We just attended the TMHA conference in Dallas. It’s a great association that has done a tremendous amount for the industry. We also heard some interesting speeches. It occurred to us, after listening to two from college professors showing stats and data, that the industry has lucked into the greatest business model in history. Whether or not those first moms & pops could ever envision such a position is debatable, but the bottom line is that we have the housing world by the tail and there’s nothing holding us back. It’s impossible to build stick-built homes at a $100,000 price point including the lot (the lots alone average $85,000 in most major metros) and cities are hostile against the concept anyway, since these homes pay little in taxes and certainly lose money when you factor in tuition for the kids. So effectively – when it comes to inexpensive detached housing – we have a firm monopoly. Of course, the corollary is that cities will become increasingly hostile towards our product, since they don’t create much tax income compared to McMansions yet cost the city large amounts in city programs. To protect our interests, it’s essential that we join forces to keep city and state government in check. And the best way to do that is to join your state manufactured housing association. We have always tried to be active in these groups and currently serve on the Board of the Iowa MHA. But it’s imperative that all owners and friends of the industry stand together to challenge government attempts to circumvent our rights. We have the world by the tail and we must never let down our guard amid challenges from those who are filled with envy and bad intentions. Get active in your association! Stand tall and never back down! The future is in your hands.
Memo From Frank & Dave
Stupid New Ideas The Industry Has Suffered Through And The Lessons Learned
The 1970s Ford Pinto is ranked by most car magazines as the worst automobile ever built. It looked good to the designers at the time, but the actual product was homely and unreliable. Sometimes, the best hatched ideas don’t turn out. And then there are the real stinkers like the Pinto – ideas so bad that nobody can figure out how they happened. The mobile home park industry has had its fair share of bad ideas. Here are among the worst, and what we learned from them.
0% down no income documentation 30 year mortgages
No discussion of industry idiocy would be complete without remembering the 30-year, 0 down, no income documentation mobile home mortgage of the late 1990s. The brainchild of Greentree Financial, the general idea was that we could make loans to people with no credit and no down and it would all work out O.K. in the end. It didn’t. I don’t know the final tally of repossessions of homes that occurred under this program, but I would not be shocked if it was around 80%. Of course, the industry is not closely tracked, as the same movie was repeated by the single-family home market a few years later, resulting in the Great Recession of 2007. What did we all learn from this? Simple. Loans do not work without skin-in-the-game and a decent credit score. You probably already knew that, but I thought I better remind those who did not live through the Great Chattel Collapse of 2000.
Putting $50,000 doublewides in parks with $100 lot rents
In the late early 2000s, a large investment group had the brainstorm of buying large parks down south with huge vacancy and placing giant numbers of doublewides in them. We were never sure what the vision was, but they invested millions in this novel idea. Most of these properties had lot rents of around $100 per month and home prices of $50,000 or more. You can guess what happened. The homes defaulted about every other month and the parks had home debt several times what the park was worth. Nobody would refinance their mess, or buy them. Most went into foreclosure and the investor money was lost. The moral? You have to match the value of the homes to the lot rents. If the value of a $300 per month lot rent yields a lot value of $40,000, then the most expensive home you should put on that lot is $40,000. That way the home debt stays in check with the park value. At a $100 rent, the budget on those homes should have been about $10,000 – not $50,000. Painful lesson for the investors.
Buying parks with no due diligence with the sole goal of becoming huge
OK, this was the 800-pound gorilla of the industry in the 2000s. The crazy rise and crazier fall of the company that had three letters but you’ll have to guess what they were (hint: it sounds a whole lot like a popular Jackson 5 song title). Their sole goal was to get huge, but to do that they sacrificed one key ingredient: due diligence. The errors were legendary. In one case in North Texas, they bought a property without measuring the lots and kicked out all the old homes. Then they found out that they had to sacrifice one lot for every one they filled, since they were too short. The end result was a property that was 50% of budget on revenue. And there were tons of these happening. The group did go public but then the stock collapsed and the industry had a black eye for years. The lesson learned? Sheer growth – in the absence of value creation – is just plain stupid. You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool the stock market analysts for very long.
Every industry has it’s Pinto. We’ve had several. But as long as we learn from these disasters, it’s probably not a bad thing. But let’s try to never forget or repeat them!
Why You Don’t Need To Buy In Areas Of High Population Growth
Some parts of America are growing like weeds. But while that’s super important to some forms of real estate, the mobile home park sector is not reliant on this one stat for success. Indeed, some of the nation’s most valuable parks are in areas of flat or declining population. How is this possible? Let’s review.
Massive growth is required to meet rising supply in most real estate sectors
In everything from apartments to self-storage, you are constantly battling new construction. It’s like the proverbial hole in the cup. As fast as you pour in water (in this case people) it runs out the bottom (in this case new construction). When you own a storage property, for example, you’re not just competing against the old property down the street, but you’re battling the 50 new ones being built nearby. It’s a hopeless race in many markets, which leads to lower rents and higher vacancy even in fast-growing markets.
Mobile home park supply is capped
Since mobile home park supply is static (thanks to hostile city governments and local residents) you don’t have to worry about new construction. In fact, there are less than 10 new parks built each year in the U.S., while about 100 are torn down for new construction. So we are the exact opposite of apartments, storage, single-family and retail – we are an endangered species. As a result, we need zero population growth to keep everything full.
Demand for affordable housing is too high to need artificial help
Most of our parks get around 30 calls a week looking for homes for rent or sale. And that’s even when we’re not advertising. With that kind of demand, you don’t need thousands of new entrants into the market to make things work. Unlike virtually every other real estate sector, our demand is off the charts, and we don’t need the artificial assistance of new move-ins to succeed. Since mobile homes never leave the lots they are initially parked on, our revenue is assured regardless of population trends.
High growth can often lead to economic collapse
And let’s not forget the net effect of rapid population growth. It’s kind of like comparing the Hackberry tree which grows incredibly fast to the mighty Oak, which grows super slow. The Hackberry is poor quality and breaks at the first big gusts of wind, while the Oak lasts for hundreds of years and can survive just about any weather event. Look at Las Vegas, for example, which saw insanely high growth and then insanely bad collapse in the Great Recession, where $300,000 condos sold on the courthouse steps for $30,000. We’ll take slow, solid growth over rapid expansion any day.
Mobile home parks have a unique position in not needing high levels of population growth to succeed. And the dangers of rapidly expanding markets, in our opinion, make these markets often less than desirable. We’ll take slow and steady any day.
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].
The Top 10 Mistakes Of Novice Park Buyers
When we’re out driving parks, we often drive by car wrecks. Some are minor and some horrendous. And the same can be said of what we see in the mobile home park industry, particularly when novice buyers are involved. Over the last 20+ years we have seen and experienced a lot, and these are the most common novice errors that we’ve made or witnessed.
Capping park-owned home rent
In the world of mistakes, this is near the top for park buyers. What happens is that there are rental homes in the park owned by the mom & pop owner, and the buyer uses not just the lot rent but the home rent in their revenue calculations. You can’t do that. You can only use the lot rent as it’s real property while the home is personal property. So what’s a home worth? Just the price of that commodity. A 1970s home might be worth $1,000 on the open market. But if you cap the rental rate of $300 on that home, you might be paying $30,000 for that $1,000 asset. It’s the number one killer of novice park buyer dreams.
Buying private utilities
While many parks have private utilities, the key is understanding what you’re buying and what the costs are to replace them. We got a call a few years ago from someone who had bought a park with a septic tank that was failing and could not be replace under local ordinance. It would not matter anyway, as they only had $5,000 in their bank account. And then the EPA stepped in and fined them $10,000 per day. The bottom line is that you have to really know this stuff and budget accordingly or it’s like going off the side of a bridge.
This may work OK in the Dukes of Hazzard, but not that great for mobile home park values. Lenders hate dirt roads since they reflect poor pride-of-ownership and infrastructure. If you are wanting to buy these type of parks, you better be good at convincing lenders to go along with you. The worst wrecks are when the mom & pop seller finances for a few years but then you can’t refinance 3 years later. Paved roads are the way to go normally (but not always, based on the location and other factors).
We like living in small towns, but we’re not sure that buying in them is always a good idea. Most lenders want metro populations of 100,000 and up. If you’re area is significantly less, then make sure that the market will cooperate with your goals via a test ad, and that the lenders are OK with your concept. Again, a big danger here is seller financing that requires new bank debt later, or bringing in a bunch of homes and not having enough customers to fill them. Another problem is some smaller markets are one-horse town employers that might cut back and tank the local economy.
Markets with low home prices
The demand for affordable housing is created by high home prices. If the median single-family home is $40,000 (like it is in Flint, Michigan) then who needs a mobile home? And if apartment rents are $400 per month (like they are in some parts of Louisiana) then who needs a mobile home with a lot rent of $300? We call this concept “contrast” and it’s essential. If you don’t follow this fundamental law, it’s like rolling your car over.
Buying based on pro-forma budgets
Some brokers give the buyer a “pro-forma” budget, which effectively shows you what the park could do if it was running at peak efficiency. The problem? It’s not. So if you use these budgets you’re going to get clobbered. Make sure to run all financial plans utilizing only real numbers based on actual occupancy and lot rent levels. Better yet, test your numbers at least three times to make sure you don’t make a mistake.
Short term seller-financing
Here’s the dilemma: the seller carries the paper but on a short fuse, and you then fail to get a real bank loan and, as a result, default on the loan and lose the property. How do you solve this? By making sure that your seller note is long enough to allow you to make all the right enhancements to net income, season that for a few years, and then obtain a good bank loan. So how much time do you need? At least 5 years, but more like 10. Here’s how it would work. On a 5-year seller note you would race to fill lots and raise rents and make capital repairs in years 1 & 2, and then season those financials in years 3 & 4, and then spend the entire year 5 in finding the ideal loan. But that’s pretty tight. That’s why a 7 to 10 year loan is infinitely better. But the car wreck is when you agree to a 2 or 3 year seller note. That does not give you the time to accomplish anything, and consistently ends in default.
Most Americans don’t want to be in the natural gas business. And that includes most every park owner. But sometimes the novice investor buys a park with master-metered gas and has no idea what they’ve done. In this arrangement, the park has one giant gas meter at the front – and pays the entire park’s bill every month – and then distributes that gas to the residents and charges them by metered use. The problem is that if there’s a leak in the system, it’s dangerous and near impossible to find and fix. In the interim, the gas stays off and the residents have no heat, hot water or ability to cook. That’s too high stakes for most investors, and many a new investor has been clobbered with this one.
Not resolving city permit issues in advance
Every mobile home park falls into one of three categories: 1) legal conforming (which means you could build it again today exactly how it is) 2) legal non-conforming (grandfathered) or 3) illegal. If your park fits into either #2 or #3, then you may potentially have problems. Obviously, a park that is illegal should never be bought, but most of the parks in the U.S. are grandfathered legal non-conforming. As a result, you have to make sure that the city will not challenge you on the park’s operation or filling vacant lots or homes. If they show any sign of not being agreeable, you need to challenge this prior to buying it. This is a risk that the seller must endure, not you. If you buy a park and can’t use the lots then that’s like driving head-on into a 18-wheeler.
Not understanding what the key drivers are to profitability
While most of the above-mentioned problems are ones that need to be solved in advance of purchase, there are also a number of car-crash problems that arise from the operations after the closing. There are basically five key drivers to profitability in any park: 1) collections 2) water & sewer billing 3) occupancy 4) property condition and 5) budget/actual/difference focus and adherence. If you screw up any of those five meters, the park will crash, just as your car will die and leave you stranded.
Many new investors are their own worst enemies regarding their success or failure with the property. The world is dangerous enough without creating your own potholes. Proactive buyers have all of these items solved well before closing, and stay on top of the property thereafter.
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.
American Pickers Buys A Mobile Home Park Novelty Sign
It’s no surprise that American Pickers is one of our favorite shows – it’s a great way to stay fluent in negotiation. But a recent episode actually had a mobile home park angle to it. The American Pickers team visited a junk dealer and spotted an unusual metal life-sized bellhop that apparently came from the entrance to a property called Verde Trailer Park. But this is not the first time we’ve seen one of these. Good Luck Trailer Park in Dallas had an identical sign at its entrance many years ago, and was the neighbor to Frank’s first park: Glenhaven. He used to drive by it frequently.
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!
Lift Station 101
While most people think of a “lift station” as something to be found in a gym, the truth is that it’s a pretty common feature in much of America but virtually nobody knows it or understands it. So here’s a primer of what a lift station actually is and works.
Why it’s needed
Unlike water, sewer is not pressurized. It can only run downhill, thanks to gravity. So sewage must originate from a point higher than where it ultimately is treated. But this is not always possible. If your mobile home park sits lower than the city’s main sewer line, the only solution is to use a pump to push it upwards into the city’s pipe. A lift station is the device that accomplishes this.
How it works
A lift station only has one moving part. It’s a concrete cylinder that the sewage pours into, and then is blasted with a strong electric pump uphill to the city’s sewer line. In most lift stations, in fact, there are two motors (in case one breaks). There are also some additional items on the top of the lift station, namely an audible siren or bell and a flashing light to warn that the lift station has stopped working.
What it costs
A lift station is typically around $50,000 to $80,000 to build from scratch. An existing lift station has one very expensive part: the motors. These motors can cost $5,000 to $10,000 installed. Lift stations have a very long useful life, but you would need to put a microscope on the condition during due diligence and budget accordingly.
How you can get a handle on it
In due diligence, have someone who builds and/or operates lift stations evaluate the unit in question from one end to the other. It’s pretty common for mom & pop owners to fail fixing one of the motors, which they procrastinate about. It’s also common for the audible and visual alarms to be broken, since mom & pop saw no reason to fix them. All of this deferred maintenance requires some capital deployment on the front end, but lift stations are not typically cash pits. You will also have to get comfortable with the fact that the manager is watching over the lift station and making sure that everything is running smoothly. Some lift stations can now have an auto-dial feature added, and this might give you some additional comfort from potential problems.
Lift stations are unique instruments, but well-built and long-lasting. You can get a handle on a lift station if you apply enough concern during due diligence, and adequately instruct the manager on how to watch over it.
The Impact Of Higher Minimum Wage Laws On Park Occupancy
There has been quite a bit of conversation in recent years about raising the U.S. Minimum Wage. Some cities and states have raised them independently, and it’s a hot topic with some political parties. So what would be the impact of higher minimum wage laws on park occupancy?
Identifying the increase in household income
There are roughly 2,000 work hours in each year. If the minimum wage goes from $7.25 per hour. If that was to increase to $9.25, it would provide roughly $4,000 more income before taxes, or roughly $3,200 after tax. This is not going to make a huge change in purchasing power or the ability to massively increase housing expenditures.
Allow for necessary rent increases
We have been writing about the mandatory increases in lot rent that are on the horizon. Charles Becker of Duke University estimates that the average mobile home park lot rent is 40% below market. Using that theory (although we believe it’s more like 100% in most markets), with a current $285 lot rent average in the U.S., the future increase is $100 per month. The increase in minimum wage would be helpful in making the future lot rent increases possible.
But does not allow for entry into the single-family home market
But let’s be honest: there’s no way that minimum wage increases would allow these workers to break into the single-family home market. It’s not income alone that is required to buy a house. Requirements also include a sizable down payment and decent credit score. Even a $100,000 single-family home would need around $5,000+ of capital and a credit score of around 600 – which excludes most mobile home park residents.
What about job losses?
One concern about higher minimum wages is that it will foster greater automation and will result in layoffs to offset the higher employee cost. But let’s get serious about that. Most jobs that pay minimum wage have already been as streamlined as possible. We’re pretty sure that McDonalds has tried to automate everything they possibly can. In addition, many jobs that pay minimum wage simply cannot be automated, like cleaning a hotel room or delivering a pizza. While the auto industry led the way on finding creative strategies to ditch employees, remember that those folks were unionized and costing $30 to $50 per hour.
The U.S. Minimum Wage may adjust upward in the years ahead, but that’s not really bad news for any mobile home park owner. Higher wages will ensure the money is there to cover the future lot rent increases that are needed to allow for mobile home parks to afford capital improvements and avoid re-development.
Why It’s Cheaper Just To Fix Things The Right Way: Real Contractors Vs. Bubbas
This is what a maintenance man did to fix a broken window in a mobile home park we recently purchased. Rather than buy some glass and fix it properly, he bought a piece of plywood but had no saw to cut it, and then held it up with a wall a cinderblocks since he didn’t have a hammer and nails. We have a theory called “the pro vs. the schmo”. The general concept is that you are always better off using a professional on most projects, despite the seemingly lower cost of the amateur who has no idea what they’re doing. There are many reasons why you’d use the licensed contractor and not Bubba who lives nearby and gives you a bid that’s 70% less.
You only have to fix it once
When you use a professional workman, the job is done correctly the first time. You don’t have to go back and do it again and again. That broken window, despite the unusual solution, is no better now than when it happened. There was time and effort spent with no reward. Imagine a water leak in your park. The certified plumber will charge $500 to fix it. But Bubba Jones in lot #14 offers to fix it for $100. If you’d hired the professional, you’d pay $500 and never have the leak again. But if you use Bubba you think you’re saving $400, but the truth is that Bubba’s patch will not hold and, after you have him fix it three times, you’ll still have to bring in the pro for $500 – resulting in a net loss of $400.
You escape potential litigation
Another cost of doing business with Bubba Jones can often be the litigation after he saws the tree limb that cuts the home in half or drills the hole through the resident’s car hood that he was using as a workbench. Just one of the these type of incidents can cost more than all the potential savings added together for years. We once hired a guy to move a 5th wheel from one lot to another and within ten minutes he’d destroyed both the RV and the pick-up truck. All in an attempt to save $200. Never again.
It’s less brain damage
How much is your time worth? When you call the professional, you make one contact and the next thing you know it’s fixed and you get the bill. But when you use Bubba, you chase after him time and time again, eating up your own personal time and energy. And then you constantly worry if he did the job right. And when the bill arrives, it’s often not the amount you agreed to. So if you add all that extra time, there’s no way that Bubba was the cheaper option.
Although the professional contractor seems more costly on first impression, when you add it all together, there’s no way that hiring an inexpensive Bubba is a better alternative. Stick with the pros and avoid the schmos.
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.
Why You Don’t See Many Doublewides In Mobile Home Parks
There are two main types of mobile homes: 1) singlewides and 2) double-wides. Yet probably 90% of the affordable housing lots in the U.S. are singlewide in configuration. Why are there so few doublewides inside mobile home parks?
Twice the cost
This should come as no surprise: double-wides cost roughly twice as much as singlewides. Why not? They are two singlewides stuck together. If a singlewide set up in your park costs $30,000, it’s a pretty safe bet that the doublewide would cost around $50,000. While some properties have customers that can afford higher price points, most affordable housing residents can hardly swing that extra burden.
But you don’t get twice the rent
Here’s the big problem: doublewides don’t get twice the rent. If the singlewide rents for $600 per month, the doublewide might bring $900 – not $1,200. So there’s a distinct economic disadvantage to the doublewide’s use in a park. Assuming that most Americans typically buy all the home they can get a loan on, the very fact that there’s only about 5% of doublewides in most park shows that the higher price is just not a winner for consumers.
Often requires two lots instead of one
Just as doublewides don’t bring twice the home rent, they also do not bring twice the lot rent. Most doublewides in the U.S. take up two separate lots, but only pay for one. That’s been the tradition for decades in most communities. The reason is that there’s no way the customer could afford to pay twice the mortgage and twice the lot rent. And since most park owners have a few vacant lots, they are willing to sacrifice one extra lot to get that extra unit of occupancy.
But they can often be important eye candy
So why does any park owner bring in a doublewide to fill a vacant spot in their park? Simple. Because doublewides look really nice and serve the role as mobile home park eye candy. Many owners want to position them at the entrance or in that big curve in the road. Some loan products even require a certain percent of doublewides to prove that the park is highly desirable. Just a couple doublewides can set a positive first impression that makes the appraiser raise the value upon sale or refinancing.
Doublewides can be a beneficial part of many communities, but typically only for their aesthetics. Until such time as they can garner twice the rent – for both home and lot – they will not be considered a serious money maker for the park owner.
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.
Can You Spot The Piece Of History In This Photo?
If you look closely in this photo, you’ll see a classic mobile home from the 1950s hidden in the weeds. It’s probably sat there for a couple decades by now, along Interstate 70 between Kansas City and St. Louis. If this was a 1950s car, it would have been already purchased by a collector and restored. But there are very few people that cherish the history of the mobile home industry, or that want these old nostalgic time capsules. If this was an airstream trailer, it would have found a happy home years ago, as they have a strong and active collector following. But these old homes, of unknown brand, languish from zero attention. If you have an interest in the history of the industry, consider visiting the MH/RV Museum in Elkhart, Indiana. It’s right beside the highway there. But you can also sometimes find classic mobile homes as sets in car museum displays, as in the Auto World Museum in Fulton, Missouri. It’s a shame that nobody cares more about mobile home history, but maybe that will change with future generations who are really fascinated with mid-century modern and smaller living spaces.
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.
Why Are Pink Flamingos Associated With Mobile Homes?
There has been an affinity between mobile home parks and flamingos that stretches back for decades. Why? There seem to be three reasons for this. The first is that flamingos are the unofficial mascot of Florida, and Florida has a huge number of mobile home parks (it ranks in the top three of all U.S. states). The second reason is that many “snowbirds” used their mobile home in Florida only during the winter, and then returned to the north with a plastic flamingo in tow, which brought the concept to the rest of America. The final reason is that the flamingo represents a certain feeling about life, a about a carefree existence filled with sun, fun and nature. In this way, it became a fixture of a Jimmy Buffett lifestyle imagery, and one that caught on with American culture.
The pink flamingo lawn ornament was invented by Don Featherstone, and first arrived in stores in 1957. Over time, its popularity soared to such a level that even Sears sold them in the lawn & garden department. The original price was $2.76 a pair. An early example is in the collection of the Smithsonian, and the rest can be found in mobile home parks across America.
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.
Why We Take Offense When People Say We “House The Poor”
Whenever you talk about mobile home parks to an industry outsider, the assumption is that you “house the poor”. That’s one reason that there is so much criticism levelled at park owners by outsiders is that they have absolutely no idea who are customer base is. With the media’s endless stereotyping of “trailer parks” as bastions of the unemployed or marginally unemployed, the American public actually believes this nonsense. Here’s why we take offense at people saying we “house the poor” – because we don’t.
Definition of “poor”
Webster’s defines “poor” as “lacking sufficient money to live at a standard considered comfortable or normal in a society”. So let’s examine that. Is living in a detached dwelling with privacy, a yard, several bedrooms, ample living area and a sense of community less than “comfortable or normal in society”. Hardly. Not even close. By definition, those who live in most mobile home parks are not “poor” regarding their lifestyle.
Section 8 is a rare occurrence in mobile home parks
Wikipedia defines Section 8 of the Housing Act of 1937 as the body that “authorizes the payment of rental housing assistance to private landlords on behalf of approximately 4.8 million low-income households.” Now we are hitting on the true definition of “poor”. These are people that “lack sufficient money to live at a standard considered comfortable or normal in a society”. That exactly mirrors the definition of “poor”. Without governmental assistance, this group could not possibly obtain decent housing – or any housing at all.
Apartments are the bastion of Section 8
So if Section 8 is the true definition of “poor”, then where do you find Section 8? The answer, of course, is the apartment industry. Section 8, by definition, does not allow home ownership. So only rental property can be utilized. While there are a tiny fraction of Section 8 customers living in rental mobile homes, nearly all of Section 8 vouchers are used on apartments and a tiny fraction of single-family homes. It’s always been this way, all the way back into the beginnings of the concept in 1937. In fact, there is a huge segment of the apartment industry that caters solely to the construction and operation of Section 8 housing stock. Apartment owner love Section 8 because it means the government guarantees that the rent is paid, and rent increases are easy because the American taxpayer is who gets stuck with the bill.
Therefore, apartments are the real estate sector that truly houses the “poor”
Scientifically then, mobile home parks are not what houses the “poor”. Instead, the housing sector involved with the “poor” are apartments. There’s simply no other way to spin it. Assuming that there are four people per household, then there are around 20 million Americans living in Section 8 apartments, which is as many people as live in all the mobile homes in the U.S. combined.
So then why do people think that mobile home parks are for the poor?
So if the “poor” do not live in mobile home parks, then why do most Americans think that they do. That answer is easy: the media. With a steady diet of movies (8-Mile, Pink Flamingos) and television (COPS, Myrtle Manor, Trailer Park Boys) the average American has been predisposed to believe that every person who lives in a mobile home park is undesirable, crazy and poor as dirt. But its not even remotely accurate a depiction, and mobile home parks have suffered as a result of this “fake news” for decades.
It’s a shame that most Americans have absolutely no idea of what our industry is all about. It may take decades to undo the damage from continual fake media, but one of the first things we need to correct is the misconception that are customers are “poor”. Because they’re not.
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