Even Scrooge secretly loved the Holiday season. There’s something addictive to seeing people in complete happiness. Opening gifts, seeing old friends, family gatherings, watching favorite movies on television, eating favorite foods (and too much of them) all spreads the Holiday Cheer. Regardless of your religion and feelings toward the commercialization of Christmas, everyone has to admit that December can be summed up with one simple word: fun. So get in the mood and reward yourself with at least one time a year in which you can eat pie, be a couch potato, splurge on that watch, leave an excessive tip. And we’d love to be the source of some of your fun, as well. Join us for the annual Frank & Dave Christmas Show again this year, participate in the Forum (yes, we’ll be posting on Christmas Eve) and call in for the Frank & Dave Show (yes, we never miss a show, even when it’s on Christmas Day or New Year’s Day). So if you haven’t heard it enough already, Have a Merry Christmas! And thanks for being a part of our extended mobile home park family!
Memo From Frank & Dave
The NCC Chicago Convention
The industry holds two major events each year: Las Vegas and Chicago. Both cost a lot of money to attend, in both travel costs and a roughly $500 admission ticket. So if you didn’t devote the time or money to attend this year, here’s a full rundown of what you missed.
Comments from the Federal Reserve
Charles Evans, President of the Federal Reserve Bank of Chicago, gave a speech on the future of interest rates, a topic which is of great interest to any owner of income properties. The plan, according to Evans, mirrors that which we have been saying for two years now. They are going to try to get interest rates up around 2 points. They envision basically a 1 point increase in 2016 and another 1 point increase in 2017. The Federal Funds rate has been at 0% since 2008, and their goal is to be at 2% by 2018. I would add that, historically, this would make the decade of 2008 to 2018 the lowest interest rate period in American history. The Federal Reserve is also targeting an inflation rate of 2% annually. However, as has been proved repeatedly in recent years, nobody has any actual idea of what’s going to happen except that the economy is going to continue to go down the drain. In the Q&A period, Evans talked about minimum wage, and said that “there’s a good bit of uncertainty that if you mandate higher costs, businesses may elect to reduce their staff.” That’s an understatement. At a $15 minimum wage, how many of those high schoolers hanging around the McDonald’s kitchen will suddenly evaporate? On the question of “how can you raise interest rates when the economy is pathetically weak?”, Evans responded that “we are trying to recalibrate our systems for the demand of a new economy” which means “I have absolutely no idea how it can possibly work but I’m buying time until I can retire and shut my cell phone off.”
HomeFirst presentation on marketing
The speakers were two individuals who handle the marketing for a chain of eight mobile home parks. They tracked the results of their advertising in 2015, and here were the traffic stats they claimed for each marketing push:
Signage: 1,638 leads
MH Village: 395
Referrals from existing tenants: 688
Their own website: 46,312
Other ideas they proposed included: 1) setting up furnished model homes to demonstrate how nice things can look, as opposed to just bare rooms 2) having the manager give a tour of the entire property, and not just the home for sale, to sell the customer on the overall “community” and 3) have great looking and consistent marketing that is compelling. These are all concepts that we have fully embraced for two decades, and fully support.
There are the boomers (1943-1960), the Gen X (1961-1981) and then the Millennials (1982 – 2004). The Millennials have their own characteristics, such as preferring happiness to money and security to excitement. They are the largest living generation with 80 million members. The speaker gave a great and thorough presentation, and I now am aware that 24 years olds are the largest single age category in the U.S. But I was stumped on how this actually related to the mobile home park business. I don’t know about you, but my millennial customers are typically plumber’s helpers and not software designers.
Dr. Charles Becker from Duke University
This was, by far, the most important speech of the event. Here is the power-point to the speech. The points are pretty self-explanatory
As I’ve been writing about for a while now, the industry should aspire to be as strong as the apartment industry. To do so, we have to provide empirical data and not just myths and legends. To have an esteemed University such as Duke focusing on mobile home parks is indeed a coup.
Dinner at the Mid America Club, 80th Floor of Aon Centers”
One of the highlights of the Chicago event is always the dinner. Not because you learn a lot. But because it’s exciting to see what they’ve planned. Two years ago, it was on a chartered boat. Last year, the top of the John Hancock building. This year it was even higher – the top of the Aon Center. The food was fantastic, as you would expect, and the conversation was always interesting, a mixture of new headlines and insider gossip. You also run into all those people you talk to throughout the year but only see in Chicago or Vegas.
Using Growth Capital to Expand Your Portfolio by Bennett Kim
I had never heard of Bennett Kim or Carefree Communities, but they were apparently part of a billion dollar acquisition by a private equity group recently. They follow the same basic business model as ELS, namely expensive communities and RV parks. But the presentation was a unique topic that I had not seen before at an event, namely the statistical data on private equity group investment in the industry, as well as other sources.
Click Here To View The Speech PowerPoint. Pretty interesting stuff in my opinion.
Transforming Ten Techniques from Apartments to Communities
This speech I liked a lot. I am a huge believer that mobile home parks and apartments have a ton in common, and rather than re-invent the wheel, we should steal all of their best ideas and use it against them. This speech outlined what some of those top ideas are that we should all steal. The speaker was from ApartmentEXperts.com, and really knew her stuff. Here are the important points:
- 48% of all leads receive no response. The only solution is endless mystery shopping. Most every manager does a terrible job of taking and returning calls. Don’t let them do that to you.
- Always ask for the appointment. One of the great failings of most managers is that they don’t understand that the successful phone call ends with an appointment to show the unit. We’ve been saying for a while that our metrics are three calls = one showing and three showings = one sale. You can’t translate a call into a sale. It’s all about appointments. Only 42% of park managers ask for an appointment – and that’s pathetic.
- Stay open later than your competitors. You can do this by being open on weekends and at nights – the times in which most customers are not at work. The 9 to 5 concept does not work well when showing homes.
- Emails are most effective between 3 pm and 5 pm. That’s when most customers are in the funky part of their day where they’ve lost interest in their job and are surfing the web, waiting it out until they can go home. That’s when you want to do your email blasting.
- Show the customer what they want to see, using modern technology. Check this out. Here are the before and after photos of a bedroom and living room using a company that photoshops furniture into it. These are not “real” after photos, but merely photo shopped. Look at the quality here. The price is affordable. Apartments have been doing this for a while now, but I’ve never seen a park owner do it.
- Start marketing the park, too. Show the entry and amenities (if any) as well as the photos of the home in your advertisements. Apartments have been doing this for decades. Very few park owners do.
- Offer specials, even if they are nearly meaningless. Apartments do this all the time. Have a “rent today and receive a can of tuna” promotion and people still feel special.
- You only have seven seconds to create a good first impression. Make sure your manager answers the phone professionally and knows their stuff. Make sure that the park entry is attractive and the park common areas are clean well presented.
- Ask for the sale. Again, a failing of most managers. They are just too shy to ask for the sale. So you need to give them sales training as well as “how to manage a park” training.
My hat is off to Jenny Hodge and the folks at MHI for putting together a roster of good speakers and interesting topics. As always, it’s hard to imagine how to outdo their dinner venue next year. Will I be back next year? Of course. If nothing else, the contacts you can make at this events are sometimes priceless.
Mobile Insurance Is Our Insurance Expert!
Whether you are simply in need of an insurance quote or you have the unfortunate, yet common task of filing a claim, Mobile Insurance is ready and waiting to take your call.
They offer you the best mobile home park insurance coverage when you need it. Being able to contact them when you need them is just as important. Shopping for insurance or setting the wheels in motion to get your damaged home or your business back on track is not easy. At Mobile Insurance, they work to make the whole process easier with greater value for your money. Call them at 800 458-4320 or email [email protected].
New Parks for Sale on MobileHomeParkStore.com
The Importance Of Having A Great Attorney
Of all the alliances you have to forge in successfully buying and operating a mobile home park, one of the most important is your attorney. There are many different attorney profiles, and you must select the one that is best suited for the task at hand. The most common occurrence, for most park buyers, is the attorney to read and protect your interests regarding loan documents and questions that come up on title and contract issues. Like anything else in life, if you chose a bad advisor, you will have a bad outcome. So how do you find a terrific lawyer well-versed in mobile home park law and issues?
The best corporate lawyer we have ever used is Dave DiMarco at Woods Oviatt Gilman, LLP. We have used him exclusively for all of our conduit loans, as well as traditional bank loans. What we love about Dave DiMarco is that he knows what we are trying to accomplish (get the loan closed quickly and inexpensively) and he can quarterback the situation and push it to the goal line without us having to bug him or worry about our progress. How many attorneys have you had to nag, or even worse, call 100 times to get them on the phone? With Dave DiMarco, you don’t have to worry about if he’s making progress – he’s typically bugging you to push you along on your part of the equation. We have given Dave some extremely complicated, time-sensitive tasks and he has successfully completed them on-budget and on-time. He also has terrific people skills and can take charge of a rogue bank attorney and bring them back around both in speed and complexity. Our success rate with Dave DiMarco has been 100%. We get calls all the time from people looking for a good lawyer, and we always tell them to call Dave. If you need a lawyer to represent your interests in a transaction, then you will be well served to call Dave DiMarco at (585) 987-2833. And, yes, he’s the brother of Anthony and Gerry DiMarco – the #1 mobile home park loan brokers in the U.S. This is a family that definitely shapes the industry.
Here’s Why I Enjoy Driving Properties So Much
As most people know, I love to drive. One of the big pluses of owning mobile home parks, in my opinion, is that it gives you a good excuse to hit the road periodically. I have always enjoyed finding those unique spots of Americana that few realize exist – the older the better. So on my drive through our park in Bloomington, Illinois recently, I had to stop by one of the most unusual restaurants you’ll find anywhere. It’s a hole-in-the-wall Italian restaurant called Lucca Grill. It’s located on the original Route 66 that went through downtown Bloomington, and opened in 1933. I don’t think anything has changed there in the past 80 years. Except I hope it’s been cleaned once or twice. The atmosphere is so dark that you have to make sure that you’re eating your spaghetti and not your napkin. But you’re not entirely sure that, when you go out to the parking lot, the cars won’t be all Model A’s and FDR might be President.
An Audience Q & A On Warren Buffett's New Program For Park Owners
Clayton Homes and 21st Mortgage have partnered together to bring a game changing new program to mobile home park owners. If you have any vacant lots in your mobile home park or in a park that you are looking to buy, then you definitely need to be aware of the CASH program to fill vacant lots with nearly zero capital out of your pocket.
For more information you can contact Lance Hull at 21st Mortgage. You can call him at 800-955-0021 ext.1218 or email him at [email protected]. You can also contact Aaron King at Clayton Homes. You can call him at 865.380.3000 Ext. 5164 or email him at [email protected]. To visit the Community Calculator website discussed in the webinar, click here.
Disclaimer: The materials and information available from this posting are for informational purposes only and not for the purpose of providing legal advice. The contents should not be construed as, and should not be relied upon for, legal advice in any particular circumstance or situation. Further, the information presented on this posting may not reflect the most current legal developments. An attorney should be contacted for advice on specific legal issues.
Disclaimer: The information in this posting is not for consumer use and is not an advertisement to extend consumer credit as defined by TILA Regulation Z.
Frank Gets Appointed To The Board Of Directors Of The Iowa Manufactured Housing Association
With the nomination coming from Joanne Stevens, one of our favorite industry brokers, Frank was elected to the Board of Directors of the Iowa Manufactured Housing Association recently. Since we own a large number of parks in Iowa, this was an assignment we are more than happy to help with. Unlike many states, the Iowa Manufactured Housing Association is an extremely professional and proactive outfit, and we are excited to be a part of it. If all industry associations were run as well as Iowa, most park owners would feel like they have a friend in case of crisis, regardless of what transpires. This is an association that has succeeded in changing state law regarding parks, so they really know how to get the job done – and that’s our kind of group.
A Testimonial For Renz And Associates
I wanted to share my recent experience with Mike Renz. Jeff and I needed a Phase I completed for a mobile home park purchase late last year. I shopped around, including Mike Renz as one of my quotes, and eventually chose a local consultant to perform the work. The savings was on the order of $300, and the local guy was "local"--meaning, he should be familiar with the area databases, industries, geology, etc.
In my initial conversation with Mr. Renz (and during every presentation he's given for you), he mentioned that regardless of who I chose, if I had questions, to call him. His advice would be free of charge.
The report I received from the local consultants was pretty bad. Being an engineering consultant in my prior life, I was expecting a much higher quality report. The local guys didn't really do any consulting, and worse, made blanket assumptions, suggested scientific theories that were incorrect with no supporting data, and worst of all, erroneously listed recognized environmental conditions (REC). I called Mr. Renz--he immediately/graciously reviewed the report, talked me through his major concerns, and provided a detailed email with a list of talking points that helped me discuss the report with the local consultant. With the talking points, I was able to reason with the local consultant. The final product was a Phase I report that I felt comfortable with, and more importantly, that the bank accepted.
Needless to say, next time Jeff and I need a Phase I, we're calling Mr. Renz.
As always, Jeff and I appreciate your help and advice and your willingness to share your experiences. After listening to Mr. Renz' presentation oat the Summit, I wanted to thank you again for bringing professionals like Mr. Renz to our attention.
You can contact Mike Renz at (614) 538-0451.
You Can Be In Your Park Every Month Without Leaving Your House
One big improvement we’ve made this year in our own operations is the heavy use of HD video. We now require all managers to turn in an HD video film of their parks every quarter. If we don’t like the looks of what they send in, we up that to monthly until we like it again. Whether you do it monthly or quarterly, there’s no question that it’s a great use of technology to get a phenomenal handle on your park’s property condition. We simply give the manager a Polaroid Cube HD video camera with suction cup mount for their hood, and two SD cards. They then video the park and send you the SD card for you to download (it’s too hard for the manager too do this). You can then watch this video with or without the manager on the computer with you, via GoToMeeting. Look at the quality of these videos. Now you can drive your park as often as you want without ever leaving your home. Notice to all managers out there that are not doing their job: you’re days are numbered as soon as all owners use HD.
Security Mortgage Group Is Our Banking VIP
We did a lot of conduit loans -- and regular bank loans -- last year. 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.
Interview With The Indiana Manufactured Housing Association
Ronald Breymier is the new Executive Director of the Indiana MHA, and he was nice enough to give me some insights as to where the industry is at in Indiana, going into 2016. Here were his observations:
- There has been a significant increase in production and shipment of homes in 2015, up by roughly 10% compared to 2014 stats. This is a great sign for the industry, and will hopefully continue in 2016.
- The Indiana MHA is working on a statute change pertaining to abandoned homes in communities, allowing for a “Quick Claim” title that would expedite the ability to obtain titles in a timely fashion after an abandoned property action. There are roughly 70,000 homes in Indiana which have no title, so this is an important part of the solution to that problem. The Indiana MHA has already succeeded in creating consistency on the title process across all 92 counties of Indiana, and this would be a further improvement to the process.
- The Indiana MHA is lobbying for changes to the dealership requirements for community owners, that would acknowledge that a park owner is completely different from a street retailer, and that would reduce the rules on signage, etc. As more community owners buy homes to fill their vacant lots, and bring them in to sell or rent, this is a very hot topic and reasonably reducing the requirements for these park owners is very important to accelerate the solution to affordable housing.
- A huge issue that the MHA is tackling going forward is the continual struggle regarding grandfathering (also known as legal conforming status) with local governments, and specifically zoning departments, that attempt to deprive community owners of their rights to fill vacant lots, or enact other costly conditions. The Indiana MHA will continue to fight for community owner rights and greater education among local governments regarding the laws of grandfathering.
It sounds like the Indiana MHA is a very proactive group with a great agenda. We’re members, and we urge you to consider joining, as well. You can reach them at (317) 247-6258.