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January 1st, 2016

Memo From Frank & Dave

January 1st is a very important day for all Americans: the day that we start the year with a clean slate and have the ability to meet or beat our budgets without any baggage of a prior period to weigh us down. We are huge believers in budgets – we are constantly building and revising budgets on everything from parks and park-owned homes to our own households. A budget is like a road map. Without a budget, you are basically driving from point A to B without knowing how to get there. Sometimes you might get lucky and wind up at your goal completely accidentally, but other times you mostly take the wrong turn and end up somewhere you don’t want to be. If you have not yet made your budgets for 2016, we urge you to do so. If you have made your budgets, then we hope that you will watch them closely and compare your progress monthly, so that you can hit your goals with less stress and more clarity. With a solid budget, even the hardest goal can be accomplished. Remember that not all budgets are mathematical. Your goals in 2016 may include such items as not missing your children’s sports games at school, or to lose weight, or to buy a mobile home park. Whatever the goal is, break down the steps to achieve that goal, and then monitor your success or failure in hitting each logical step. Putting a man on the moon was our government’s goal in the 1960s, and they were able to achieve what appeared to be impossible by setting a methodology of events and then managing the timetable to make sure each was accomplished.

We would also like to take this opportunity to wish each and every member of our extended mobile home park family a Happy New Year! We look forward to a great 2016 for everyone!

What Do Virginia, Missouri, Mississippi, Minnesota, Massachusetts, Idaho And Arizona Have In Common?

These states are part northern and part southern. They are some of the most densely populated and some of the least. Some have impressive NFL teams and some have none. So what in the world do these seven states have in common? They have all passed significant grandfathering laws that set the record straight once and for all that mobile home park owners have to obey no ordinances except those that were in effect when the park was built.

What is “grandfathering”?

It’s a slang term for the technical name “legal non-conforming”, which means a property that was built 100% in accordance with all local statutes and regulations when new, but those regulations have now changed and the park is no longer in conformance with the current rules. Federal and state law holds that a property that was built legally is not required to meet any laws or rules established after the property was built, unless such time as the improvements on the property are destroyed or abandoned for a specific length of time, typically 180 days.

Why is it such a hard concept for many cities to understand?

Apartments, houses, retail centers, office building and industrial warehouses are all grandfathered “improvements” to land. These improvements are what is grandfathered when the permits are given to build them. So if a grandfathered house burns down, then that house cannot be built back on that lot unless it meets the new rules. The structure is all that held the grandfathered rights, and then the structure is no more, the grandfathered rights also evaporate. But a mobile home park is an entirely different item. A mobile home park has no structures (other than a clubhouse or laundry building), so what’s being grandfathered is the land itself, in its capacity as a “use”. Effectively, a mobile home park is a parking lot for mobile homes, and you cannot end those grandfathered rights unless you voluntarily ask the city to do so in the form of a demolition permit for the whole property, or by abandoning it as a complete mobile home park for more than 180 days in most cities. Since mobile home parks are unique in this right, many city managers and inspectors don’t understand it. But their ignorance has no bearing on the law.

Why did these states codify the rights of grandfathering specifically for mobile home parks?

These states are the ones that have had a city and park owner do legal battle that has worked its way all the way up to that state’s Supreme Court. By winning their Supreme Court case, these park owners have set the precedent for all park owners in the state, and created case law that no intelligent city would dare challenge. The only reason that all 49 states (Hawaii has no mobile home parks) don’t have this forceful reminder on their books is that no park owner case has gone to the Supreme Court yet. But we have never heard of a mobile home park owner losing one of these cases. And, of course, as each state permanently clarifies the protection of park owners’ rights, the other states see that case law and realize that it sets the precedent for their state. Remember that property rights are a federal law, given to us by the Constitution.


We face a few grandfathering disputes with cities every year. We win every one. We have never had to go to court yet – the city typically crumples when their attorney educates them on how things work and what the damages would be if they tried to fight the law. But we are thankful for those states that have codified this right and made it easy for park owners in those states to stand up for their rights.

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].

Studies Have Shown That Only 1% Of Housing Is Designed For Seniors’ Needs - And That May Be An Opportunity In The MH Sector

Recent studies have found that only 1% of American homes are designed to meet the needs of seniors – a horrifying statistic in a country that is growing old quickly. With Baby Boomers the largest segment of our population, and 10,000 of them retiring per day, the need for houses that meet the requirements of senior citizens is a major issue. And one of the clear winners of this drama will be mobile homes and parks. The biggest problem with most U.S. dwellings is the lack of being on one level. While the single-story ranch house is prevalent in most southwest cities, multi-story dwellings are the norm in the rest of the U.S., and in most of the heavily populated urban markets of the northeast. Older construction homes also feature extremely small bathrooms that are unable to be modified to accommodate grab bars and other necessities. This may prove an important dynamic in the mobile home park tenant base dynamics going forward. The combination of downsizing to less expensive housing, coupled with the fact that mobile homes are always on one level and feature larger, more simple bathrooms, may prove a lucky component that nobody had focused on before. Luck has been very much in favor of mobile home parks in recent years – from the Great Recession to the simple aging of the Baby Boomers – and the single-story dynamic seems to be right in line with this fact.

New Parks for Sale on

Interesting Comments From Sam Zell - The Largest Owner Of Parks In The U.S.

Largest Mobile Home Park Owner

Sam Zell holds the unique distinction of being the only person in American history to attain the status of the largest owner of more than one property sector. Zell has been the largest owner of three. He has owned more apartment units, more office space, and more mobile home park lots than other person in the U.S. As a result of his unbelievable level of play, people listen when Zell talks. And he does not talk very often. We saw an interview with Zell recently in the news, and thought it would be interesting to analyze it.

There’s a reason he’s called the “grave dancer”

Zell has long held that the only time to buy properties is when nobody else is doing so, or when they are mired in distress. Said Zell in the interview “so if you are an investor, the question is, what do you do better in?  Do you do better in a booming economy?  Or do you do better when the market is distressed and there is no competition?  My experience is distress produces much higher rates of return and much more risk-reward benefit than joining the crowd and riding the wave.” He then went on to compare the application of this theory to his investing in Brazil. “Brazil is going through a very tough period of time.  It's got this giant elephant in the room call Petrobras, which is negatively affecting everything.  It's chasing people away.  The real has gone from 165 compared to the dollar to 414 compared to the dollar.  So you have real distress.  But when you have real distress the value of your investment, or the value of your dollar is much, much stronger.  Now a lot of people would say, "Yeah but I'm not going to go into that morass."  And I understand that.  But each of us has different appetites for risk.” We 100% agree with Zell. From the beginning, our business has been built on buying “broken” parks at lower prices, and then fixing them. This is not the easy road to take, but the most profitable.

The benefits to long-term investing

Zell is famous for holding his investments not for years, but for decades. Here are his thoughts on this approach. “I think the answer very much depends on the particular investment.  There are certain assets that we think are very, very long-term assets.  And yes, there's going to be volatility.  But we just have to stay in until they get better.  And then there are other assets that I think are short term.  It’s the nature of the investment that determines the time period, not the philosophy.” He continues. “But in the end it’s simple economics. The way I look at it-- and this very much applies to long term vs short term -– is the following. Think about the richest man in America today, Bill Gates.  If Bill Gates had to mark-to-market at the end of every year and pay tax, Bill Gates wouldn't be the richest guy in the world. The fact that we are able to compound without recognizing tax is what being a long-term investor is really all about.  Last year I sold some stock in Equity Residential. I took the company public in '93, and last year was the first time I sold any stock.  Same thing with Anixter. I sold some stock in Anixter last year for the first time, and I’ve held that stock since the 1980s. In each case I got about $70 a share.  And my cost basis was a $1.20 and $1.80, respectively.  That's how you make money.  That's how you compound.  So, from my perspective, that's the benefit of being a long-term investor.  Now you can't be a long-term investor without staying power.  And with a lot of ability to sleep at night.” We think that’s a philosophy that should make sense to anyone, and one of the reasons that we look at holding every park we buy for around a decade.

Why he refused to become the largest owner of single-family homes

Zell was often considered to be the logical buyer of the millions of vacant, foreclosed homes in the U.S., as a result of the 2007 mortgage crisis. However, he had no interest in that business model. He tells the story of why he did not participate. “Well during the depths of the 2008, 2009, 2010 period I was inundated by calls, mostly from bankers offering me piles of mortgages that I could buy that were in foreclosure.  And I turned them all down.  They said, "Well you're the grave dancer.  You're the guy who is supposed to be taking advantage of all these opportunities."  And my response to them was that I thought it would be a good trade, but I didn't think it was a business. We've now had, I think, five or six very large collections of houses that have been assembled by Blackstone and various other companies.  And I think they're going to make money on the trade.  But now they're in a business where they can't afford to sell anything because they can't replace it. If you're in a public company -- as some of these guys have gone public-- rule one, two and three about public companies is you don't get paid for one-time events.  So yes, you made a great deal.  You bought a house for 20 and you sold it for 30.  And then what?  Invest the 30 at one percent? So my answer is that there has been a single-family rental market, and there will continue to be a rental market. I think the guys who bought early will probably benefit from the trade.  But is it a business?  No. Is it a continuing theme?  No.  Because literally, if any of these guys sell a single house, they can't replace it at an economically justified level.  It's a one time distortion of the market.  I chose not to play in that.  I think they're going to do fine.  I don't have any criticism of the decision to buy.  I just think that there's an enormous misconception that this is going to be the next form of multi-family housing.” We couldn’t agree more. We thought that managing millions of stick-built homes is an impossible task, each one across town from the other. We don’t know how that will turn out for Blackstone, but even for those who own a small portfolio of homes, we think that the management is a nightmare and mobile home parks offer infinite superiority in operating the asset.


Zell is a real estate legend. And his thoughts are straightforward and easy to understand. We just wish that he’d give them out more often. He once spoke at an MHI event in Chicago, and his total words were about a couple paragraphs in length. He’s the one person that we look forward to always hearing from. It’s a shame that he hates politics, as he’s one of the few people that could probably put the country back on the right track.

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.

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.

Refugee Crisis Brings New Concepts To Micro Housing

Refugee Mobile Homes

The world refugee crisis is constantly in the news. Nobody knows what to do with the avalanche of folks fleeing the unrest in many nations, most particularly the Middle East. But one of the few benefits from this world crisis are new developments in micro housing, some of which may end up as part of mobile home design. When the world is doing well, the focus is on how to build McMansion kitchens, but in times of trouble the topic is “how small and inexpensively can we build a dwelling” and much of this research may have a benefit to our industry, just as the Apollo missions had benefits to creating new forms of fire retardant materials.

Understanding The Economic Challenges Of Our Customer Base

Mobile Home Tenant Challenges

The bottom third of U.S. households demographically – which is our customer base – gets hammered in all directions. Not only do they have the lowest incomes, but studies have shown that they have virtually no savings as well, and no educational attainment to allow for most higher paying jobs. They are effectively stuck in a tough position. But that does not mean that they can’t be great customers, homeowners and neighbors.

Priority of bill paying is critical

When your customers don’t have enough money to go around, what’s critical is to be on the top of their stack when it comes to getting paid. You can accomplish this through:

  • Monthly invoices. These written reminders allow the tenant to remember that the rent is due and when.
  • Having a high late fee. This is not to punish them – you hope that they are never late. Instead, it’s to steer their priority of bill paying. Often, the resident will pay bills based on the size of their late fee, with the ones with the smallest late fee paid last. You want to stay on the top of the list.
  • Always maintain a “no pay/no stay” policy. This forces the issue that you are #1 on payment priority. Most people put having a roof over their heads as their number one concern, and you should always be the top bill paying priority as a result.

Be flexible on the rules, as long as there’s a reasonable excuse

If you don’t have a lot of money, there are some steps you have to take to stay on your feet. Work around these as best you can. Help them hold it all together.

  • Allow minor auto repair in their driveway. Many residents have to do their own auto repair because they cannot afford to have a professional do it. They have to go buy the parts and install them on their own. Don’t harass them for doing this necessary work. If a car is up on jacks for a couple days while being fixed, don’t sweat that. Be thankful they have the ability to get that work done, and help be the solution, not the problem.
  • If a tenant has a job that requires the storing of the materials for that job, and such storage can be done without bothering the neighbors through sensible placement of those materials, then don’t stop them from being able to perform that work. If they have to keep a pallet of shingles in their yard, and they place it behind their car and completely out of view, then let it go. Don’t stop them from gainful employment.

Understand the basics of “pride of ownership”

Most lenders are not concerned about the age of a mobile home, or the quality of the car in the driveway. What they are focused on is the “pride of ownership” – how clean is that house, yard and car? You don’t have to have a lot of money to demonstrate “pride of ownership”. And there are brand new homes that show no pride of ownership. So it’s really a state of mind. We have found that there are many ways you, as a park owner, can contribute to the residents showing “pride of ownership”:

  • Make sure the common areas are immaculate. You set the tone for the rest of the park, and there’s no way that you can expect the residents to have self-respect when you demonstrate none. You entry should be nice, with a new sign and white vinyl fencing (if applicable) and all common areas should be well mowed and edged, and all other structures painted and free of any ugly features. When you care, the residents care.
  • Identify the worst offenders, and work with them to bring their homes and yards up to par. In some cases, you’re smart to get the job done yourself and bill it back to them in affordable installments or, in other cases, just do it yourself and look at it as a gift. Remember that it’s really hard to do home maintenance when you don’t have the money to hire it done.
  • Recognize those that do a great job. Have a “yard of the month” or “home of the month” award. Congratulate those that do a good job. Create an atmosphere of positive works.


Despite the economic limitations that many of our customers face, it is not impossible to run your business effectively and successfully with this client base. You simply need to work around their troubles, and find ways to get the job done. Much of what you need done, as a park owner, requires effort and prioritization more than dollars.

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.

-Jill S.

You can contact Mike Renz at (614) 538-0451.

Looking for a company that has proven to be an “Expert in Chattel Lending”?

If you are the typical owner/operator of a Manufactured Home Community, you no doubt have mobile homes in your inventory that you would like to sell. They may be vacant units or rental units that you would like to convert to owner occupied. Potential buyers may express an interest in becoming home owners but finding a source to lend them the money becomes a deal-breaker due to their poor credit histories. Well, that no longer has to be the norm.

Performance Equity Partners, Inc. (PEP) offers creative chattel lending programs to Manufactured Home Community owners who need a funding source for individuals seeking home ownership. Established in 2007, PEP is currently licensed/registered in the states of Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Nebraska, Texas and Wisconsin. Our owners/mangers collectively have more than 100 years of lending experience and our staff has been serving customers’ credit needs for 20+ years.

At PEP we understand that bad things can happen to good people resulting in a negative credit rating history. We specialize in lending and servicing applicants that have less than perfect credit histories and don’t qualify for traditional manufactured home financing. Throughout the entire application and closing process, you and your customer will work directly with one loan officer assuring that every application submitted by your park staff will receive prompt and courteous service. Our courteous but aggressive collection program helps control payment delinquency and we work closely with your community property manager to retain good tenants. Our goal is to assist your staff in ways that will allow them to focus on sales, filling vacancies and property management issues.

Do you have a portfolio of existing loans that you would consider selling? Performance Equity Partners looks for the opportunity to assist community owners to help free up capital through the bulk purchase of inventory which has generally been financed personally.

If what we offer interests you please contact our General Manager and Owner, Richard Voboril directly at (708) 478-5251 or by email at [email protected]. (NMLS Lic. #288432)

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 Texas Manufactured Housing Association

Texas Mobile Home Park Association

We had the opportunity to interview D.J. Pendleton, the Executive Director of the Texas Manufactured Housing Association (TMHA), to get his pulse on the industry heading into 2016, particularly the issues facing Texas mobile home park owners.

Some Texas cities are behaving badly when it comes to the MH sector, and the TMHA is fighting that

The TMHA is watching closely for cases in which cities are violating the state laws regarding MH, as well as Federal law in some cases. These cities behave badly in three broad arenas:

  • Attempts to ban MH altogether, such as in Huntsville, Texas, which recently attempted to eliminate any individual or company from bringing a mobile home into the city limits. These cities think that they can simply pass such a resolution that eliminate affordable housing from their city. Of course, these concepts are completely contrary to state and federal law. The TMHA was able to step in and defeat Huntsville’s attempt to cause harm to the industry.
  • Attempts by cities to violate park owner’s rights under grandfathering (also known as legal non-conforming status). Typically this happens when a city refuses to allow a park owner to bring in a home to fill a vacant lot, claiming that the lot has lost its grandfathered status since it was vacant for over 180 days. The truth is that a mobile home park is a “grandfathered use” like a parking lot, and it’s an all or nothing proposition – the only way to lose your rights to fill every lot is if you close the entire park down for 180 days and cease all marketing. Some cities fully understand this, but attempt to bully park owners nevertheless. In these cases, the TMHA attempts to educate the city or threaten legal action to make them comply with the law.
  • Attempts to enact rent control on mobile home parks. There has been much discussion by some city governments on the ability to control how far or fast mobile home park lot rents are allowed to escalate. The truth is that Texas state law forbids rent control by any city. The only one who can enact rent control is the Governor of Texas, and even then only in the event of emergency. So any city that even claims to consider such an action is completely wrong in their thinking – they absolutely no right to do so in Texas. The TMHA is continually educating cities and towns on the existence of this state law.

Some Texas cities are wanting to behave even better, and the TMHA is proactively helping them

Just as some cities in Texas are obsessed with eliminating or reducing available affordable housing stock, others realize that there is an extreme shortage of affordable housing and are trying to improve their relationship with the industry. The TMHA is always watching for cases in which cities or towns demonstrate an understanding and acceptance of MH, and then try to proactively educate them as to the benefits and opportunities. One of the TMHA’s greatest successes takes effect in 2016 on the state level. The TMHA, among other lobby groups, was able to alter the homestead exemption in Texas from $10,000 to $25,000, which means that a huge number of mobile homes used as primary residences now have to pay no property taxes. Only those mobile homes valued at more than $25,000 have to pay property tax beginning in 2016. This is a huge advantage to those who live in mobile homes, as well as to park owners who are trying to sell such homes to the residents.

See for yourself the benefits to membership in the TMHA

If you are interested in learning more about the benefits to membership in the TMHA, contact them directly at (512) 459-1221. We have been members of the TMHA for years, and recognize their efforts in keeping all park owners out of trouble. We wish that all state associations were as well run as the TMHA.

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If you need more information please call us (855) 879-2738 or Email [email protected]