Transitioning to remote management

We have a 42 unit park that is currently owner managed. Of those 42 units 15 units are Park Owned with the majority of those tenants here for 10+ years, the other 27 spots are occupied by tenant owned homes.

We’re looking to bring in either a manager or management company to handle the day to day operation.

I’m curious as to what issues or concerns people have had going in this direction. Also at what point is it more appropriate to look for a greeter as opposed to an on site manager?

What’s the typical cost for a manager or management company

Is it necessary for some one to live on site or is being in town enough coverage

Do you get better results going with an individual or a realtor that also property manages?

Regards,

-John

On a typical 42 lot park, we would pay around $500 per month cash and free lot rent. We would hire the greeter/manager from within the current park population (probably the nicest house with the nicest car and yard). We would use the greeter/manager to help bug people on collections, possibly make the bank deposits of the checks and money orders, show any vacant homes, give some feedback on home re-,modelling, and just act as your eyes and ears in the field. We would pay all bills, do all financial statements, handle any significant issue from our remote office.

Management companies (particularly the type that are simply in charge of managing the manager from a remote location) are a zero value add. They will only screw things up. Do that task yourself. We have every greeter/manager send in a report every Friday we call the “Friday Fax” and it details who moved in, moved out, and other similar data. We take a quick look every Friday and, normally, there’s nothing to discuss. We have literally gone months in a park that small without physically talking to the manager, as long as they are doing great on their duties. We will go out and drive the park every six months or so, on a park of this size and with so few park-owned homes.

Where a 42 space park becomes a disaster – as far as time – is when you start making payment plans, loan tenants money, get to know them personally, etc. If you simply rent land, enact no pay/no stay, strictly enforce the rules, and avoid all unnecessary contact with tenants (what’s there to discuss?) then you can manage that whole park, by yourself, in a few hours per month. The park owners who come to us with their life in shambles are invariably dating tenants, hanging out with tenants, lending money to tenants every month, etc. A well run park, with decent systems, will make your 42 space park the most boring – and easiest – business in the world.

I am dealing with the same situation in which I have written about recently. This park has 30 spaces with 0 POH’s, but a local resident in town owns 3 homes in the park which I can’t decide if it is a good thing or bad - and wondering how to handle. There are 3 vacant spaces. The local resident pays lot rent but I am wondering how it will go when lot rent is raised. The current owner has a lease for each home in the park but I assume there are no provisions keeping the homes in the park. And, I need a greater and a system to get the tenants to send lot rent to a new address while implementing a lot rent increase. Timing is the question. All at once when you buy it and send the new address letter to tenants or baby steps?

Regards,

Vasque

You need to do all of these things at the same time. You need to send the tenants a new lease and rules, and enact your higher lot rent at the same time, and inform them of the P.O. Box to mail rent to. As for the guy with three homes, he will pay around $3,000 to $5,000 to move and re-set up each home, so it’s not like he was a ton of bargaining power. If he moves them, he moves them, and you’ll have to adapt to it by bringing in a few homes yourself. But you can’t live in fear of what the guy might do – then he has you trapped.

Excellent points. Exactly what I needed to know about making the changes in one move. There doesn’t seem to be a reason to attempt to acquire the investor homes while the lot rent is being paid. Although if purchased at a bargain they could be resold on terms to maximize profits and cash flow? However that adds many more variables and work to the equation while currently there are no POHs and all I have to worry about is lot rent.

Thank you,

Vasque

Mobile home parks are at their best if you own none of the homes in the park. When the tenant owns their own home, they become a “stakeholder” in the business, and have a vested interest to keep the park in good order. Fight to stay out of the home business if you can. But if you can’t, it’s O.K. because the demand for affordable housing is gigantic and you can easily sell or rent virtually anything that is “shelter”. But if you have to get in the home business, then by all means work to make the tenant a homeowner as fast as you can, so that they become a “stakeholder” in that park.

When acquiring a park, new rules and a lot rent lease will be mailed to each tenant. What is the length or term of the lot rent lease usually proposed? 1 year seems like a lot of additional work to have new agreements signed on a yearly basis. Obviously the longer the better. What has been the lucky number or formula? 30 day might even benefit the owner rather than the tenant having a long term lease if they are a problem.

Regards,

Vasque

Every state has rules on how long a lease must be offered to the tenant. However, in most states, the tenant is not required to sign more than a 30 day lease unless they request a longer term – which virtually none of them ever do. So first consult your state manufactured housing association and see what the laws are. But if you have the option – and you do most of the time – keep your leases at month-to-month. The tenant cannot move out because it costs about $5,000 to move a home, not because of the lease length. However, as landlord, month-to-month leases give you the right to raise rents when you want to, as well as to non-renew the lease of undesirable tenants. It is the industry norm.

Exactly my thoughts, I am in Oklahoma which it sounds like you have some experience. Thank you again.

I only have one park so it’s fairly easy to manage.

I have worked out a system where my tenants MUST send or hand carry their rent (checks and MO’s only) to a mail box rental like the UPS Store. That way the checks and mail can be forwarded to me if I’m out of town. I make all deposits.

My Park Manager handles only rudimentary day to day duties and is my eyes and ears. They are under orders to not accept any checks except at move-in or if the tenant has received a 3-Day Notice. ALL legal documents originate with me and are emailed to the Manager as a PDF. Virtually every document we use is digital. If the Manager receives paper documents they are scanned and emailed to me as PDFs. The only time we use snail mail is for wet signed documents.

I have an e-Fax account setup with voice and fax. The park phone is forwarded to this number. The voice greeting includes an emergency number just in case. All voice messages and faxes are forwarded by e-Fax to the Manager and myself as MP3 or PDF email attachments. All can be retrieved by Smart Phone or Tablet.

Utility readings are emailed to me by the Manager and I in turn send them to our local utility (PG&E) for calculation. They email me the tenant bills back as PDFs. I send them to the Manager and they pass them out.

I have found that by doing it this way very little happens around the park that I don’t know about. By relying heavily on email I can put photos, voice messages, faxes and emails in digital folders. They are ALL saved for future reference and can be e-mailed to our attorney or accountant as necessary.

Of course there is more to it, but this is the system I wound up with. I’ve been very happy with it and have had three different Managers that have worked with it over the years. Whether I’m in town or not we handle it just the same.

Just to give you another perspective.

This is the law in California.

798.18 LENGTH OF AGREEMENT; COMPARABLE MONTHLY TERMS

(a) A homeowner shall be offered a rental agreement for (1) a term of 12 months, or (2) a

lesser period as the homeowner may request, or (3) a longer period as mutually agreed

upon by both the homeowner and management.

(b) No agreement shall contain any terms or conditions with respect to charges for rent,

utilities, or incidental reasonable service charges that would be different during the first 12

months of the rental agreement from the corresponding terms or conditions that would be

offered to the homeowners on a month-to-month basis.

© No rental agreement for a term of 12 months or less shall include any provision which

authorizes automatic extension or renewal of, or automatically extends or renews, the rental

agreement beyond the initial term for a term longer than 12 months at the sole option of

either the management or the homeowner.

Good luck.

Vasque -

We always install a rent box on-site. It is more convenient for tenants, and there is no ‘check is in the mail’ story. That way we also do not have to pay for a PO Box. The rent boxes generally cost around $500 to install. We get payback of $30+/month for not having to pay for a PO Box, we get paid the rent quicker, and tenants do not have to pay for postage for their rent checks. It is the ultimate win/win.

Thanks,

-jl-

John -

Purchase Frank & Dave’s books if you’ve not done so already. But the rule of thumb is to pay a manager $10/month for every ROH, and $15/month for every POH. Plus free lot rent. Plus $10/lot if the manager has to mow.

As far as manager vs. greeter, we always hire the most technologically savvy person we can find in the park (provided they have the other qualities - nice home, nice car, responsible). We provide our managers with pre-printed deposit slips and envelopes so they can mail all rent checks. Our bookkeeper has read-only access to the bank accounts so the bookkeeper flags any discrepancies. With FaceTime and Skype, it’s like being there yourself.

-jl-