Random Thoughts...

Don’t know if he gives talks/seminars as a regular thing. He is a fellow member of the Ohio Manufactured Homes Assoc. where I heard him and I’m sure no-one charged a fee to give a presentation there.

I have to give a plug for the OHMA to anyone from Ohio reading this thread. Joining that group has saved me a ton of money and made my business life immensely easier. If you haven’t joined you should and I suspect joining such associations in whatever state you do business would be equally beneficial. How else would I have been able to talk about this business model had I not been a member?


Wheat Hill

Post Edited (04-14-11 21:50)

I can’t picture myself buying a park that was filled under the giveaway scenario. ( I own two parks…one in Oregon and one in WA. ). It is so hard to improve the tenant base in a park ( especially in states like WA where an eviction can easily cost over $1000.) I can’t help but think that the tenants that come with the free homes are going to be some of the worst.

For me it comes down to the golden rule…if I don’t want it done to me …I shouldn’t be doing it to others.

Hi Darrellc,

Is one of these easier, less time consuming and cheeper ~ an eviction or financing repo? (Or they may be both about the same - in that case you can still use the following for an additional security interest in your parks.)

I ask because in some states evictions are expensive and time consuming but a repo can be fairly straightforward and inexpensive.

One solution in this circumstance is to use a collateralized note payable to turn the eviction into a repo. How?

When a tenant goes into default, instead of issuing a statutory demand notice for eviction I would have the tenant sign a collateralized promissory note to repay the lot rent instead. The conversation goes like this - Mr. tenant, until you can bring the whole amount of the rent current we will need you to sign a promissory note stating you will repay the park for the back lot rent. They sign for the back lot rent with a repayment schedule and interest. Now here’s the good part, lien the MH (or car/boat/rv/whatever) until paid in full (that cost for recording the lien is disclosed to the tenant and added into the note for repayment). If they do not repay the lot rent as agreed you now have a choice of how to handle it - repo, or eviction, or both. Best thing is that you secure the home as collateral (or find out who really owns it or if there are other liens on it, etc.)

Maybe this will help you?


PS - IMO, infill programs are infill programs (they all come with a percentage of deadbeats - maybe higher if free and maybe not since the burden of housing payments is that much lower). The term of the client base is what I’m interested in. If all the tenants moved in for free but had been there for 2 years or more (as reflected on the parks financials and tax returns) then I’m OK and will pay a premium for a nice turn key project. If they all moved in on Lonnie deals and have only been there for less then 1/2 of their lonnie deal term, AND you have to buy out all those notes without a DEEP discount, that is not worth the same as the previous park.

I advise people to become good judges of the quality of the various cash flows they are buying. You do this by looking at the term and turn over of the client base, total monthly housing obligations, and equity of the final collateral (the Mobile Home). In other words: A park with little to no turn over (besides death) and free and clear homes (think 55+ senior park) is a far superior cash flow to a park with high turn over and a bunch of lonnie deals/rentals (turn around family park). Especially if you have to buy all the notes/homes with the park. I may pay a 7-9 cap (contingent on non recourse debt leveraging) for the former and completely pass (i.e. 12 cap or higher) on the later. I think we can all agree that there is a reason that “the new banking system” does not like vacancies, rentals, notes, or homes. Again, FWIW…

this is a VERY interesting thread to me. We (actually you have karl) touched on two critcally important points:

  1. All cash flow is not equal. Seasoned, well qualified Notes (MH or L/H) are more valuable than L/d’s in their second month for example. Lot rent versus MH Note paper for another. You break it down even more which is in keeping with the DD duties you do so well

  2. This is a little harder to quantify, but what I seeyou, Fred, Jim and ellen, Rick Steve et al do is not only upgrade the inventory base in your parks but also the TENANT base. It hit me at your park that day when those Northern folks were looking to purchase a used unit on one of your lots. These were quality, respectful people and I know if they didn’t buy used you would place them in a new unit if at all possible…you were actually upgrading tenants…Cool!

Like everything else in this business, everything is actually much more comingled and combined that it would appear at first glance.

I learn something new almost every day here and I’m not convinced I will ever know everything on one part of this business and I’m not sure I need to to be sucessful. I just know I have to be WILLING to try new things as the market changes daily it seems.

Thanks to all that have posted!


The upgraded tenant base is in my view a necessity for successful long-term investing in many markets (all but big population, short supply housing areas) less resident turnover, less repair expenses, residents that maintain & improve their homes all lead to more referrals and higher occupancy. I know that the potential for higher ROI comes with the lower end MHP, I question the sustainability. It seems that if the energy, creativity, and drive of the MHP owner-operator were to subside, even briefly, then that type of operation deteriorates immediately. These ideas that I hold makes resident screening a very interesting topic to me. I was especially interested in a blog posted by Daphne regarding a resident screening group in her MHP. I look forward to hearing more about that at the MOM. I would also find it helpful to hear other MHP operator


    Why don't we have Mr. Flask on a teleseminar for MHU.

Dan Dawson


let me run it past him. Mr flask has not returned my 2 emails tho!