Thanksgiving is the right time of the year to reflect on all that we should be thankful for. Despite our rocky political issues, America remains the best country to live in. We have established property rights to protect our investments and a solid police force to ensure our safety. We have terrific healthcare and plentiful and safe food to eat. Our industry is in the best position it has ever been, from demand to financing to consolidation. But all those things are eclipsed by our relationships. Harvard University completed a study recently that took over 60 years to perform. The goal was to find the root of happiness. They followed the life cycle of a generation, monitoring careers and families and affluence. And they found that the #1 source of happiness was “relationships”. If that’s the case, then we’re the luckiest people on earth because we have a huge extended mobile home park family out there of other owners and related individuals. We really appreciate our conversations together and enjoy putting these labor of love newsletters together every month. We hope you have a Happy Thanksgiving!
Memo From Frank & Dave
Lonnie Dealer 101
The late Lonnie Scruggs wrote a book in the 1970s called “Deals on Wheels” and it had a great impact on the concept of buying and selling mobile homes inside parks. While some of the information is not longer applicable, and it has challenges in dealing with the SAFE Act and Dodd Frank which came after Lonnie passed away, nevertheless many investors spent their $20 on the book and got the idea to buy a home or two. And for many park owners, this is a good opportunity to make money, too.
What they do
There are two types of Lonnie Dealers: 1) those that buy and sell homes and 2) those that buy and rent them. They have a business model that is all about the homes while park owners focus on the land. There’s no reason they cannot happily co-exist, as there is a win/win potential to this model. We have had many longstanding, beneficial relationships with Lonnie Dealers for over two decades.
How park-owners benefit
When a Lonnie Dealer brings in a home to fill a lot, it saves the park owner from doing so. And, of course, with the average mobile home park lot in the U.S. probably worth $30,000 or more full and $0 vacant, the financial gain for park owner is substantial. If a Lonnie Dealer filled 5 lots, for example, the net gain to the park owner might be $150,000 or more.
How to help them
Since it’s established that Lonnie Dealers make park owners money and provide a needed service of providing affordable housing, then how can you best help them to succeed? To attract them to your park – and help them get off the ground – one common advantage is to not charge them any lot rent until their home is remodeled and occupied with the first resident. You can also help them by having your manager show their home, since it’s hard for them to drive all the way over just to open a door. And, of course, the best thing you can do is to make the park as nice as it can be so it attracts nice quality tenants for them and contributes to their retention.
But there’s one potential issue
When you already own a mobile home park with vacant lots, getting someone other than yourself to fill those lots is a huge win. But you also need to consider the perception of a future buyer or bank to a park that has too many homes in the hands of one individual or entity. Most banks want you to hold the exposure to one common owner to roughly 5% of total occupancy. But it does not have to be that cut and dried. The key is to think through the future impact – I think we’d all agree that 100% is a bit too much.
A success story
We have many success stories, but here’s one worthy of discussion. A Lonnie dealer down in Texas filled up 30 lots over time in several different parks. With the value of an occupied lot being roughly $40,000, that created over $1 million in additional park value. At the same time, they created 30 affordable homes for needy individuals. This Lonnie Dealer used the model of buying, renovating and selling the homes, and that meant that they were filling the void of credit and homeownership that exists for many households with lower income and credit. A total win/win for all involved.
When you come across a Lonnie Dealer, your first thought should be “how can I get this person to bring homes into my property and fill my vacant lots”? There’s a huge amount of potential in this relationship and it’s a win/win model in many cases.
This Is What The Most Prosperous Streets Of America Looked Like In 1950
It’s a little-known fact that in 1950, if you lived in a mobile home park, you had higher education and income than those in stick-built homes. This high demographic status was not lost on those trying to tap into the wealth. Frank Lloyd Wright designed a mobile home, as did Raymond Loewy. Even Stanley Marcus – the founder of Neiman-Marcus – built a prototype mobile home park in west Dallas. It was during this period that Ricky & Lucy moved into a mobile home from their New York City penthouse in the movie “The Long, Long Trailer”. It talked to someone who lived in my first mobile home park, Glenhaven, which was built in 1951. They told me that everyone in the property were in medical, dental or law school and drove British sports cars. These were the returning soldiers that were part of the GI Bill and lived in mobile homes as a cool, exciting new take on traditional housing. Those who believe that mobile home parks were the offspring of the need for affordable housing have not read up much on the industry. It’s a much more complicated – and classy – story.
Want To Re-Finance Your Park Using The New Agency Debt Product?
If you are considering re-financing your mobile home park, then you need to learn all the benefits of the new programs offered by Fannie Mae and Freddie Mac, collectively known as “Agency ”debt. The advantages of this type of financing are numerous, including:
- Low, fixed interest rates
- 12-year terms on 25 year amortization
- The ability to re-size the loan annually and take out even more money as income increases
MJ Vukovich is an expert on Agency debt and he works for Bellwether Enterprises, which is one of the top underwriters on this specialty loan product in the U.S. He is also a third-generation park owner who speaks your language. So give him a call today at (612) 335-7740 and let him tell you what an Agency debt loan can do for your property, or email him at [email protected].
Why No Pay/No Stay Is The Only Way To Approach Collection Of Rent
There are many different ways to collect rent. You can have it mailed in. You can have it delivered to the manager, or possibly a metal drop box inside the property. You might even have the money directly deposited into your account at the bank, or even through ACH. But there’s a bigger system to collecting rent that holds true regardless of how you structure how the checks and money orders actually come in. It’s a philosophy. It’s called “No Pay/No Stay”. And it’s the only system that really works. Why?
The only fair way
There’s nothing more discouraging for any mobile home park resident than everyone not being treated exactly the same. If you’re paying your rent, then it’s unfair if your neighbor did not yet is still living there. And payment plans are just as bad. The only fair way to approach collections is to hold everyone to the same standard, which is that rent is due on the 1st, later after the 5th with late fee applied, and evictions filed on the first day after the end of the demand period. No exceptions.
The simplest method
Those of us that tried doing payment plans in the past can testify that it’s an extremely difficult way to live. You have to keep track of a ton of payment plans with different amounts due on different days – it’s completely crazy. Instead of this anarchy, you can simply have all the rent due on one day and not take partial payments or track any random amounts due.
It keeps people in their homes
This is one of the most important attributes of No Pay/No Stay that few people understand. When you let residents get a little bit farther behind in their rent every month (by accepting partial payments) you basically give them a housing death sentence. After you’ve let them slip hundreds or thousands of dollars behind, they will never be able to dig their way out of that hole. The best thing for any tenant is for the landlord to demand that they stay up-to-date on their rent at all times. Sure, there’s things they’d rather buy than the rent every month. But consider it a form of “tough love” to ensure that they stay current and, as a result, always with a roof over their heads.
It places credit on outside forces and not you
One of the big drawbacks over accepting partial payments is that you are essentially lending your money back to the residents. You have bills to pay every month, like the utilities and the mortgage, and if you let the residents fail to pay the full amount, you basically float them with your own money. You want to be a park owner, not a bank. There are institutions out there to help residents when they can’t pay their bills, which include banks, payday lenders, pawnshops – even friends and family. Let these options fill the gap when the rent is due, and not shoulder that burden yourself.
Time tested and always successful
We have been doing No Pay/No Stay collections for over a decade. Prior to that, we often indulged in payment plans. We can tell you from experience that No Pay/No Stay is the only way to go. If you stick with it rigidly, you will find that your life is much happier and your late fees will equal your bad debt. You business will prosper, and your residents will respect you and make paying rent their #1 priority. There simply is no successful alternative strategy.
No Pay/No Stay is the only way to handle your collections. It’s fair, simple and effective. Although it may seem mean on the front end, it’s actually better for everyone involved, and the residents soon learn the system and don’t run afoul of it. If you are doing any method other than No Pay/No Stay, you should change over immediately – you will be glad you did.
Why We’ve Been Converting All Of Our Water Sub-Meters To Metron
We have been rapidly converting every existing water meter in our 30,000 lot portfolio to Metron-Farnier Sustainable Services. 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.
Lessons From Charleston Boot Camp
We have just completed our annual Boot Camp in Charleston. It’s a great town with a rich history. But it’s also a terrific mobile home park market. Part of our Boot Camp involves a tour of mobile home parks in the city and surrounding area. What did we learn from the tour this year?
Astor was right (buy on the fringe and let the city engulf you)
Charleston has benefitted from explosive growth, with a metro population of 744,526 that has grown nearly 50% since 2000. As a result, the city is constantly pushing beyond its existing boundaries, as well as filling in the gaps of any undeveloped property. In these type of situations, there is a huge value add simply by sitting in the path of progress. And that’s exactly how it’s been going for the parks we visited on the tour. John Jacob Astor – America’s first real estate millionaire – focused on this theory over 200 years ago when he started buying rural land on an island called Manhattan. To achieve this the key is to buy in fast-growing markets and in the direction of expansion.
Follow highway construction maps
One of the properties we toured had been the recent recipient of a new off-ramp to the highway, which gives it an incredible boost in value. What many people may not know is that these type of highway improvements don’t have to be left up to luck. There is a published inventory of all current and future highway developments available at most state’s Department of Transportation. All new highways are shown in the progression of proposed roads, right-of-way purchased, bids let and construction started, as well as estimated completion date. There’s no better way to verify future growth than by looking at where new roads are being built.
The power of a proactive chamber of commerce
Charleston has a robust economy based on tourism alone. But they are nailing continual additional employers, as well as large expansions. What fuels this growth is an active Chamber of Commerce. This is one of the advantages of being in a larger metro market (Charleston has a metro population of 744,526) where city budgets can afford a high paid business development director and staff. These folks are tasked with beating the streets to attract new companies and existing expansions. In addition, a strong Chamber often leads to many tax incentives (such as TIFs) as well as a full knowledge of all available business development programs in the U.S. With a 4.4% unemployment rate and a $307,000 median home price, they are clearly doing their job.
Charleston is a very fast-moving economy, with a constant stream of new residents creating a continual path of new construction. This has directly benefitted park owners in many ways. It’s always interesting doing our Boot Camp park tour there, because so much as always changed over twelve months.
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 “Park” Is Not A Four-Letter Word
Millions of Americans pull off the highway and enjoy our National Parks. Millions of others relish our state and city parks. So why is it so objectionable to say the word “park” in reference to our industry? Even Sam Zell refers to our sector in his book “Am I Being Too Subtle” as “manufactured home parks”. I have long harped on the fact that “park” is not a derogatory word. The negativity is more in the minds of the industry itself – certainly not in the minds of our customers. Here’s how I see it.
Positive word association
“Park” is defined as “a large public green area used for recreation”. The mental imagery is a positive experience, whether it’s a picnic, a playground, a walk or throwing a football. It’s one word that has 100% good vibes, and that’s true for people of all ages. It’s the refuge from urban blight, the reward for hard work, and the setting for fun, celebration, and even romance. It’s never a negative term.
A source of pride in the early days
Back when the industry began, those who built “parks” were proud of the term. Look at some of the early photos of those first properties. They typically feature a giant metal frame over the entrance that proudly announced that you had arrived at the “park”. Remember that the demographics of those residents in the 1950s were higher than those in stick-built houses – so why wouldn’t they be proud?
Reflective of the outdoor nature of the product
I’ve always thought that one of the strengths of our home product is its connection with nature and the outdoors. That is probably the result of its early history with recreational vehicles. If you ask most of our customers what attribute they enjoy about our properties is that they have a country “feel” inside a hectic city environment. And, of course, no term represents bountiful nature better than “park”.
A part of modern nostalgia – not disrespect
America currently has a fascination with the 1950s and 1960s. Mid-century modern homes are one of the hottest sectors of real estate, and cars from the 1960s are pinning the meter on classic car values. I was just in Las Vegas and saw 100 different souvenirs featuring a pink flamingo. There’s a certain throwback excitement in the term “park” that is not a negative, but rather a term of fondness.
The #1 word usage by our customers
One of the key reasons that all smart owners use the word “park” prominently in their marketing and vocabulary is that it’s the #1 term used by customers in searching for our product. By a lot. Like 99% of all searches. The industry has long failed in gaining acceptance for its attempts at changing the terminology. While you can change the front-end from “trailer” to “mobile home” to “manufactured” you can’t get people to use the term “communities” rather than “park”. Just talk to any customer or average person, and they will always say “park” and never “community” – other than to describe the “sense of community” inside the park.
So where did the negativity come from?
Since we’ve established that “park” is a happy word and our customers are not turned off by it, the big question is “why is the industry so against it”? In talking to hundreds of owners each year who all use the word “park”, I’m not sure that the “industry” really does. Instead, it’s just a handful of people who want to promote the narrative that our properties are elevated above the old concept of “park”. While I don’t mind the new term – as we tell people all the time that a sense of “community” is a big amenity that all parks offer – I’m continually confused while these folks don’t give up on their official name change given the total lack of traction. I also don’t understand why there’s no tolerance or admission that the term “park” is not derogatory.
Google search analytics has already clearly proven that “park” is the official term of our product and not “community”. However, I personally have no problem if that were to change going forward. The important thing is to acknowledge that either term is fine and there’s no reason to look down your nose at those who say “park” when they want to. Because that’s currently 99.99% of the American public.
“Park” is not a bad word. It never was. It never will be. For those who refuse to accept this fact, I can only hope that you are willing to settle for zero internet visibility and getting blank stares from customers who have no idea what you’re talking about.
Westland Has Acquired Arizona Home Supply And Nevada Home Supply
Westland is the dominant force in mobile home parts and accessories in the west – and they just got bigger! With their acquisition of Arizona Home Supply and Nevada Home Supply, they now have warehouses in Denver, CO, Tempe, AZ, Sacramento, CA, Phoenix, AZ and Las Vegas, NV. You can buy all your set-up parts, skirting, tie-downs, shading, decks, heating and cooling from one trusted source.
So why should you call Westland when you need that special part? There are many reasons:
- 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.
If you want to be able to talk to people who know more than you do about how mobile homes are constructed and exactly what part you need -- and want to get great pricing, customer support, and fast shipping -- then you need to try Westland. To reach Westland call (800) 525-8847 or visit their websites at www.westlanddistributing.com, www.azhomesupply.com, or www.nvhomesupply.com. Tell them Frank & Dave sent you.
The Dangers Of Coastal Parks
It’s always easy at this time of year to discuss the detrimental impact of hurricanes on the U.S. Just a couple of weeks ago, Hurricane Michael proved to be one of the strongest storms to ever hit Florida. If you own a coastal park, you have a perpetual threat of hurricanes that is as predictable as summer heat or winter cold. So what is the impact of hurricanes on mobile home parks?
The most dangerous part of coastal parks is the potential storm surge. This is higher water levels brought on by waves being pushed ashore by high winds. In some hurricanes, this storm surge can reach nearly 20’ in height, which results in massive flooding. The worst part of this is that, in most cases, the flooding is not insured. Without insurance there’s no Daddy Warbucks to replace those damaged mobile homes. And that means that occupied mobile home park lots can suddenly become vacant – and that means a $50,000 lot becomes worth zero based on cash flow. There’s really no solution to this problem if your property is on the ocean in a hurricane area. It’s just the risk you run.
Rain and flooding
Not as severe as storm surge – but equally alarming – is the severe rain and flooding that follows the hurricane moving ashore. Remember that Hurricane Harvey brought 60” of rain to Texas only a year ago. With these type of precipitation levels, many FEMA floodplain maps go out the window. The only benefit to mobile home parks is that the homes are already on stilts (roughly 3’ in the air) and can survive flooding far better than single-family homes and any structure that sits on the ground. Additionally, in times of huge rain the drainage still follows the normal patterns, only with a vengeance. So if your park is not in the floodplain, you’re probably fine. The big problem with flooding is that it’s not typically insured, just like the storm surge issue.
Of course, one of the features of a hurricane is punishingly high winds – often over 100 mph. This can cause a huge amount of damage, but the good news is that it’s typically insured. So if the wind knocks down the mobile home, the insurance company will put it back if they’ve been paying their premium. Most of the parks we own in hurricane areas have this as the big danger, and that’s a danger we can handle (we are able to limit our exposure to wind loss by buying parks that are miles inland).
The reality of “loss of income” insurance
Don’t be fooled into thinking you’ve got hurricanes conquered by carrying “loss of income” insurance. While it’s helpful (it pays out monthly when the park is damaged in the weather event) most of these policies have a limit of a couple years while the mortgage has 30 years to run. Another issue can be the fact that the policy can turn off once you have re-opened for business, even though all the homes are missing.
One of the depressing attributes of owning parks in hurricane areas is that you know that virtually every year there will be a few hurricanes – always at roughly the same time of year. This can really drag you down mentally as hurricane season approaches. But if you’ve done your due diligence properly, you can come to grips with this concern and compartmentalize it. But it’s always there.
The ramifications of “global warming”
Whether you are a believe in “global warming” or not, the fact is that recent weather events keep becoming more frequent and severe. So any hurricane risks with a mobile home park are actually amplifying annually. This means that it’s more important than ever before you properly identify the risks and make sure you have the right insurance in place.
Some of the most valuable mobile home parks in the U.S. are on the coast. And Texas and Florida are the top two states in total mobile home park supply. You can own a park in hurricane areas as long as you know what you’re doing and have an insurance agent who does as well (we suggest Kurt Kelley).
Why Do People Like To Live In Mobile Home Parks?
The sad and unfair stereotype of our industry has led some people to question the reasons why customers would ever want to live in a mobile home park. How wrong they are. Our customers like living in our communities, for many logical reasons.
The carefree feel of camping
Because of its roots in the RV industry, mobile home parks always feel like “camping” even inside a dense urban environment. The concept of being inside a structure on a chassis and not a foundation, surrounded by nature, creates the “feel” of being on vacation. And most people find being on vacation a pleasant thing.
Lower cost means lower pressure
It should come as no surprise that America is in a strange transformation right now in which younger people (and some older) are questioning the wisdom of living in large dwellings. HGTV is packed with programs promoting “tiny homes” and viewers love them. If you watch the shows, the standard plot is that the consumer explains why they want to break out of the vicious cycle of living beyond their means, and are looking to lower their household costs so they can enjoy a less pressured existence and have money to devote to their own interests, such as travel. Mobile home residents often have these same aspirations.
More opportunities to socialize and interactTime magazine recently declared that mobile home parks “are like gated communities for the less affluent” and then went on to rave about how strong a sense of fellowship they have among residents. At the same time, Harvard recently concluded a 50-year study of happiness and found that relationships – not money – is what made people satisfied. Why do mobile home parks foster such a strong sense of community? Perhaps it’s the high density that forces neighbors to interact. Or maybe it’s because residents – even those that have normal jobs – turn off the clock each day at 5 pm and spend the rest of the day in conversation and enjoying time together.
Stable neighborhood feel
We’re not sure what the average length of residency is for apartment dwellers, but it can’t be too long. Apartments are known to be highly transient. Mobile home parks, on the other hand, enjoy extremely long lengths of stay (some claim that the average is 14 years but we’re unaware of any documented research – but we are aware that over 99% of mobile homes never leave the spot they were first delivered on to). As a result, residents love the fact that their neighbors really get to know them and forge relationships and a support network.
Privacy when you want it
If you ask most mobile home park residents why they like living in the property, one of the first statements is “privacy”. They like having nobody knocking on their walls or ceilings. They also like parking by their front door. But the big benefit is the one thing that apartment occupants can only dream of – having their own yard. With the yard comes complete privacy. Yet, when you want to socialize, all you have to do is step outside your gate.
The stability of home ownership
One final thing that mobile home park residents love is the ability to own their home. This is never possible in rental property and offers a huge improvement in the feeling of stability. It also delivers the least expensive housing option in America. Once the home is paid off, residents often enjoy a 3 bedroom/2 bathroom dwelling for a U.S. average of around $280 per month in lot rent.
Those who can’t understand why people like living in mobile home parks have never spent any time inside one. The actual reasons are overwhelming and that’s why the demand for our product is off the charts.
Back When America Put The Focus On Work...
It seems hard to believe in the Kardashian era that Americans used to cherish those that actually did something beneficial. This was a statue I found recently in Chicago that was dedicated to a dentist named G.V. Black who was considered the “father of modern dentistry”. There was a time in the U.S. in which we celebrated those who made the world a better place. And there’s much more benefit to society in being an expert at buying and turning around mobile home parks than being another singer on American Idol. Although we are bombarded with media images celebrating entertainers and lottery winners, the truth is that all smart Americans hold those who contribute to society in much higher regard. So be proud of your mobile home park because, whether you know it or not, you are a hero to a whole lot of people who call it home.
Is Your Attorney a “Deal Killer” or a “Deal Maker”?
How many deals have you seen go down the drain because your attorney stacked up a million roadblocks to even the simplest problems, and then failed to offer any path to solve 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. 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.
Tiny Homes Have Achieved A Cult Status – And That’s Good For Our Industry
Our industry suffers from an epic image crisis. We can’t think of an American sector that has been so punished by unfair media stereotypes – from Trailer Park Boys to 8-Mile. It’s been so prevalent for so many years (probably starting with Jeff Foxworthy in the 1980s) that it’s probably too late to convince the bulk of the Baby Boomer generation that our product is actually nice. But there’s hope at the end of the tunnel: young people are starting to really dig the concept of micro-housing. Although tiny homes are not exactly legal (they don’t have HUD seals most of the time) and are ridiculously small (who really wants to live their life in under 300 square feet of space) the bottom line is that this tiny home phenomenon is the best thing to happen to mobile home park P.R. in a half-century. HGTV should win an industry award as marketing MVP. Remember that Marlboro cigarettes began in the 1920s as a women’s brand and were converted to a macho men’s brand over a few decades of aggressive marketing. Tiny homes may be the industry’s ticket to having a positive image with the younger generation. It will take years, obviously, until the Boomers are replaced with the Millennials, but at least a solution is in sight.
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.
The Economic Resurgence In The "Flyover" States
Have you noticed the new power formation in many American maps that highlight low unemployment and high opportunity? The parts of the U.S. found between the coasts are called the ‘flyover states”, and many investors have the wrong impression of them. A recent article highlighted the economic strength found today in middle-America. So what’s so good about “flyover states”?
The lowest unemployment rates in the U.S. are found in the middle of America. There are multiple reasons for this including 1) the backstop of agriculture 2) stable employers including healthcare, government and education 3) the growth of advanced manufacturing and 4) lower labor costs due to lower cost-of-living. It may come as a shock to many but the middle of America – if it was its own separate country – would be the fourth largest economy in the world. Back in the Great Recession, when national unemployment rates were around 10%, states such as Iowa were at less than 4%.
Generational improvement rates
Another interesting feature of the “flyover” states is that they are among the only in the U.S. that offer a higher standard of living to each successive generation. In a recent study, all 19 states that were analyzed in the middle of America delivered a higher standard of living for each consecutive generation, while the coastal states went backwards due to unsustainable housing prices. Of course, when people have bright futures, they tend to stick around, which leads to extremely stable residents.
Stable home prices
One item that fuels both of the factors described above is the steady level of housing prices. The “flyover” states don’t have housing booms nor do they have housing busts. Homes are something that don’t gyrate in value. Perhaps that’s because people refuse to overextend on their residence. Let’s look at the stats in three different markets as an illustration. In Kansas City, the median home price is $135,100 while the median household income is $45,376 per year. That’s a ratio of roughly 3 to 1. But in New York City, the median home price is $662,100 while the median household income is $52,737 per year – that’s a ratio of roughly 12 to 1. And in Los Angeles, the median home price is $670,200 and the median household income is $49,682 (roughly the same as Kansas City) for a whopping ratio of nearly 14 to 1. Being “house poor” is not a good attribute if you desire stable home prices.
Don’t take the “flyover” states for granted. They offer some stunning economic stats, and are the home to many great mobile home park deals.
You can contact Mike Renz at (614) 538-0451.
Need A Phase I Environmental Report? Mike Renz Is Your Man For The Job!
The New York Times called Frank a human encyclopedia of all things mobile home park and, if that’s true, then Mike Renz is the human encyclopedia of all things under the ground. You see, when it comes to Phase I Environmental Assessments, nobody in the industry is more knowledgeable than 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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