Michelle Opelt has been managing mobile home parks for six years and has handled the turn-around, collections, occupancy, property condition – even political and media challenges – on over 6,000 lots in mostly the Great Plains and Midwest. In this discussion we’re going to handle a myriad of operational topics ranging from the best way to collect money to creating the “value” perception that helps increase rents.
A Spirited Discussion With A Manager Handling 6,000 Lots - Transcript
Welcome, everybody. Our guest today is Michelle Oppelt, she's with Open Management. And unlike some of the discussions we have, which are focused mostly on how people found deals to buy, or finance the deals, Michelle, instead, works in the world of operations on mobile home parks. She's managed, or manages around 6,000 lots, mostly, Great Plains and Midwest, which is where a lot of our portfolio is. But we thought it'd be fun to have her on here to talk about some of her experiences in the business so far, turning around and operating trailer parks. So, Michelle, are you here with us?
I am. glad to be here.
Well, great. Well, very glad to have you. So Michelle, let me ask you first, because it's one of my favorite questions. How in the world did you get into mobile home parks? I mean, how did this occur? When did you have the first idea about mobile home park investing, or management?
Yeah. It's funny, I had a feeling that would be a question. It's a small industry. I feel like it's a very small world. Actually, I didn't mention this to you, but when I first got into manufactured housing, my entire training was watching your course. Company's like, "Go watch this course. And then go figure out how to build out our operations." So it's a very full circle moment for me now, to be talking with you. I didn't originally plan to be in manufactured housing. I feel like that's... A lot of people fell into this, which I'm one of. Really learned to love it, over the last six years. I think it's a very interesting asset class, very dynamic. So I enjoy it. But I started off in real estate and single family, did about 13 transactions, and then realized commercial was definitely more where I would like to start heading. So then, as many people got into the multifamily, started attending all the conferences. And there was someone there who was in the multifamily world, and was looking to start purchasing manufactured housing, and they needed an operating partner. So that's how I got started, at the end of 2020.
Got it. And what was it like starting around 2020? You had the evictions moratorium. You had Covid. Some of our parks, they wouldn't even allow us to open our offices, based on the state. That was, probably, a strange time to enter. Did you learn any deep thoughts from being in the business, back during that very unstable period?
Yeah. It was interesting, because I started late December 2020, right before heading into 2021, a lot of it has started being lifted, especially in the states that we were in. Kentucky was really the only one that we had some properties that you just couldn't evict anybody. And that went on, probably, for the first six, nine months of me starting. And thankfully, it stayed pretty stabilized, given the fact that we couldn't evict. But it was a newer acquisition as well, so I think it was a good buy, because I think the previous owners were having those struggles. We were able to come in, and pretty quickly, within 18 months or so, get it stabilized. So it wasn't as impactful, as I'm sure people who... 2019, and having to live all through 2020 in this, that must have been more of a whirlwind. Thankfully, I came in at the coattails of it.
Gotcha. And compared to single family management, or any other style you've seen, how does mobile home park differ from that? What are some of the key differences between managing a mobile home park, and managing a single family, or some other asset?
Yeah. That's a great question. When I was in a single family, it was more transactional and flips, and things like that. So I actually wasn't managing long term rentals. But in terms of, like, apartments, versus manufactured housing, or single family, I would imagine, it's much more of a community aspect. So we do put a lot of focus on resident polls, resident satisfaction, how they feel living within the community. And I think that's what helps with retention, and making it as positive of a community experience as you can. I think that's more important in this asset class, than I would assume, in other asset classes.
Sure. And right now, as I'm sure we're all aware, there's this feeling is misguided in America, that landlords are evil, and that being a landlord is a bad thing. And it's kind of... Just effectively, what I call, the war on landlords. How are you trying to set the stage that you're a nice group, that you're a helpful group, you're providing a meaningful service? How best can you communicate that to residents today, given this awkward political climate we're in?
Yeah. Absolutely. We say that all the time, especially internally. The big bad landlord, is going to be the perception. And we are going to have to work hard to have our residents believe otherwise, because that will be the default, is they're going to think we're the big bad landlord. So especially, when we first take over community, we put a lot of effort into the welcome packets that go out, making sure that it tells them right out of the gate, "We want to hear from you. We want your feedback. The only way we know if we're not doing well, is if you tell us." And so, we really try to have an open line of communication. We have a call center, that's all they do is take inbound resident calls. It's a virtual team, and we have certain automation set up. So if there's trigger words that are used, for example, anything utilities related. If somebody's calling saying I have a sewer backup, a water pressure problem, that will automatically trigger an escalation of that call. So people know that we're going to be on top of these type of things that are the most urgent for them living there, which, infrastructure and things like that. We do a lot of AI automations for customer satisfaction. And we have a team member that that's all they do, is review what's the satisfaction level of our residents, how many of our calls are getting escalated, those kind of things.
And so it's just a constant feedback loop, is really important. And I think the other thing is... Obviously, this is more of an ownership decision, than the management company. But we try to keep rent increases to $60 or below, annual. And I know a lot of groups, sometimes rightfully so, especially in the states where they're well below market, and you know rent control is coming, you've got to bump them up closer to market. So I get it; sometimes you can't stay within that $60 threshold. But that's what we try to do. We try not to have our rent increases be so crazy, year one. We try to give people time to... Over three, four years, bring them up to market, versus this huge, all of a sudden... "I've lived here for 30 years. And I have to move because we're priced out." So it's a little bit of that, but it's still a business. And so sometimes, we have to make business decisions. But definitely, resident satisfaction, being on top of maintenance calls as they come in. Because that's the... No matter where you live, that's probably the worst thing, is when you're like, "Hey, something's broken," and nobody ever comes to fix it. So things like that, obviously, we try to stay on top of.
You have many rental homes in your portfolio, or is it mostly tenant owned home?
Yeah. When I first started, there were zero. We had no rental homes. And that's the model everybody tried to go for, all tenant owned homes. I think that's probably still ideal. But then, as inventory for used homes got so dried up and so competitive, it really, at some point, just stopped making sense to buy used homes, most of the time. By the time you move it in, fix it up, sell it, it just... When I first started, we were still finding used homes at, like $,5000 to $10,000. They would make sense to bring in. Pretty quickly, especially throughout 2021, early 2022, we just couldn't find any. And if you're... There's no point in buying the home at $30,000. Because then, you got to rehab it. And so. Anyway. Somewhere around 2022, we really started shifting into brand new manufactured homes. We had about a thousand homes we needed to infill. Absolutely no way we're going to do that solely with used homes. So we created partnerships, or I should say, good relationships with the manufacturers, got the best pricing we could get by buying in bulk, hundreds of homes at a time. And so, that really helped out.
But with that, the brand new homes often were too expensive for people to either purchase right away, or they wouldn't qualify for the financing. So what we did was we would rent them, and then we've got some shadow lenders that after two years of good rental history, they'll help those people get them converted to homeownership. But we are having to do a lot more rentals to get the homes filled quickly, and then work on a conversion program to then sell them. So I would say, about 20% to 25% now, the homes are rental homes. And then still about 75% are tenant owned homes.
And most mobile homes look pretty equivalent. But is there any one certain manufacturer, or brand, or size, you have found has worked best? I know three bedroom, two bathroom, obviously, the hot, hot item.
Right.
But is there a certain size category, or manufacturer, that you just find that that works better? I know it's an awkward question, but most people always wonder...
Yes. I was thinking to myself, I don't want to get on anybody's...
Without offending anyone, but is there any certain thing, if you could give people, as far as a certain size home, like, 14 wide, 16, 18, or I've seen 76 foot length. And then, what manufacturers just seem to have that little extra sparkle at the moment, that people like them better?
Yeah. I think there's a lot of great manufacturers. For us, it's... Every property, we've got to look at, "What's the tenant base?" Obviously, there's nicer homes you can order, and there's some more basic models that you can order, more affordable models. So the property itself, the location, the tenant base, is always going to drive what kind of product and which manufacturer, therefore, we're going to. We do a lot of business with Clayton. Overall, they've been really great. We've had some other manufacturers that are also really good.
Definitely, the one bedroom's super hard to sell. We've had to do it. We've got some smaller, denser parks, that you can only fit a very small home on a very small lot. And so, we've had to order some of those. They do take longer to fill. Two-twos have been harder, of course, than three-twos, but we've been able to do some two bedrooms and they've been okay. But yes, if the lot can fit it, we're going to do a three-two. Sometimes, we'll do double wides, they're very in demand. But the economics don't always work with the double wide. So that's really just more of a pricing game of what could we get for the home, if we were to sell it. Because they do, they are very quick to sell if we do double wides.
And do you allow RVs in any of your parks? Do you have any RVs on long term tenancy or not?
Not ideally. Because what we found... We haven't managed any RV parks that are just RV, up until now. The only RV component we've had, has been in a mixed use property. And that's been really tough. We've just found that RV-ers, especially ones that are, obviously, vacation type, or seasonal type RV-ers, they don't really want to come and stay next to manufactured houses, and vice versa. People that are there in the homes, don't really want this constant fluctuation of RVs. So we have a couple properties where it's worked okay, because they're a little bit more isolated. There's like a section of the property that's sectioned off. And that's worked okay. But even in those, we're trying to convert as many RV lots as we can to manufactured housing lots, to just get the longer term resident base. And so, yeah. There's been a couple that it's worked. And mostly, we try to do 12 month leases with the RVs. In the beginning, we have one property in Tallahassee, Florida, that has a lot of vacation residents. But those very... Like, operating at a campground, was just a nightmare. And the extra administrative work for us, made no sense. And so, we ended up having a three month minimum. People can come for the season, but not weekly rentals.
Right. Do you get many organic moves a year? That's where people move their mobile home, from one park to your park. You get very many of those? We get... Not a lot. We do get a continual drip of one here and one there. Do you get much of that?
Exactly. Yeah. We have a move in special, where we offer to help with the transportation costs, and we try and incentivize people to move their homes into our properties. It's not a lot. There's not a ton of people that are... Especially, if they already have it on private land. Sometimes, if a park is closing nearby, that's great for everybody because they'll move their homes, they're looking for another park to move it to. But it's not a high volume, and it's not the majority of what we focus on, by any means.
Right. And obviously, right now, value is a key component, which you already mentioned. The customer has to feel good about what they get for their money. What kind of lot rents you are you at right now, on average? $400 a month, $500 a month?
Yeah. Varies by market, obviously. I think the lowest right now, would be in the high $300s, but that's pretty abnormal. $450 to $650, is probably where 90% of our lot rents are. And we have some in the heart of a metro that are higher, of course. But $450 to $650, is right about where we're at, probably in the mid. If I had to take the entire portfolio, 5,000 plus lots, it's probably somewhere around $575.
And when you take over these properties, what are some of the key drivers that you do to try and increase the sense of value with the customers? What are some of the amenities you like, or packages? What do you like to do to a park to make people feel like, "Oh, this is a really nice place to live. And I'm proud to live here. And yes, I'll pay more rent because it's worth it." What do you do to try to foster value?
For sure. Yeah. What we found, by far, more than amenities and add-ons that you can do, it's the obvious stuff. It's coming in and making sure you're enforcing lot violations, and bringing up the pride of ownership. No matter what amenities you add, if people have broken down cars, and paint buckets, and whatever... Tires in their yard, and window coverings, that are God knows what... The random... It's going to be really hard to bring up the perception of that property. So we're very big on respectfully letting the residents know, as soon as we get there, what the rules and regulations are, and why they're in place to help them. Like, we're not here just to be mean, and to say take your curtain... Your bed sheet down and put some real curtains. But it makes a difference. And if they want to have new neighbors coming in that are quality neighbors, help us help you, kind of thing. So it's a lot of that dialogue, of let's make this a clean, safe, quiet, community together. And if it's lacking in any areas, help us get there. Like, raising the standards, for everybody. Obviously, our own offices need to set the bar. And the way that we have the common areas... Can't expect the residents to do something that you're not doing with the property. So physical upkeep is really important.
And then after that, I would say, any deferred maintenance, obviously, capital improvement projects need to happen first. There's no point putting a dog park and a picnic table, if the roads have potholes everywhere. So we really try to work on the basics first. And then after that, once the property stabilized, if there's still some capital improvement projects that the ownership's willing to do, then we can start talking about, "Okay. We think a picnic area, or a dog park, or... Pools are really tough. And I don't know if I would ever suggest somebody adding a pool. We have some that we maintain, but I don't know if it brings up the value enough to justify the cost of a pool. But the smaller things, the gazebos, and just the things that give little gathering areas, can be nice additions. And dog parks are really easy, if you've got green space you can't put homes on.
In your structure, I assume, is you have a manager in each park, is that correct? Whether they live in the park, or you bring it from outside? Or do you have some that have no manager onsite at all?
Yeah. It depends on the property. We've had some... And the size of the property, as well. So our smaller properties, often, aren't... And by smaller, 50 units or less; we're not usually going to have an onsite office, and therefore, no onsite manager. But we always have some sort of boots on the ground. So for the really small properties, like we have a 33 lot in Texas, it's just the maintenance guy. And he'll take the videos for us, the drive thru. We do those once a week, in between obviously visits that we're doing ourselves there. Just make sure it's physically maintained. But there's really no reason to have a community manager. We do... Like I said, we have a virtual call center for any tenant questions that come in. We have collections that can be done virtually. We've got sales and leasing that can be done virtually. So there's one extreme, is that extreme, where it's just an eyes and ears; very minimal. And the other is some larger properties that do have a nicer office. They have the pools, they have other amenities. People expect that office to be manned. So of course, we're going to have some sort of office staff there. But we still have a lot of our operations that happen virtually. So if a manager's sick, or whatever happens, we can still show homes, we can still collect rents. Operations can continue, regardless of the onsite presence.
And some states require you to have an office manned 40 hours a week. So obviously, if it's a compliance thing, we're going to do that. So.
Sure. And when you say virtually, are these live people, or have you automated to the point that it's like AI generated? So is your call center a call center of humans, or is it a...
Currently, yes. Hot topic right now, right? Yeah. Everybody's moving more and more towards AI. We're definitely exploring that. Currently, it's an international team. So we've got a lot of VAs that man the phones, are obviously bilingual, as well. So that really helps, because we do have a very high Hispanic population, specifically in a lot of our communities, especially in Texas, Florida. So right now, it's humans. But we are starting to add in more and more AI automations. I was just at a conference where some people talked about... They had done their first home sale, start to finish, zero human involvement. I know that's happening, and I know there's pros and cons. So we're going to try to work in that direction, while still keeping the human touch, as much as we can.
Gotcha. How do you do... Based on your structure, how do you do showings? Do you use smart locks, or do you have people unlock the home in the morning and lock it back at night? Or how do you get over the showing hurdle?
Yeah. It's a mixture of both. We usually use lockboxes, and then there's software that people will give their license, and you qualify them first, and then they'll get a code and they can do a self showing. If it's during business hours, and we have a manager there, that's always the preferred, is to have the human actually show the home. But we can definitely... We do lockboxes, as well. So if it's after hours, if it's a property that doesn't have a manager, then people can do self showings. And that's worked out pretty well.
And of the properties you have, at a given year, what is your manager attrition rate? I mean, ours is ranged as high as 30% a year, in some cases, because not everyone is built to manage a mobile home park, obviously. How is your attrition rate been? And then what do you look for in managers to find people who will succeed and stick, as opposed to churn them?
Yeah. It's a great question. I don't have a specific data point. With a portfolio this large, it's hard to track, because we're going to have turnover as properties on board and off board. What we look for? I do think we have a very high EMPS score, that's something that we can constantly monitor. So every quarter, we're asking, "How are we doing as a company? Would you recommend people to work for us?" And we do make sure that that stays at, what we call... Well, I guess it's considered world class level... So 50 or above. And we work really hard to make sure that we're... People are happy to work with our company. That's really important. We put a lot of time and energy into culture initiatives. And for us, especially the boots on the ground people... Because it's easy when you're virtual, to be happier working behind your desk.
When you're onsite, and you've got people screaming at you, and you've got sewer backups, and... We all know the crazy things. I'm sure we could do a whole episode just on weird stories. Those people have a tough job. And we're expecting them to meet these high standards constantly, regardless of the chaos that's going on. So we put even more initiatives towards making sure they feel supported. "How can our virtual team... We're all there to support you. You guys are really the ones that are the face," especially onsite of the community. So I think that helps; all of the support, everything that we can do to retain great people, we're going to do it.
But you're right. Sometimes people... You have to have thick skin. Property management is tough. And it's not any easier in this asset class. So I think we do really well, but we're quick to... We have very high standards, and we have high accountability. So it's very easy to know you're either meeting it or you're not. And no hard feelings if you can't; like if you can't keep collections above 97.5%, this isn't the job for you, because our portfolio is at 98.5%. And so that's extremely important, and it's an easy one to know right away, within the first 30, 60, 90 days, are they hitting it or not. So we do have very clear high standards, but we also give them all the support to set them up for success. After that, it's are they going to be a good fit or not?
And how do you collect money? Is it mostly ACH? I know it varies by community, but how do you, for the most part, get the money?
Yeah. I think, probably, ACH is the highest percentage. We give three options, it's all virtual, we don't do physical collections. Every now and then, there'll be a big check that comes in for a home purchase, or something. We'll take the certified money order for that type of thing. But just paying rents, they get three options: They could do online, through the... We use rent manager, so they have the TWA portal; They could do cash pay, which I really love. Not cash to us, but I think it's Zego offers, to where they can go to Walmart, Kroger. There's local businesses that instead of buying a money order, you just give them your CashPay ID, and it goes straight to our portal within minutes, and it shows us as the transaction being paid. There's a small fee, it's not our fee, it's Zego's fee. But some people like that, because they don't have bank accounts, or they want to pay in cash, for whatever reason. And then of course, we have ACH, so they can sign up for that as well. And we can do auto drafts, or one time drafts from ACH.
Right. What has been your worst day ever? And then how did you overcome that?
Oh gosh. Well, our worst day evers, are when tragedies happen onsite. And we've had a couple of those over the years. But other than that, other than the uncontrollable tragedies, a shooting happens onsite, or something... Which has happened... Those are by far the worst days. I would say, from an operations perspective, things we can control, dealing with city councils that clearly just want to shut you down. And we had an instance in Michigan, that went all the way up to state senators that I was on calls with, because we had become the poster child for the big bad landlord, as you've mentioned. And then they had some residents... This one specific resident, that they were really anchoring to as their face of the poor resident that we're against, he would threaten to drag our manager into a trailer, and murder him and his family, daily. He would do donuts throughout this. I mean, it was... The level of destruction that this one person, that all of a sudden, was the poster child for the city, that was wild. So that was a tough one. It was a lot of media. I had to talk to a lot of reporters. It was a lot of diplomatic things, that aren't normal. And it's a huge time suck. And it doesn't help the rest of the community. So that's frustrating, when it's like... Most of the residents do not side with this person. They know that we're there to help them, and they know that this could lead to us getting shut down, which doesn't help them either. And so, it was very frustrating for us, and the majority of our residents, to get thrown into that media, and that regulation whirlwinds. But other than that, some infrastructure stuff. But that seems like easy cake, compared to the other stuff.
Sure. And where do you see the industry heading? I mean, you've got... What? Around 6,000 lots right now, roughly, I think. Which means you're a business that's worth $300 million, $400 million plus. And so, parks have dramatically changed over time. 30 years ago, the average park was $20,000 a space, $30,000 a space. Today, there's many parks that are booking over a $100,000 space. Probably the average is $50,000- $60,000. So these things have become extremely serious, extremely valuable properties. And where do you see this all going? Because as our industry values go up, the lot rents go up. We try and hold it to that value quotient, but at the same time, it's a mobile home park, sometimes a rowdy audience. You have issues, as far as new residents who tend to be a little more upscale than the existing in many properties. You have all these different complexities, and political complexities. Do you think the industry, at some point, will get out of the spotlight of all this? Is it just a fad, that there are so many articles and issues, or is this a new permanent feature?
Yeah. I think that's every operator's question, every owner's question, in their mind, "How long?" At some point... We're already seeing it happening, obviously, with rent controls, with a lot of legislation coming down the pipeline to make it harder for landlords to take advantage of... Which can happen, sometimes. Some of the legislation's good that it's there. But obviously, that can go too far. And so, more and more REITs keep getting in the industry, more private equity money keeps getting in the industry. It's pushing down cap rates. We all know this. When that'll stop? I don't know; maybe never. But at some point, being able to... Just double your lot rents in two, three years, that's not gonna be a thing anymore. And a lot of these properties have traded so many times, there's not as many under market either that you can do these huge value adds. Infill is still happening, but at some point, you're gonna fill all the parks. And there's not a lot of new construction happening. And so, it will be interesting. I don't know how long it'll last. But I think I would love to stay in this asset class forever, because we can do long term holds, and keep great operations, and don't have to be reliant on doubling and tripling lot rents. We can just stay in it for the cash flow in the long haul. And whatever happens in the market... As long as you can hold long term, you've got good long term debt, you're secure. Then, we'll ride it out the next 10, 20 years and see what happens. But I wish I had a better answer for that. It's the question on everybody's mind.
Do you think the industry can overcome its whole stigma problem, in the future?
I do think so. And I think it has started to, I think it's very interesting. Every conference that I've gone to over the last five years, it's getting more and more dynamic in terms of the audience, and who's coming in, and younger crowds, really pushing more data driven initiatives. And it's becoming more and more sophisticated, which is interesting to see. And I think that only benefits residents. But unless there's going to be more development, and cities are going to allow more parks to be built, at some point, the volume of parks that exist, is going to go down. So it's going to be interesting to see. But I don't know if that answers your question.
Well, no. It does. Again, this whole industry, we're all in something that no one has truly mastered yet. Everyone tries. We all have our science that we use, "Oh, this works. That works." You all try to limit your lot rents to going up $60. We try and limit it to... Same ballpark, $50, $60, somewhere in that range. But we're all just learning as we go. And so, that's what makes the industry interesting, is... And particularly, when you came into it, you came into it at the worst period in industry history, because you entered during the Vietnam War here. I mean, you came into Covid, eviction moratorium, massive interest rate run up. If you'd gone into the industry back in 2010, you would see nothing but endless stability for a decade-and-a-half, roughly before it all just got kind of weird. So now everyone's trying to sort these things out as we go, try to watch what other people do, try to learn from what they're doing, and see how it's heading. But yeah. There's no defined answer to any of this. We're all just gonna have to figure it out.
The only thing that's a given, is that rents will have to go up. Because our rents... Even at the rent levels you're at, which are similar to our rent levels... We're still way under market. We limit... We're the only industry I know that actually limits its price increases. Whereas, many industries try to figure out, "How can I maximize my rent? How can I push it to the moon on my box of cereal, or my energy drink?" We're the opposite. We're like, "Okay. How much... We know we could go up a ton, but how much can we go up, hit our budget, without making the tenants mad?" So we bought this weird, precarious position, so politically charged, that it's just very, very odd.
So let me ask you this. What are some of the key items that you have learned managing parks? Like, what are your top three things that you've learned, some of which may be things you didn't even expect to learn, about mobile home parks?
Yeah. I learned a lot about infrastructure, that's critical. In terms of properties that I personally would purchase, the denser, smaller properties, that you may or may not be grandfathered in, to certain lot sizes, those are the riskiest, by far. Older infrastructure, as well. You really better be ready to have some major breaks in your infrastructure, or just come in and be ready to start replacing right away. Because obviously, if it was built in the 60s, 70s, 80s, starting to fail. So have a lot of capital expenditure money sitting aside. And the cost of all that's gone up, as well. So that was a huge thing when we were... When I first came on the team, what we were spending on capex, really started to skyrocket, with labor costs going up, material costs going up. And so that was a big thing to navigate. So making sure there's lots of buffers built in. Sinkholes pop up sometimes, other infrastructure failures, and they're obviously very expensive. So making sure that you've got good capex buffers, was a big learning lesson that I would suggest. And also, the cost of renovations. So as you mentioned, we try not to just push rents to the moon. Part of that is because it can be more costly to have the turnover, to then take back these 80s, or older... Especially, if they're older than 80s homes, pre HUD homes, oh my goodness... The cost of renovation to get that unit back to then refill it. If you lose too many residents, and you end up with this inventory, you have to demo half of them. You really just undid the value from the rent increase that you got. So it's a little bit of a science, of making sure we don't end up with a ton of older, very expensive homes to turn. And if we have to demo them, and then bring in a new home... Like, at some point it's just a wash. So renovations, and retention, and all of that, has been a big learning lesson. We have a whole department that's dedicated to infill and rehab projects, just to keep the home inventory, and that revolving door, under check. So that's been important.
And then other than that, it's the basics. Collections, to me, is the number one indicator of how well your property is being managed. And if that starts to slip, the ripple effect will be everywhere. So your occupancy is going to slip because your evictions are going to go up, your legal fees, your term costs, it's all has a big ripple. So we are very, very strict on collections. I think that's like a no-brainer for most people. Yes, property management should be good collections, but some people don't hold it as tight as I think we should. So I've heard of operators saying, "We have good collections; around 95%." To me, 95% in this industry, is a fire alarm. Because that is expensive inventory to get back. So those are the key things that have been the biggest learning lessons. And then, the stuff with the city council has been a big learning lesson as well.
When you look over the portfolio, the properties that are the easiest for you to manage, versus the ones that are the most difficult for you to manage, what are some of the attributes of the easy versus the bad? You already mentioned one which is the high density properties, which I see mostly means lower bedroom count. So you're probably going to have more churn, more difficulty to fill, things like that. What other commonalities are you seeing between your favorite properties, and your least favorite properties?
Yeah. Great question. The hardest ones are the ones that we take over, obviously, that aren't stabilized, and have a really tough tenant base. And that's when the onsite management is the most critical. So when I first came on, I got really lucky. We had a couple of properties in Nebraska. Their collections rate was, maybe, 75%. It was owned by a person that was friends with all the residents, had it in the family for a while. And as long as they paid a dollar, and showed some kind of effort... And obviously, that trains the residents in the wrong way. And so, I think there was $100,000 in delinquency at this hundred lot property. It was rough. And physically, it was rough. There was no potential.
So... Sorry, hear a little ringing. Turning those around... Okay. Good. Turning those around takes some time. But then once they're stabilized... And having really good management to help you stabilize, is key for that first, I would say, 18, 24 months, of really getting it to where the residents know what's up, they're working with you. We've got a positive relationship. Other than that... Yeah. The ones with older infrastructure, are just always going to be the most management intensive. And then the ones that do have higher rentals, are going to be more management intensive, of course. Because now, you're getting the broken sink and toilet calls, not just the ground infrastructure. So of course, from management side, if we could have all tenant owned homes, that's way easier. But other than that, the cities that we've been in... We've been in some pretty rough areas, and they're quiet. We don't get a lot of calls coming in from... Like, escalated calls coming in. And then we have some that are more class A, and very needy residents, I would say. And we get more calls, even though it's a much higher quality park. So that can just vary based on the tenant base, I guess. But older infrastructure, is a big problem. And that will keep us constantly having issues to deal with.
Have you had a property you just couldn't turn around? Have you had one that... It was just everything was so screwed up that it was impossible? I mean, I had one one of my early parks in Louisiana; at the end of the day, when I did a crime scene investigation of why it was such a failure, before I even understood what the words due diligence was. And there was no demand at all. The problem would be when you have no demand, you can't really collect, because if you lose a tenant, you can't put another one back. So next thing you know, you're in a very defensive mode. You're like begging people, "Well, if you can't pay your rent, could you pay a little now and a little next week?" Filling vacant lots was nearly impossible. It was a very, very tough position. Ended up able to sell it by carrying paper, and get out of it. But have you had any properties that were hopeless, and if so, what did you learn from the ones that were impossible?
Yeah, yeah. From a management side, we've never had any that we couldn't get collections up. And thankfully, we do stress test the market before purchasing. So we really haven't had any demand issues. We also really have stayed more in the secondary and primary markets. Haven't done a ton of tertiary markets, where that would be a little riskier. So demand, thankfully, hasn't been an issue. The main thing that's killed from a business execution side, has killed the deal, would be when homes age out and you can't replace them. So there have been a couple. Those are usually the more dense parks that, again, you don't... The city says the second that home gets demoed, or somebody pulls it, or whatever happens... Usually, it's a demo, because they're very old... You cannot replace it. And you've got to wait until you can combine lots. Well, now you might have just taken a property that you bought at 100 lots, and now it's 70. So the value is going to go down right out of the gate from that. We also had some properties that infill became impossible. I mentioned we had one in Alaska, that originally, when it was purchased during 2020, we could barge in homes. And then post Covid inflation, just made it to where that made no sense. So we couldn't do the infill. It wasn't a loss, but it was just... We sold it, because there was no way to add value anymore. And so it was pretty much a break even type situation. But the ones where we weren't able to replace homes as we lost inventory, those are the ones that really can't be recovered. So we would try to sell those, because we're never going to be able to execute the business plan.
And you talk a lot with the media, you said... And I'm sure you do. So are there any tips for people in dealing with the media? When I get calls from people, I tell them, "Look, just do it in writing." Like, have them send you their questions in writing, and respond in writing. But obviously, you're very, very good on your feet, speaking. So I'm sure you pick up the phone, and talk to them, and things. But any tips on working, or navigating the media, or navigating irate politicians, or any of the stuff, you could give people?
Yeah. Thankfully, that was only those two properties in one city, that we were at odds with the council. And again, they were making us the poster child. I would never try to get in front of the media if we could avoid it, because more often than not, they're going to try to be buddy buddy with you to get you to talk to them, and they're still going to portray you as the big bad landlord. We all know that. So I really try not to talk to the media, or have our company comment. And most times, there's no reason for us. We haven't had any situations that we really needed to comment. The things that have been major problems, have been crime happening, that usually the landlord is not pulled into that. And if they do try to talk to us, well, I'm not going to comment on that. You can talk to the police department, because there wasn't anything else we could do. So thankfully, I haven't talked to the media a ton. It was just that one unique experience.
And I would say, if you do get sucked into that kind of experience where you can't ignore it, you have to give your side of the story, or they're just going to run you over. Find the most diplomatic person you possibly can, the one that doesn't get rattled, because they were really trying to poke us constantly, and we had to tell some other team members to stand down, because it would start to get a little heated. And that doesn't help anybody. You have to be able to be perceived as the calm, cool, collected person. So find whoever that person is on your team, and give the most diplomatic answers. I always started with empathy... And true. Like, we are here for the residents. We are here... I was hired, solely, to make this a good experience for our residents, to oversee operations and make sure they're high quality. So help us help you. Like, "What are you looking for, city council? Let's partner. We would love to do this together." It was a lot of that. And they were, "Well, we're gonna come in and do a city cleanup day." "Great. Tell us the day. Well, we'll show up with food trucks. We'll make this possible." And none of that was fake, but we did have to lean into that a lot more openly, so people would see that we are trying to work with the city, and the city was the one trying to like work against us.
And so, if you absolutely have to, then that's what I would say. Otherwise, I think it's best to, probably, not comment, as much as you can. And then same thing with officials. We're not the ones trying to go speak with the state senators. But if they're, all of a sudden, contacting us, absolutely, we're going to be very quick to show that we're responsive, show that, "We have a lot of proof, a lot of tenant documentation. They say we never fix anything, we'll look at our files. That shows the call comes in here, and it's fixed 24 to 48 hours later." You just throw as much evidence as you can at them, and it usually gets it to calm down pretty quickly.
And what's the future of Open Management? Are you taking on clients? I think initially, you were an in-house thing, as part of some group. But are you now expanding where you're taking other accounts as well?
We are, yeah. We started... Open Management was created, initially, just for the parent company to manage their portfolio. And now, we've built this engine that we're very proud of. We always say we try to McDonald-ize everything, but really, we're trying to Chick-fil-A-ize it. We want to be the, my pleasure... The standard for clean, and quality, and happy people. So we're trying to Chick-fil-A-ize Open Management. I think there's a gap in the industry for... I know there's other third party managers out there, and I'm sure that some of them are quite quality. But I still think there's a gap. I still think we could use more, really high quality, third party management companies, specific to this space. Because it is so nuanced, and... I created it, and I am a GP in some of the deals, like, we have the ownership mindset. I also oversaw our asset management department. I understand from the ownership perspective, and when you have a company that was built out that way, I think there's a lot of benefit to other owners to work... We work more like an operating partner, than just a management company. We can also handle infill. I know a lot of property management companies try to stay out of the larger projects. But we have a whole department that that's all there for, is capex projects, infill. We're getting into development, some development projects, and so we can do more of the heavy value add lifting, and partner with other owners to help them execute on that. So I'm pretty excited about it.
And if someone watching this wanted to reach out to you to discuss management, what is your best contact information? What's your phone, and/or email contact?
Yeah. The best place would be our website, because then you could see some of the information there, as well. And obviously, book a call with us. So open, M-G-M-T, it's management abbreviated... So openmgmt.com, is the best place to go. I'm also on LinkedIn, if people just want to have a chat. We don't necessarily have to get signed up for an agreement, but I'm always happy to chat with other owners. Like you said, see what's working for everybody, what's not working. We can help connect people. We have a lot of connections in the industry at this point, just from having so many... Such a broad footprint in the industry, and across many different states. So we're always happy to chat with people. If it's more of that kind of connection, and people just want to reach out to me directly, LinkedIn is the best place. And I'm just Michelle Oppelt on LinkedIn.
Okay. Well Michelle, I really appreciate you being here again. It's exciting that you went into the industry at the worst moment in American history, and you stuck with it. Most people would have thrown in the towel, I'm sure, by the midpoint of the whole Covid crisis. But we're glad you stuck it out. Again, if someone's watching this and you're saying, "Well gee, I wanted to reach out to Michelle on managing, or discussing management of my park," by all means, give her a call. And we appreciate you taking the time to be here with us. And that wraps up this discussion. And we will see everyone again, soon.