Changes


#1

What a difference a few years make. Sitting here in my retail sales lot BORED I got this idea to put down on cyber paper some of the changes I have seen from 2 years ago.

  1. Good tenants are no longer taken for granted…they are valued!

  2. Net profits are less important to me than money needed down.

  3. Cash and credit have taken on much more daily importance!

  4. Hard times bring out the very worst in some people.

  5. Every expense is being looked at…twice.

  6. Creative financing is a much more important tool now.

These are a few of the biggies that pop out at me. anyone else seen any changes in the way they are doing business? About the same? Let’s hear from some of you lurkers…I know you are out there LOL

Greg


#2

Greg, I totally agree with everything you said and have noticed the same changes here.

I would add that as a Lonnie dealer, in the past year I have received FEWER homes back as people are hesitating to make any kind of move whatsoever… so while sales have dropped, so have repossessions. Personally, I’m thrilled with this change.

My state is in year #8 of this recession so while it’s new for many, it’s old news to me, and getting worse each day. One thing that continues to happen is that as incomes drop, so must the rent or contract payments, and ultimately, prices. The investor who can get ahead of the wave can do really well. I was fortunate to restructure MANY loan payments (lower payments, longer terms) to keep people in my homes, before they started getting behind.

Jeff


#3

Greg, your point about not taking good customers for granted stuck out from the rest of your post. My wife and I pray together each morning, and most days one of us will thank God for the residents of our MHP. I read the posts on the boards and talk to friends in the MHP biz, and I can


#4

Great posts!

I’ll comment on the “Hard times bring out the worst in people” line.

I have been reflecting on this quite a bit lately, and the conclusion I come to is that in good times people have many more options, and so you don’t see the true colors the way you do when the options shrink. Those who are willing to cross the line will do so when things get tough. It can really blindside you.

This is true of tenants, partners, employees…anyone. I think it’s important to be especially vigilant and be quick to respond to these transgressions.

I will be sending out a letter to all of my residents letting them know that I value them, and that in these tough times, good communication is more important than ever. I will ask them to please let me know about life-changes and issues that may affect their finances and ability to pay. As we’ve talked about on a previous thread, I want to know about things before it gets so bad they need to move.

Partnerships need to be examined closely, too. How might your partners’ solvency or cash flow problems impact YOUR bottom line? The consequences could be scary. It’s worth a little contemplation and planning for the worst.

Lin


#5

The awesome thing about owning our own business is how quickly we can adjust to changing environments. No need for board meetings.

Thanks Greg.

Because of your post I created a spread sheet of my tenants with eye opening results. Out of 80 +/- tenants there is really only about 5 or 6 that cause all the problems. I happen to know all their names too. I dont know the other tenants whom never cause issues and always pay on time. WOW there is something wrong here. I need to change my focus and get to know the good people better.


#6

R Ewens wrote:

"I don


#7

same thing in January and have spent 14K on 36 tenants. We sent our handyman Nick to “audit” tenant homes that had been with us for 1 year or more…WOW! We replaced leaking skylites, replaced 1 roof, replaced c^^p aplliances, steamed 20 carpets or more, caulked numerous tubs and showers, replaced carpet in 1 home that had a single tenant in it for 5 years, the list goes on…and folks it was the best money we have ever spent.

As Rick states, the squeaky wheel gets the oil and this is so wrong. In 5 homes we bought paint and tenants did all the work. We had not heard a single complaint from these folks and it makes me wonder how many of our move-outs we could have saved if we had done this sooner. Frankly, we were lazy. 10% of our tenats get 80% of our time and effort.

I got a great idea from Fred Balke and we will have our second BBQ at the park in may. Hotdogs, burgers, soda, chips. Cost 150 bucks WOW! This makes tenants feel a part of and not apart from.

Funny how we all seem to learn a lot of these important lessons at the same time.

A wise man from this forum said that he will try to provide better stewardship over the many gifts he has received…in a very small way we are trying to do the same.

Greg


#8

a lot!

What a GREAT way to start every day.

We are truly blessed.

Greg


#9

on statement 2. I don’t get it.


#10

Unfortunately our society is filled with 5% club members. As a police officer I dealt regularly with about 5% of the population.

I worked as a School Resource Officer at a high school and was told by the administration that their problem kids represented 5% of the student body.

The amount of money and time spent on 5% of the population is staggering. For whatever reason it always seems that in any group you find that small population that takes the most and never does good for either themselves or for others.

Seeing this number in the parks is just further validation of this theory.

What always seemed foreign to me was the reasons why? I never could get an answer. I would ask them after arrest why they went to so much thought and trouble to risk gaining so little and losing so much. I can tell you that the criminal mind (for example) can be quite creative in how to do something. What they don’t seem to do in most cases is think through the consequences and weigh risk vs. reward.

As best I can tell, 5% of the population does not respect cause and effect in regards to consequences. They seem to believe that it won’t happen to them and when it does they just move on to do no good somewhere else, never truly learning from their mistaken pattern.

I don’t know if you have monitored it yet but over time you will have to evict a tenant from your park who has remaining family members still living in the park. Over the years you will see that evicted tenant stop by and the family chatting about their latest eviction, latest arrest, celebrating their release from jail etc.

I have seen one group go through this from Grandparent, parent and now that they grandchildren have witnessed this pattern I am sorry to say that they too may follow in same.

Just like society, we park owners will spend more money and more time on these folks with little return. We will get to fix the damages they cause, haul off all the personal junk they leave behind when they move, spend time and money taking them to court to get rid of them.

Can we fix it. I don’t think so. Treat them fairly and move them out if they don’t fall in line is all I can do. These folks remind me a child that never grows to maturity to gain their own sense of responsibility.

Screening is the best we can do but for some reason we still end up with 5% that takes more time and effort than others. I have never understood why a certain % of any population seems to gravitate towards the low end of responsibility.

Tony


#11

The Pareto principle (also known as the 80-20 rule,states that, for many events, roughly 80% of the effects come from 20% of the causes.[2][3] Business management thinker Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of the land in Italy was owned by 20% of the population.[3] It is a common rule of thumb in business; e.g., “80% of your sales come from 20% of your clients.”

I am thankful that 20% of my tenants arent trouble makers.

Tony thank God 20% of the people are not criminal also.


#12

I have had to pass on 2 very sweet deals this past year Shawn, one of them a Park…I simply didn’t have the available cash or credit to buy in to the deal and I refuse to borrow more hard money without a bulletproof plan in place.

I have to look for deals that don’t break the Bank here. In the past three of four times a year I’d get a big wad of cash and be ale to buy 2-3 lots that were ready to develop…I no longer have these episodes. We are able to pay bills and fulfill obligations but there is little left over after putting aside for contingencies, taxes, insurance, ad infinitum.

We have had to add another requirement to deals we consider…affordability!

Our credit lines are gone and without selling something we have to look at 5-10K down Parks and this is very challenging. I miss the good old days but this is fun too!

I’ve never seen your Park Shawn but I bet it is a beauty! I have only had this feeling with one other person’s Park…Tye’s! I’d bet the farm she also has a beautiful Park.

greg


#13

your talking about. In mid 2006 I shut down my sales lot as the supply of repo MH’s had dwindled in my area so as to render my sales lot operation non-viable. The income stream from the sales business is sorely missed as I used it for the lump sums of cash portion of the three legged stool, I am lacking that component now.

I have in the past took on large debts and have profited from having done so, nowadays I’m more risk averse. Cross collateralization is my least favored borrowing. No matter how you slice it “the borrower is slave to the lender”

That having been said with regards to MHP related investing,I’m really fascinated by the possibilities of hypothecation strategies.

Greg, Thank you for the compliments and thank you for your contributions to this forum, I feel that my MHP operation is better off today from ideas/strategies that I found on this forum.


#14

Greg,

I’m having a park BBQ the Saturday after Easter, and it was suggested by one of my tenants. We’re going to have the usual foods, sodas and juice. I’m going to get some frisbees and hula-hoops and have contests among the kids, with the frisbees and hula-hoops as prizes. We have something like 50 kids in the park under 11 years.

I’m hoping this will be a chance for the different groups in the park to meet each other and interact. Our park is very diverse, and in particular we have 5 hispanic families who interact with each other, but not with the other residents, although their kids all play together. I’m hoping to get the parents talking to each other as well.

Since I don’t live in the park, but rather commute, I want everyone to lean on each other in times of crisis (mostly weather-related so far), and know each other well enough to talk things out rather than call me up to say so-and-so is playing music that they don’t like on a Saturday morning. I’d like to set up a phone tree in case I need to reach people from far away.

Anne