Mobile Home Park Mastery: Episode 275

Sharing Is Not Always Caring

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When you have two mobile home parks in the same basic market, you always wonder if you would be better off hiring one manager to supervise both or having two separate managers to do the job. The concept of “sharing” management is not restricted to just mobile home parks, as many other industries have tested and employed it. However, mobile home park manager “sharing” has its own unique issues to consider. That’s the topic of this Mobile Home Park Mastery podcast.

Episode 275: Sharing Is Not Always Caring Transcript

When you have two or more mobile home parks that are close together, you will always ask yourself, should I share the manager? This is Frank Rolfe with the Mobile Home Park Mastery podcast. We're going to talk about the concept of sharing managers between properties, some of the good things and the bad things that are going to occur from doing that. And as you'll find out, there are really a lot of issues to consider before you take that plunge. The first thing you have to know is you have to have at least one warm body in every mobile home park you own. You cannot have a mobile home park with no manager on site. That just doesn't work. So when you're talking about sharing a manager, don't let that mean that you're going to have one manager and nobody else overseeing those properties ever on location there. Because here's the problem. You need to have someone there to let you know when there are utility problems or weather problems or the police were there. And all those many things that go on in mobile home parks often at nights and on weekends, that data has to be watched over and compiled by somebody.

So you'll have to have someone if you want to share managers, you'll have to have somebody in the park that the manager either does not live in or if the manager lives in none of the parks, you'll have to have someone on site. You can call them an assistant manager if you like. In the old days, some people called them the night porter. But whatever you want to call that individual, you have to have somebody there. So sharing managers and not having someone physically present on a property at all times, that isn't going to work. So you actually have to have somebody there. Next, if you've got a bunch of vacant park on homes, it may be very, very difficult for you to enjoy your sharing dream because you've got to have someone there to show those homes. You can get calls in off your ads, but they're worthless unless you have someone to then show the interested consumer inside those dwellings. So how are you going to do that if your manager isn't on site? You can't tell a customer, hell yeah, you want to see the home? Sure, no problem. Come back on Thursday.

That doesn't work. People are very point of purchase. They want to see what you have to offer and they want to see it right now. So as a result, you have got to go in there. What in the world? When you have two or more mobile home parks in a market, you will at one point ask yourself, should I share a manager? Should I have just one manager who oversees two or more properties? This is Frank Rolf, the Mobile Home Park Mastery podcast. We're going to talk about the concept of sharing managers. Now, it can be a good idea in some cases, but in other applications, a terrible idea. So I thought we'd go over some of the things you need to consider. First, you have to have somebody on site in every mobile home park at all times. So if you think you're going to successfully share a manager and by definition, have nobody in the park they don't live in at any time, that won't work. So you're going to have to have somebody typically called an assistant manager who is there on location. Why? Because you've got to have a warm body there to report such items as weather problems and utility problems and police presence and those type of things.

So every park must have a person. Now, if you have that person, if that's the assistant manager and you want to share a more high level person, the full manager between properties, that's one thing. But when you talk about sharing a manager, make sure what you're not talking about is leaving one property unguarded with nobody physically present. That is going to get you into a lot of trouble. You've got to have somebody there. Now, what do you want to title them is completely up to you, but you have to always have one person on each property. Also, if you have any vacant park owned homes, it can make the concept of sharing very, very difficult because what do you do when you have vacant homes? Someone has to show the homes. If your manager is not physically present, if that manager oversees multiple properties and so is not in that property at all times, how are you going to show the home? You've got to have a plan. Now, if your manager is so good at what they do that they can organize all their showings around certain set days that they will be on property, then it might work.

For example, if they said, well, I'll be on that property on Monday, Wednesday and Friday and the other property on Tuesdays and Thursdays and anyone who calls in, they say, yeah, I'd love to show you the home. Just come in Wednesday at seven. Okay, now we have a shot. But if it's kind of instead like, okay, well, yeah, I'd love to show it to you, but I can't be there for a couple hours or I don't get there until next week, that's really not going to work. The customer is going to move on to another option. If you have homes that make sharing really, really difficult. Another way you can get around that showing issue would be to have somebody who lives on site, do nothing more than unlock the homes that are vacant and then lock them back at a certain time each day. And then the shared manager can say, yeah, we'd love to show you the home. Just come on by any day you like. Our show homes are always available between the hours of X and Y. So there's an option. Or you might have somebody who is there on site. Let's say the person who's your warm body who reports problems that they have no sales ability.

You actually, as long as you have these homes you're trying to sell, you have another person. You might call them the sales person. They can then show and sell the homes in the absence of the manager being there. And in addition to that person who is your kind of warm body reporter. And the reason you want to structure it that way is often people who are good about telling you of things that are going on on property, that assistant manager configuration don't have any sales skills, because those aren't typically the kind of roles that you need that work well for sales. And when you have homes to sell, that's typically a temporary phase. So you could bring in an additional person strictly on commission, and that could help bridge the gap so that on the shared property with the manager not always present, that gives you one more way to try and get homes sold. Another consideration is how far is it between these parks? How far is too far for you to actually share? Well, we have found from experience that typically you can have a manager who shares parks over, for example, a metro area.

We have a manager who oversees all three of our mobile home parks in St. Louis, and they do a great job of it. However, you can drive between those properties, from the farthest end to the farthest end is about an hour drive. So that is not a ridiculously far amount. However, we've also tried in the past doing them in farther distances. And the problem is when you get over basically an hour, if you have a distance between properties of two or three hours, it probably isn't going to work very well. It's simply too far. Invariably, when your distances are that big, when you're talking a round trip of, let's say, four hours for them to go from park one to park number two and back, they're just not going to do it. Now, on the front end, they'll talk a big game. Oh, yeah, I'll go out there and I'll be at every property every other day, but you know they're not going to. It's too much driving. So instead, what they'll do is they'll just let one kind of fall behind. So be very, very careful when you try and share a manager over areas that are too diverse in distance, because typically it's not going to work.

You're going to have one that's going to be under managed and one that's going to be over managed. And that leads to the next topic of favoritism. When you share a manager over several properties, they tend to always want to hang out at the one where everything is going well and all the customers are happy. It's just human nature. They don't really want to go to the one where people are unhappy and things aren't going that well. And the problem is you need them at the bad one. You need them at the unhappy one to make things right again. So one issue when you share the manager often is the manager will want to devote all their time to the property that you want them to devote the least amount of time to. And that can be a real issue when you have one manager who shares. Also, if you want to get into the sharing game, it's very, very important that you get your rent collections changed over to ACH or online payment. Why is that? Because when your manager is not there all the time, you lose that presence for collections.

And a lot of mobile home parks, not too long ago, before ACH became more dominant, collection of rent came in the form of checks or money orders deposited, maybe through a slot in the office door or a dropbox. And your manager had a very active role in picking up those checks and money orders and depositing them typically daily at the start of the month. Well, you lose that ability when your manager is shared. So one big thing you can do if you want to share managers, you can pave the way by instituting a more aggressive plan to get people signed up onto ACH. We've gone from virtually zero to about 92% online payment. And that gives us more of an ability to share managers and do more customized manager features because collections are no longer a big part of the manager's job. And don't forget the size of the park you're talking about also would have some degree of bearing on whether you should share or not. If you have a park that's 100 spaces or larger, you are definitely going to want to devote a full-time manager to just that property.

It would be wrong to share a manager on a large property like that because that is so valuable in today's market. A hundred space park in most parts of America will give you a valuation per lot of let's say $50,000 and more, which means that hundred space park is a $5 million property. You would never have a $5 million property that has any less than the best full-time manager. Can you imagine a McDonald's that instead of having a McDonald's manager shares it between several McDonald's? That mobile home park is worth probably more than that McDonald's is. And McDonald's would never even think of doing that. Typically when you share a manager over properties, they are typically smaller properties, but there is an exception. If the park is completely full or nearly completely full and you have heavy online collection, then it may be possible to still give high quality of service, even sharing larger properties, but they have to be basically finished goods.

And again, you would have to have at all times on the large property when they are not there, an assistant manager, but it just doesn't make a whole lot of sense often to share managers when you have a very, very large property. Finally, you want to think very hard if you're going to entertain the idea of sharing the manager of the way that Sam Walton used to approach such issues. Sam Walton had this theory of almost any idea was worth testing if you could measure it. So how do you measure the success or failure of the manager? Well, we know there are key metrics, the collections, the occupancy, the property condition. These are all very real and tangible numbers. So if you want to share properties, then what you could do is you could go ahead and give it a whirl and just see whether those gauges do well and get better, or if they start doing more poorly and declining. Sam Walton was in a Walton Walmart store one time and somebody came up to Sam Walton and said, "Hey, Mr. Walton, you know, the walls of the store are really boring. They're gray colored. What if we painted them a brighter color like yellow? I think that people would buy more."

So Sam Walton said, you know what? I've tried yellow. If you want to try yellow, I want you just to paint the electronics department wall yellow. And then I want you to measure the sales with the yellow wall for a few months, compare them to our sales back when they were the different color at the same time of the year, and we'll see how it worked. So lo and behold, they did that. They painted the wall yellow and they came to find out they actually sold less with the yellow wall than they did with the gray. So they painted it back to gray. Walton was never worried about testing anything. That's how Walmart began. It was in bedrock. It was new. It was different. It was innovative. He had no fear of testing. He only had a fear of testing unless it was properly measured because then you come to bad conclusions.

So if you want to share managers, then there's really no problem with that idea. Just make sure that you do it in a scientific manner. You figure out what the experiment is and how you will measure that. And then at the end, you actually look at the data and you make a final decision, but it needs to be educated. It also helps if you have a helpline. Now, helpline is something we've been talking about for years. And what it is, is it's a dedicated line and email address. And you let the residents know if they've got a problem, then here's how to contact quote the home office. So what you do is you give them a refrigerator magnet that has a phone number and an email on it. You can also put it primarily on an invoice. And it just says basically, "Need help?" And then it has a helpline number and the email. You don't have to live answer it. The call will be recorded if you do it properly.

So you'll know the number they called in from and you'll know the nature of the call. But it allows the residents to get around the manager and tell you, the management company and technically the owner, what's really going on. And when you share a manager, this is another great way to see if it's really working or not. You can look at those gauges and those will tell you how you're performing. But also you want to keep your residents happy. You want them to have a good quality experience. You want to retain them and you want to attract new customers. And sometimes when you share managers, you will find that there are issues that people don't feel properly serviced. They feel like people have now lost the attraction to try and to give them the best and most pleasant customer experience. So once again, this will help you make the decision whether sharing works or not.

We've been sharing managers probably for like the last 20 years in certain properties. And we've tested it many times and we've grown to kind of had a knack of whether sharing them works or not. And it doesn't work for all properties, but it does work for some. It's not always a cost cutting measure. Some people think that sharing is a great way to reduce cost. That is not always true. When you add in the cost of having those additional assistant managers, sometimes sharing can be more expensive, but that's also okay if you have a really high quality manager that you could only pay that extra amount by sharing. A very good manager who is shared can easily handle the requirements of several properties or that good an organization. And having them on board may allow you to take that property to the next level. This is Frank Rolfe with Mobile Home Park Mastery Podcast. Hope you enjoyed this discussion. And we'll talk to you again soon.