Mobile Home Park Investing Newsletter

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January 1st, 2017

Memo From Frank & Dave

The New Year is the best time for setting budgets and goals. We are firm believers that you cannot get ahead if you don’t have a road map of how to get there, and a way to measure your progress. Mobile home park owners are lucky in that their business model has been forged decades ago, and they simply have to follow the established plan to get from Point A to Point B. But you can still get lost in the woods if you don’t establish firm, realistic budgets and stick to them. Most smart operators have a monthly Budget/Actual/Difference review to see where they are going off the path and what they need to do to get back on the road. But what about if you don’t yet own a park to budget for? Then you’re goal should be to come up with an action plan to find a good property in 2017. You should establish exactly what your ideal park would look like (deal size, geography, etc.) and then a plan to get the highest volume of deals through your funnel (on-line listings, brokers, direct mail, cold-calling, etc.) to find it at a good price. Your plan should not be just macro, but micro in nature, with concrete action steps weekly.

2017 is a fresh year for you to enact your plans and goals. There is no limitation to what you can do with smart, sufficient planning and a “GPS” budget to follow your route. Happy New Year and we look forward to helping you with that planning and tracking again this year!

What’s Showing In 2017

movie theater

There are some big industry items coming out in 2017 and some might even be game changers. So what should we all be watching for in this New Year?

HUD’s Section 8 Voucher Program

One of the big announcements of 2016 was that Obama had signed into law H.R. 3700, the Housing Opportunity through Modernization Act (read the details of it here http://www.cbpp.org/the-housing-opportunity-through-modernization-act-hr-3700 ). How the industry pulled this off, nobody is sure. But for the first time in its history, Section 8 Americans will be able to choose a mobile home in a mobile home park and pay for it using Section 8 vouchers. The suspense is that the actual rules have not yet been decided on or enacted, and nobody knows for sure how this new program will work. If, in fact, it opens the gate for unhappy Section 8 apartment renters to buy much more preferable mobile homes in mobile home parks – and have a yard for the first time, as well as privacy and home ownership – then the impact could be gigantic, as there are more Section 8 customers than residents in every mobile home in the U.S. combined (about 24 million of them). This could be the big news story of 2017, especially if you own a park in a blighted area that can score big by “stealing” apartment dwellers on Section 8.

Fannie Mae and Freddie Mac’s Proactive Lending on MH

There has was a push inside the Federal Government in 2016 to be more proactive in supporting affordable housing. And two action steps came from that strategy. One you’ve already seen in the MH industry in 2016, and that was the new “Agency” debt product that competes with traditional conduit debt – only with the ability to “re-size” the loan as your net income increases. The other attack plan is to increase the presence of Fannie Mae and Freddie Mac chattel paper. That would be another first for the industry, and a very welcome addition in an industry where most income-challenged buyers have a tough time finding a suitable home loan. We would love to see new homes come into our parks without us having to buy them, so we are hoping that this government agency push picks up a lot of steam.

Industry Consolidation

We have been writing about this for several years, so we were not shocked when there were no less than three $2 billion transactions in 2016: 1) the sale of Carefree to SUN (a U.S. public REIT) 2) the sale of Northstar to Brookfield (a Canadian REIT) and 3) the sale of YES to GIC (the sovereign nation fund of Singapore). The MH industry has been way behind all other real estate sectors in consolidation, and it’s catch-up time. Even the self-storage industry – the only real estate niche younger than MH – is already three times more consolidated. Consolidation is a natural feature in the life cycle of an industry, and is nothing to be feared, as it gives the option of greater liquidity to park owners and brings valuable attention to the sector, resulting in greater access to lending and other benefits. It also results in higher management talent and best practices entering the industry. It’s worthy of note that the industry consolidation has been limited to the lifestyle choice and higher end of the affordable sector, so it’s not going to be felt in the trenches when buying new parks.

Manufacturer Home Programs for Park Owners

The CASH program has been a huge boost to park owners since its inception. For those who have not heard of it, it’s the program from 21st Mortgage (a part of Berkshire Hathaway that also owns Clayton Homes) that allows you to bring in brand new homes at no out-of-pocket cost to fill your vacant lots. The program keeps getting fine-tuned and improved, and now includes the ability to re-finance used homes, as well. Meanwhile, Champion is working on a similar program, and Legacy continues with their original program to finance park owners. As these programs ramp up and gain in aggressiveness, there will one day be a day in which vacant lots are filled quickly and effectively, and in a manner that could never have been envisioned in the old “dealer network” days of a decade ago.

Media Assault on Park Owners and Capitalism in General

Because we get contacted by so many media outlets because of our visibility, we can see what’s trending in the media ahead of everyone else, and for 2017 it’s going to be non-stop condemnation of all things capitalism. Perhaps it’s a planned retaliation for the election of Donald Trump, but there is a certain hostility brewing in anything to do with being a landlord. While we have been trying to spread the fact that mobile home park owners are actually the solution and not the problem, but that argument falls on deaf ears if you don’t want to hear it. They are focused on the fact that there is class warfare between the rich and the poor, and that anyone who charges money is evil and should give everything away for free. Of course, this is a socialist message in a capitalist country, and makes no sense, but we guess the media hopes that those who watch TV or read newspapers will get turned on by that narrative. So brace yourself for a weird 2017 in which the government acknowledges that mobile home parks are the ideal cure for the affordable housing crisis, while the media strikes back with the claim that anyone who does not live in a Section 8 apartment is an evil money grubber who cares nothing for their fellow man. Of course, you probably will not see any articles on why top television anchors earn millions of dollars a year yet are the salt of the earth. First rate hypocrisy, of course.

Conclusion

There should be some blockbusters coming out in 2017. If you like big-budget movies, then you’ll love the MH industry this year.

Don’t Miss The 2017 Summit

And speaking of predictions for 2017, our annual MH Industry Summit features the top industry experts discussing the trends and predictions for their market segments in the New Year. It’s a must for anyone who owns a mobile home park, or is looking to buy one in 2017. If you bought an hour of time from each of these speakers it would cost you around $5,000. But all the information is yours for only $99, and it also featured Q&A after every speech, so you can drill down even further on what interests you. Keep an eye out for a full announcement soon.

Successful Market Stats For 2017

skyline

Has anything changed for 2017 when choosing a market or park to buy? Here are our opinions on what to look for in a successful market for 2017.

Geography

We still prefer the Great Plains and Midwest, as they have solid economies and little boom/bust cycles in housing. But we think that there are still good buys throughout the U.S. if you look hard enough. The primary state that was red-lined by the lending industry – Michigan – has now been embraced for lending again, and is seeing a continually improving economy. It’s hard to find a deal at an attractive cap rate in California, Florida and New York, but that’s been true for over a decade. Probably the biggest news story in geography for 2017 is the growing strength of some of the southeastern markets, such as Alabama. These states are seeing big gains in manufacturing (Alabama, for example, picked up plants from Airbus and Mercedes-Benz in the last few years) and this could accelerate if Trump shuts down trade agreements and penalizes companies that manufacture abroad. The two weakest states in the U.S. for mobile home parks in 2017, in our opinion, are Louisiana and Mississippi – but even then the larger cities are fine. Hawaii, of course, continues to have no mobile home parks.

Population

We still prefer markets with 100,000+ metro populations, but we will look at smaller amounts if the market and deal have superior attributes. It’s always worth mentioning that Aspen, Colorado has a metro population of less than 7,000, but has a median home price of over $1.5 million – so there are other considerations besides just raw population stats. However, the important point is that, 99% of the time, you need sufficient population to ensure a diverse employment base, a strong chamber of commerce to attract new industry, a professional city government to ensure working utilities and school district and long-term attractiveness, and a big enough population to be on the radar screen for all franchises and big-box retail stores. We have found that number to be around 100,000 in metro population.

Contrast with Single Family and Apartment Prices

We cannot emphasize enough at every opportunity YOU NEED EXPENSIVE HOUSING TO CREATE THE NEED FOR AFFORDABLE HOUSING. We get calls year round from buyers who are looking at markets with low single-family median home prices, and low apartment rents and we always tell them those will never work. If traditional SF and apartments are cheap, then who needs affordable housing? To succeed with a mobile home park you need a single-family median of around $100,000+ and three-bedroom apartment rents of around $1,000+ per month. Those are ballparks, and not set in stone, as a SF median of $70,000 will still be unattainable to 99% of park residents. But when you’re looking at $40,000 median home prices and $500 apartment rents, there’s simply no niche for an affordable alternative, as those are already affordable enough. The best markets for mobile home parks – the ones that produce test ad results of 100+ calls – are those with extremely high housing prices. Austin is a great example. The median home price is over $180,000 and the average 3-bedroom apartment rent is over $1,400 per month. The result is so much demand that you have zero vacancy of any habitable home in your park, and dealers that will fight to bring in a new home to your vacant lot with a customer in hand.

Market Vacancy

Healthy markets rarely have a vacant housing rate higher than the U.S. average of 12.46%. Some of the best markets can be as low as 5%. If you find a market that exceeds the U.S. average, you need to put a microscope on the reason and it better be good. In some markets, an older, blighted inner-city neighborhood with super high vacancy will skew the number. Talk to the Chamber of Commerce and try to decide on whether the market vacancy is a deal killer or not.

Population Growth

In much of America, the future is a decline in population growth. The reason is simple: Americans are just not having kids like they used to, coupled with lower immigration and accelerating aging. Here’s an article that explains the phenomenon http://www.prb.org/Publications/Articles/2012/us-population-growth-decline.aspx . This is not a big deal right now, as what’s important is the number of occupied housing units, not the size of the family unit in that home. A home with two people in it is just as occupied as one with four people. Negative and zero population growth may be a part of America for years to come. Vermont, for example, had state-wide negative population growth, as did New Mexico and Maine in 2016. To drill deeper on this issue, follow your test ad results and watch for housing market vacancy numbers.

Recession Resilience

Nobody could come away from the Great Recession of 2008 without noticing that some states and cities seemed not to be impacted at all. For example, much of Iowa maintained unemployment rates in the 3% range while the nation soared to 10%. So what makes a market “recession resistant”? We have noticed that these stronger markets have their employment built around 1) healthcare 2) education (school districts and colleges) and 3) government employment (federal, county and city). They also are frequently backstopped with agricultural employment that remains in demand throughout any recession (we all need to eat). They also display a diversity of private sector employment, without reliance on any one industry. A good example of this is Kansas City. The top ten employers are 1) the Federal Government 2) HCA Health Center 3) Cerner Corp. 4) Sprint 5) St. Luke’s Hospital 6) State of Kansas 7) State of Missouri 8) Children’s Mercy Hospital 9) University of Kansas Hospital and 10) the City of Kansas City. That means there are only two private sector employers in the top ten. Since none of those top eight can really reduce their employment even in a depression, the market is pretty secure. Compare that to the markets that were destroyed in 2008.

Conclusion

Great markets in 2017 display the attributes of solid population, high housing costs, low housing vacancy and recession-resistant employment structure. If you are not seeing these in a market, don’t buy there.

Why Mobile Insurance Is The Best Protection At Affordable Prices

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. We’ve used Mobile Insurance for over a decade, and their superior service is known throughout the industry. Kurt, the owner of Mobile Insurance, is a top resource for any park insurance question, and they provide free quotes on parks that you are acquiring. That’s why around 2,000 park owners in the U.S. are Mobile Insurance customers.

Mobile Insurance can help you engineer the policy you need to cover all your concerns, and their prices are unbelievably low. Being able to contact them when you need them is just as important. We recommend that every park buyer call them first, as we know of no other group that has the same expertise, quality of service, and low prices. Call them at 800-458-4320 or email [email protected]

The Importance Of Window Coverings

mobile home mini blinds

One aspect of mobile home park aesthetics that is often overlooked is simple window coverings. Nothing destroys the appearance of a property more than windows that display raw plywood or broken glass, or coverings made of beach towels, blankets or aluminum foil. And those windows that had mini-blinds that have been bent and broken are worse than none at all. So what’s the solution? You need to get with the resident and explain that the community rules are that the window has to have a neutral, acceptable window covering and the beach towel with a tiger on it is not going to work. Suggest white mini-blinds and offer to install them for free. They cost $10 and can be installed in minutes. It’s easier just to do it than to bug the resident for months to get it done. You will be impressed at how much better your park can look with good window coverings and how much bang you get for your buck.

Why We Are Excited About The Gama Sonic Imperial II Solar Street Lights

When we first saw the Gama Sonic booth at the Las Vegas MH Show four years ago, we were immediately impressed by the product, and ordered over 20 units to test them out in some of our properties. We have not been disappointed. These lights serve a need for many park owners and have unbelievable bang for the buck as far as property appearance and even safety.

Let’s look at the park we own in Bloomington, Illinois, for example. This property has direct access on the frontage road to Interstate 55, but had no illumination at the entrance, so you could not find the park’s entry at night. We installed two of the Imperial II lights at that entrance, and it has completely changed the way the park looks at night. On top of that, these fixtures look fantastic during the day – and they cost a fraction of what the residents think we spent.

One of the key benefits to solar lights – as opposed to traditional ones – is the fact that they do not have to be connected to a power source. That one step alone translates often to thousands of dollars of expense. But the problem with solar lights of the past is that they look dim. The Imperial II lights look as bright as a conventional bulb. Another huge plus of these lights is that they are zero maintenance – they turn on at dark and turn off at dawn or when the battery is exhausted. No need for timeclocks.

You can use these lights at your entrance or throughout the park to create a common, attractive theme. And, because they are a light source, they also add security at night. So they basically look great 24 hours a day. Low cost plus low maintenance requirements are what every mobile home park owner wants – and it’s even better when they increase the aesthetics of the property and, in turn, it’s value. On top of all that, these lights come with a two year warranty.

For more information, please contact Matt Cohen at 678-736-8303 x 104 or email Matt at [email protected] or see the product at www.gamasonic.com.

In Praise Of The MH Product

arch

Our industry does a lousy job of self-confidence. Few people truly believe in the product. They only think that Americans live in mobile homes because they can afford nothing better. That’s not the case. Our customers choose us over the other housing options for a number of good reasons. Here they are.

No neighbors knocking on their walls and ceilings

People hate hearing loud noises, shouting and the general distraction of having humans right on the other side of their walls. Can you blame them? One of the greatest benefits of a mobile home park is that these are detached dwellings, as opposed to attached dwellings. Privacy is a huge desire of all Americans, and mobile homes really deliver on that promise. Apartments don’t.

A yard

Having your own yard is a huge part of most American’s goals in housing – especially if they have kids. Apartments can’t deliver on this desire. But mobile home parks can. The ability to have an outdoor living space, a place to entertain, and a place for kids or pets to play is a huge motivator, and among the top reasons given by our residents for selecting the mobile home park as a residence.

The ability to park by their front door

In apartments, you have to park in a communal parking lot and walk to your door. In the rain. And the snow. And the summer heat. Mobile home parks allow you to park by your front door, where you can be in the house within seconds. It’s a huge item to residents.

Non-transient neighbors who are settled and offer a sense of community

Apartments are filled with transient neighbors who are only there for a short term and then they’re gone. Most of the time you have no idea who they even are, and don’t know any of their names. But mobile home parks are extremely stable and neighbors live there for decades. As a result, there’s a sense of community and neighbors looking out for one another. This is extremely reassuring to know your neighbors are watching your home while you’re away, and there for you in an emergency.

The ability to be a home owner

This is where apartments can never compete by definition. Apartments are purely rental. But a mobile home park offers home ownership. That’s encouraged by park owners, because the business model is that the resident is a stakeholder in the business, through ownership of their home. Some skeptics say “why would they want to own it?” That’s a stupid question. The average lot rent in the U.S. is around $275 per month. So if you own your home, you’re sitting there with a 3/2 at $275 per month, as opposed to over $1,000 per month in a similar apartment. Who would not want that? But on top of financial benefits, most people simply like to own their home and customize it to meet their tastes. Some skeptics complain that mobile homes don’t appreciate. Nobody, to our knowledge, has ever purchased a mobile home with the goal of appreciation. They simply hope that it will sell for what they paid, which it frequently does. Apartments, of course, don’t appreciate at all. Customers buy the home for the immediate cash benefits, not some intangible gain decades down the road.

Conclusion

Every time we hear some park owner say “I’ve got to keep my rent cheap because otherwise I’ll lose all my customers” we cringe. People live in mobile home parks for a variety of reasons, with cost only one of the parts of the equation. We’ve rented and sold literally thousands of homes and the reasons shown above are what closes the sale – not just price. It’s a shame that our industry does not realize what the real selling points are and have some degree of confidence in our product. It’s not the housing of last resort – contrary to what the media may often claim – but the housing of choice for millions of Americans. Anyone who does not believe this to be true should spend a week selling or renting mobile homes in one of our offices, and you’ll learn the truth real fast.

A Story About Dave DiMarco

The best corporate lawyer we have ever used is Dave DiMarco at Woods Oviatt Gilman, LLP. We have used him on virtually 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. Here’s a story that illustrates why we use Dave Dimarco.

A few years ago we bought a mobile home park and, after turning it around, went to refinance it into conduit debt. Everything looked great until the lender’s counsel found a minor problem with the title: a city street that fed into the park actually belonged to the park and not the city. On top of that there was around 16 square feet of land that the park owner had not obtained an easement for 40 years ago, and that made one side of the city’s road in jeopardy. Now, the whole situation was ridiculous, as the city itself was adamant that they owned the street. In fact, state law mandated that, under adverse possession, they had owned the street for decades. It even showed as the city’s street on the street map. However, the impossible-to-please lender would not move forward unless we could obtain a letter from a judge stating that the city owned the street – which could take months or years. So Dave DiMarco ran out and located the owner of the 16 square feet, initiated negotiations, and we bought the easement. It saved the day on that loan. No other attorney on earth would have taken that outside the box effort. We knew then that Dave Dimarco was our man.

If you need service like that, then consider using Dave DiMarco on your next transaction. You can reach him 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.

The Truth About Demolishing Homes

mobile home demolition

OK, so a mobile home has just burned in your park and the resident has run off. Off you just bought a park and there’s an abandoned home that needs to be torn down. How do you do it? Here are some key considerations and observations.

Make sure you have the legal right

Before you can even think about demolishing a mobile home in your park, the first question should always be “do I have the legal right to do so?” Just because a home is sitting empty in your property does not necessarily make you the owner. In most states, you’ll have to go through an abandonment process to gain title and ownership. This can often take 60 to 90 days, based on your state. If the owner of the park deeded you title at closing, then that’s another story. But make sure you have a handle on every vacant home before you ever touch it.

Don’t try to move it – tear it down where it sits

Want to turn a $2,000 cost into a $2 million cost? Then move a mobile home that’s in poor condition and 50 years old down the highway at 55 mph. The only safe way to demolish a home is on-site. You bring in a roll-off dumpster and place it beside the home. Then you hire a contractor who bashes the home into bite-sized pieces and puts it into the dumpster. The only thing that you may be able to transport out is the frame, but even then you would never do that yourself, but sell it to a scrapper who can sell it by weight.

Hire a professional contractor with insurance and references

And you can’t just hire some hillbilly for this task. You need a real contractor who is licensed and insured and has references (which you have checked out). Here’s what happens if you fail in this mission. You hire Crazy John, who starts the process and then runs off after two days. There’s debris blowing all over your park and you get reports that there’s kids climbing around on the half-torn-down hulk. Liability is everywhere, and then the city inspector shows up to start issuing you violations. Meanwhile, Crazy John won’t answer his phone, so you have to hire a real contractor to now not only finish the job but clean up the mess, not to mention the two lawsuits and ten city code violation tickets. Then of course, Crazy John shows up and demands payment, and then files a workmen’s comp claim because he hurt his hand while doing the job (because he wouldn’t let go of his liquor bottle). This is not a job that you can delegate to anyone less than a professional.

It should only take a couple days

A professional can complete the entire job in two to three days. Period. If your contractor is taking longer, then you’ve made a bad selection and should never use them again. The real McCoy will use a bobcat or other large equipment, not a shovel and a wheelbarrow.

The job site should be left immaculate

The job is not done until the entire worksite is immaculate. Not covered in bits of debris. Professionals know this and will not even think about asking for payment until all you see on that lot is fresh dirt and grass. The amateur will claim that his contract never said anything about cleaning up the mess.

Conclusion

Demolish most mobile homes right where they sit. And use a professional who is licensed and insured, and who has actual equipment and doesn’t ask for payment until the job is completed. Let the local hillbilly contractors continue to nap.

Why We Love Clayton’s CASH Program So Much

As many people know, we are the largest users of 21st Mortgage/Clayton Home’s CASH program in the U.S. We have around 1,000 homes in our parks under this initiative. So why are we such huge fans of CASH?

  • It allows you to fill your vacant lots with no money out of pocket.
  • You are not the home owner: the customer is the buyer and 21st is the lender.
  • 21st Mortgage handles all the paperwork, so you do not have to be SAFE Act licensed.
  • 21st does a terrific job of screening applicants, and has very low defaults.

We’re not alone in our excitement for this program, as the number of homes ordered under CASH has more than doubled this year from a variety of park owners, both large and small.

For more information on this program, call Candice Doolan at 800-955-0021 ext 1735 or email her at [email protected].

Is The All-Linoleum Home A Good Idea?

All Linoleum Mobile Home

This is a photo of a mobile home that is completely floored in linoleum. There’s not an inch of carpet in the entire home. And the linoleum is the same pattern throughout the entire house. Is that a good idea? Well, there are certainly a number of reasons why it might be.

Attractive from an initial cost perspective

It’s far cheaper to floor a room in linoleum than in carpet and pad (assuming even a decent grade of carpet). So just based on price alone, the linoleum concept would be a winner. And since it’s all about affordable housing, the lower cost translates to a lower sales price and/or rental rate, so it’s a win/win for the consumer, as well.

Attractive from a repair perspective in-between residents

But the cost savings do not stop there. Where the real savings come from is what happens “in between” residents – when one moves out and you have to make repairs for the next one to move in. In many homes, the departure of the resident also signals the departure of the carpet and pad; often destroyed by pets and bad living. This is an extremely rehab cost, especially when some homes can churn the customers once a year. Linoleum does not absorb moisture or pet urine or stains of any type, so all you have to do is clean it and you’re ready to go.

Versatility in that you can augment with area rugs

Having linoleum does not exclude the carpet “look”. You can buy area rugs at stores like Walmart and Home Depot to sit on top of the linoleum and give the look and feel of carpet (although not the plush feel with you include the pad). It’s a whole lot cheaper to throw out these area rugs in between tenants than to re-carpet the rooms.

Better deterrent to moisture and “soft” floor issues

Linoleum also serves to shelter the plywood or particle wood in the floors from moisture, which is what destroys it. In this manner it further reduces the costs of operational repairs. And that can mean thousands of dollars over time.

Can mimic hardwood with the right application – and appear stylish

Many customers are conditioned to expecting hardwood flooring throughout a typical single-family home today. So they are not that disappointed in the linoleum if you choose something that resembles hardwood. In fact, they may like it better.

Proven model with the petroleum industry

Out in East Texas, for example, oil and gas companies have long used linoleum as the sole flooring in their employee residences, for all the reasons cited above. And that’s been the case for decades. So the linoleum idea is not radical, but instead steeped in tradition in some markets.

But there are serious limitations

But before you go out and replace all your carpet and pad flooring with linoleum, here’s the problem. It’s just not acceptable in some markets, and will render your home impossible to sell or rent. In Wisconsin, for example, we have had homes that are hard to get occupied simply because people feel that the carpet pad is not thick enough. So you have to look at this concept market-by-market. As in most things regarding mobile homes you have to really know your customer base well!

Conclusion

An all-linoleum home is not a radical idea. It’s been around for a long time. We have some 1960s models in our parks that came that way from the factory, and still look great. But you have to match this concept to your customer base or you might create a product that nobody wants.

Why Mike Renz Is The Only Name You Need For Phase I Environmental Reports

You can’t buy a mobile home park without doing a Phase I – you could lose everything if it turns out to have environmental pollution on it. So who do you choose to do the report? We choose Mike Renz. Mike is the consummate professional and his range of knowledge is unparalleled. Here’s an example. We were buying a mobile home park and it failed the Phase I. Most people would have given up, but Renz knew that something did not seem right. It seems that a disgruntled manager had called the EPA and claimed that the owner had been operating an illegal land fill at the back of the property, yet Renz saw no evidence of this on aerial photos. So he did some quick borings and found the claim was a lie and the EPA removed it from their database. Case closed and park purchased. That’s the reason that we refer so many people to Mike Renz. Have you ever seen the “Beard of Knowledge” character on the show Pawn Stars – the guy who is a walking encyclopedia of all trivia? Well, for environmental issues, Mike Renz is that guy.

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

The MHU Investor’s Club Classified Ads

To advertise here, you must be a member of the MHU Investor’s Club which is a program available to our Mobile Home Park Boot Camp and Mobile Home Park Home Study Course customers. Contact us for more information.

Member Name: Steve BaikPhone: 206-326-8764
I am looking for a park with City Water & Sewer. Septic will also be considered. I am willing to pay commission if you can bring me an off market deal. 30+ lot preferred. Price between $500,000 - $1.5 million. Please call me at 206-326-8764 or email me at [email protected]
Member Name: Gayle DenhamPhone: 606-669-4911
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Member Name: Michael HinshawPhone: 949-202-9806
Dear Mobile Home Park (MHP) Owners and Brokers, Donna and I are interested in purchasing a MHP and can act quickly to close the deal. We are principals and will be happy to pay referral fees or commissions when we close on your park. Our preferred park criteria include up to @$2M purchase price, 50 – 150 spaces, paved roads, city water, city sewer and a sound economy. With that said we do realize that few parks are perfect and we are willing to concede certain criteria for the right opportunity. We have quick access to additional equity and can purchase a park up to @$4M if the seller is willing to participate in a 1031 exchange. Please feel free to visit our webpage at http://gallerymhp.com for more on our background and objectives. If you do have a newly available MHP to sell we would like to discuss purchasing it with you. I can be reached at 949 202-9806 or [email protected] Sincerely, Mike Hinshaw
Member Name: Steven IltzPhone: 503-439-9069
Looking for a MHP deal size of about $3 million or larger, with about $1.9 million of debt or larger. Have about $900k cash as part of a 1031 exchange. Looking for Mobile Home Park to own or joint venture with. I have cash to invest. My preference is to own a park that is about 100 spaces. If your looking for someone for your team that can add value and time along with cash, give me a call (503) 439-9069 Portland, OR. If you like I will send you a flyer on the park I rehab in Tyler, TX.
Member Name: Shoaib KhawajaPhone: 312-568-6493
Looking for equity partners who would like to purchase MHP's in the midwest. (MI, IL, OH, WI, IN). I have cash to invest.
Member Name: Megan KrekorianPhone: 530-830-2803
We have a park under contract that our credit partner just fell out due to personal reasons. We are looking for credit partner on a park. Here's your chance to get vested in a park without cash.
Member Name: Andrew NissenPhone: 615-456-5391
- Capital partner wanted to buy parks Will provide Capital Partners with Tax benefits or Cashflow or Equity - depending on your needs / desires. Let us know how we can work with you to accomplish your goals through MHP investing. We currently own two parks. Have 4 years experience owning and operating MHP's. Real Estate investing since 2004. Experience as a general contractor. Accredited investors ourselves. Currently seeking Parks in and around the Carolinas and Ohio but will gladly go further if the deal is right. Call or e-mail any time. Will gladly provide resume, references and so on. Thanks, Andy
Member Name: Bryce RobertsonPhone: 714-603-1394
I have a 200 space value add MHP that I'm closing on in the mid west. This park has all the typical metrics of an attractive MHP deal. If you are interested in becoming part of this deal please email [email protected] or call (714) 603-1394. Thanks, Bryce
Member Name: Ryan WannerPhone: 615-481-5395
I currently have 2 properties under contract. 1 in Hutchinson MN MSA and 1 in South Bend IN. We are looking to either assign the purchase agreements or preferably looking for equity partners to help complete our purchase. Thanks.
Member Name: Val WhalingPhone: 413-822-6960
To Brokers and Owners: We are interested in purchasing several MHParks and are set up to close the deal quickly. We are principals and will be happy to pay referral fees or commissions when we close on your park. Our ideal park criteria include up to @$2M purchase price, 50 – 150 spaces, paved roads, city water, city sewer and a solid economy. However, we do understand that few parks are perfect and we are willing to concede certain criteria for the right opportunity. Please feel free to call anytime: Val Whaling [email protected] 413-822-6960
Member Name: Ed WillisPhone: 907-460-6646
If anyone is looking to start a direct mail campaign to find deals I can help you. If you're not wanting to do the owner address research yourself I could provide you with lists for MO, KS, NE, IA, & ID (1000 owner addresses thus far). If you've got another state you want to mail I could help with that too. I can help you design your postcard or do it for you. I also know of deals I'm unable to do that I can refer. Let me know if you're interested, Ed Willis 907-460-6646
Member Name: Brian ZobergPhone: 305-301-2443
I have several years experience of buying, owning, operating and selling (for excellent returns) mobile home parks. I am looking to partner with other owners, investors who are interested in buying their first park or expanding their portfolio. I am also offering to pay a referral fee for a mobile home park on any deals. Please contact me if you are interested. Criteria: minimum 25 occupied lots, city sewer or septic, city water or well water.

How Many Things Can You Find Wrong In This Picture?

mobile home with issues

So how many things are wrong in this photo? Really only one: the large dog on a wire in the yard. But that’s the biggest one that there could possibly be. Why? The liability of dogs is crushing and completely irrelevant to the business model. Insurance companies are fine with insuring the mobile home park as a working business. They understand slip and falls and other liability items. But a dangerous breed of dog can create millions of dollars in damage to humans and is not a natural byproduct of the business. While there are liabilities that any business has to face day in and day out (think about an airline, for example) you do NOT need to have large and dangerous dogs in a mobile home park. They serve no purpose, other than to terrorize residents and create liability. Talk to your insurance agent and get the big dogs out in 2017. Insurance companies are not banning dogs – they love them when they’re 30 pounds and under – they just won’t insure you if you allow these four-legged destruction machines to hang around. It’s not our rule, it’s the insurance industry’s. But if you want to have insurance on your park, you better do what they tell you.

Security Mortgage Group Is The Premier Loan Broker For Mobile Home Parks

We do a lot of conduit loans -- and regular bank loans -- every year. A common feature of those loans is Security Mortgage Group. If you are buying or financing a mobile home park, let Security Mortgage Group get you the loan. They build the loan package, they pitch the banks, and they bring you the best options. It saves a ton of time and energy, and the rates and terms they find are always better than what you can obtain on your own – they effectively more than pay for themselves. If you have any loans you need help on, you can reach Anthony or Gerry at (585) 423-0230. Tell them Frank & Dave sent you.

You Can Tell A Lot About A Park By The Residents’ Cars

Old Car In Mobile Home Park

Nothing offers am immediate glimpse into the soul of your residents more than a look at their cars. You can tell a lot about a park by the types and conditions of the automobiles parked in front of each home. Here are some of the macro conclusions you can gather.

Their likelihood of decent credit scores

Most people tend to favor newer cars. But those require bank loans (or similar programs from the manufacturer), and that’s means a decent credit score. If you see newer cars in the park then it’s a good guess that your customers have decent credit. But if the cars are 1990s and older, then it’s a good bet that they lack sufficient credit to get a car loan, and settled for what they could buy for cash or less restrictive used car lots.

Their occupations

While this is an imperfect science, generally those who have jobs that require them to carry tools and supplies – like roofers, dry-wall, construction, painters, landscapers, etc. – drive pick-up trucks and vans. And those that have jobs that are indoors drive regular cars. While this might not seem like a big deal, it does give you an idea of what your diversity is of job types and reliance on one industry (like construction) that might give you a feel for what would happen in a recession. And if you’re thinking of filling vacant lots with new homes through the CASH program or something similar, you probably want to see more cars than pick-up trucks, as they put a lot of weight on how long someone has been on their job at that employer, and people who are in the construction business tend to jump around a lot, and have gaps in their employment.

Their pride of ownership

Look at the condition of the cars, regardless of age. Are they clean and well maintained? Are they reasonably washed and without broken glass or missing hubcaps? These are all signs of “pride-of-ownership” which is a big deal with bankers and appraisers (and park owners, too). People who take care of their cars will also theoretically take care of their homes and yards, as well.

Aesthetic sensibility

We hate it when we see cars where one body panel is a different color or a side window broken out with a hefty trash bag duct taped over it. That means that the residents are lacking the type of aesthetic sensibility that you need to elevate the park up a notch. You want residents who will follow your lead in making the park the nicest it can be, not dragging it down and fighting you as you try to fix the aesthetic issues that make it so unattractive.

Get a good idea on percentages for collections and rules violations

People with nasty cars typically don’t pay rent on time (or at all) nor do they obey park rules. Do a count of how many lots have nasty cars. If it’s 10% of the entire park, then that’s a good guess on how many will need to probably be evicted over time because they simply can’t behave in modern society. If it’s every car in the park – which we’ve seen – then you might want to get a massive price reduction to allow for the remodeling of all those soon to be vacant homes (after you evict them all for non-payment and rules violations).

Conclusion

Some properties we own have fantastic, clean, newer cars at every lot. And others have junker cars at many lots. Which property performs better? I’ll let you make your own judgement call.

Join The Mobile Home Park Boot Camp In Orlando, FL On January 13th-15th

mobiel home park boot camp class picture

If you want to get 2017 off to a great start and learn the correct way to identify, evaluate, negotiate, perform due diligence, re-negotiate, finance, turn-around and operate mobile home parks, then don’t miss the Orlando Boot Camp in two weeks. It’s held both in a classroom as well as in the field inside real mobile home parks. And, of course, Orlando is the perfect place to bring the family, as it is home to some of the finest attractions in the U.S. and warmest winter weather.

For more information and to register, visit the Mobile Home Park Investor's Boot Camp information page.

Rusted Roofs Are A Giant Billboard That Screams “Lack Of Pride”

rusted roof on a mobile home

Want to make change your parks appearance in a big way for $200? Then get those rusted roofs coated with white or silver sealant. It’s super easy to turn that rusted hulk of a roof into a fresh, new surface with a bucket of rubberized compound and a paint roller. Any painter can do this quickly, and the results are fantastic. If you have any roofs that look like this photo, then end that immediately. It screams lack of pride of ownership to residents, inspectors, bankers and appraisers. And there’s no need for it, as it is not expensive or dangerous to accomplish. You can Henry Ford assembly line it for a bunch of rooms and drive the cost down to a really low amount per roof. Don’t let your park go another year with rusted roofs in it!

The Market Report

Mobile Home Park Stocks

Equity Lifestyle Properties - $89.15

Sun Communities - $90.05

UMH Properties - $15.77


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