I
just finished reading the Bloomberg article and comments. A few thoughts:
1.
A writer for Bloomberg who does not understand how to calculate cap rates –
wow.
2.
Read the comments to the article; we as
owners are seen as pariahs feeding off the poor. And I can tell you, it is not
just some lefty internet nuts that view us that way. We really need to do a
better job of communicating the advantages of this real estate market niche to
the general public. It is not that our clients are trapped and at our mercy. It
is that we provide the absolutely superior housing option for that third of
American families who are struggling at the bottom. Here are some of the bullet
points that make me feel pride about the product I provide:
Path to ownership program costs
less then apartment rent
Once tenant becomes an owner,
cost drop to about half (to just a fraction of apartment rent)
Gives tenant/owners a pride of
ownership and sense of belonging that can be life changing
Allows low income, poor credit
families to get on the path of home ownership without a mortgage or a down
payment
It gives tenant/owners an asset
worth thousands of dollars that can be sold and used as a down payment on
a conventional home if circumstances warrant
Monthly lot rent is less then
monthly maintenance costs of owning a conventional home
Another
point to make to the general public is about the importance of being strict
when it comes to the rent and park rules; as park owners we have a responsibility
to the families who have their most valuable asset in our communities, that the
park does not become rundown hellhole. MHPs, just like apartment communities,
can go south fast if management does not hold the line. You can confirm this
fact by a drive through any city in America.
A
point to make is that we as owners are not the only investors in our parks. Our
tenants are also investors and we; both park owners and home owners, all do
better when the rules are enforced and the rent is paid. Part of that is making
sure the rents are adequate to maintaining the park and justifying a continued
investment of capital in the park. A
healthy park is to everyone’s benefit. Rents that are too low can be just as destructive
to the long term viability of the park community as rents that are too high.
Bottom
line message and one I firmly believe: there
is no other low income housing option that comes close to benefits that we
offer to our tenants.
The entire concept is misunderstood by most when you mention it. They would rather gamble in the NYSE casino and flip single family homes than
A safe investment.
And… More than that we are helping a lot of people who really appreciate being given an opportunity to try and own a home
Even with little to no money.
I should have put a link to the Bloomberg article for those of you who don’t get Frank’s excellent newsletter. Here it is.BTW, I don’t know why the formatting of my post is so weird.
Short blip of an article on zerohedge concerning Freddie Mac and Buffet. Direct link Zerohedge;
Hey Randy, can I put your Bloomberg outline in my next newsletter or Journal article?
Sure.I hope you don’t mind me beating a dead horse for a minute, but the reason I believe messaging to the general public is important is because of life here in California. As you all may know California is famous for its abundant agriculture. And you may also know, our number one crop which is exported all over the nation is nuts. To be more accurate, it is not the nuts but the nutty ideas that our nuts come up with. Our nuts are quite the national trend setters. Hey, you want to guess where all that PC crap that is everywhere originated? Yeah, that’s right, Berkeley California. Anyway, one of those ideas that has taken hold in communities around here is that the poor, trapped mobile home park residents need to be protected from the greedy, bloodsucking, Cadillac driving park owners by passing laws that force park owners to put any rent increases to a vote of the tenants. Ha, like that will ever happen – power to the people! Think that is an outlandish idea? Think it could never take hold in flyover country? Really? As landlords I think we have a special insight into how quickly things can deteriorate. While holding that thought in mind, let’s review some of the comments from Bloomberg article:“Welcome to the new Dickensonian America. There is a circle of hell reserved for these sociopath opportunists of the less fortunate.” “A NYT article published a few weeks before this one does a better job explaining how the tenant’s vulnerability is exploited”“The attitude of these guys is the same attitude the upper feudal classes had. Barons and dukes would do the same thing; burn the huts then raise the rents. Sad how we are just going right back to the Dark Ages. Super greed will always be man’s downfall.”“the smug and self-righteous attitude combines with aggressive white nativism”“Sound like white southern slave owners.”“Greed is why we are where we are today.”“There’s a lot of poor folks that these guys can screw over”“Making money off the poor.”“It’s like a little Fiefdom.”"Nouvelle yuppie hipsters making money off the poor and gloating about how cool they are. Privileged creeps."Do you feel the love? It’s all part of that 1% vs the 99% thing that you may have noticed is so popular these days. What self righteous demagogue wouldn’t love to grab an issue that engenders such outrage like this and make political hay with it. Even in flyover country. Let’s all go out there and gloat about our business model. But let’s keep the gloating to how much better off our residents are then those poor souls who are trapped in the endless monthly cycle of high priced apartment tenancy that keeps them from ever enjoying the economic and personal development benefits of home ownership. Remember; mobile homes in professionally managed (that means us) parks is the answer to the huge low income housing crises in this country. By talking up the advantages afforded the residents, I’ve been able to turn around the hardened attitudes of any number of people, who had nothing but disdain for mobile home parks and my ownership of them – even here in California.
Well said!Brandon@Sandell