Mobile Home Park Mastery: Episode 243

The Waffle House Vs. Mom’s Home Cooking

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What really makes customers stay in mobile home parks for decades on end? Is it truly a barrier to removing their homes or is it something more? In this Mobile Home Park Mastery podcast we’re going to focus on what really makes residents stay in place, as well as what makes them leave, and what the options are when they want to go.

Episode 243: The Waffle House Vs. Mom’s Home Cooking Transcript

Everybody knows my old Waffle House quote, the quote I gave the reporter from Bloomberg years ago trying to explain why mobile home parks have such a low default rate on their loans while restaurants have such a high default rate. The reporter seemed to have understood my allegory that it was like a Waffle House where the customers were chained to the booths, it made complete sense to them. But somehow it got lost in the translation many years later, and people think it's some kind of public statement that people who live in mobile home parks are in fact trapped there. It's a very false narrative, but I've always wondered if part of the problem with my Waffle House quote, was I used the name Waffle House, because as we all know, Waffle House is not exactly the most delectable place to have a dinner. I don't know anyone who when given their list of favorite hunts to go have a dinner at, has ever made Waffle House anywhere near the top of that list.

So perhaps let's turn the quote around and instead of making it a Waffle House, let's just make it like home cooking, something we all know, do much more frequently than going out to eat and certainly out to a Waffle House. And something that we don't find mentally abhorred as far as the idea of eating at. I think the problem with the Waffle House quote was people would only eat at a Waffle House on a continual basis if they were in fact chained to the booth. So let's flip that around now and look at what the real reason that mobile home parks have a low default rate, that the customers are extremely stable, and why it's not because they are in some way trapped there. So the first reason that most people are gonna love home cooking and come back and do it frequently, is of course, it's very, very inexpensive, definitely less expensive than eating out at a restaurant, so the bottom line is they simply can't beat the price that they can obtain in the mobile home park.

Time after time, even when you read articles negative on the mobile home park industry, condemning mobile haome park landlords as evil. The person, they interview in the article admits that the restaurant, I'm sorry, the restaurant, the apartment down the street is $1000 a month more than what they're paying. So let's all agree, the main reason people live and stay so stable, an average of a 14-year tenancy is simply because they can't beat the deal. If they could get a better deal, like any American consumer, they would jump all over it. If you're looking at buying a new car and the new car is $30,000 at this dealership and $50,000 at the other... Well, you're gonna shop at the $30,000 dealership, people basically like getting what they perceive to be a good deal. So just from a pricing perspective only people in mobile home parks are very stable because they just can't find anything that's anywhere near as low a cost, also just like when you eat at home, you like the environment around you.

So most people like to be at home, they like talking to their friends and family, the same is true in a mobile home park, because mobile home parks have the sense of community, the sense of spirit, the support network. So just like your family, people who live in mobile home parks, they have that extra edge, they feel in their life because of their surroundings, and the people that are there. So it's that sense of community that frequently binds them to living in the mobile home park. It's not chains, it's not shackles, it's the fact that they have friends everywhere and they don't wanna leave their friends. My partner, Dave, lived in a mobile home park in Hondo, Texas while he was bringing it back to life, Brandon grew up there for a brief while, and Dave was blown away at the extensive support network that mobile home park had back in Hondo. They had meals on wheels before meals on wheels existed. If you needed food, if you had a problem, all of the neighbors would chip in and they would provide you food for as long as you needed it.

Couldn't get to work? Well, they had ride-sharing, long before anyone had coined the phrase ride-sharing. Your car broke down. Let's face it, a lot of people in mobile home parks frequently have car problems, they don't have a prize money to pay the car dealership, the fancy dealership to fix it, so you need a ride to work, well, they'll get you to work. You need someone to pick up your kid after school, well they'd do that too. And that sense of community is a big thing. Time magazine wrote an article called The Home of the Future, and it extolled the virtues of what they felt to be the gated communities for the less affluent. Now, I don't agree with that statement. Many, many people in mobile home parks are not the less affluent, not by the definition of that, but they are like gated communities, because a gated community, when you really ponder what that would be, that would give you a really strong neighborly bond with a lot of people who view that is their own little enclave, their own little city within a city.

And mobile home parks definitely offer that. Also, don't just forget the fact that people love detached housing, we've all gotten through over two years of COVID now, and after two years of COVID, most everyone now relishes the whole idea of detached housing. So another reason people like mobile home parks and they're not going to leave, not because they're tied to the booth, but simply because they really, really enjoy the concept of detached living with a yard. When you live in an apartment, what do you have? You have neighbors knocking on your walls and ceilings, you can't park by your front door, you don't have a yard. You have no outdoor space. You have people everywhere. The density is mind numbing, most people just don't like it. They didn't even like it before COVID, but they tolerated it. Now, they no longer really wanna tolerate it, they want to have space, they want privacy, they wanna have a yard, and mobile home parks deliver that and let's be honest, the other forms of housing, that people who live in mobile home parks can typically afford are all attached, not detached.

So that's yet another reason why, just like you enjoy home cooking, people like mobile home parks. 'cause they really, really just like the general spirit of the fact that they have space to themselves, they're not all jammed in there with all the other diners in the restaurant. Another reason is the great location, mobile home parks pretty much uniformly have really, really good locations, at least all the ones we own do, most mobile home parks do. There's a lot of mobile home parks out there, and they may occasionally have the one that's down by the bridge, down by the river under the bridge, but that's not the norm, that's just the fringe, that's a very, very small percent of all the mobile home parks in America, but that's what gets the most publicity from the media, but that's not really the truth. Mobile home parks in general, though, have a great location, kind of like when you dine at home, what a better location, how more convenient can you be, your commute time from your living room to your dinner is approximately 10 seconds.

So mobile home parks typically have nice attractive locations that people really, really like and they don't wanna give that up, they can't get a detached home for anywhere near the price of that mobile home park in that location. Yes. Maybe they could get a stick built home at a similar price point, an hour out of town, in the middle of nowhere, where there's no schools, no services, no hospital, nothing. I mean, perhaps that is on the table, but to even touch with their price that they're paying with a stick built home is impossible in that location. In fact, it's the overall strength of the location of mobile home parks in general, that really make them such a desirable asset class. They got these locations, 'cause most parts are built between the 50s to the 70s, over half a century ago. So those locations back then, they might have been a little outline, but over the years, the cities have grown around them.

We've in fact owned mobile home parks that were ground zero for the city, which have grown to large cities. We used to own a mobile home park down in Glenn Heights, Texas, you can Wikipedia it up. That mobile home park is in Wikipedia because it was ground central for Glenn Heights, that's where Glenn Heights began. And over time, civilization grew up all around it and the city grew of thousands and thousands of people, but it all started right in the mobile home park, and it's the fact that parks are typically so old that they have such prominent locations, and they have location that people simply cannot replicate. Also kind of like when you dine at home, things are always getting better and always being updated around the home, and maybe even dining, trying out new recipes, always saying what's the better way to cook the shrimp? How can I make a better pasta sauce? 

Same with mobile home parks, these things get brought back to life, owners are constantly trying to figure out even better ways to make people feel like they get a good value. Most park owners have been doing all kinds of things, putting in all kinds of new amenities, putting in new street lights, ambient light, new entries, all kinds of things, all the things that people like to see where they live. They like that field. Things are always going up, never going down, they're gathering that greater pride of ownership, because every time they pull in, well it looked better than it did a week or a month or a year ago. The bottom line to it all is that people live in mobile home parks on such a long-term basis, again, the industry believes it to be 14 years tenancy for customer, they do not do this because they are trapped, they don't do this because they're chained to the booth, they do this 'cause they can't beat the deal.

They can't meet the price, they can't meet the location, they can't feed the quality, they can't beat anything, and as a result, like any consumer, they stay right where they are because they like it there. There's no tricks, there's no gimmicks. Anyone in a mobile home park always has the freedom of selling their home. They could sub-lease their home. They could even move their home, there's many park owners nationwide who would happily pay the cost to move a mobile home from one mobile home park to theirs, but yet they don't, even though they have these many options, all these many rights, they still elect to stay where they are, and they stay there because they love it, not because there's trapped there. This is Frank Rolfe, Mobile Home Park Mastery podcast. I hope you enjoyed this. Talk to you again soon.