Frank & Dave own over 200 parks in 25 states. But what do those collective parks look like on a macro scale? In this Lecture Series event, Frank is going to discuss at length the data those 200 parks hold, and what it suggests about their winning formula for buying and operating mobile home parks. The information that will be shared has never been publicly discussed before, so this should be a very informative evening.
And bring your questions, as there’s going to be an extensive Q&A session immediately following the lecture.
To join this free event, Click Here and fill out the registration form.
Sounds great but I believe you use other peoples money which is fine but the investors are the ones building your empire. Just for the record how many parks are enough?? For years we have noticed owner-operators with one or two parks having a good standard of living and being very satisfied being great operators to their residents. As America breaks down with big government and big businesses changes are occurring that are unsettling as to its outcome. As with most businesses our local grocery stores hardware stores, small dairies etc. owned and operated by locale owner-operators is past and so has the connection with owners and clients. We are very contend owning 2 or 3 parks locally and have been very blessed financially and wonder what the meaning of greed might be. You have a good web site but remember if our country fails our wealth will also fails and every type of business has it day in the sunshine and time as with Sears will fade including the park business–something always more innovative comes along–just some thoughts from people who have lived in mobile homes and in our parks with over 40 years of experience watching change. One of the biggest event we see is modern apartments and section 8 housing being build near parks that are now competing with parks and have noticed ONCE full parks with vacant homes, vacancy sites and owners wondering how to fill the spaces with Mr. Buffet passing the solution on two park owners and big operators maybe can make deals small operators could not1!!
We have learned a lot from F&D and that has helped us close 5 parks in less than 2 years. Frank has always been helpful in his advice. We have also lost a deal with F&D, in retrospect, it was worth it. We learned from the loss and improved our strategy to buy the parks.
The more we feel victimized by anyone, the less power we will have leading to frustration. Not a good way to live life.
Let us learn from successful people and that will help us be successful.
What’s great about the mobile home park business is that you have the ability to be as big or small as you want. The stats show that the majority of park owners have just one property. To be the 100th largest park owner you only need around 500 lots. We are not suggesting that anyone needs to hit 20,000 lots to be happy – we never had a certain size goal in mind at any time in our careers, just the desire to buy “good” deals that we found compelling.
I disagree completely with your assessment of the future of the industry. SEARS declined due to enhanced competition and lower demand for their products. The mobile home park industry does not mirror the retail segment in any possible way – our demand is through the roof and only escalating. Section 8 apartments do not appeal to our customers, nor do regular Class B and C apartments. The average American wants privacy and a yard. The only way that mobile home parks could decline would be if they can bring out a brick house in a subdivision at a price point of $500 per month, or Class A apartment stock at that same price. Another way that mobile home parks could decline would be if American wages rose by 200% and everyone could just walk off and abandon their trailer and buy a brick custom home. The final way would be if city governments across America suddenly reversed course and re-zoned all the vacant land to mobile home zoning and even printed bumper stickers that said “Build a new trailer park now: ask me how”. Personally, I don’t see any chance of any of these events over the next 1,000 years. But we all have to make our own investment decisions, and if you really think that mobile home parks are a fad with a bleak future, you should sell your 2 or 3 parks immediately and get out while you can.
As for Warren Buffett’s “solution” to vacant lots (I assume you mean the CASH program), this program is available to any park owner who has about 10 vacant lots and decent financials. I know a ton of people who are using this program, and most do not have more than a park or two.
Last night’s vote on Brexit has increased the risk of recession substantially, while ensuring that interest rates remain low, and both are good news stories for park owners – but not for SEARS.
I was on a plane last evening and so heard the recording today. I like the fact the presentation was data driven and so clear even my kid can understand what he is talking about I am awestruck by the clarity with which Frank answered each question as well.
Thanks to all who made it happen.
I am just a massager involved with many different enterprises and we elevate businesses along the lines are they in the pass, present or future or a combination. According to the WSJ developers have been building thousands and thousands of apartments in cities all over the country using CHEAP EASY money and constructing more than double the historical pace. Renters are now getting rent concessions and PLEASE tell the people if the park business is fantastic where are all the new parks that are renewing the business model for the FUTURE. If very few NEW parks are being built what is the problem since we know there was a time that spaces could not be built fast enough with people bring in THEIR OWN NEW HOMES. Are your empty spaces being filled by people bring in new homes or by Mr. Buffett’s way?? In reality most parks today need spaces filled, vacant outdated homes updated and owners are trying to get POH sold. I am not selling classes, own a web site merchandising parks, etc just trying for buyers to see that there is a problem that is being glossed over and even the ELAVATION GROUP is not building parks but buying properties that need spaces filled and NOI raised ?? like the one you bought in Hasting, Ne. The people with the future is for example the Sun Communities that yes are paying less that a 6 cap but are dealing with niche markets–look at their properties beautiful, neat and updated–no trash, junk, or outdated homes that most of us would not live in. Sears decline was their constant demand for higher margins and poorer quality of products that brought in NEW competition (parks need to be careful there also). Frank we all have the right to our opinions and from our experience close to 20% of parks are in the past with little to no future unless we desire to be slum lords. Franks we love our niche properties (looking for more please tell me when you see some) and dealing with great people but our water front properties also have more value empty than a park; which is also happening to many parks in up and coming commercial area. Love the ability to state our opinion and also hear yours in a civil way, thanks–looks like we are headed to a Brexit direction in our own country–sick of all the government intrusion in our lives. The question still is how many parks is enough and when is greed part of the adventure or does greed have redeeming values??
While I don’t agree with any of those concepts, I respect your right to be different, and believe that’s one of the hallmarks of this forum – there’s no bullying allowed.
In response to two of your items, I would make the following observations:
The reason that you will see no new parks built in America is simply a matter of economics – but not necessarily on the part of park owners. If you are a city manager or council, you can quickly see that parks are a financial catastrophe. Let’s assume that you are the city manager with a 100 space park at full occupancy in your city limits. A single lot in that park is probably valued at $30,000 on the tax rolls, and the home on that lot at $5,000. Assuming the real and personal property tax rate is 1%, then the total tax on a given year on that lot is $350 ($35,000 x .01). At the same time, that lot and home contains a family with two kids, in which the cost to educate those kids to the city’s school district is $2,000 per child. Not even including such other items as police, fire, social services, and city amenities, that’s a net loss for the city on that lot of $3,650 per year. Now multiply that times 100 lots (in many parks in great school districts, that’s the reality) and you have a net loss for the city of $365,000 per year. And that does not take into account any “stigma” issues with mobile home parks – just dollars and cents. That’s why you won’t ever see any new parks built in the U.S. But nobody ever talks about it, because cities are supposed to be advocates of affordable housing. They are, as long as you’re talking new SF and apartments that have $100,000+ per family in taxable value, and pay for themselves regarding city services.
The mobile home park industry is not built around “greed”. It may look like that to some people, as any new buyer of a park has their job #1 getting the rents up to market levels, which may mean doubling them in some cases. But taking a lot rent of $150 per month to $300 is not greed – it’s survival if you want the park not to be re-developed into a higher use, or to have the necessary capital expenditures made to keep the utilities flowing. This whole concept of “raising rents is greed” is the biggest hypocrisy in the world. The average apartment rent in the U.S. is around $1,250 per month. The average mobile home lot rent in our portfolio is $285 per month. Do the math. You can’t even use the words “mobile home park” and “greed” in the same sentence – it’s a ridiculous assertion. That was what the writer for the New York Times thought before he lived in our park in St. Louis for a week. After living there, and interviewing the entire park population, he said that Dave and I “may represent the best thing going in affordable housing at a time when the nation’s need for low-cost places to live has never been greater.” It’s in the sixth paragraph down in this article http://www.nytimes.com/2014/03/16/magazine/the-cold-hard-lessons-of-mobile-home-u.html?_r=0 So here you have Gary Rivlin, an openly liberal writer who had just written a book called “Broke USA: How pawn shops and payday lenders ruined America” and he’s saying that mobile home parks are NOT about greed but about providing a great product at a fair price. I think that’s the most powerful Exhibit A to that argument on earth.
While I know that you will argue with nearly anything I say, I still respect your right to do so. And that will not change.
Carl (and Frank),
I rather enjoy seeing this healthy debate and enjoy speaking your minds. Rather reminds me of 7 years ago when MHU and MHPS folks disagreed.
I wish to first make sure I understand what the issue(s) you are addressing is:
Greed because F&D have been acquiring so many parks
Government intervening with their regulations (Frank Dodd, HUD fair housing changes, etc)
Apts, Sect 8, etc competing with MHP tenants
My opinion prior to hearing your feedback.
Greed - In using this term, I think of people abusing other people for their personal gain - a slumlord in our industry. I agree with you in that greed in our industry, or any other taints our image and I abhor it!. Does growing a company automatically indicate greed - no. In our industry, we see greed with both large and small operators - greed is merely a by product of the leaders of the company regardless of the size.
In fact, with most RE niches, I would argue the larger companies are financially solvent enough to be able to also be socially responsible. Many small operators are ones which just have not been able to ‘keep’ up with the proper maintenance. I will also state that MHP properties have life cycles, just like single family houses. Its only the ‘next owner’ who is able to upgrade the home to maintain current standards. I live in a great community with many older homeowners. MANY have not kept up with their homes - it costs a lot of money. As each generation/owner comes in they are able to upgrade.
I don’t think owning many properties is a matter of greed. It is YOUR decision how many properties you wish to own - purely your prerogative.
Gov’t Intervention - I do not like it but it is what it is. I live in America and love it, warts and all. As an entrepreneur I need to STFU and learn how to pivot my business around it as each new obstacle comes. It was great when I could create my own paper for POHs. Do I like the Rent Credit program - no. But I like it for what it is and helps me accomplish NOW.
I also love what the 21st program is attempting to do. They are trying to fill a void and need. Of course they make good money on this program. I am fine with that.
Completion of other groups like apts, Sect 8, et al: There will always be competition. America is born on free trade and if one group is not able to differentiate itself to be better then they become obsolete. That is neither good nor bad. Let’s look at Walmart. When it started rising, people loved it because it brought commodities to the reach of millions. As our economy has changed, they are struggling against some of the niche and box stores. Each niche brings some Evolutionary business impact to our society. The fact of the matter is that the end decision maker is a human being — this is the hardest thing to understand, especially as we move from one generation to the next.
I gather that you deal with a rather higher end market of the MHP space. This is great and commend you for this. I also realize that F&D deal with more of the affordable MHP niche. It would seem that our experiences formulate our opinions.
Final Comment: My opinion - Do I love MHPs in absolute terms. NO. If you know me then you know that I don’t like people in general. But I respect and love all human beings. I treat all our employees and tenants with respect. Our communities abide by rules just to provide the best housing afforded to them. MHPs simply provide an incredible value. The business model is absolutely great for our economy because it simply provide a great need for much needed demand. IF major shifts occur in America as Frank lists, then not only might MHPs shift as viable business model, but so would TONS of other industries.
I live in the Bay Area and was in Silicon Valley and firmly believe this is currently one of the best ‘business models’ around.
Greed according to Webster is: "Selfish desire to acquire MORE than one needs or deserves." Greedy according to Webster’s Dictionary: "Excessively eager to acquire or gain something…"
As per no more new parks (1) from Frank why would cities approve section 8 housing for poor people since taxes and income is very negative and less than from a normal mobile home park. When an enterprise is not expanding or reproducing it is dying. Why is Mr. Buffett not building parks to help sell more product since if no more parks are being built his sales will eventually decline and knowing his family he will find a solution–maybe he has a security interest in parks with the 21 Century program since he the smartest person in this discussion with his 9% interest on homes. Are some of the larger mobile home buyers, like Frank, getting special deals with Buffet that small park owners can not receive? I personally do not like Mr. Buffett’s politics but he is a BRILLIANT BUSINESS PERSON and one needs to very carefully to learn from his movements. We love the park business being owner-operators and have been blessed more than any other enterprises and looking for more niche properties to personally enjoy our clients–never raising people’s rent to take food off their table that is excessive at any one time. When parks are concentrated in a small group of owners it will be more difficult for small operators to buy the same size parks or even invest into the market (opportunity) but small parks less than 25 spaces??? they have little to no interest but can sell classes for new entrants who are very eager to be an entrepreneur and go 100 mph with very little caution. Just giving the reality world of 40 years of experience with the blinders off.
Let’s turn this discussion around – how can you have been in the business for 40 years and only own two parks? What do you do with your time? I started out with one park, just like you, but added 199 more on over 20 years. You’re currently at a pace of 1 park purchase every 20 years. What happened? What is your end goal?
Your definition of “greed” would include just about every American who has been successful in any endeavor since the beginning of time, and is one of the most bizarre assertions I’ve ever seen. Just curious – is your last name “Marx”? Karl Marx - Wikipedia
We are involved with our community, church boards, and help those in need and our direct families!!! The end goal is heaven and try not to have a hearse follow me in the process. Our desire is to help people and the community we live in since we believe we have been very blessed and need to share our blessings. As per Frank how many parks is enough, maybe 500 so perhaps fewer parks available to new potential park owners. Webster definition of greed highlights American’s downward spiral of the wealthy 1% and the middle class breakdown if it included (you) that is your call and maybe some conscience whispering is happening–maybe that’s the difference we have no need to be greedy like the generation that I was raised by. We were financially poor like our fellow classmates but we never know it since our parents were present and took care off our needs. Interesting how poor farm kids (5) all ending up with master degrees plus when our parents because of working on the farm never got beyond the 6th grade–WE ARE BLESSED!!!
Growing up on a dairy farm neighbors helped each other and cooperated when others were in need and these men were not trying to farm a whole township and than say wow in 20 years boosting we own 200 parks. We had no need to own more than 2-3 parks and most others in the 80’ and 90’s were making a great living with the same but you need to 200 parks to exist or be??? We are content and very happy with what God has blessed us with and if we can help others even on this site great. We were just sending some warning shots from experience and the best experience for anyone thinking about this business work for a successful operator for a year and see if that is the type of business is agreeable. Look for great location that have upward social movement, great occupancy, few POH, and if it is you first park near to you home plus be not afraid to sell and move to a park with more sites. We never needed 200 parks to be HAPPY FRANK of the 200 parks please be honest do you own 100% of those parks or maybe just 5-10% or maybe less—the people need the truth. People watch he will never answer what % he owns of the 200 parks–we own our parks FREE and Clear. How many investors are in the elevation group–please tell and are your related to Hillary. The Marx comment is what for??? Thanks for being civil and polite!
You have been posting on the forum for about two years and, while you’ve put a lot of good information on there, you also have a pattern of blasting anyone who you perceive as “greedy” (of which I’m one of your primary targets). Here’s a post you put up in Novermber 2015 regarding Warren Buffett, as an example:
“Mr. Buffett is a liberal just like George S. althought Warren has been more tolerant of American values. Warren’s dad was a local store owner in Omaha that also served in congress who was a true ethical, conservative who did not seak the goddess of money. Please remember the hate that follows any company Mr. Buffet takes over–jobs are loss but his profits increase. Mr. Buffet if he cared could easily give loans to park owners and new mobile home owners for less than 3% and Clayton Homes would still be rolliong in the money. Mr. Buffett will always do what is best for Mr. Wonderful and builting mobile home is only about money–net helping our fellow American having a better life and future. Have a happy Thanksgivings!!!”
While you are certainly free to express your opinions, your “socialist” agenda is found offensive by many folks on the Forum, and we receive constant complaints about it – we have probably received over ten requests to ban you from the Forum. I have refused to do so, however, because half the time you post really good stuff on parks. So could you please just stick to mobile home parks and stop bashing anyone who does not support your political opinions?
I have been a part of these forums for years. I have heard you give good advice many times. I have also heard you pick on people, be mean to people, and just flat out judge people repetitively. As far as you know Frank gives large amounts of money away to charities, good causes, or any number of other things he may do to help people. I know he helps massive amounts of people with this business. Frankly what Frank does with his money, is his business and should be non of your concern. Remember, when you judge others, you are actually judging your self. Acting like you act, then bringing up God and faith, is a HUGE turnoff to people who maybe considering turning to God themselves. You should be an image of a loving God in order to attract and influence people. Maybe you could turn inward and take an honest look and consider if your actions on these forums are Christ-like. Consider staying active in the forums and acting like your faith would teach you to act. Stop the judging and turn to lovingly helping people. I know people on the forums would appreciate continuing to hear about your years of experience. Why not take a 180 and be a positive force within these forums?
thought the conference call was great! a ton of good info. My wife and I are young (for the park business) and have really enjoyed the growth we have experienced. We are looking forward to buying more parks and spreading the news that our communities are the most affordable and attractive to anyone looking for housing.
thanks again for all the info!
I am awestruck by the clarity with which Frank answered each question as well.