Mobile Home Park Investing Newsletter

2018 is here! A new year, and 365 days of new opportunities. So what will you do with this year to make it extra meaningful? We seem to have an annual theme for our portfolio of over 27,000 lots, and this year it’s going to be “building the community amenity”. We are going to strive to enhance the quality of life for our residents by fostering new concepts in helping neighbors socialize with each other, and take advantage of all the activities that the greater market offers. We want our residents in 2018 to say “I live here because I love it” and not “I live here because I cannot afford any better”. Time Magazine said in its 2017 article “The Home of the Future” that mobile home parks are like “gated communities for the less affluent” and we plan on pushing the envelope in discovering how to empower this concept and built the strongest sense of community possible. This is one amenity which, once kick-started, is a perpetual motion machine of resident retention and support, and every smart owner should endeavor to tap their property’s full potential in this arena.

We would also like to wish everyone a Happy New Year! We look forward to a continual discussion again this year, as we all strive to solve the affordable housing crisis one community at a time.

And to start off the year on the right foot, this is the longest newsletter we’ve ever written. Enjoy!

It appears that Fannie Mae and Freddie Mac are poised to undertake what could be the biggest game changer for mobile home park owners in years in 2018, with the pledge to start supporting mobile home chattel loans and their securitization. Here’s an article on the topic in the National Mortgage News. So why would that be such a big deal?

Chattel loans – for mobile home park residents – have been missing for around 17 years

The last time we’ve seen serious securitization of mobile home loans was in 2000. Back then, government support for mobile home loans was still basically non-existent, but the private market was making loan securitization possible, promoted mostly by Green Tree Financial. However, the chattel collapse of 2000 ending the process, and the securities markets lost interest in the mobile home asset type in a big way. As a result, it’s been nearly impossible for a customer to get a loan for a new home in a conventional manner for the past 17 years unless they have unusually high credit scores and down payment funds. That’s why mobile home shipments have declined from around 400,000 units to under 100,000 today. Obviously, all park owners would love to see those 400,000 figures again. The only way to make that happen would be Fannie Mae and Freddie Mac assistance, exactly in the form currently being discussed.

The ability to fill lots without park owner involvement is extremely attractive

The methodology for most park owners to fill vacant lots today is to either buy a new home with the CASH program with 21st Mortgage, or to buy a used home and bring it in the park themselves. Regardless of the method, the net result is that the park owner is saddled with being in the loop of responsibility for the home payment. Clearly, it would be preferred by park owners to focus on their business of buying and operating mobile home parks and not being home renters, lenders or guarantors. The efforts by Fannie Mae and Freddie Mac – if successful – would allow community owners to quietly get out of the home business when it comes to filling vacant lots.

It’s the right thing to do

Although it gets little discussion, the complete absence of government assistance for those wanting to buy homes that cost $50,000 or less – chattel or not – has been very disappointing. Morally, there is no question that the Duty to Serve laws are there for a reason, and those with lower incomes (or those who just want to live inexpensively) should be favored by the government, and receive the same treatment as those buying McMansions. Although default rates may be marginally higher, the potential losses are lower, and the net benefit for the U.S. housing system is much greater. As anyone who watched the C-Span replays of the affordable housing crisis discussions in Washington, D.C. knows, we have a huge problem brewing in the U.S., and current government efforts have been anemic. The concept of mobile home chattel collateralization could usher in the support this worthwhile effort has needed for almost two decades.

Conclusion

We look forward to turning the clock back to 1999, when we had individual dealers filling several vacant lots per month in every park we owned, without our involvement in the home process itself. It would be good for the customers and good for the nation. Truly a win/win/win opportunity that we hope finds good traction in 2018.

Probably one of the most common questions we receive each year is how to make $100,000 per year on just one mobile home park – either to replace a day job, or to hit the type of investment numbers that many folks are seeking. Well, here’s the way you do that.

Find a mobile home park with at least 40 lots where the rent is substantially below market levels

This is the most important part of the concept. You need to find a mobile home park that has 1) significant enough scale and 2) rents that are significantly below market. So we’re talking about 40 lots and up, and lot rents that are $100 to $200 per month below market. These situations exist all over the country but are found mostly in markets that have benefitted from high recent population growth and home price increases.

Buy it at a price in which it can service its debt

The benchmark of these type of strategies is that the property must be “stabilized” and fully capable of supporting the debt on the amount you are paying for it. This needs to be a war on one front only, and not a property in which you are battling multiple dangers, such as the clock ticking on filling lots or making significant capital improvements. So all you have to find is a park that is self-sufficient in carrying its own weight.

Increase the rent to meet market levels

Moms and pops keep their rents artificially suppressed for many reasons including a lack of desire to offend residents or simply lack of knowledge of what market rents actually are. We have frequently seen parks in which rents have not been raised in over a decade, despite annual inflation increases on park costs. The bottom line is that you are simply raising rents to pre-established market levels – not gouging them. You may tap into the market rent levels in several jumps, not just one huge one.

Yes, it’s that simple

If you can buy a 100-lot park and raise the lot rents by $80 per month, then that’s $100,000 per year of cash in your pocket after debt payment. If you can buy an 80-space park and raise the rents $100 per month, then the same story. A 40-space park with a $200 rent increase gets you there, as well. It simple math and a simple business model. This may take you one to five years to achieve, but the net effect is the same.

• A park in which there is insufficient scale. You will not be able to create a $100,000 cash flow off of a 15 space park unless it’s in Los Angeles and the current owner has been living in a cave for the last thirty years.
• A property in which the market rent is currently in-line with the park’s rent. The whole point here is not to be the market leader in rent and push the envelope, but to simply bring rents in-line with the competition. Remember that being excessively higher than the market rents could potentially result in other park owners moving your existing tenants into their vacant lots – that’s what basically equalizes the lot rental market. The only way to benefit from rent increases is to have the residents happily stay and pay.
• A market in which rent levels are very high to begin with and are already bumping up against the limits of affordable housing (a good example is, once again, Los Angeles, where lot rents are over $1,000 per month). The mobile home park business is all about affordable housing, and when you are having to compete head-to-head with brick single-family homes, then you’re in a whole different level of risk and difficulty.

Conclusion

Many investors have the goal of creating $100,000 per year in cash flow from one property. The good news is that it is still possible, but only in the mobile home park sector.

We’ve been using Westland to buy mobile home parts for over a decade. We’ve bought entire 18-wheeler loads of skirting from them. And it always shocks us that more people don’t know they exist or what they have to offer. So here are the reasons that you should talk to Westland about all-things mobile home:

• They have thousands of items in stock – virtually the Home Depot of mobile homes.
• They have award winning customer service. That’s super-important when you don’t know exactly what part you need for certain homes (and don’t know the exact name of it, if you did).
• They are truly a “one-stop shop” for all your parts needs. It saves you from having to make endless calls to different vendors (and staying on hold) looking for just one certain item.
• They have great pricing. That’s why we buy 18-wheelers of skirting from them (trust us, everyone wants that order).
• They have built the business on long-term relationships and live by the Golden Rule. They will go out of the way to make sure you are happy with their pricing and service.

But there's one new fact that even old customers may not know - they are under new ownership. The new management is an energetic, entrepreneurial group that is open to new ideas and growing together with your business.

So if you want to be able to talk to people who know more than you do about how mobile homes are constructed and what part you need, and want to get great pricing and customer support, and want your parts shipped fast and tracked accurately, then you need to try Westland. You can reach them at 800-525-8847 or on their website. Tell them Frank & Dave sent you.

The dawn of a new year brings with it the annual opportunity to craft New Year’s Resolutions. Since we are huge believers in the necessity of planning ahead, we feel it our obligation to give our annual message concerning the necessity of crafting New Year’s Resolutions.

Consider them a GPS

When you set off on a road trip, you load in your destination and the GPS system tells you how you’re doing on that progress, as well as affirming where to turn. In the same vein, your New Year’s Resolutions can serve as a key driver to getting outside your comfort zone and making forward progress.

Be realistic

It’s vital that any New Year’s Resolutions be based on realistic targets and not unattainable goals. Faulty resolutions can actually harm you, as they put you in a mental funk and depress your confidence and energy levels. While goals should be set at a high level, it needs to be one that can be reasonably reached and not ridiculous.

A good plan now is infinitely better than a great plan later

For those who are prone to procrastination, remember the old quote from General George Patton: “A good plan violently executed now is better than a perfect plan executed next week”. Time is an important tool, and losing time because of “paralysis by analysis” is never a good strategy.

Follow up with those resolutions monthly

Once you have made your New Year’s Resolutions, there’s little value to them unless you have a structured system of reflecting on your performance. Going back to the GPS analogy, there’s little purpose to loading in the address and then unplugging the system. You should review your goals monthly and see where you stand in relation to them.

Conclusion

Every investor needs to make annual New Year’s Resolutions. If you haven’t made yours yet, then today’s the day. Go get a cup of that remaining eggnog and grab a pen.

Obtaining a loan for a mobile home park can be difficult and time consuming if you do not know how to build an effective loan package, or which lenders to hit. And then there’s the unpleasant task of meeting with lenders and dealing with rejection, as well as knowing what terms are negotiable and how much you can push them. What’s the solution? For smart buyers, it’s MJ Vukovich at Bellwether Enterprise. MJ is one of the top loan brokers in the U.S. He goes out and gets the loan and all you have to do is pick which bank you want to go with from those that want the loan. It’s fast and painless, and the fee is around 1%, which is a real bargain. Best yet, you only pay on performance, with the fee due at closing. We’ve been using MJ with great success, and his real strength is in the “agency jyiyjjyijj” arena with Freddie Mac and Fannie Mae, where his firm is a leading underwriter. Best of all, MJ is a third generation park owner, who understands the business and looks at the entire process from your perspective.

To get ahold of MJ Vukovich for questions or to get the loan process going, email him at [email protected] or call him at 612-335-7740. Let him know Frank & Dave referred you for VIP treatment. And let us know if your loan closes and we will send you a $500 gift card to the home improvement store of your choice to get you started on your park renovations.

We are constantly seeking factual information that can help shape our impression of different markets to buy mobile home parks in. We recently came upon the following article, which we found of interest https://www.msn.com/en-us/money/personalfinance/the-united-states-of-indebted-america/ar-BBGJ8Dk?ocid=ob-fb-enus-894 . While this is very macro data, it definitely suggests the states in which a park owner could expect more difficult collections.

Here are 10 states with the highest share of residents with debt in collections. The national average is 33 percent. 

Louisiana: 46 percent
Texas: 44 percent
South Carolina: 43 percent
West Virginia: 42 percent
Nevada: 41 percent
Alabama: 40 percent
Georgia: 40 percent
Kentucky: 40 percent
Mississippi: 40 percent
New Mexico: 40 percent

This pretty much reflects our standard impression on the economic challenges of the southeast states (except Florida), but three that are more baffling are Texas, Nevada and New Mexico. We are going to assume that macro Texas collections difficulties are skewed due to oil and gas weakness in those parts of the state that are virtually one-horse towns for energy. Nevada, on the other hand, is potentially the result of residents periodically over-extending themselves on homes and cars (the economic cycles there are frequently boom and bust). New Mexico is a state that is virtually bi-polar, as it has some extremely affluent areas and then others that are extremely depressed – making it vital that you only buy in the stronger areas. Like all macro data, these type of statistics are not reflective of any individual market, but can help shape your caution in certain regions.

Over the past year, we have been rapidly converting every existing water meter in our portfolio to Metron-Farnier Sustainable Services. And every new mobile home park that we change to sub-metered water & sewer use, we meter using Metron. Our entire portfolio – except for those parks that are directly billed water/sewer by the city, or not allowed to sub-meter by law – will be with Metron by the end of this year. So why are we such huge fans of the Metron metering system? The answers are many:

• These meters are read remotely and do not require our managers to read them (or screw up the readings).
• The meters are read by Metron every 60 minutes, 24 hours a day. As a result, Metron can alert you when there’s a leak, and that can save you thousands of dollars per year.
• The meters are amazingly accurate and strong.
• Metron’s meter bodies have been manufactured in Europe for years – they are well-established and a proven performer.
• Metron’s electronics are built and tested in Boulder, CO.
• The cost is only around $5 per month per meter, and in most states this cost can be passed on to the resident.
• These meters do not require you to have access to them, so they are perfect for winterization or difficult access situations.

So why would you not use Metron? We don’t have a clue.

To get more information on Metron metering, call Rick Minogue at 303-449-8833 or email him at [email protected]. Tell them that Frank & Dave sent you. We’re their biggest fans.

Every park buyer must initially choose what part of America they are interested in pursuing. But what should that footprint look like? Here would be some of our suggestions.

Initially a 4 to 5-hour radius from your home

Over the past two decades, we have learned that the distance between your home and the mobile home park has no bearing on the park’s financial performance, we would be hypocritical to say that we would have been comfortable with our first park being a Southwest flight away. Frank’s first park was 10 minutes from home, and Dave moved into his first park. But you’re not going to get anywhere if you insist on being a bicycle ride from your property. Instead, you need to cast a larger net. We would suggest that a 4 to 5-hour car ride from your house is definitely within your comfort zone, as it means you can leave at 8 am on a Saturday, be at the park by noon, and home by 5 pm. That’s not a scary situation. So draw a 5-hour radius circle around your house, and that’s a fine territory initially.

A preferred region

You will notice that, in most of America, your 5-hour radius will take you into several states (there is 700 miles between the polar opposite edges of your circle – which is roughly 25% of the entire width of the U.S.). So you should divide this circle into four quadrants, and the see which of those you prefer the most. For example, if you live in Little Rock, Arkansas, you would probably want to focus on the Southwest quadrant, which would include Tulsa, Oklahoma, Oklahoma City, Oklahoma, Dallas/Ft. Worth, Texas, and Texarkana, Texas. But then you might prefer to work the Kansas City and St. Louis quadrant, which is the Northwest quadrant. The bottom line is that you probably already have, once you draw that circle, an idea of which markets and regions you prefer to invest in, so focus on those, first.

Unusually attractive markets in that region

Clearly, you are going to focus on the largest metro areas first, but there are always secondary and tertiary markets worth considering. We prefer metro markets of 100,000 population or more, but we’re also with markets with even lower metro populations if they have something spectacular about them to offset that. Remember that, unlike all other real estate asset types, you can’t build mobile home parks anymore, so you don’t have to have the same extreme population numbers for the industry to work. Apartment owners, by comparison, are constantly having to battle new construction to keep occupancy high – it’s like trying to fill up a cup with a hole in the bottom.

Micro niches inside markets that are unusually compelling

Here’s where it gets really interesting. Once you start seriously looking at deals in these metro areas, you will find niche spots that are unusually compelling. For example, let’s say you are looking at parks in Tulsa and you suddenly hit a neighborhood with a median home price of $280,000 and a three-bedroom apartment rent of $1,300 per month. You know you’ve hit a little-known gem of affordable housing demand, as everyone is going to want to live in that school district and zip code. So you then double-down on that area and start hitting every park by phone or direct mail. While the metro area is important for employment, city limits within that metro are what provides schools, services, and desirable housing environments.

Conclusion

Choosing the correct territory is vital in finding a mobile home park to buy. This plan should at least get you off on the right foot.

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 “tiny home movement” receives a huge amount of air time on HGTV, as well as in the normal media. But we were shocked to see someone bring a tiny home to the pawn shop on History Channel’s popular Pawn Stars. The owner was seeking $38,000, but Rick was only interested in offering $22,000, due to poor craftmanship. Of course, we were more shocked that a 400 square foot home-made tiny home was worth $60 per square foot. Pawn Stars must be unaware that you can get a really nice 14’ x 76’ mobile home straight off the factory floor for less than that. More evidence that our industry just does not promote itself aggressively enough.

We have been buying mobile home parks located on the Mississippi River for almost two decades. So why do we like these towns located on the “Big Muddy”? What do they all have in common?

Strong transportation network

The first thing you’ll find out about a Mississippi River town is a strong transportation network. That’s because the river, itself, is one of the nation’s major transportation hubs. The Mississippi is like its own interstate highway system, although the route is limited to a north/south trajectory. Those giant barges move as much cargo as an entire train. And there is a typically strong highway presence in these same markets, as these towns have long histories of moving items.

Older with mature economies

Our personal favorite Mississippi River towns are St. Louis and Minneapolis/St. Paul. Both of these markets have very mature and well-developed economies. We prefer this type of market as we're strong believers in the importance of a diversified employment base, as was amply demonstrated during the 2007 Great Recession in which the U.S. unemployment soared to around 10%, and some markets were hammered while others maintained 4% to 5% unemployment rate. Without jobs, residents can’t pay rent.

Solid housing markets

We prefer markets where housing prices are high and stable. We would prefer a market where single-family home medians are $150,000 ad rarely go up or down, to one in which the median fluctuates wildly in a “feast or famine” mode. There’s nothing more depressing than having a market fall out from under you, and stable housing prices suit us just fine.

The true middle of America

The Mississippi River just happens to go right through the middle of America – at least as far as people are concerned. It’s been said that St. Louis is the exact midpoint of America based on U.S. population disbursement. We have great confidence in Midwest markets based on experience, although the river also flows through two major southern markets: Baton Rouge and New Orleans.

Conclusion

We own mobile home parks in many cities and towns up and down the Mississippi River. We have always liked these areas for a number of reasons, and suggest you also examine the power of the Big Muddy.

How many deals have you seen go down the drain because there was attorney involved that stacked up a million roadblocks to even the simplest problems, and then failed to offer any path to solving them? This is called “deal killing” and some attorneys do this so that they take no risk – if the deal never happens, they can never be criticized for missing a deal point, or for not spotting a flaw in the contract. The problem with this, however, is that you can’t get anywhere in business if you can’t move forward on a single property, regardless of how good the economics and market are. At the other end of the spectrum are the “deal maker” attorneys that recognize real problems from trivial ones, and strive to solve these roadblocks using common sense and legal experience. And the best of those type of attorneys is Dave DiMarco from Woods Oviatt Gilman. We once had a deal go south in a big way – the very driveway into the property was determined to be on somebody else’s property. Any other attorney would have said “well, that’s it, the deal’s dead” but Dave DiMarco sprung into action. We located the owner, negotiated a purchase, personally handled the details, and the deal went forward. And all that over a weekend, no less. And that’s why we love Dave DiMarco and you should, too.

If you need service like that, then consider using Dave DiMarco on your next transaction. You can reach him at (585) 987-2833.

Just as no two people are exactly alike, neither are any two mobile home parks. While many would attempt to stereotype “trailer parks” as all being the same, the truth is that we’ve never seen two identical parks. Some may exhibit similarities in some areas, each one is truly a custom creation.

Macro regional differences

The starting spot of trying to compare mobile home parks is the basic geography of where they are located at. We’ve found that America is much like Europe with each state having its own unique culture. The people of Wisconsin, for example, live differently than those from Arkansas, and it’s reflected in the manner in which they maintain their homes, yards and cars. Even the selection of what cars they buy and what colors they paint their homes is clearly different. This means that, even at a 5,000 foot elevation, you have at least 49 different base differences between mobile home communities (remember that Hawaii has no parks).

Property specifics such as size and age

Virtually every mobile home park is a one-off custom build. There was no set “team” of architects and developers building these things, nor was there even an established methodology for doing so. There were some books back in the 1950s on “how to build a trailer park” but they are around 100 pages and have no technical data at all except thoughts like “you’ll need a laundry” and “ping-pong is a fun amenity”. While mobile home parks can often fit into some macro categories such as “HUD property” and “shotgun”, that’s about as far as it goes.

Age and type of homes

A mobile home park is, technically, a parking lot – and that means that the type and appearance of the homes in the park has a huge impact on what the final product looks and acts like. Most every home in every American mobile home park has been in that spot since first arrival. The only exception are those parks that removed the original homes deliberately and replaced them with new ones. There are also obvious differences in communities that include a large percentage of doublewides, or other upgraded models.

The residents

The final permutation of the personality of any mobile home park is, of course, the residents. There are a million varieties of residents, ranging from lower-income to highly affluent, and from those who care deeply about their property to those who have other interests. And that does not even count such items as those who pay on time vs. those who don’t, and residents that are highly demanding vs. those that are easy to get along with. With such an immense variety, it’s clearly hard to put any mobile home park in a pre-established box.

Why any of this matters

All investors like to establish clear-cut tranches of investment quality, and then drop each property they look at into one of these defined categories. That’s hard – if not impossible – to do with mobile home parks. That’s why the “star system” fell apart decades ago – there simply is no easy way to “rate” a mobile home park against its peers. Each one is completely different and has its own good and bad elements. The only way to really rate a mobile home park is simply on its numbers; the amount of net income it can create both currently and in the future. When somebody asks “what’s the star rating of this mobile home park” the correct answer should be “five star cash flow”. Because the only thing that’s consistent between all parks is that the numbers are all in U.S. currency.

Conclusion

There are roughly 44,000 mobile home parks in the U.S. that represent around 3.5 million lots. Each of these properties is as unique as a fingerprint. As a result, it is very difficult to categorize or stereotype them. More important should be the individual analysis of each park’s unique attributes and potential income.

One of the biggest things going in the mobile home park industry is the CASH program from 21st Mortgage. If you own a mobile home park, the power of this program is astounding. You can fill vacant lots with zero out-of-pocket cost. You can get customers approved to buy homes with amazing speed and a “can-do” attitude. You don’t have to get in the middle of financing or the SAFE Act. And you can tap hundreds of thousands – or millions – of dollars sitting there in vacant lots. The demand for affordable housing in the U.S. is enormous, and the only thing holding most parks back from 100% occupancy are new and used homes that your customers can qualify for. With the CASH program, those obstacles can be overcome and your occupancy can soar. We are the largest users of this program in the U.S., and we know how great it is.

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

Harry Potter always seems to be one step ahead of the protagonist. But is that the result of luck or insight? Is it random or planned? Are mobile home park investors better off being lucky or smart?

The two go hand-in-hand

That’s actually a trick question. Those who are smart create their own luck through their actions before the mobile home park is ever purchased. Just as a top NBA star makes even the toughest shot look easy, the truth is that smart mobile home park buyers do a huge amount of work to create what seems like an endless lucky streak.

Due diligence – Ben Franklin weighs in

Ben Franklin once said that “diligence is the mother of good luck”. That’s a timeless observation that was as true in 1778 as it is in 2018. Doing successful diligence removes the risk from the purchase, and ensures that all budgets are accurate and attainable. You will notice that the successful folks in the industry area those that are extremely focused on due diligence.

Persistence in finding properties

There is a basic tenet that the larger the volume of deals you look at, the better your chances are of finding a really good one. Buying successful mobile home parks is very much based on sheer volume of properties examined. If you want to create luck, you should make it a mission to review as many potential buys as you can humanly find.

Looking in the right places

Smart buyers should work every possible angle at the same time – from on-line listings and brokers to direct mail, cold-calling and drop-bys. And they should also work smart and focus on regions and markets that are conducive to successful mobile home parks. If you spend your time looking for mobile home parks only in rural markets of Alabama, and even then only checking the listings on Loopnet, you’re luck in finding a successful deal will be negligible.

Conclusion

When someone tells you that they’ve been very lucky with their mobile home park, 99.9% of the time that’s not the complete story. What they’re really saying is that they put in a lot of effort on due diligence, volume of deals reviewed, and working smart, and that’s what created their good fortune.

If you enjoy this monthly newsletter, then you will certainly also like the Manufactured Housing Review – the industry’s only monthly magazine that covers many different industry topics. Edited by our friend Kurt Kelley of MobileInsurance, MHR offers many insights and opinions that reflect current events in the affordable housing industry, with no topic taboo.

To view this month’s issue, click here!

We are strong believers that one of the most important attributes of any market is the way that its economy is constructed. We prefer markets that have what we call “recession resistant” employers – essentially education, healthcare and government. If we had to go down one more notch, it would be our favorite private industry titan: Walmart. On a macro scale, the good news is that these employers are the largest in most U.S. states, as shown in this recent article. But the bad news, for four states, is that they are most reliant on one gigantic private sector employer (other than Walmart):

Maine: Hannaford Supermarkets, 8,500 employees
Nevada: MGM Resorts International, 55,200 employees
New Jersey: Wakefern Food Corporation, 35,000 employees
Washington: Boeing, 71,036 employees

Does this mean that you would not want to buy a mobile home park in these four states? Certainly not. But it’s an interesting fact that might help shape your exposure to a state or give you the basis for a “worst case” scenario calculation.

When it comes to Phase I Environmental Assessments, nobody in the industry is more knowledgeable than Mike Renz. He’s our go-to guy for all things pollution-oriented, from Phase I reports to simply asking questions on what we see going on next door to the property (or even inside that concerns us). We were once walking through a property and saw a brown colored solution oozing from the property. Within minutes, Mike had pulled up the data and figured out what it was (rusty water from an iron-ore- rich artesian spring). That’ the kind of information that we find invaluable in today’s litigious world of environmental condition. On top of that, we’ve had Phase I reports that failed for existing pollution, and Mike Renz has been able to solve them by using common sense and technology, like the time he proved the EPA wrong by doing a simple core-drilling to prove that a supposed landfill on a mobile home park did not actually exist (it had been phoned into the EPA by a former manager who had a grudge against the owner). If you want that level of expertise on your side, then you need Mike Renz to be your Phase I Environmental provider. That’s who we use, and he’s amazingly good.

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

Just because somebody gives you advice, that does not mean you should always take it. There is a whole bunch of bad information floating around both on a macro and micro scale. So how can you mitigate being misled as a community owner?

The importance of qualifications

Whenever anyone offers advice, the first stop is to check their credentials. Do they really know what they are talking about? If it’s a skill that can be licensed (such as an electrician) then they would need that certification or be ignored. If it’s not something that is licensed, then they would need years of experience – the more the better. Sometimes age is the best qualifier – when you go to a hospital, you seek out the oldest doctor, right?

References

Any person that offers their opinion needs to also supply references. Preferably three. And before you take stock in what they say, you should call each one and get their feedback. We have some unusual stories on contractors who have supplied us with references – they often don’t think you’ll really call them. One reference told us they’d never heard of the person, and another could not believe they had been given out, since they were in the process of suing that contractor for fraud. The bottom line is that a reference – without a call – is a worthless exercise.

Insurance

All contractors should have insurance. If they don’t, it’s just about a given that they are unsuccessful and can’t afford to attain it, or that they have lost it due to too many claims (an equally bad sign). Insist on getting a copy of their insurance, and then making sure that its currently in force. We have a hundred stories of contractors who faked injury (or broke something significant) on day one.

Questioning their motives

When a plumber tells you “this park needs to have all the water lines replaced” you must ask yourself “do they have an ulterior motive?” Clearly, anyone who profits from the advice they give is suspect for being “tainted”. At a minimum, you should get three bids or opinions (hoping that at least one of these folks is honest).

Added places to get input

Where can you get the names of reputable “experts”? Two resources that many people overlook. One is the state mobile home association where the property is located. There is an MHA in every state except Hawaii (there’s no mobile home parks there) and many of these are staffed with extremely capable people who have published lists of contractors that are user-friendly for park owners. The other is neighboring park owners themselves. Because of the unique fraternal nature of owning a mobile home park (with so few people who are members of this club) you will find that many owners are very generous of their time and knowledge.

Conclusion

Don’t listen to anyone based on face value. Before you heed any advice, make sure that it’s from a qualified source who has nothing to gain.

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.

Here’s a scene from the cult classic “Kill Bill II”, which transpires in a mobile home out in the desert. It’s the typical stereotype of the trashy, bizarre killer who lives in a trailer. And it’s part of an endless stream of negative portrayals in the media. Fake news must have started with mobile home parks, as there has not been a positive portrayal of a mobile home resident since Elvis Presley’s “Speedway” in 1968. Why is that? Maybe it’s the fact that most Americans have grown up on the negative portrayal and associate the concept of “trailer park” with sex, violence and action (which is what many media outlets are hoping for). Or maybe it’s because most media content providers have never been inside a mobile home park in their entire lives and have absolutely no idea what a real mobile home park is like. Or maybe it’s because our industry has done too little for too long in offering a positive portrayal of our residents. All we know is that each year we hope that the negative stigma will end. We hope that 2018 will be the year (but then again, we’ve been saying that for the past 22 straight years). The best thing we have going for us, as an industry, are the Clayton “Have It Made” television advertisements that appeared on college football this year. Also, we’re hoping that the national affection for “tiny homes” will spill over into a more positive attitude as a grassroots movement.