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November 1st, 2015

Memo From Frank & Dave

While Thanksgiving, like most holidays, has become hugely commercialized over the years, we think it’s a great time of year to extend thanks to the people who are important in your life. So we’d like to take this opportunity to say “thank you” to our extended mobile home park investor family. Nobody realizes just how much fun we have talking and educating about the industry. When we started writing about the industry nearly a decade ago, there was absolutely no dialogue between park owners and those who were looking at buying them. Owning a mobile home park was a very lonely existence. Fast forward a decade and we have a whole group of people who are passionate about the business and enjoy sharing stories and concepts. So we would just like to take a moment to thank everyone who shares our interest in the “trailer park”, “mobile home park”, “manufactured home community” and “affordable housing” sector. We hope you have some terrific turkey, cranberries, mashed potatoes and dressing – and sneak in a minute or two on the forum.

Tiny Houses Are Not A New Invention

Tiny House Mobile Home Parks

In all the excitement of the “micro housing revolution”, it’s been forgotten that tiny homes are not something new. In fact, tiny homes are the oldest dwellings in the U.S. So the new focus on living in smaller quarters is simply a return to the past. So why did taste in homes change from small to large, and why is it changing back?

In the early days, you had to build it yourself

Maybe the key reason that homes were originally small was that the owner had to build it themselves. Ever see Lincoln’s log cabin that he grew up in? It’s smaller than your bedroom. When you have to cut the lumber and build the roof, you don’t shoot for too large a structure. And, even if you did, where would you get the building materials? There were no Home Depots in 1850.

And then there was a matter of living within your budget

By the late 1800s, you didn’t have to build your home yourself in most of America, but you still had to pay for it. Mortgages in the 1920s required 50% down payment – so a $20,000 house required $10,000 cash down. So even if the buyer wanted something bigger, they didn’t have the cash to pull it off. Bankers were not aggressive in home loans in the old days, and would never even consider allowing a home buyer to pay more than their budget would allow.

But construction methods changed

The 1950s ushered in many changes in America, and one was the way that homes were built. Slab foundation and tract houses meant less expensive construction methods and more home for the dollar. Sure, these homes did not deliver the craftsmanship of the early days, but growing American families were willing to sacrifice artifice for more bedrooms.

And lending became more aggressive

There had never been a period of time in American history with less stringent lending requirements for mortgages than the period that began in the 1990s. The cycle culminated in the “zero down, no income documentation” loan, which virtually meant that a panhandler could buy a $250,000 custom home with no pushback. So home sizes just took off and never looked back. Bathrooms became as large as bedrooms, and bedrooms became as large as sports stadiums.

Don’t forget the “me” generation and “keeping up with the Jones”

Helping to fuel the crisis was the vanity of spoiled homeowners who wanted to build the biggest house on the block. Case in point the home “Versailles” built by the Florida time share king David Siegel and coming in at 90,000 square feet, to house a family of ten – about 9,000 square feet per person. Does that sound reasonable to you?

But then came the mortgage collapse of 2008

The loose lending standards ultimately ended in a mortgage melt-down. Suddenly, those folks who wanted to build McMansions and homes they could not afford found themselves repossessed and living in apartments. And the new mortgage standards of 20% down and good credit have ceased the ability to buy more than you can afford.

And our households are becoming smaller

The “Baby Boomers” (those born between 1946 and 1964, and the very folks that started the home boom) are now downsizing. They are retiring at a rate of 10,000 per day, and selling their home is an important piece of their retirement plan. With no other dependents living at home, this group needs smaller space.

And the prices are becoming larger

The price of housing in America, meanwhile, continues to move into rarified territory, with the median home price in the U.S. of nearly $200,000. This has created an environment in which many young people cannot afford a conventional home, at the same time that the older Americans are downsizing.

And Americans are becoming poorer

The United States is becoming a nation of progressively lower incomes. Roughly 20%+ of the U.S. population is near poverty level, and over 50% of Americans are on some form of social subsidy. As a result, there is no money to buy every more expensive houses at ever more conservative loan terms.

So the return of “tiny houses” was fairly predictable

The end of the “big house” era and the return to the “tiny house” era was, as a result, fairly predictable. But it’s more than just a fad. All of the megatrends that created the return to “tiny” are going to be with us for decades. So just how far the “tiny house” movement will take us is not yet known. But it’s going to be extremely interesting to see how it matures. And this will have a profound – and positive – effect on the mobile home park industry.


Tiny houses are not a new concept. But they are a very worthwhile concept. Small houses are more reflective of the new America, and that’s a setting that mobile home park investments flourish in.

Why A Good Market Can Still Have Negative Population Growth

U.S Average Household

When you’re looking at markets to buy a park in, most everyone goes to and sees, among the statistics, the population growth numbers. In some cities it’s a positive number. For example, Austin has a positive population growth of 14.5% over the past decade. However, Charleston, South Carolina – a fantastic mobile home park market by anyone’s standards – has a negative population growth of (7.3%). So how can you have a great mobile home park market and post a negative population growth number?

It’s not about the number of people, it’s about the number of households

When you are in the housing business, you don’t really care how many folks are in each home, only if that home is occupied or not. People with kids tend to have more members in their households than those who don’t. But they pay their rent or mortgage, just the same. So often a positive population number is a reflection of the age and status of the households. If you had a city of ten homes, and they were all filled with single adults, the population of your city would be 10. If they all had spouses and two children, you population would be 40. But the homes would all be occupied either way, so the number does not mean a lot. That’s not to say that growing population could not also be a reflection of a growing market with new housing construction. But most of the time, it’s more of a reflection of household formation.

Focus on the “vacant housing” stats

The real measure of the strength of a market – based on housing – can be found in the “vacant housing” statistic. The U.S. average is 12.47%. If you are looking at a market that is around this statistic or lower, then you are looking at a market that is considered healthy regarding housing demand. There are hundreds of markets that we have analyzed that have negative population growth and “vacant housing” that is lower than the U.S. average. We have also seen markets with high population growth stats, and even higher vacant housing stats. Las Vegas, for example, shows population growth of around 21% while also showing a vacant housing stat of 14.21%, which is nearly 20% worse than the U.S. average.

High population growth does not always equal what you think it does

In 1875, the average New York household had 14.5 in it, while the average St. Louis household had 7.5. So the New York population grew at a phenomenal pace, roughly double that of St. Louis. And that’s a super important statistic to know if you are a school district, or a hospital. But in the housing business, it’s not that critical an item. High population growth can sometimes be like a weed – it grows fast but is of little quality as far as income, credit, or ability to buy a home. Bel Air, California is shrinking in population, but I’d much rather have a mobile home park there than in Las Vegas.

But sometimes a significant drop in population can mean real trouble

All that being said, if you are looking at a market with horrendous population reduction, it’s definitely time to worry about the economic health that represents. For years, the population growth of Detroit was double-digit decline. And that meant that the market was collapsing in terms of employment. So you definitely need to explore further any negative population numbers you see. Talk to the Chamber of Commerce, consider the status of the top ten employers, review the other market stats. While a negative population growth number is not necessarily a deal killer, it’s definitely a wake-up call that further due diligence is needed.

The test ad helps equal the playing field

When it comes to gauging the demand in a market, the key stat that is more important than any other is a “test ad”. In any market that we’ve tested and received a strong response, the park has done great. In any market that receives a weak response, we always pass and watch as other buyers get killed with that property. A test ad is the great equalizer of all stat metrics.


Population growth can be a misleading statistic when it comes to mobile home parks. Don’t drop a deal over a low or negative growth number, but also don’t blindly buy a park just because of a high growth stat. It’s a gauge on your overall instrument panel, but it’s a really small gauge.

New Parks for Sale on

Mobile Insurance Is Our Insurance Expert!

Whether you are simply in need of an insurance quote or you have the unfortunate, yet common task of filing a claim, Mobile Insurance is ready and waiting to take your call.

They offer you the best mobile home park insurance coverage when you need it. Being able to contact them when you need them is just as important. Shopping for insurance or setting the wheels in motion to get your damaged home or your business back on track is not easy. At Mobile Insurance, they work to make the whole process easier with greater value for your money. Call them at 800 458-4320 or email [email protected].

The Importance Of Having A Great Attorney

Of all the alliances you have to forge in successfully buying and operating a mobile home park, one of the most important is your attorney. There are many different attorney profiles, and you must select the one that is best suited for the task at hand. The most common occurrence, for most park buyers, is the attorney to read and protect your interests regarding loan documents and questions that come up on title and contract issues. Like anything else in life, if you chose a bad advisor, you will have a bad outcome. So how do you find a terrific lawyer well-versed in mobile home park law and issues?

The best corporate lawyer we have ever used is Dave DiMarco at Woods Oviatt Gilman, LLP. We have used him exclusively for all of our conduit loans, as well as traditional bank loans. What we love about Dave DiMarco is that he knows what we are trying to accomplish (get the loan closed quickly and inexpensively) and he can quarterback the situation and push it to the goal line without us having to bug him or worry about our progress. How many attorneys have you had to nag, or even worse, call 100 times to get them on the phone? With Dave DiMarco, you don’t have to worry about if he’s making progress – he’s typically bugging you to push you along on your part of the equation. We have given Dave some extremely complicated, time-sensitive tasks and he has successfully completed them on-budget and on-time. He also has terrific people skills and can take charge of a rogue bank attorney and bring them back around both in speed and complexity. Our success rate with Dave DiMarco has been 100%. We get calls all the time from people looking for a good lawyer, and we always tell them to call Dave. If you need a lawyer to represent your interests in a transaction, then you will be well served to call Dave DiMarco at (585) 987-2833. And, yes, he’s the brother of Anthony and Gerry DiMarco – the #1 mobile home park loan brokers in the U.S. This is a family that definitely shapes the industry.

An Audience Q & A On Warren Buffett's New Program For Park Owners

Clayton Homes and 21st Mortgage have partnered together to bring a game changing new program to mobile home park owners. If you have any vacant lots in your mobile home park or in a park that you are looking to buy, then you definitely need to be aware of the CASH program to fill vacant lots with nearly zero capital out of your pocket.

For more information you can contact Lance Hull at 21st Mortgage. You can call him at 800-955-0021 ext.1218 or email him at [email protected]. You can also contact Aaron King at Clayton Homes. You can call him at 865.380.3000 Ext. 5164 or email him at [email protected]. To visit the Community Calculator website discussed in the webinar, click here.

Disclaimer: The materials and information available from this posting are for informational purposes only and not for the purpose of providing legal advice. The contents should not be construed as, and should not be relied upon for, legal advice in any particular circumstance or situation. Further, the information presented on this posting may not reflect the most current legal developments. An attorney should be contacted for advice on specific legal issues.

Disclaimer: The information in this posting is not for consumer use and is not an advertisement to extend consumer credit as defined by TILA Regulation Z.

The Odd Connection Of Mobile Home Parks, Roto-Rooter, And Thanksgiving

Just as predictable as the seasons is the annual Thanksgiving Day sewer line clog. We remind every park manager to be ready for a sewer stoppage on Thanksgiving Day – and we remind them several times. We tell them to take the roto-rooter phone number and stick it in their wallet if they leave the house. So why is Thanksgiving Day one of the top days of the year for a mobile home park sewage problem?

Cooking with grease and not disposing of it properly

Many mobile home park residents cook using a huge amount of grease, and then pour it directly down the drain from the skillet – often while it’s still piping hot. This grease is the beginnings of a sewer clog, as it does not mix with the water and, instead, joins forces with the other grease to be found in the main sewer line. Most everyone knows you should never put grease down your drain, but people just get lazy and think “just a little grease won’t hurt”. Well, it does.

More than the normal amount of households cooking at the same time

The number one day for the American family to cook is Thanksgiving Day. Cooking a turkey and all the trimmings is a classic tradition. But when you have every family cooking at the same time on the same day, the stress on the sewer line is huge. It’s kind of like the first day of summer when the entire city turns on their air conditioning at the same time and there’s a blackout when the power fails.

Lack of working garbage disposals

On top of those problems, most mobile home park residents do not have working garbage disposals. Sure, they did back in 1980. But then it broke and they never bothered to fix it. So most of those items that go down your personal residence drain in a pulverized condition, instead go down the park drain as whole lemons and such. These large objects then mix with the grease and build virtual bowling balls of muck that can clog any line shut.


If you own a mobile home park, Thanksgiving Day is not a day you look forward to. But the good news is that the Roto-Rooter guy can make fast work of the clog and be on their way. The other good news is that Thanksgiving food is to tasty that it makes the whole problem worthwhile.

Just In Case You Think The Current Candidates Are Stupid

If you have been annoyed by the recent Presidential debates and the lack of quality candidates, here are some examples of what prior politicians have accomplished in office, and lend proof to the theory that our legislators are perhaps not the brightest:

  • In Hillsboro, Oregon, is it unlawful to allow a horse to ride around in the back seat of your car.
  • Cicero, Illinois prohibits humming on public streets on Sundays only.
  • In Hood River, Oregon, you cannot juggle without a license.
  • Lima, Ohio prohibits the sale of any map that does not show Lima, Ohio on it.
  • It is against the law in Binghamton, New York for ninth grade students to wear mustaches in class.
  • In Taylor, Arizona, it is illegal for a person to kick a mule.
  • It is illegal in Nebraska to picnic twice on the same spot within any thirty day period.
  • Well, that was a good use of our tax dollars!

A Testimonial For Renz And Associates

I wanted to share my recent experience with Mike Renz. Jeff and I needed a Phase I completed for a mobile home park purchase late last year. I shopped around, including Mike Renz as one of my quotes, and eventually chose a local consultant to perform the work. The savings was on the order of $300, and the local guy was "local"--meaning, he should be familiar with the area databases, industries, geology, etc.

In my initial conversation with Mr. Renz (and during every presentation he's given for you), he mentioned that regardless of who I chose, if I had questions, to call him. His advice would be free of charge.

The report I received from the local consultants was pretty bad. Being an engineering consultant in my prior life, I was expecting a much higher quality report. The local guys didn't really do any consulting, and worse, made blanket assumptions, suggested scientific theories that were incorrect with no supporting data, and worst of all, erroneously listed recognized environmental conditions (REC). I called Mr. Renz--he immediately/graciously reviewed the report, talked me through his major concerns, and provided a detailed email with a list of talking points that helped me discuss the report with the local consultant. With the talking points, I was able to reason with the local consultant. The final product was a Phase I report that I felt comfortable with, and more importantly, that the bank accepted.

Needless to say, next time Jeff and I need a Phase I, we're calling Mr. Renz.

As always, Jeff and I appreciate your help and advice and your willingness to share your experiences. After listening to Mr. Renz' presentation oat the Summit, I wanted to thank you again for bringing professionals like Mr. Renz to our attention.

-Jill S.

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

What Is That Thing In Front Of My Mobile Home Park?

mobile home park motel

Many mobile home parks come with a unique design attribute: a series of old, abandoned or re-purposed buildings awkwardly placed across the road frontage. There is a simple reason for these unusual structures. Back in the 1930s and 1940s, many mobile home parks were built behind roadside motels. Not the type of motel you see today, but rather rooms like cabins with parking next to the wall of each “bungalow”. Essentially, those that had trailers pulled in behind the motel, and those who did not have a trailer rented a room. While these are often really interesting structures – sometimes made of stone – the fact is that they are extremely difficult to re-purpose into another use. Because of their era, they typically do not have central heat or air, and have no kitchens. Additionally, they are extremely small inside – about the size of a typical bedroom. Some owners simply elect to shut them down, paint them an attractive color, and let them sit as yard art. Others attempt to convert them into efficiency apartments, and ultimate end up with tenants that are somewhere between carnival workers and panhandlers. So the next time you see little buildings in front of a park, you now know why they’re there.

Security Mortgage Group Is Our Banking VIP

We did a lot of conduit loans -- and regular bank loans -- last year. A common feature of those loans was Security Mortgage Group. If you are buying or financing a mobile home park, let Security Mortgage Group get you the loan. They'll get you better terms than you'll ever be able to find on your own. That's why the win the industry mortgage broker award virtually every year from MHI. If you have any loans you need help on, you can reach Anthony or Gerry at (585) 423-0230.

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