Landlording

mobile home university
1

Please help me create a path to follow to become a good landlord. A fair, and wise landlord, one with vision beyond the investor’s ROI quest. In this business we get stuck a lot in our numbers, and all the money is controlled by our customers. All customers that pay out money for products are human beings. And we know not where they really come from, nor where they are really going. We only know the relationship we need with them is dependent on them paying us money. There are so many issues that are old and new now to this business:

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Stigma of a house trailer park.

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stigma of the occuppant/lessee.

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stigma of the business and it’s landlords.

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How the community fits in the community it is mired in.

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The landscape, the green issues, the right of way treatment.

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The Mexican connection/illegal immigrant/Patriot Act.

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SECURITY

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DOGS CATS BIRDS SNAKES, et al

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GARBAGE

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Relationship with the legal system, the city, the county, the nation.

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When are the landlords of this unique revolving community in America, going to get together and decide how to be the governor of their communities?

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Let’s answer all the landlord’s dilemmas, there’s nothing new under the sun. Thanks for any help you send forward in the future.

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P.S. Did I mention COLLECTIONS? grin

2

Br5,

I have read your post a couple of times and maybe it just me (it certainly could be) but I cannot figure out what it is you are trying to get at, ask, state or start with it.

If your post is geniunely asking for advice on how to landlord mobile homes and mobile home properties, then I am happy to reply.

In my land/home properties and my small mobile home parks I want to own and rent all the mobile homes with is contrary to what has until recently been the norm for mobile home park owners.

There are many reasons why I choose to rent vs. sell or lease optioning off the home and renting the dirt. More and more the large park owners and those who buy turn-around parks are finding out that in this market, the fastest way for them to fill spots is to buy and rent mobile homes. This is often little more than a necessary evil for them but for me it has become my preferred way of running my business.

We talk about it in our book, “Investing in mobile homes with land” that is for sale here and we have courses dedicated to nothing but landlording for mobile homes. Those courses will be here soon.

I am not trying to tell you to “buy my stuff.” If you have a specific question about how we handle landlord concerns, how we handle tenants, how we control the tenancy, why we will only rent month to month (except when we use section 8), why we use section 8 and how, how we handle repairs and make them “landlord friendly,” how we evict bad and non-paying tenants, why we allow pets, how we collect rent, how we …

Do you see long this can get? That is the reason we put these question and many more in a course. Just too much to put in a post or two.

Tony

3

Bill, as for the 3 stigma issues: Stigma seems to be a character flaw rooted in pride on the part of disinterested third parties, the only damage is the influence that these people exert onto others. What a disinterested party says is out of my control. What is in my control is the operation of my MHP, If my goal is to fill my MHP with people who are stable and keep things in good repair, pay on time without much prompting, I would have to be much more selective in approval than if my goal were to fill vacancies ASAP. The consequences of the differing goals would affect the type of neighborhood that my MHP would provide to residents in and nearby. IMHO your goals and persistence are the key to a quality neighborhood… the question is how much short term income is reaching the goal worth?

I’ll leave the other issues for someone else.

4

I have tried to make money in rentals, but all I find is that it looks good on paper, but I am constantly coming out of pocket and nothing ever goes into my bank account. Am I just doing it wrong? If so, how come there is no large REIT or big company based on renting mobile homes in existence? If it was such a great idea, don’t you think there would be the McDonald’s of trailer rental out there? I am pretty pessimistic at this point.

5

Rentals aren’t for everyone. I think your McDonald’s comment is relevant in that many types of independent, owner-operator businesses can thrive where large corporations will surely fail. I think this should be kept in mind when hiring others to manage/ sell.

6

Edwin,

I agree with Shawn, rentals are not for everyone but I find that most often folks assume it’s not for them before they every try because they have heard all kinds of crazy horror stories.

Those horror stories are rarely first person accounts… always my neighbor’s bosses, friend’s cousin etc.

The reality is renting is a business and if you approach it otherwise and don’t follow the landlord tenant laws, you will have horror stories.

As for making money with rentals, think about how many people make a living renting real estate. Think about Lonnie Scruggs and his story. He was a landlord for 20 years BEFORE coming up with his mobile home investing ideas.

Read the millionair next door. I believe it is page 9 or so where it talks about the type of businesses they really own (not what you might assume they own). Guess which one they mentioned…mobile home parks.

I know several prolific house “flippers” and even they own rentals eventually to reduce their tax hits, increase their net worth and provide for their retirements.

Edwin, I am not trying to convince you to be a landlord. It matters not to me if you choose to own rentals or not. Only you can decide.

As for your belief that REITS are the litmus test for good investing I could not disagree more. REITs to me always bring to mind Wall Street money trying to act like players in real property arena. Wall street investments seem to work on paper but to me fall short of truly understanding the face to face, people realities of landlording.

Take a look at some of these huge park investment pools that buy up parks all over the country at prices no one investor would be willing to pay, they jack up the rents hundreds of dollars per month and wonder why their vacancies are out of sight. That idea may have sounded good on paper but it was a short term gain followed by a long term problem.

Would you invest in something just because a huge, money banked company decides to do so? How could you begin to approach it the same as they do? Two totally different animals.

Why would I rent trailers Edwin? Easy. Look at the folks making a living investing in stick built rentals. Most spend many, many times the money to buy a stick built home that I buy a land/home property for and yet I cash flow better, have less overhead (lower risk) and appreciate and I still get appreciation to boot.

Less money at risk, better cash flow, lower overall risk, lower debt risk, appreciation and by renting (in most states) I get the use of the landlord/tenant act to quickly evict (if you play by the actual rules instead of self help evictions or listen to someone instead of knowing the rules yourself)…why would I NOT rent trailers?

Tony

7

Thanks Shawn and Edwin, and yes, Tony it is a serious concern. I wrote as well as I could at the time I posted it. Shawn I get your communication, and I agree. Tony I bought your book back in 2005, we spoke about it, I am Bill Russell from CREO, and have been around the business and the forums. I posted the request for help in earnest, and I thankyou for your comments. I agree, and am now committed to do as you say, maximum the income of the property, which also maximizes its value in today’s market. All of us investors like to trade for income opportunities, but all investments don’t give a person a job all the time. Landlording needs to become my job for four or five years if I’m gonna do this stuff right, so I asked for help, and for the benefit of the experienced. I intended no mixed messages.