Most mobile home park owners are good-natured people who like to be helpful. But most park manager requests for “favors” need to be avoided at all costs. In this Mobile Home Park Mastery podcast we’re going to review the typical manager requests, why they rarely work out well, and how to fend them off.
Episode 404: The Dangers Of Favors For Managers Transcript
If you own a mobile home park, then someday soon, when you least expect it, you'll probably get a call from your manager and it will say, "I hate to ask you this, but can you do me a huge personal favor?" And how you can respond to that question can make all the difference between happiness and huge regret. This is Frank Rolfe of the Mobile Home Park Mastery Podcast. We're going to talk about the dangers of doing favors for managers, how these things never work out, and how you can try to avoid them. Now, when the manager calls you with this favor, it's normally going to fall into one of these five frameworks. Number one, they're going to want a loan. Who knows how much, sometimes in the hundreds, sometimes in the thousands of dollars, but they're going to want a personal loan because they're having a problem and they're going to pay you back later. Or they're going to want you to buy them a car, whether used or new, and they'll tell you, look, I have to run business occasionally for the park. I have to go to the post office and my car doesn't work. I need you to buy me a car.
Or they'll want you to co-sign a lease or a loan for a car, for a mobile home, who knows what. Or they're going to want you to prepay their salary for the next several months in one lump sum right now, well in advance. Or they're going to want you to give them some kind of massive amount of time off paid because, gosh darn it, they deserve it and they have some personal error they have to go run. And what you're going to say next when they ask you this question can have a huge impact on your mental happiness. Let me tell you the story of the first time a manager ever asked me to do them a favor. It was a manager I had on my very third mobile home park, still a complete neophyte with no idea what I was doing. This guy calls up and says, hey, he needs a new pickup truck. And he's been looking around at dealerships and he found the ideal pickup truck. And, you know, I do want him to be out there renovating these homes and things and he can't carry plywood and things like that in his car.
So he found this pickup truck at a dealership and it's a really good deal. And could I go ahead and buy it? And of course, being a complete idiot, no experience in the mobile home park industry, needing to get these mobile homes renovated and assuming I would get paid back, I said, well, okay, I guess so. And next thing you know, I'm over at the dealership buying this Yahoo a new pickup truck. Not a super expensive addition, thank heavens, but a pretty expensive vehicle in the realm of doing someone a personal favor. And then what happens? Well, it was a stupid idea to begin with. I was having a manager doing home renovation, something that would be taboo today. No one would typically be that stupid. You have no oversight with a manager who you look for good information on status of projects is the one doing the project. He'll always say, yeah, it's coming along great. It's looking perfect. But in this case, I had a call from the city inspector not too far down the road for buying the park and getting this guy a car. And he says, "Hey, you know, don't know if you're aware of this or not, but your manager, Chris, is having these yard sales pretty much almost every week selling plywood and two by fours and saws and hammers. And I kind of think it's your stuff."
So I called up Chris and said, "Hey, Chris, you know, is that my stuff you're selling there on the weekends?" "How'd you find out about that?" "Well, the inspector for the city called me. He said he's been seeing you having these sales and he's never really seen anything quite like it. And he assumes it's my stuff." "Well, well, yeah, yeah, it is some of your stuff, but man, I'll pay you back. I just needed some more money." So, of course, at least even though I was a neophyte, I came out of a business background in the billboard space. So I was smart enough to realize I can't have this guy around. So I fired him and said, "Hey, you need to give me the pickup truck back." You can guess what happened with that. He then refused to and ran off with the pickup truck. Now, the good news is I hired a repo company and they ultimately found the pickup truck and repoed. He was over at a 7-11 inside getting a soft drink or something and they just repoed and took it out of the lot. So I did get the truck back.
However, when I went to sell the truck to pay off the debt of the truck, it obviously depreciated being a new vehicle becoming used. So it was a total travesty. But the bottom line is I did that to myself. I should have never, ever bought that vehicle. It was so stupid and it nodded at me endlessly. How can I be this stupid as to have done that? And I've been hit up and engaged in almost everything I just mentioned. Loans, cars, co-signing a loan, prepayments, time off, and in every case it's been a complete disaster. And here's why it never works. Number one, they're never, ever going to pay you back. They have no plans on paying you back. They don't even have the ability to pay you back because they don't have enough income to ever pay you back on any of these items. Also, as a fact of life in the mobile home park industry, you often churn managers at a rapid pace. So more than likely in the not too distant future that manager will no longer even be your manager. There's no way you're ever going to get paid back if they're not even still your manager.
You have no lever or power over them at all. Also, it's not really going to help them because typically it's been my observation that when managers fall woefully behind and need a lot of money and need the personal favor, they're already behind the scenes crashing and burning and it's hopeless anyway. So, when they need that personal loan of $1,000 to get them back on their feet, that's not going to get them back on their feet. They probably need $10,000 or $50,000 and whatever you give them, it will just evaporate overnight. So, you're not really doing anything. You're not accomplishing anything really of value. And also, if you ever do engage in any of those items, they're simply going to ask for more later. They're testing you to see how gullible you are basically. And when they say, uh-oh, this person's gullible, well, then they put the pedal to the metal. So, if you do grant them the loan, it's almost guaranteed they'll be back at you for another loan and another loan and another loan. I was branded so gullible by my manager Chris because I got him the truck and, of course, didn't catch on until I had to have a city official call me about his yard sale shenanigan that Chris's mother called me months later wanting to borrow money.
How insane is that? They had obviously put a sign on their living room wall that said the most gullible person in the world is me. So, who would have ever even thought you would have the guts to do that? But they just thought I was a complete idiot, which I was because, heck, I did buy the car. So, I was guilty as charged. Now, how can you avoid following my disastrous mistake of trusting people and being too good-natured for my own good uses? Well, number one, when someone comes to you with questions like that, you simply say, "I'm sorry, but that's against our policy." That's all you have to do. Now, how do you do that? How can it be against your policy? It's because you should never, ever be in the role of your mobile home park as the owner. You should simply always be there from the management company, and you work for the management company, and you should legally work for the management company. Talk to your attorney. I'm not a lawyer. I'm not an accountant. But in most cases, you need that structure of a management company which hires and trains and fires the manager, and you're no better.
You're also part of the management company. You just tell them that's not our policy at the management company. We don't do any of those things. We don't make loans like that. And then just stick with that. Be firm, and don't ever give in. So, if you want to avoid those loans and items, what I'm telling you is on the very day one of buying the park, you need to be from the management company. That is your relationship with the manager. That is the hierarchy. As a result, they then will not put pressure on you, and you will have an easy out when they ask, looking for personal favors, "Oh, I'm sorry, that's just not the policy of our company." What will they do then? Well, they won't hit you up anymore. As long as you stay firm to that, they'll go to other sources and resources, trying to borrow money, cosign for the car, whatever the case may be. But the most important thing is never get in that trap. I've been in this business for 30 years. I have never, ever seen a loan or any of those favors work out. Now, I'm not going to say that there's not some terrific managers out there, and in certain instances, an owner might make an exception, and it might work out fine for them. But in general, you just must beware. This is Frank Rolfe, the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.