The recent spaceflight of William Shatner – broadcast live – demonstrated how mobile home park turnarounds work. Just like a rocket it comes in a series of stages with tangible transitions. In this Mobile Home Park Mastery podcast episode we’re going to discuss what these stages are, how they work, and what the positive gains are to residents from these boosts in their quality of life.
Episode 226: The Stages on the Rocket of Park Turnarounds Transcript
I was recently in a couple of our properties in Texas. These have been really tough turnarounds that are now completely finished. At the same time you see Jeff Bezos blasting William Shatner into space, not really sure the purpose, but nevertheless, he now can truly say he has been, you know, up towards the stars. But it got me thinking when you combine the two together that in many ways turning and bringing an old mobile home park back to life is kind of like a rocket ship. It goes in a series of stages. This is Frank Rolfe with the Mobile Home Park Mastery podcast. We'll go over the various stages, like a rocket ship of bringing an old mobile home park back to life and discuss why each of those stages exist and how each one is a smooth transition to the next.
So let's start with the very first stage. And that is when you first buy the mobile home park, we're talking a true turnaround here, of bringing law and order back. Because in many of these older mobile home parks right off the bat, Mom and Pop have not had Law and Order. They've not had any rules about paying your rent, or obeying the park rules and being a good community citizen and neighbor. They just let it all kind of go. Maybe it's because they got older and they had health issues, maybe they lost interest, maybe they died and left it to a family member who didn't care. The bottom line is in many of these properties you bring back to life, you shouldn't expect on the front end even often a rent roll. And you're not going to get any respect from the residents, because they've been running roughshod over the mom and pop for often decades.
So the first thing you have to do is enact basically two simple plans. Number one, no pay no stay on collections, they have to either pay you or leave. They don't have to pay you but they can't live there if they don't pay you. And that's called no pay no stay. The other is called no play no stay. Once again, they don't have to abide by the park rules, but they do if they want to live there. So the first step is simply to enact good business practices of collecting rent, and making people abide by the very basic rules of a mobile home park. So that is stage one.
Now stage two is the transition from stage one, because what happens is those who can't pay the rent every month, those who refuse to live by the rules, well they have to go. So yes, you will lose some customers going from stage one to stage two, because stage two is when you finally get down to the solid base to build back from. It's no different than trying to fix a house with a lot of rotted wood on it. You can't paint over the rotted wood, you have to strip all that rotted wood off to get out of the solid wood. So here, what we've done is we've gotten down to the solid residents who want to pay the rent every month on time, who want to abide by the community rules, who want to make the community a nicer place to live. But will I lose some people doing that? Certainly I will. Do we know how many? No, it's based on the beginning of the personality of the park. And just every property has its own custom work of art. There are some where every resident will make the cut, and there's others where some portion of the residents will make the cut. But regardless, you've got to get it down to the solid foundation, the very beginnings to build back from. So that's stage two.
Stage three, you bring in your physical planned improvements. Why don't I do that prior? Why didn't I do that back on stage one, when I'm establishing law and order? Well, that's because as people are leaving the property, they'll destroy pretty much anything you do. So I'm not going to put in any effort or any money to put in physical improvements until I've been able to sort out what in the world is going on in this turnaround property and get everyone on the same page. And we want to make this the nicest place it can be. We want to bring it back to life. I'm then going to start enacting physical plant improvements. Now every property again, starts off life a little differently. Somebody lots of TLC, lots of infrastructure work, and others not so much. A lot of it depends on what it was like when Mom and Pop hands the ball off to you. We had properties that were already very, very attractive and others that were just unbelievably rough. But the third stage of the rocket is bringing all those things back to life. So going in and redoing the roads so they're free of potholes or water so there's no leaks of sewer so it's flowing freely, the power so that it's safe and working well. You know the drill, basically making sure everything is in good working order and nice and safe.
Then we move on to the fourth stage of the rocket. Now on stage three, I've gone ahead and made the property so it's in a very, very attractive solid condition. And so now in stage four, I'm going to really wrap up the marketing. Now how do you market a mobile home park? For one thing, we always put a new sign up front, we definitely improve the curb appeal by putting in white vinyl fencing or something similar and feather flags down the frontage, and new signage throughout. All the general things that make you yourself want to be somewhere, live somewhere, be proud of living somewhere, your residents are no different. So in the marketing phase, it's more than just advertising. It's basically saying to the world, hey, this property is great live here. We're proud of this place. So that's the marketing phase. Now, why did we do the marketing phase earlier? Well, again, there's no point in marketing, drawing attention to the property until you've turned it around physically made it attractive again. If you didn't do it that way, you'd be basically advertising and giving people a false impression of a property that had so much potential, but it doesn't have it yet. So the fourth stage is marketing.
Now we'll move on to the fifth stage. The fifth stage is basically filling up all your vacant stuff. Now Moms and Pops will often give you a mobile home park that has a range of vacant items. It might be vacant lots, it might be vacant park owned homes, it might be vacant homes just sitting there that were abandoned, which are not park on homes yet. It might be a vacant commercial building, it might be vacant apartments, might be vacant storage units, whatever the case may be. Vacancy doesn't make any money. Vacancy does not help the bottom line. In the world of income properties, vacancy is of actually negative value, I can't even say it's of no value at all because it actually drags you down. You have to maintain, you have to insure, you have to pay tax on vacant things the same as occupied. So you've got to get everything full. At this point, at this fifth stage, at the fill stage, I'm in the best position to do that. The property has now been a lease aesthetically turned around, made whole, made solid, attractive to people, they're going to look at that property to say, "Yeah, I want to live there." There's no point in trying to fill it though till you get there, you wouldn't want to do filling in stage three. Stage three is physical plan improvement, who's going to want to move in if the physical plant looks awful? So kind of with the marketing phase, but really after the marketing phase is enacted, you then go into the filling phase. And so that means running ads, basically spreading the word of all the many things you have that are vacant, hoping that people will be impressed by everything you've done and want to occupy them.
Then you move on to stage six, and that streetscaping and the final punch list. Now a lot of these properties when you start out, things are so bad, there's so much wrong, that if you went to write all of them down, you couldn't even have enough lines in a full legal pad to do so. So by the sixth stage, however, we've already gotten through a lot of other stages and got a lot of the big stuff done. We probably have already got in and painted rusted roofs, painted the worst of the homes, fixed the decks, all the various items that drag mobile home park down and give it that terrible stereotype that the media loves to herald everyone. And but now by stage six, we've really fine tuned it, and now we're trying to get it very, very much tighter. So now we're going to be out there doing what's called streetscape. You look down at each street and say what can I do to improve the way the street looks? Sometimes it's replacing the skirting with new vinyl skirting on the most visible home, maybe it's some form of landscaping. Maybe you say, Oh, well, I know what the street needs. This street needs a little seasonal color, whatever the case may be. By stage six, we're really working it. We're really trying to gild the lily, we're really putting in a lot of effort trying to get every last detail in good working order. So stage six is kind of like the Martha Stewart shows I see on home TV networks, we're really trying to put a lot of aesthetic sensibility, a lot of design, really tried to take the thing to a final next level.
And then finally you come to stage seven on the rocket. And that is the finished product. Now how do I know when we've hit a finished product? I know it because you can feel the vibe in the park, you can feel the pride of ownership, you can see it. It's very tangible. Properties that were in terrible condition where people literally threw their trash in the yard, push the refrigerator off their deck and let it sit there as a horizontal piece of yard art for 20 years with a prior Mom and Pop. Those same people are now at a weekend's landscaping their own yard. They're washing their car, they're painting their deck, you see it all around you. It's really strange people really get turned on. And when they see people making improvements to where they live, they all jump on board. It's almost like keeping up with the Jones'. One resident builds a carport and then two more want to build that carport because they want to compete. And that's when you know you've really turned the corner and you become a finished product because now your residents are pushing it forward. Before you were pulling the whole load. They weren't contributing whatsoever. But now by stage seven, they're pulling as hard as you are. They're excited. They feel proud about living there, and that's when you really know you've done something.
However, the movie is never really done. Even when you get to stage seven, no properties ever fully complete. So you can never fall on your laurels and never let the manager back off. If you do that, what happens is it starts going back to the beginnings of its origins of not being the best that it can be. You must always keep your foot on the gas. Always try and find ways to make the property more attractive, better run, more profitable, raising rent there's nothing wrong with that. As the value improves on the park and it's better, nicer place to live, people are willing to pay more to live there. We're all aware there's a huge affordable housing shortage in America. People are searching far and wide to find anything they can humanly afford and mobile home parks are one of the few things out there that works for them.
But the bottom line to it all is mobile home parks are just like that rocket you saw William Shatner in. There are various stages to the rocket. They all make complete sense. The transition is very tangible. And if you just follow those seven stages, you can take almost any mobile home park in America and once again, bring it back to life and make it a great place to live. This is Frank Rolfe, the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.