybe, bring in out of thousands and thousands of lots, maybe 50, maybe 80 homes, in these unconventional methods. But here's the deal. If you realize that any mobile home lot you take from vacant, which is worth zero; to occupied, which might be worth in this case, let's say, $50,000... If I can bring in 50 of those a year, well, that's $2.5 million of profit. And for just doing something that just took a lot of effort, but no real cost to be spent. And it's such a good feeling when you can fill that vacant lot without having to buy a new or used home, without having to take any of that effort or risk, to get the job done. Because an occupied lot, is an occupied lot.
This is Frank Rolfe, with the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.