On the 6th of June 1944 – 74 years ago – the U.S. invaded France in an operation known as “D-Day”. It was the turning point of the Second World War, but was also a highly complicated feat, employing hundreds of thousands of men and machines. Owning mobile home parks is not nearly as difficult, but it does work best with a similar focus on planning. When you’re buying a mobile home park – and making your initial “assault” on a sometimes difficult turn-around property – it’s essential that you have a complete to-do list with trigger dates of when to start that activity. You typically have to transfer utilities (and make deposits) at the same time that you are sending letters to all residents about the purchase at the same time that you are getting new leases and rules to the residents at the same time you are sometimes firing and hiring a new manager… you get the idea. It’s an affordable housing ballet, and the worst possible thing you can do is to not start thinking about all of these items until the night before closing. Planning can make all the difference between getting off on the right foot or making a terrible first impression with the residents (and your own ego). As Winston Churchill said “let our advance worrying become advance thinking and planning”. Every time you buy a new mobile home park, you should spend a considerable amount of time in the planning-for-takeover phase. If you do so, you’ll be as successful as the commanders of D-Day were.
Memo From Frank & Dave
When Should The Park Owner Throw In The Towel On The Resident?
While most people who reside in mobile home parks are thoughtful of their neighbors and take pride in their property, there is a small minority that have no such interests. You tend to inherit these folks when you buy mobile home parks from moms & pops, and you then spend years trying to figure out what to do with them. They pay their rent on time, but they create such a visual nuisance that it depresses the quality of life for all who live around them. So when should you throw in the towel on a resident?
Damaging to the quality of life of neighbors
Let’s first examine the damage that these residents do to your property, to get an accurate handle on the situation. When you have a home in horrible disrepair, it’s simply unfair to all those residents in nice homes that have to look out on it. In addition, it creates embarrassment for those same residents when they have others come to visit them, as they know that these visitors will pass by that terrible mobile home and think “what a horrible park this must be”. And those are only the visual problems. Frequently, these same bad residents will have giant parties, loud activities such as revving car engines and boom boxes, and have a menacing dog on a chain (or two). And don’t forget the non-running cars in the yard where the feral cats live, and the sanitation issues of throwing raw garbage on the ground. This is a very serious issue and not just a cosmetic one.
No attempt at following rules despite repeated requests
Sometimes, when you first buy the park, you can talk to these residents and they will fix up their issues. But after you have talked with them and sent them multiple notices, you suddenly realize that they have absolutely no intention of making any attempts at clean up. In fact, many of them are downright vocal about the fact that you can’t make them do anything (of course, they’re wrong on that one).
Refusal to allow the park owner to make necessary repairs
There are cases, particularly with retired residents or those that have mobility issues, where the proposed clean-up is not within their abilities financially or physically. In those cases, the park owner will typically try to step in and do the clean-up themselves. However, what do you do when the resident refuses to become a productive part of society even when you are paying the tab personally? How can you possibly refuse all efforts – even free – to make your property blend in with the community?
Liability implications of actions
And then there are the liability issues, of course. Many of these homes in poor condition ultimately burn down due to faulty wiring or excessive draw on the power system due to space heaters. When that occurs, the park owner always seems to be drawn in by the personal injury lawyer, even though they have no case whatsoever. Or maybe the neighborhood kid gets injured playing on the rusty junk in the yard. And then there’s the incredible danger of those dog on a chain breaking loose and biting someone. These properties are basically time bombs waiting to go off.
Causing problems with city hall
Many issues with city hall begin with a single resident in one of these catastrophe homes and yards. The inspector will receive a complaint and then get so fed up that it grows into a major battle with the city manager. Don’t let any resident ever threaten the peaceable operation of your property. There have been cases of annual park health inspection renewals being held up by that one resident that lives in complete squalor and refuses to make any changes.
Creating issues in the surrounding community
One of the worst things about these type of homes are when they turn the general community against the park. The industry has made great strides in improving its image, but all that good work is quickly erased by a single resident or two that are on a mission to create havoc. With many cities trying to improve their tax base and attract wealthier citizens, you will soon be in trouble with the general community if you allow people to live inside the city limits in deplorable conditions.
Every community owner would be smart to evaluate those few homes that are dragging down the general community and cutting them loose after exhausting every avenue to redeem them. Although nobody likes a vacant lot, it is sometimes an essential part of maintaining a good living environment for all residents.
Decade-By-Decade Changes In The Mobile Home Product – The Important Stuff
Here’s a row of mobile homes I passed by recently on the lot of a used mobile home dealer. Sure, they are all similar in some ways, but it’s their differences that make some attractive to buy for your park and others to be avoided. So what are the important differences between mobile homes over the years?
The exteriors of mobile homes have not evolved significantly over the decades. They all essentially look like shoe boxes. But there are some stylistic items that help you identify the era of the mobile home in question. Mobile homes from the 1950s to late 1970s have flat roofs. HUD began the regulation and control of manufacturing in 1976, so most of the homes with flat roofs are “pre-HUD”. This means that they lack the all-important HUD seal that allows you to get your power turned on in most cities in the U.S. So you want to steer clear of flat-roof homes if you’re trying to buy something to fill a vacant lot in your park. After the flat-roof came the round-roof in the late 1970s to late 1980s. These homes (as we’ll discuss further in a moment) are the work-horses of the industry, offering attractively sized rooms and smart floor plans. In the late 1980s until the mid-1990s came the “pitched” roof, which was replaced by the more steep “modified pitch” in the mid-1990s to current.
There have been basically three types of siding and two styles of roofs over the past half-century. And only one of them was awful. Metal and vinyl siding is maintenance free, attractive, and long-lasting. But T-111 siding (which resembles wood) is a lousy product that has been the curse of homeowners for decades, as it tends to rot and fall off with water intrusion. Of roofing materials, both the metal and shingled versions are successful.
Here’s one area where the age of the home has a huge material impact. Because mobile homes have become wider as time has gone on. The earliest mobile homes were only 8’ wide. As the decades passed, the width went from 10’ to 12’ and – by the 1980s – 14’. Although modern mobile homes are as wide as 18’ in some cases, the important width is the 14’. At that width, the bedrooms can hold king-sized beds and the living areas are plenty large enough for standard furniture arrangements.
The earliest mobile homes through the 1970s often had the bedrooms at one end, and the kitchen/dining area at the other, separated by the living room. The problem, of course, is a total lack of privacy. By the 1980s, the standard design was to have a bedroom at each end with the living areas separating them, allowing for privacy. When it comes to floorplans, with the 1980s and newer models.
Interior color palate
The homes from the 1970s and earlier are very dark and dreary on the inside, typically with dark paneling, dark carpeting, and small windows with very little light coming in. By the 1980s, the designers had realized that light and bright is a much better way to create a happy living space. The interiors from 1980s to new are mostly marked by improvements in cabinetry and kitchen designs, as well as bathrooms that are more reminiscent of Class A apartments.
Early mobile homes frequently featured vinyl in the living areas and carpet in the bedroom. By the 1960s, the carpet was throughout the mobile home, and it’s stayed that way for decades. However, there is a trend back to vinyl, supplemented by area rugs for those who like carpet. The reason is that a vinyl floor is a barrier to moisture – and that’s the kryptonite to the mobile home floor. In addition, in-between residents – you can simply throw away the area rugs and save thousands of dollars in carpet replacement.
There are some basic winners in the design and finish out of the mobile home dwelling, and a few misfires. Stick with the basics described above, and you will only buy homes that not only fill your lots but delight your customers.
Why Smart Community Buyers Are Using MJ Vukovich For Financing in 2018
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” 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.
Why The Small Investor Can Still Beat Even The Largest Portfolio Owners
There is a myth that small investors cannot possible compete with larger owners. The truth is that it’s often harder for the large portfolio owners to compete with the small investor, since the small investor has so much more going for them. Here is why the small investor can still beat even the largest portfolio owners.
The power of bonding
There is not nearly enough written about the power of “bonding” – the magical ingredient to negotiation that the small guy always has in droves and the big companies sadly lack. All you have to do “bond” with a seller is to have them like, respect and trust you. This requires you to spend time with them, both on the phone and in-person. Most small investors are willing to make this time investment, realizing that it’s a great opportunity to learn all about the property. But some big portfolio owners fail to want to spend any time in “bonding” and, therefore, fall into the #2 position when negotiating a sale. In addition, it’s hard for a seller to “bond” with multiple people, and many big companies have multiple chefs in the “acquisition kitchen”.
The power of speed
Large companies often make decisions by committee, and this precludes the ability to move fast. Individual buyers can make snap decisions, and do not have any red tape to slow down their process. One of our favorite sayings is “time kills deals” and that means that there is a natural correlation between how fast you move and how many deals you complete. Time has never been a friend to mobile home park deal-making and never will be.
The power of creativity
The smaller investor is more willing to embrace new concepts and take risks than larger owners. Because of their size, the larger owner has to utilize standard procedures and is not set up to think outside the box. The smaller owner, on the other hand, has no operating manual. In a world where moms & pops have often created unusual problems that need a clever response, the ability to be creative is extremely important.
The power of enthusiasm
Warren Buffett once said “without passion you have to energy, and without energy you have nothing”. This is completely true in buying mobile home parks. The small investor always has more passion than the larger groups. This is because of two reasons; 1) the ownership of the larger group is often distant from the acquisitions team, so their enthusiasm is diminished and 2) the larger owner has already obtained a set of properties and one extra one is not as exciting as it is to the buyer who has none. It’s like the old adage “it’s not the size of the dog in the fight, but the size of the fight in the dog”.
The power of lower overhead costs
Big companies have big overhead expenses. Their infrastructure necessitates higher costs as the things that the small park owner can do on their own are delegated and that equals payroll. In many turnaround park situations, the only way to make the numbers work initially is to self-manage and cut every cost imaginable. A small owner can pull this off, but a more institutional one cannot. On my first park, Glenhaven, it had a $2,000 per month negative cash flow on day one, and I was able to bring it to breakeven by cutting the only cost I could (cable TV) and by putting in -0- for management cost by doing it all myself. A larger owner would have never taken this deal on, as when you added in professional management cost it would have lost its attraction.
Contrary to what many people may think, the larger the size of the park owner does not translate into the larger the advantage in buying mobile home parks. The first-time park buyer still has many significant advantages over even the largest portfolio owners.
Why Metron Is The Best Utility Sub-Metering Option In The Industry
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.
Why Sears, Roebuck & Company Is Just Like Some Mobile Home Parks
This is a photo of R.W. Sears, the founder and CEO of Sears Roebuck & Company, at his desk at the turn of the century. He ran a great organization and ruled the world of retail, having the first retail IPO in 1906. However, as are all aware, the retail giant has had a huge fall from grace, barely surviving today as an enterprise and with a questionable future. So how did this happen, and what can mobile home park owners learn from this?
OK, this point is kind of nebulous. But the truth is that Sears stores have some pretty bad locations, as far as retail goes. Of course, successful mobile home park locations are much more stable than retail ones, but the fact of the matter is that Sears rarely had – even in its heyday – great locations. They began as a catalog store (even back in the 1890s) and their choice in retail locations was never that hot. I remember back in the 1960s when, even then, I thought how lousy the Sears siting of stores was. It’s a universal truth that all forms of real estate revolve around location, location, location. The moral is that there are two forms of locations that work for mobile home parks 1) great school districts with high home prices in healthy metro populations and 2) urban locations in the middle of everything. Rural and undesirable suburban locations are just not a winner, for mobile home parks or retail stores.
This point is less nebulous. Sears, as a company, has always seemed to have zero excitement or enthusiasm in what they do. This is the mark of doom when it comes to business. Warren Buffet once said that “without passion you have no energy, and without energy you have nothing”. That pretty much sums up the average Sears store. I walked through one recently – just to get some material for this article – and I don’t think I’ve ever seen a department store where people cared less. It was dirty, poorly merchandised, and not a single person even said “hi, welcome to Sears, can I help you?” The same can be said of failing mobile home parks. The manager doesn’t even bother to answer the phone, or greets the customer with a shrug. There is litter and debris everywhere, no rules enforcement, and no pride-of-ownership. When you lose the passion for owning and managing a mobile home park, the best thing you can do is to sell it to an enthusiastic new owner before it declines into oblivion.
Low perceived value
Why shop at Sears? Good Question. They’ve failed for decades in delivering a message of why they are a good value. Many park owners share this same bad trait. You need to constantly reinforce why your residents should want to live in your park. At every rent raise, give them a graph showing them the difference between what they’re paying in rent compared to competing apartments and single-family homes. You should also come up with at least three main compelling reasons to live in the property (such as great schools or shady trees) and put this sound byte into every piece of marketing you do, from your website to your ads.
Failure to stay up with the market
It’s strange that a company that was built on innovation so completely lost track of that important concept. Sears invented catalog shopping, then the IPO, then the big-box retail store. It was originally just a company that sold watches out of a small Chicago street front. But it missed the boat on everything from discount pricing to the internet. And it never even attempted to improve the locations of its stores when it was obvious that it was stuck in undesirable niches. The same can be said of mobile home park owners who fail to stay up with the trends, whether it’s the addition of white vinyl fencing, new signage and feather flags to the entry, or utility sub-metering.
The failure of Sears mirrors the failure of some mobile home parks. Don’t let this happen to you. Fight against being a laggard, and keep your energy high and your thinking fresh. Do it, not only for yourself, but your residents and their quality of life.
Here’s Your Copy Of This Month’s Manufactured Housing Review
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!
Why Mobile Insurance Is The Best Protection At Affordable Prices in 2018
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]
Productive Things You Can Do With Clubhouses
In the 1960s and 1970s, every good mobile home park had a clubhouse. It was required under the HUD park construction lending programs of that time, and moms & pops who did not use this financing still had to keep up with the Joneses. The concept was a good one – a half-century ago. But today, the clubhouse has been replace by better activity centers in the city, and most mobile homes have their own washers and dryers, rendering no need for communal laundry facilities. So what do you do with these white elephants that stand near the entrance to many properties?
Gathering areas with the right activities
The first thought should be “is there something productive I can do with this building to enhance the sense of community in the property?” Let’s face it, the presumed use of these facilities changed decades ago. Nobody wants to get married in a mobile home park clubhouse today, and residents do not hang out and play pinball like they did in 1969. For recreation, most customers play video games and watch youtube. I have a game room in my house and it has a pinball machine and pool table (just like HUD mandated these clubhouses to have) and it hasn’t had anyone in it in a decade. So the activities of today that a clubhouse might provide are completely different than the park’s founders envisioned. Here are some of the activities of today that a clubhouse area would actually get use out of:
- Reading area and/or library. This is a popular attraction at many of our parks, and is used by seniors and kids alike. You can actually get much of the “library” items for free from community grants and similar non-profits. It’s a great idea because it also fosters quiet activities and doing homework. The manager basically locks it every night and turns off the lights around 8 PM.
- Party/activities set-up in which you provide large folding tables and chairs, that can be arranged classroom style or as individual tables. An erasable easel is another plus. This heated/air-conditioned space allows all types of groups to hold year-round activities including quilting, classes on a number of topics, parties, art activities for kids, even meetings for such groups as the Scouts. While you can find great entertainment venues in most markets (like Dave & Busters) you can’t find free meeting spaces almost anywhere (not even Starbucks will allow it).
- If you place outdoor seating (like picnic tables) near the clubhouse, it offers groups the ability to hold indoor/outdoor events, like kid’s birthday parties. And you can install outdoor grills inexpensively, and residents love them (they are also, contrary to urban legend, not that expensive to insure).
Convert to an income producing feature (if the city permits it)
Another option for any clubhouse is to see if there’s a way to make it income producing, and a part of the park’s overall revenue stream that has the additional advantage of being included in the cap rate that derives the park’s value. There are basically three options here:
- Housing unit. Can you convert the structure into a dwelling? This makes common sense, because it fits in with the business model of offering affordable housing, and ties in well with your marketing efforts. One common thought is to put the manager in this structure, as it is typically at the front of the park. If the structure is large, you could also break it up into several apartment units. We’ve done all of the above, and they all work well.
- Commercial space. We own clubhouses that have been converted into a number of uses, from a grocery store to a vending machine repair facility. While these are still income producing, the biggest problem is that the uses for these buildings is often not very aesthetically pleasing. In addition, it has been our experience that housing is more valuable in a mobile home park than commercial space is – and certainly easier to find customers for.
- Self-storage. There’s always been a correlation between mobile home parks and self-storage – it’s a pretty common feature at many parks. The reason is simple: mobile home parks don’t have much storage space. On top of that, many mobile home park residents work in trades that need some degree of storage of materials and tools. Again, any income derived from this use will be classified as rental income and used in the overall calculation of park value.
Use as a marketing tool
Sometimes the best thing to do with a clubhouse (assuming the city won’t give you a permit to do anything else) is to simply keep it looking pretty and use it as a marketing tool to improve the aesthetics and desirability of the park. There’s nothing wrong with this, as that clubhouse might mean a lower cap rate on your appraisal, or the straw that broke the camel’s back on that new resident moving in. But if it’s to be used strictly as a marketing tool, at least turn off the monthly cost of heating and cooling, which can run about $700 per month and wipe over $100,000 off of your park valuation. Winterize the building, lock it, and put a sign on the front door that says “Out On Property – call (XXX) XXX-XXXX”.
Use as a central hub for a chain or properties
A final option for a clubhouse is to convert it into an office building – for your portfolio of properties. I once converted a 2,500 square foot clubhouse into a very professional office space capable of housing 8 employees. If you have more than one property, then the clubhouse could become your main base of operations, housing all functions such as accounting and a call center of sales calls. Another reason this is an excellent idea is that it keeps all employees thinking about the customer, since they spend their day inside a property that you own and seeing first-hand the mobile home park business.
There are many uses for clubhouses, despite the fact that none of them are as the original builder’s planned halt-a-century ago. But that does not mean that you can’t adapt these structures for a new America.
Westland Is The Park Owner’s Wonderland
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.
Why Mobile Home Parks Have Fared Better Than Motels Of The Same Vintage
This is a motel located near a mobile home park we own. Both the motel and the park were built around the same time – roughly the 1960s. But the park is worth millions and the motel is worth nothing, except the value of the land after it is scraped. So why have mobile home parks fared better than other property types of the 1960s?
Mobile home park locations are very stable, as they are residential in nature. Motel locations (and all businesses) are fickle and constantly change with consumer tastes and demographic changes. Assuming that the metro area itself remains strong with viable employment and steady population, it’s rare to see a mobile home park in a location that precludes its success. But seeing failed motels is commonplace, as commercial centers are constantly changing.
No obsolescence of design
Nobody wants to stay in old motels with exterior access doors. That’s been out of vogue since the 1980s. On top of that, modern lodging includes some degree of amenities and a fancy lobby, all of which are lacking in these early motels. Mobile home parks, on the other hand, have not changed in over 50 years. That’s because a mobile home park is the most basic real estate sector on earth: a parking lot. Even though tastes in the homes themselves have changed decade-to-decade, the park owner is only concerned with the parking lot that they sit on.
The curse of the “star” system
Another problem with the entire lodging industry is that they are labeled with a “star” that can destroy them. If you only get a 2-star ranking as a motel, very few people will stay with you. It’s cruel but entirely valuable to the consumer, who cannot be misled when they make their reservation. Mobile home parks, fortunately, are one of the few real estate sectors that has escaped this labelling. While motels and office buildings – and even retail – are slaves to this evaluation system that brands them with success or failure, mobile home parks have not had a star rating system since the 1970s and are unlikely to ever have one, since they are so varied in style and amenities. The standard response when asked “how many stars is your mobile home park” by the banker that doesn’t know any better is “five-star cash flow”.
More attractive financing
One problem with the motel industry is that it’s hard to get a loan. The business model is complicated and laborious and it frankly scares banks. Mobile home parks, on the other hand, have a simple business model and the lowest loan default rate in the U.S. The motel in this photo might have been remodeled at some point (although it probably would not have been economically viable) but getting a loan that would allow for a big capital expenditure is impossible in that asset class. Mobile home parks – due to their steady cash flows – are easy to finance and to make large capital outlays (on the roads, for example) when that is needed.
Stronger demand (affordable housing vs. overnight lodging)
Perhaps the main reason that mobile home parks have fared better than motels is that the demand for the product is so much stronger. The demand for affordable housing in the U.S. grows daily, and the demand for overnight lodging declines every day. If this motel was in a “hotter” demand area, it would probably still have customers despite everything that’s wrong with it. But with the internet changing the necessity of travel, anything that is not A-list just never has the phone ring.
The mobile home park and motel grew up together. Many of the earliest mobile home parks began as parking areas behind busy motels. They are very close cousins as they both were started to address the needs of travelers on the road. But the two could not be more different today, with the mobile home parks remaining strong and the motels growing weak and dying over time.
Despite A World Of “Deal Killing” Attorneys, Dave DiMarco Is A “Deal Maker”
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.
All About Carports
A common feature of most mobile home parks is the “carport” – the metal structure that the customer parks under. These slabs of metal have many good qualities and are under-appreciated by most park owners. So what’s the inside story on carports?
Residents love them which equals greater retention
Garages are rare in mobile home parks as there is little room for them and the cost is prohibitive. The carport is the only way to get a roof over their automobile. This shelter keeps the car cool in the summer and free from fading and damaging the interior, and keeps snow and ice off the windows in the winter. It’s also a protective barrier from hail. And the best thing about carports is that residents love them and that makes them want to live in your park. They are a very high-quality retention tool.
Homes can’t be moved without their removal which equals greater retention
And they have another retention feature. In most cases, you can’t move the mobile home without removing the carport. While very few mobile homes ever move in the first place, it’s a handy message to any potential buyer that moving the mobile home will not be easy, nor can it be done in the middle of the night without warning.
They demonstrate “pride of ownership” which equates to higher values
Banks love carports. They exude “pride-of-ownership” which is that intangible feeling that the resident is happy and takes care of their property. The thought is that the resident would not invest $1,000 or so in a carport unless they planned on living in their home forever. It also sends the signal that the resident has $1,000 in disposable money. Since banks love carports, they express their love with higher values they are willing to loan against.
They are relatively inexpensive and last forever
Although most carports cost around $1,000, that’s still a great value for the consumer. Think about other things that cost $1,000 and how long they last. Their car A/C compressor. Their washer and dryer. These things only have a life of 5 to 10 years. But the carport lasts seemingly forever – I’ve actually see one wear out. And look at all the benefit they give the resident. They save a fortune in auto condition as well as time needed to scrape windows when it snows.
Carports are a great addition to any mobile home park. Every owner should do more to encourage their purchase. When the carport sales guy asks if he can distribute flyers to every resident, you should definitely agree. They are a great complement to any property.
The CASH Program From 21st Mortgage: One of the Big News Stories of 2018
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.
Even Model Railroads Need Affordable Housing
Here’s an ad we saw in a model railroad magazine recently. Apparently, even model railroad cities need affordable housing. The good news is that it doesn’t cost $5,000 to move one of these (unlike the real thing) and there’s no need for filing an eviction as the property owner can just simply remove the tenant with a pair of tweezers. It’s interesting that mobile homes have gained a strong enough foothold in American culture that somebody would build miniature mobile homes for model railroad sets – and equally shocking that people must be buying them.
Mike Renz Is The Source For All Things Related To Environmental Pollution
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.
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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.