Spent a half hour or


#1

so on the phone this afternoon with a very savvy investor from NC. We realized we were facing a lot of the same challenges regarding our rental and Note properties. I picked up a really good idea from him. Something I have never really used before is a handy man special ad, and tomorrow I will place one on a rental we don’t still have “rent ready”. I just don’t want to deal with the thing. Rented out in Nov., they paid first, last and deposit and Dec 1 they gave 30 day notice and left. left all their cr***y furniture, fridge full of spoilt food and 40-50 bags of trash. Needs a good cleaning, carpet cleaning and paint in master bedroom (partial pink mural). Rather that attack it using our crews, I will skip 500 deposit and have folks move in with a cleaned out house and first and last rent as move in allowance. It will be 3 weeks before I have crew available to fix up this unit.

Something I have never been shy about is admitting I don’t always have all the answers. The market here has gone crazy. Typically there are 55-80 for rent ads in the Ocala Star Banner Sunday paper…last Sunday there were 456 in Marion county alone. Folks built spec homes in the good times and are tired of feeding them each month as they are NOT selling. I lost avery good tenant in Oct. He was with me for 15 months and rented a 4/2 28 X 70 1999 mobile on a acre for 1100 per month. he moved into a brand new 3400 square foot custom home. 4 bed/ 4 bath, porcelain floors, granite countertops, stainless apps, heat pump, three car garage for 800. No deposit, no last month. Home was built/completed in /feb and the Owner was paying 1700 per month on it…got tired of paying that so low ball rented it…i was happy for my tenant, sad to lose him. In this same new neighborhood I counted 33 for rent signs!!! Needless to say, this is killing my business model. We are having to get creative to rent our mobile homes out.

While talking to my buddy, I thought it would be cool to post some of my current favorite ads and where I place them and ask y’all to do the same. We have a huge collection of brains here and I need to tap some of this energy. Please post some ads that have worked well for you. My area is unique in many ways, but I bet it also similiar to other areas. Here is an kinda weird stat…over 2/3 of our tenant base are in construction trades.

We place ads in this daily paper:

http://www.thevillagesdailysun.com/classifieds/?loc=detail&main=Manufactured%20Homes%20for%20Rent

with ads like this:

YOU FOUND US!

LAKE WEIR PALMS

Unfurnished Units

3/2 Doublewide, nice, clean, pet friendly park setting. $800 mo. First month free.

We require last month rent and $500 deposit to move in.

2/2 Singlewide, nice, clean,

$600 month. First month free. Last month rent and $500

deposit to move in.

Sewer and Garbage Paid

We are a Pet Friendly

Mobile Home Park and only

allow A+ Tenants. This is a very clean and well kept community. Park Rent includes Lawn maint.,

For more info call Greg:

352-216-2020 or 352-216-9919

Save ad

Email a Friend

and then this:

http://ocala4sale.com/real-estate/rental-property.php#Mobile%20Homes

with these ads:

WE HAVE SEVERAL NICE HOMES AND MOBILES HOMES ON LAND FOR RENT. $600-$1000 PER MONTH. SINGLEWIDES, DOUBLES, HOMES. ALL HAVE CENTRAL A/C AND WE ALLOW NO PETS. OCKLAWAHA, BELLEVIEW, OCALA, THESE ARE NICE, WELL MAINTAINED HOMES AND ARE EMPTY AND WAITING FOR YOUR FAMILY. CALL TODAY FOR A CURRENT LIST OF HOMES. 352.216.2020 ASK FOR GREG OR 352.216.9919 ASK FOR TJ. [xp.02] Infinity Homes, Phone: 352-288-0046, E-mail: gmeade124@hotmail.com

I really ask that other folks post current or past ads that have had good results for you…we are in challenging times here, also very exciting times. I feel folks that have tight control of their business models willt hrive…but the old days of rentals renting themselves are gone from my market!!

Thanks in advance,

Greg


#2

I have had pretty good luck just running a regular, nothing tricky ad on craigslist.com

This is definitely a regional thing, but it gets me as much response as anything else - can show 4 photos, or even more if you’re techie (who has time for THAT?)

I feel ya on the spec home rentals - less than half the mortgage! Yeesh! How do you compete with that? And dollars to donuts the doesn’t-know-better homeowner isn’t screening as tight as you, so in the medium-run, he will lose, but for now? offer 27 inch flat panels as a move-in bonus . . . Greg, you really oughta check out Jeffrey Taylor’s stuff at mrlandlord.com. It is gold.

Residents vs Tenants

Incentive programs

Turning headaches into profits

etc etc etc

there’s a new book - THE LANDLORD’S SURVIVAL GUIDE - I haven’t seen it yet, but its only $20 and it purports to have all his good stuff in it - I’m getting it, you should too:

http://www.mrlandlord.com/mllshop/management.html

Better yet (or actually, in addition to) you should see him speak. He’d be a good MOM candidate, BTW.

Funny thing is, the forum at mrlandlord doesn’t really espouse many of his teachings - check out his stuff.


#3

I just ordered the book. $18.95 is cheap for even a single suggestion that fills even one unit for one month.

This is the kind of feed back I need. I’m just smart enough to know I can use some help with this dynamic going on here. An hour ago my realtor called and we have a contract (full price) on a home I have had for sale since May. YAY!!

Greg Lunday (my realtor) says there is an 18 month supply of existing inventory on the MLS right now of SFR’s. The only real growth is in commercial properties and …yep you guessed it 2M+ waterfront homes…you gotta be kidding me!

Thanks for the link Steve,

Greg


#4

I believe we are all going to face more challenges before everything is said and done… The media says everything is crap therefore it is according to our society. This Ideal has always flabbergasted me, just cause I type on the net that the sun is purple don’t make it so… however the economy going to crap according to the media has drastically affected my business!

The creative folks will excel in this market and those who can’t adapt will sink like rocks, I took a gamble last year and bought way more units than I could realistically handle (call it arrogance) and then tax season never materialized. I’d over paid for a few homes expecting to get great down strokes and took a beating in the process… Won’t happen again!

Currently there seems to be next to no cash in my market all of the sudden and people are downsizing again… people that are living in MH’s working service jobs are not making ends meet and moving outa state. The lower end homes are filling with retirees and people downsizing outa upper middle class SFH’s… The bubble has busted… AGAIN! I went through this 3 years ago due to massive layoffs and made some pretty dang good money on paper cause I didn’t realize I should be getting more for the units, I didn’t realize it takes time to fill a unit, I didn’t realize I should be getting a specific amount down, I didn’t realize a lot of things that I had come to accept as solid fact.

The end result was I was pushing homes with payments at a much higher retail price and even offering easy terms I was having trouble filling units! Empties = money outa my pocket period end of story…

I took ideas from you, Steve, Chris R. and a couple others and started dumping units just to get something coming in, Those tenants place a year ago are stuck firm and not near as demanding as my upper end tenants!

Here are a couple of the ads I’ve ran lately in a niche paper here:

2 bedroom 2 bath, $5500 Morganton / Salem area, nice family park, needs some work, owner can work out easy payments if needed. Small inside pets welcome! (828)334-5879 - Have got a ton of calls on this ad and filled 2 homes off it. (home in ad is still for sale)

2 bedroom 1 bath, Morganton Salem Area, $300 month No deposit possible, section 8 and small inside pets welcome. (828)334-5879 - this ad is about $50 under market and has added call volume but lots of trash callers but has given good results in the past getting first dibs on the best tenants and just filled one unit off it.

Chris C. flyered the hell outa the area surrounding her SW L/H over the weekend and filled it from a flyer at a local gas station in less than 48 hours… Will try to get my hands on her flyer!

One thing I forgot is that I will often list a 3/2 home as 3/1.5 bath in the paper to get better placement, not sure it this is right, wrong, or even truly accepted (over delivers maybe?) but I find my phone rings more if I’m higher up in heavy listed papers. The other new media’s I’m using are your local Ocala for sale site as we have a lot of folks from FL moving here and I get a good response every time I run an ad. The other is Craigslist, I tried all the different areas around me and found that only one (a very high market area) really brings in calls and I’ve been targeting it a bit lately… reminds me I need to take more pictures.

The biggest thing I’ve found (and it’s a tough pill for me to swallow) is that I need to be more competitive in my prices and my move in cost, on my lower end units I’m now doing 1 months rent moves you in… if anyone try’s it remember, screen, screen, screen! The pill went down a little better when I realized I was paying 3-4 months holding cost at $150+ ($450-600) to get 750-1k as opposed to 4-500 on my LD’s net gain is the same and much less stress! I think it’s time I forget what I think I know and I read that little paperback book again!

Thanks For the chat today Greg =)

Best wishes,

Ryan Needler


#5

also. I’m amazed how similiar our markets are reacting to the credit issues we are seeing.

I agree with your assessment of investor participation. There will be millions made as we work our way through this new marketplace. I’m excited.

The flip side is there will be millions lost also…

Just going through our day to day operation we have found about 1.3K we can save each month through better (bulk) purchases. We use the same things EVERY month. Carpet, pad, pergo, paint, drywall, mud, skirting, vinyl, metal roofing, trim.

We are starting to order 5 rolls of carpet, 75 rolls of pad, etc. and seeing some large discounts.

Anyone else have any ideas??

Greg


#6

My phone doesn’t ring much these days…on a positive note, the few that do call have bought. I bought and placed 25 repo homes in my MHP in 2002-2003 and since that time I used rental as a plan B when case sales were slow, now it seems that sales are more plentiful than renters.

I agree with the impact of media coverage…here in mid MO our economy is doing very well, historically low unemployment, some modest population growth, but people are not looking, we weren’t overbuilt in sfh, I would have to think that some pent up demand is being created…big bounce-back?


#7

Welp, I got Chris’s little secret on how she rented her L/H in 48 hours…

She kept it WAY simple and spent $10 for advertising where it’s most effective… I told her about a statistic I’d found a few weeks ago along with my experiences with signage and she listened to me better than I listened to myself! GRrrrrrr…

She went to the store and bought a bunch of the cheapest signs she could find and some yellow construction paper. She hand wrote directional arrows and her number on the little signs and stapled them to scrap pieces of wood and what looked like used 5 gallon paint stir sticks. She pounded them in at every cross road within 1/2 mile of her unit and placed flyers at the local gas stations along with placing the big sign next to the school entrance near her unit.

every thing was done with a black marker and is super simple! I added pictures of the items she used to add $425 a month to her income at:

http://www.picturetrail.com/gallery/view?username=ryneed

The only problem is she only had the one unit to rent and has gotten over a dozen highly targeted leads on the unit and the phone calls were starting to get to her so she was desperate to get the signs picked back up… What a problem to have!

Best wishes,

Ryan Needler


#8

Maybe - she should buy another one?


#9

James, I’d LOVE to buy another in that area, possibly even more than one… but I haven’t found the RIGHT deal yet. We can ill afford to forget… (even if our phone is ringing off the hook)… that this business only works when we buy RIGHT. If we pay too much for a unit, somewhere down the line it is likely to transform overnight into some kind of nasty alligator.

This particular unit is a 3/2 on an acre and a half wooded lot with a creek. I hauled off more than 100 bags of trash from inside and outside, plus a couple of truck loads of you name it… literally. Patched walls, replaced the water heater, had the heat/ac fixed, cleaned and painted and spent tons of time getting it pretty again… the upside? I only paid $8,000 for it because the seller couldn’t see past the trash her previous tenant left. In it’s condition now I feel it would sell fairly quickly for cash at $35-$40,000. On a note I may get closer to $48-50,000… BUT… I ain’t selling this puppy. It’s a keeper.

Yes, I’m on the lookout for more deals in this area, but they will have to be deals.

I also have learned how topsy-turvy the market can be. My advertising campaign worked like a charm this time, but I never know if it will work the same next time, even in the exact same area with the exact same property. I feel my success this time can be attributed to about 60% knowledge combined with 40% pure luck, and I’m just simply grateful for that.

I love the ideas on this board! It’s awesome. Thanks Greg & Steve!

Take care,

Chris


#10

To those who like to Rent without a lease, or without a lease that has an acceleration clause:

In an appreciating marketplace this practice can be a good thing. To “cash in” during a bull market most investors do not want to be encumbered by a lease. Simply sell and give your tenant notice - or if it’s a really good sellers market let your buyer kick the tenant out.

But, in a bear market the leverage swings toward the tenant. If a tenant finds a better deal they can walk with little to no penalty. This problem can be mitigated by signing them up on a carefully written lease with acceleration clauses and mutual buyout provisions. This way your tenant can’t simply find a better deal and leave. The lease gives you leverage over the situation via the acceleration clause - a very powerful tool to be sure.

I once NNN leased a beachside apartment building to an investor (and sold her a Contract for Option allowing her the upside potential of the project). Everything was fine while the weather was good but she unfortunately had premise control and rights to the rents during the 04 hurricane season in FL. She decided that she was only a “fair weather investor” and tried to walk away from the deal without cleaning up the property and replacing the tenants. Of course, after the many conversations trying to talk some sense into her failed, the “investors” eventually had no choice but to sue and invoke the acceleration clause. With this clause she now owed another $90,000 in rent simply for the right to walk away from the lease. She ended up paying (and the investors begrudgingly took) a $10,000 settlement stipulation. This is a “big deal” tool that works equally as well with a mobile home and land tenant. The amount of zeros only change.

My point - as professional investors we need to read the market which dictates what tools we use and when.

Next thought…

Home and land rentals vs. dirt rentals: A lot of people get into this business by purchasing a home and land rental unit or park. In providing DD services I am continually amazed by the amount of risk investors are willing to take because the number look better (to them) then a nice straight dirt rent park (at a premium). Don’t get me wrong, for the right price, a very low price, home and land rentals work. But the risk, return, and price must all be understood (for you).

Those having to compete (home and land rental business) with new construction and other forms of surplus inventory are certainly feeling pressure - and in my opinion this pressure, in some locals, is just starting. The only way to combat the surplus in supply is by lowering your price (purchase or rent) so that the MH and land payment gives the same or better VALUE as compared to the competitions property and payment (supply and demand economics 101).

I know this is a hard pill to swallow, but for me a quick nickel beats a long dollar in all markets (especially down markets). Consider making concessions or “giving up perceived equity” (entice your renters with ownership via lease w/ contract for option or by doing a Lonnie Deal) in order to keep a good tenant or fill vacancies. Once you are in the rental MH business there are very few “other exit strategies” to fall back on when times are tough without experiencing real financial pain. Waiting for yesterdays rental prices w/ increasing vacancies is certainly not the formula for short or long term sucess.

Just some ideas FWIW …

Karl


#11

I like your lease ideas. I’ve actually started doing 6 month leases. Found out in FL you , as landlord, have to pay sales tax on rentals for rental terms of less than 6 months. my bad!

I have pre pay (5%) on all contract sales for the first 3 years…

It was good to hear from you and I am glad your model is doing so well…I truly love your Park Karl…it is one of the nicest Parks I have ever seen in FL or anywhere else. They don’t make parks like that any more…

Greg


#12

Thanks Greg. You know I like your park too - even though I have not seen it I know you bought (leased w/ option) it right - I remember your #'s and “it is good”.

I got lucky on my park. I heard luck once defined as:

Good Luck is when opportunity meets preparedness.

Just hope others are being patient - there are going to be some realllllly good deals out there in the next couple of years!!!

I just put another park under contract w/ a local partner in Maine recently - nice little park surrounded on three sides by a National Park. The family and I are flying up there next month for some DD and skiing. Great little land bank. I think I got lucky on that one too :slight_smile:


#13

One good thing about my neck of the woods. We don’t see any real boom or bust times in the home business. Developers around here build as sold most of the time. So the good and bad is no big jumps in prices either up or down. Our rentals are not vacant for long. Karl you are so right on the opportunity meeting preparedness. I got a painfull lesson in this yesterday. About 3 months ago a friend in the septic business called me to tell me about a 22 unit park 20 15 minutes from my house (network network network). He said they just did some work there and it was “bank owned”. So I investigate and it’s under a management company. I call and leave a message on the managers phone to call me if the park is for sale. No call back. I call the town and the only contact they have is the management company. So I figure it is not for sale and move on. Well yesterday I find out it sold at auction the day before yesterday. For $175,000 a DEAL!! It was never advertised in our city paper because it was bundled with a much larger park the next city over. That park did not sell. I beat myself up all day about it and then My wife beat me up some more when I got home because she wanted to pursue it more. The bank would not list it with the management company so he had no incentive to call me back! But he would have told me about it if I called back till I reached him. I have vowed to dig till I hit paydirt or a dead end from now on.


#14

Ummm, dumb question time: What is an acceleration clause and how does it work? Is it applicable to LDs?

Thanks.

Rolf


#15

Don, if this park was packaged with a much larger park, I would suspect that the buyer may have only really wanted the larger park but had to buy this one too in order to get it.

That buyer may well be interested in selling the smaller park you want so they can just keep the one they want. It would be worth doing some homework to find out who bought it and who the closing agent/attorney may be to get your idea in front of that buyer.

Tony Colella


#16

Rolf,

Here’s a simple example … Now for the legal mumbo jumbo - this is not to be construed as legal advice - its simply a copy of a portion of a lease and it’s a tool I find valuable in my business practices - your milage may vary…

The sum of Two Thousand, Three Hundred and no/100 Dollars ($2,300.00) monthly rent, for a total over the entire term of Eighty Two Thousand, Eight Hundred ($82,800) Dollars, which may be accelerated in case of default.


#17

Don,

Tony is spot on with his advice - good chance you can still buy the little park - or even better, lease it from the buyer with an option. Let them finance the park for you since it is probably encumbered by some form of financing!


#18

The larger park did not sell at the auction the bank bid it back. I know the buyer and they are a large local owner.