I am very new to mobile home park investing. I have read Franks books and just trying to figure out how to find a manager that I can trust to run my 35 pad park in GA. I have the park under contract but it is currently managed by the owner who lives a few miles away. I am over a 100 miles away and need to find someone. The park has 32 POH and I am going to sell those back to the homeowners who are currently paying 450-500 for the home and just make it 300 a month lot rent. (3 lots currently lot rent at 300) So the numbers work out very well even before I sell off the homes. But what is the best way to find someone who either lives in the park or is close to there that can collect rent and take calls about repairs, as well as help get the mobile homes out of my name. They are mostly 80 and 90 models and dont have much value. Sugestions?
-Ask the owner who he would recommend to manage the park
-Send out a letter to all of the residents inviting them to apply for the management position
-Post an ad on craigslist looking for someone who is willing to move into the park to manage it, and see what resumes come in. Surprisingly I’ve gotten a really good manager from this.
If you are very new to the mobile home park business; live 100 miles away and have 32 POH homes: I would pass. With experience I would still pass as what Greg has mentioned many times we make money renting spaces not depreciating mobile home. Trying to sell and keep sold RTO homes is a real challenge IF??? the market area is good WHY?? such a high percentage of .rentals???
Thanks for the advise. The guy that built the park has passed away and his kids just took it over this year and just want to sell it. I am going to just sell the homes for a couple thousand bucks each and just make it all lot rent at 300 per month. Is this still not a good idea?
Ideally for first time park owners try to buy with some vacancies with a high potential to raise rents and an area with demand for tenants bring in homes will becomes a great park to sell or keep. Parks renting out homes or trying to do RTO face some real time spent and money pits as to upkeep and keeping the RTO sold. Sometimes the blogs will indicate how easy it is to do RTO but there is an area of trial and error that will test your grit–the 100 miles will become a long distance quickly!!! Hope you find your niche in this great business.
Thanks for the insights.
100 miles doesn’t seem that far. If you could bear it for a year or 2 while getting rid of the homes, I would think it is worth it.
On finding the manager:
-
Find the nicest looking home in the park with the cleanest yard and the nicest car in the driveway.
-
Talk to this resident about being your manager and where they see the park currently and see if they “share your vision”.
-
Strike a deal for free rent and some cash (in a park like this we’d give around $300 per month cash and free lot rent). That’s a huge deal to the tenant.
-
Train them in exactly what you want done.
-
Give them a Polaroid Cube camera with hood-mounted suction cup mount, and have them drive through the entire park monthly and send you the chip out of the camera (give them two originally) and download the video. It will look the same as if you drove it yourself. This will allow you to follow the property condition. Then send the chip back.
-
Follow just the following items with the manager weekly in a short call or email:
a) Collections
b) Water/sewer bills not deviating from their norm
c) Occupancy (in this case including the sell-off of the homes)
d) Property condition/repair issues
I know that it sounds hard to do this from 100 miles, but it’s not. You can get in your car and be there in two hours if you need to, which is not a hard drive. We operate many parks that are over 1,000 miles from where we live. It’s all about systems and following those systems.
My opinion based on your being new to the business and other factors - finding/training a new manager, extensive number of POHs etc. I would caution you that this will be a far bigger challenge that you are likely prepared for. You are not buying a arm chair investment and need to appreciate the fact that experienced owners may make this sound like a easy go. It will not be by any stretch of the imagination.
Simply finding and training a manager can be a frustrating hair pulling experience. It could take numerous tries and will require that you are extremely diligent in monitoring their progress. You could get lucky but that is rare. Additionally dealing with that many POHs is a major undertaking. You are going from owning no buildings to being responsible for 32 individual rental properties to say nothing of the time and work involved in selling and possibly reselling the homes.
I know we tend to make owning a community simple but in my opinion you should make yourself available to be on site weekly for the first 6 months to a year at minimum and from that point forward be dealing with issues by phone on a weekly bases until all the homes have new owners. Assuming of course that you find a excellent manager which I would not bank on based on the pool you will be drawing from.
Greg is shooting you straight here. I purchased a community this year and turning it around has been more work than I had bargained for. You will find out very quickly that if you don’t have an onsite manager or someone to enforce rules the inmates will be running the prison in no time. I have not yet found a park manager that will stay on top of things. I’ve tried 3 people so far and am now working on finding the 4th, preferably someone to be on site.
With regards to POH, what I have found in my limited experience thus far is that if you have old ratty homes in various states of disrepair and try to sell or RTO them in that condition it is the equivalent to baiting for rats…you will attract rats meaning very low quality bottom feeding tenants. If I repair the homes with new paint and floor coverings I’ve got a feeding frenzy of higher quality buyers with higher standards but it takes longer for them to pay them off.
Running a clean park will require constant pressure being applied to keep residents in line. Parks definitely do not take care of themselves.
@dcole100 , as per your MHP under contract:
- “35 Lots Total / 32 Park Owned Homes / 3 Tenant Owned Homes / New To Mobile Home Park Investing”
My Husband and I own 2 MHPs. One MHP was stable and the other was a turn around.
We have 15 Park Owned Homes.
Owning Park Owned Homes takes A LOT of work.
As per @ErnestPecunio the following is spot on:
- “With regards to POH, what I have found in my limited experience thus far is that if you have old ratty homes in various states of disrepair and try to sell or RTO them in that condition it is the equivalent to baiting for rats…you will attract rats meaning very low quality bottom feeding tenants.”
Please do not try to sell those POHs to the current Residents immediately.
First wait and see how the current Residents behave.
If the current Residents have “Good Behavior”, please sell the POHs to them.
However, do not keep the “Bad Behavior” Tenants.
@ErnestPecunio , was exactly correct with his statement:
- “If I repair the homes with new paint and floor coverings I’ve got a feeding frenzy of higher quality buyers with higher standards but it takes longer for them to pay them off.”
If this was my first MHP, I would pass.
It would be best to start with more of a stable MHP.
We wish you the very best!
We like the original poster are new and looking at a 30 pad park all TOH but we are 700 miles away. All pads are rented… would this be a bad idea for our first park?
When I bought my first park, I was so adamant that I needed to be there to watch over it that I went each day from 9 to 5 and sat in a tiny singlewide office so I could “be there”. I wasted an entire year doing this. “Being there” does not a value add. What IS a value add is watching over the key profit drivers like a hawk. You need to keep a daily eye on 1) collections 2) occupancy 3) water bills and 4) property condition. Three of the four are from your phone and computer and #4 can be done with HD videos using a Polaroid Cube or Go Pro at whatever frequency you want (monthly or quarterly – I would not do more frequently than that).
The bottom line is that 700 miles is fine, and 1,700 miles is fine. You physically visiting will not make the park a winner or loser – what makes it work is buying it right and then staying on top of the profit drivers.
So we passed on the deal and told the sellers we could only pay 375,000 for the park. They of course laughed at us and said no way. It is currently bringing in 9830 per month. I called yesterday to see how it was going and if they had any offers. We are now under contract at 375,000. There are 2 spaces renters one at 250 and one at 300. There are two land contracts that have 3 years left on one and 2.5 years on the other. Both at 485. 22 rented park owned homes ranging from 400-500 per month. 6 homes that need to be rehabbed. Two of them need to just be removed. This is on 35 acres of land and the land alone brings about 5-6,000 an acre. There is 18 acres in the back of the park that could be broken off and sold as hunting land, or for grazing cattle. Agent thinks we could get about 60,000 for it as we would have to give an easement through the park to get to it. So I was going to buy the park and sell off the land in the back, and work on getting good numbers through a park manager and then sell the park for about what I had it under contract for 4 months ago at 510k. The lady that inherited the park is pushing 70 and just said she was too old and tired to continue to take care of the park. Do you think this will be an easy park to flip. It was only marketed by a local agent and was never put on any popular sites like loopnet or mobilehomeparkstore.com Thoughts?
Frank, these suggestions sound excellent to me. It makes sense to choose the person who already has the best-groomed yard–what a great indication of their commitment to caring for their property.
You have two priorities on this deal. First is finding a manager and second is selling off the homes to residents who are qualified. For number one, I would both interview existing tenants who seem responsible and also post a job ad on Craig’s List for a manager. Make it a requirement that the new manager live in the park and interview anyone who responds to your ad. We’ve had some very good applicants apply to be managers in our parks from Craig’s List. Usually better than the talent pool we can scrape together in the parks we tend to buy.
Second, you will be selling homes. Make an offer to sell to the existing tenants and remind them of this offer monthly. I would advise against the bullying of a non-renewal or the give away tactic until you really have a handle on the park and the operations (at least a year). Residents also need a little time to make sure you aren’t going to be a nut-case before they commit long term to owning in your community. You’ll generally start getting some takers after three months if you are doing a good job. Simultaneously, you’ll want to market the hell out of your property so you can choose the best applicants for your vacant homes. We like bandit signs the best as they pull about 10x more leads than Craig’s List. Therefor, we get to be very selective with who we put into our communities.
I’ll also add that your price seems pretty good. To me, a good price is worth the hassle of POHs. Others obviously disagree with this, but we’ve done very well with repositioning these types of parks. Just understand that you’ll be spending some time each month at the park until the systems are in place, you’ll likely evict 25% of the renters in the first 3-6 months, and that you’ll get a few maintenance calls each week. The first few months will be frustrating with the new manager(s), but it’ll get easier with time.