The article about us in the New York Times, reprinted in this newsletter, has set off an avalanche of discussion on the affordable housing business. The most interesting impact of the article has been to further delineate the schism between affordable housing and lifestyle choice. That was not in any way what the writer was trying to accomplish in this article. In fact, the whole point of the article was simply to show that, despite what some people might think, the mobile home park model is win/win, with all parties involved satisfied. But most of the comments on the article pertained to our use of the lingo “trailer” and “mobile home”, as well as our continuous rationale on the best way to hold costs down for the tenant and provide an inexpensive lifestyle, which those in the “manufactured home” business find demeaning and hurtful. Of course, since that’s the terminology used by 99% of the earth’s inhabitants – except those that work in lifestyle choice, manufacturing and retailing – then it would be silly to stop. We feel that the gap between affordable housing and lifestyle choice is becoming a battle between realists and those living in a fantasy world. To those who think that lifestyle choice is what drives folks into living in trailer parks, I would suggest we place a mobile home next to a brick home, and offer 100 people the option to have the keys to either of them at the same price. Do you honestly think anyone would take the trailer? If you think “no” then you are an affordable housing realist. If you say “yes” then you are a lifestyle choice fantasist. While we respect anyone’s right to live in a fantasy world, we hope you don’t put hard money behind it. Sadly, two of the three public REITs did, as well as many smaller operators, and now their investors are suffering the ramifications.
Memo From Frank & Dave
The Long Awaited New York Times Article Is Here
About seven months ago, a reporter for the New York Times came to us, wanting to write an article on the mobile home park industry. We gave them complete access to the Boot Camp and our properties, and the result was a giant article in the New York Times Magazine. Although the New York Times is considered the most liberal newspaper in the U.S., the article gave a very positive portrayal of the win/win nature of our business model, as the writer could not find a single tenant who was not happy with us and our properties – and some were downright enthusiastic about how our ownership had improved the quality of their community.
To read the article, Click Here.
How Refuse Specialists Has Saved Us Thousands Of Dollars, And Why You Are Crazy If You Do Not Get A Free Consultation On Their Services
We got a call from a guy named Jack Johnson about six months ago. He was pitching a new concept to us: a company that would re-negotiate our trash contracts for a part of the amount saved. We are suckers for 100% performance driven concepts, so we gave them our blessing, assuming that it probably would not amount to much. To date, this relationship has saves us tens of thousands of dollars, and resulted in ten times more in additional property value. How do they accomplish this? We still don’t have a clue, other than they really know trash well. If you want them to look at your park or parks, give Jack a call at (817) 525-3241. You have nothing to lose and everything to gain. And it paid off big in our case. Check out this video about their services.
Kurt Kelley Is The Only Resource You Need For Insurance
We use Kurt Kelley for everything -- from quick estimates on parks we're buying to random questions on how to mitigate risk and, of course, carrying the insurance on every park we own. That's not only our opinion, but that of most of the larger park operators. If you need insurance -- even just pricing on a park you're buying -- then call Kurt. If you want high prices, sloppy service, restricted coverage and low levels of expertise -- then call somebody else.
War Of The Worlds? Or Missed Opportunity?
Anyone driving up Interstate 55 from the Missouri line towards Chicago has seen this sight. What most people don’t know is that this is a legitimate mobile home design from Europe in the 1970s. It’s a mobile home model built of fiberglass, that did not require skirting. The water and sewer were only in the middle of the home, with a circular wall around a kitchen and bathroom. The only electricity was also in this wall. The homes were accessed via an exterior ladder and steps, just like a spacecraft. The homes are extremely appealing in interior appearance. Although this is obviously beyond the grasp of most American shoppers, another design by Frank Lloyd Wright had much more promise. The famous architect designed a mobile home that did not attempt to replicate a traditional house, but instead make use of the unique aspects of a mobile home; no load bearing interior walls and some unique, curving deco exterior walls. This model, despite its clear design superiority, was not put into production because the manufacturing companies felt it was too radical. Too bad. Had the industry adopted some more tasteful plans, the mobile home sector might not have fallen into disarray to begin with. Joe Dirt would have been replaced with Grey Poupon. The mobile home industry is filled with stories of missed opportunity.
Renz And Associates Has Become Our Official Phase 1 Expert
We have used many different Phase I providers over the years. But some recent events have changed our opinion on who the best Phase I provider is, and we want to spotlight some “beyond the call of duty assignments” that have saved the day on some deals recently. One of the most important occurred on a property we were buying in Indiana. The park already had a Phase I that had been done when the owner purchased it and financed it with a well-known bank. However, at the final hours when the deal was to close and be financed by a new lender, a Phase I issue popped up that we had never seen before. A disgruntled former manager of the park had called the EPA and claimed that the park was operating an illegal landfill, in which entire trailers were demolished and buried near a barn. Although the report was suspicious, it had to be substantiated before the deal could close. So Mike Renz immediately went to the subject area and, using a device that he developed, was able to do immediate boring and testing to prove that the claim was a lie. There’s probably no other Phase I provider in America who could do that work, or do it that fast, or do such a good job of it. As a result, we are now using Renz and Associates as our exclusive Phase I provider, and we suggest you look into using them, as well. You can contact Renz at (614) 538-0451.
Filling Your Vacant Lots Just Got Easier With The Legacy Park Finance Program
Most mobile home park operators have vacant lots to fill in their parks. They know they have the demand to fill the homes, and they know that they can get enough in rent to cover the costs. But the problem is financing – nobody carries the paper on the homes so you have to come out of pocket 100%, right? Well, that’s not the case anymore. Legacy Homes has brought out a new Park Finance Program that allows you to buy homes to fill your lots directly from Legacy, and they’ll finance 70% of the cost of the home including installation. We think that this will be a game changer for many operators, as they have been dreaming of a dependable financing source for their home purchases. And the Legacy product is outstanding as a home – nice floor plans, attractive colors, and great low pricing. We have been customers of this program from day one, and are excited that Legacy is now offering this program to all park owners, large and small. If you are interested in it, call Mark Ledet at Legacy at (786) 785- 9827, or contact us for a reference. We’re one of their largest customers.
Security Mortgage Group Is Our Banking VIP
We did a lot of conduit loans -- and regular bank loans -- in 2013. A common feature of those loans was Security Mortgage Group. If you are buying or financing a mobile home park, let Security Mortgage Group get you the loan. They'll get you better terms than you'll ever be able to find on your own. That's why the win the industry mortgage broker award virtually every year from MHI. If you have any loans you need help on, you can reach Anthony or Gerry at (585) 423-0230.
The Market Report
Equity Lifestyle Properties - 86.10
Sun Communities - 86.46
UMH Properties - 15.01