Park management - full-time repairman


#1

Hi.

This site has been a great help to me, but I’ve come into some questions.

A MHP I’m looking to buy is currently giving free rent to a collection manager that collects electricity bill/rent and giving free rent to a repair maintainence guy + paying him a salary of $1000/month.

The park brings in $3900 net after these expenses from 18 lots.

Is this park worth it (tons of old trailors) if I will have to keep two full time people on taking over$2000 of my cashflow instead of a property manager?

Is it smart to keep both on if this park is established and been around for 30 years? I’m worried if I stop them the park could go into a lot of problems. The town is only 3000 people near 15 minutes of a bigger city.

The price would still let me net at least $1000/ cashflow after paying my mortgage with only 10% down.

let me know what you think of full-time paying these people. does it sound ridiculous or is it smart?


#2

I guess I would have a couple of questions for you prior to giving you an answer. Is the park a rental park where you are renting the homes or is it a park where the homes are owned by the residents and you are only renting the dirt?

If it is rental park where you are renting the homes I suggest you keep both the handyman and the PM since you will have more issues with collections and repairs.

If it is owner occupied homes and you are just renting the dirt you need to look at how involved you want to be. If you are close to the project and are willing to do the work then I do not see the need for a PM with only 18 lots. You can do the collections and pocket that money. Depending on how many repairs you have in the park you would have to evaluate if you need the handyman full time but if the dirt is all you are renting I do not see how you will be using him to justify 1K a month in expenses. I may be way off base here and actual small park owners may want to check me if I am wrong. I would evaluate it by seeing if I would have more than 12K in repairs over the year. If yes I would keep him. If not I would make sure I had an emergency person (which will cost when you have those 2 AM call outs on Thanksgiving day which is a Steve Case story from the boot camp) to call but would hire off my work on a job by job basis. If you are handy and willing to do it yourself you save again.

While that is my 2 cents but I am still only a park shopper and do not own one yet. Anyway good luck with your deal.

Ruben D. Flores

816 918-9041


#3

For a park this size you should not need someone to collect rent and and electricity payments, in fact this is a terrible idea from the get go. Don’t let anyone, especially a tenant touch YOUR money. Don’t give them a chance to confuse it with their money.

Money needs to be mailed to you directly or some other form of deposit arrangement that cuts out anyone that stands between you and your money.

Cut that tenant loose and start getting lot rent coming in from that one. The maintenance guy is getting a better deal than we have ever given. We give free rent of one of our (owned by us/rental) mobile homes in the park for maintenance. I do a lot of the repair work myself so you may have to choose your poison here.

The onsite guy needs to be the emergency guy and general maintenance guy. He gets free rent. From there you can work on grass cutting etc. but you may want to balance the 12k against what you could hire a true handyman or mobile home repairman to rehab units as necessary.

Keep in mind that the lot rent from the former rent collector also helps offset any costs that go overboard in a month.

Tony


#4

Ruben,

The park is a rental park where I own all the trailors ranging from 10-30 years old. It still seems to me that a full-time handy man is a lot. I heard he only does repair stuff around 6 hours a week. I was thinking about cutting back his pay but keep him on part-time.

I will be an out of town investor so I will not be present at the park and since these two main people have been working for the previous owner for years I feel I can trust them being a small town.


#5

Tony,

I will not be there to collect rent. It is a small town. I was considering just hiring a professional property manager to collect rent/electricity money (because I pay for electricity and it is metered hence the collector that checks the readings and collects the money).

It is like a poison, but I feel I don’t have much of a choice. The repairman is a professional contractor and I hear is very good, but I’d take your advice on only giving him free rent and paying him when there are general repairs or emergencies.

I recently bought a 6 lot park all park owned and my property manager there is driving me a bit nuts. It seems real estate property managers do not like collecting rent from trailor parks even if they get a big commission. I’ve been wanting to fire him, but since I’m not there its hard to without someone else taking over management. Things that I feel are simple easy steps to helping me control the park he is not doing or at least is not reporting to me and done.

Is it realistic to have tenants sign some type of lease? Fill out application and give a small deposit in case they abuse the trailor?

I’m running into problems I don’t really have answers to. I’ve rented small homes and these issues are not the same, but I thought the same ideals of property management would apply when renting a home.

I’ll take anyones 2 cents.


#6

Hi.

Couldn’t resist sticking in my .02 worth so here goes:

  1. Stop collecting rents. I use Edison MicroUtilities for my space rent and water/sewer billing. The residents get a statement each month detailing what they owe and you get all the info online. Looks very professional.

  2. Have someone else other than your handyman or manager read the meters. Someone not connected to the residents in the community. No chance of favoritism happening. Been there, done that and it costs you money. Plus you now have another set of eyes and ears on the property.

  3. Hire an offsite handyman even though it may be difficult to locate a good one. Handymen love accounts like yours and they owe their loyalty to you and not their friends in the park or the previous owner. Plus they can be replaced at any time and they know it.

Owned a park in AZ and I kept the manager/handyperson. She was loyal to the previous owners and her favorites in the community. Cost me a ton of money. Just bought a place in Ohio and the first thing I did was to line up a new manager and handyman. Better to start with a clean slate.

  1. I cannot think of a bigger headache for an out-of-town owner than a park full of rentals. Put them on lease-options and just do a space rent park. Many of your problems will go away and you can probably achieve the same cash flow as you now have. You will have little need for a handyman when the residents own their homes.

Good luck.

Rolf


#7

Rolf,

Thanks for your two cents. It seems parked own homes are more profitable cashflow but more of a headache. I’ve tried doing lease-options but the renters are unwilling. I have not bought this park yet, but it seems the owners are only willing to sell to someone that is going to keep the park the same way it is. Maybe if I can convience them that I want a fresh start with a property manager and take the two other managers off making them pay rent would bring up my cashflow +1000. Paying a property manager at 10-15% still would only be $500-700 month.

What should I expect for paying 10-15% of the gross rent to an outside property manager? Since he/she will be dealing with all the repairs and getting a person to fix them.

The sites are all metered with all utilities, 18 park owned homes on lots, for $190,000 creating $5700 gross rent. It seems like a good deal to me if I can change the management as you said.