Old vs. New: Common Personnel Issue

I recently acquired a mostly vacant park from a bank. The manager that came with the park, and oversaw things for the bank as well as the previous owner, is a 20-year veteran of the park that knows the place inside and out. To help rehab and reposition the park, i brought in a younger assistant, which the old manager was initially happy with, whose job is to fix the unit and do general maintenance.

My problem is that there is growing resentment between the old manager and the new maintenance guy. The maintenance guy is quickly picking up the ins and outs, and understanding the problems of the park. Clearly, the old manager feels threatened – and with good reason since if i had to choose between them i would elevate the young guy to manager. Nonetheless, i’ve made it clear that the old manager has a job as long as he wants it.

(In my perfect scenario, they would learn to co-exist, the young maintenance guy doing the bulk of the work. I"m happy to keep the old manager onboard for his institutional knowledge of the park.)

How to manage such a prickly situation?

How many lots does the park have, how many occupied lots, how many occupied park-owned homes and how many vacant park-owned homes?

I am confused! The park is “mostly vacant” and purchased from the bank. The 20 year veteran surely has something to do with the failure of the park to thrive. What institutional memory are you preserving (how to give the park back to the bank)? You said you would choose the younger assistant. I don’t see how the park can support both. Make the change, move on, and make your own mistakes.

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It’s a 56 pad park, with 52 homes (8 tenant owned, 44 I got as part of the purchase). Thirteen of the homes are occupied with paying tenants. An additional 11 more homes have been fixed and are about ready to rent, and of those 6 should be occupied shortly – owing mostly to the rehab work of the younger maintenance guy. And my costs to carry both guys is minimal, and would be worth it to me if they could co-exist.

You really have two different two different functions in this park: 1) manager (collect rent/sell homes) and 2) rehabbing the homes. They require two totally different people and compensation plans.

The manager should receive free lot rent and around $500 per month, and would need to come from one of those 8 tenant-owned homes, as you need someone who is a “stakeholder” in the park and has something to lose if the park does not turn around (namely their equity in their home). I would select the homes that show the best pride of ownership and talk to the owners. Ask them “hey, I’m curious what you think of the park?” and they say “it needs a lot of work but it’s a great place to live” then they are a candidate. Their job will be to collect rent, sell or rent homes, and report on the success or failure of the group that is renovating the homes.

The group renovating the homes should give you a firm price on each home being fixed, and never be paid by the hour. Do not pay them a penny except when they are done, and the home has been inspected by the manager and then seen by yourself via smart phone photos. This person or group will need to be insured (either independently or on your policy). The “young guy” you are describing sounds like he is paid by the hour and has no insurance. That’s a terrible combination for this job. Remember that the rehabber should only stick around until the homes are completed, and then be off the property immediately. Theirs is not a job but simply a short-term function.

When you say “the cost of both of them is minimal” that concerns me as the number of lawsuits against park owners by employees is soaring, most of which revolve around not getting minimum wage for the hours worked. Make sure that hours are accounted for and that you are not at risk for someone claiming that they are underpaid.

My bet is that you have to replace both people you currently have. The old manager needs to go simply because they were in charge when the park failed. The young guy because he does not sound like a legitimate rehabber. We are big believers in the “pro” vs. the “schmo” – we use only real people who have real insurance and real references. Using some hack that appears cheap always ends up costing you several times more than the pro when you add in poor work quality, failure to meet the ordinances, unhappy tenants and litigation.