What day job transitions best into MHP operations and management?

I recently purchased my first park in Alabama and I am loving it. It’s 100% occupied and I’ve only had issues with 2 tenants out of 40. I feel like I’m basically just cashing checks and that’s one of the reasons I went with this park. Anyways, I currently work as a financial advisor for a major firm but I would like to look at some jobs that would translate best into experience for MHP ownership. I plan to buy at least 3 parks over the next 5 years and once that is done I won’t need a day job, but in the mean time I would like to spend my 40 hours a week doing something relevant to what I plan to do for the next 10+ years. Any suggestions would be much appreciated.

Thanks,

Dominic

I don’t understand your question.

You’ll have a phd in park management soon enough without quitting your day job.

Maybe become a handyman?

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To put it in more simple terms, if I wanted to becoming a better MHP operator, would it be better to work as a court stenographer or a commercial real estate appraiser? One job would put me in an occupation where I’m constantly honing my relative business acumen and the other would have almost no carry over.

I’m new to the business and asking if anyone has ideas for occupations that are relevant to MHP ownership.

Do what you love to do…isn’t that why you are investing in parks in the first place? for the freedom the additional income provides?

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Just a thought for you…

There are plenty of poorly run parks out there. You could try mailing some park owners providing a turnkey management service, including the backoffice items. When you get bigger hire a VA to do the monotonous stuff and you review their work and crank out the complicated problems. Maybe if you meet certain performance criteria (that the park owner will think is never achievable at the time) it triggers an option to purchase the park? :wink:

You have a great story that you have a full park that is well run, and can use that to find clients and potentially expand your portfolio if that’s how you want to spend your time. It won’t be as easy as I describe but would be a great way to learn how to polish some turds and hone your skills at the same time.

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@jhutson

Thanks for the response. This is definitely what I was looking for and I appreciate the outside the box thinking. I am going to look into this further.

It takes years to become an appraiser. You couldn’t just start tomorrow.

Get a job as a Septic Tank Pumper!

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@Unclebob9

That only gives you a shot at the private utilities! Paving contractor is better. I know Frank mentions that as a lead. Since I’ve started , i have actually come across two paving contractors who were also park owners so there is some truth to it!

I think if you are a hard worker , you have a passion for something, can learn, and half way smart ( and if not - work with someone smart :slight_smile: ) Then you can pretty much succeed with everything !

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I don’t get it. You’re going to quit doing the job that makes you the capital to invest in parks? This is not rocket science @dominic730. I would say a theoretical grounding in the arguments for and against modern portfolio theory will prepare you for this - which you may already have. MPT vs behavioral finance is a debate worth becoming literate about - but since you are up for buying more parks it sounds like you’ve made your decision.

As for the dirty side of things - learning all you can about construction/plumbing/electrical will help as you go on so that you can have a literate conversation with your tradesmen.

Finally, some basic financial modeling skills are helpful because parks have a somewhat complex capital structure - with several different discounted cash flows to build out to arrive at an NPV you can use to compare one park to another when in the buy phase.

Negotiation skills are useful anywhere in life but especially in parks during the purchase, operations and disposition phases. Negotiation with sellers, tenants, tradesmen, buyers, employees.

Love of reading helps - consuming all the info you can from great sources like Frank and other industry leaders who enjoy teaching.

A love of organization is helpful if you intend to do turnaround parks and manage a lot of rehab/remodel projects. There are software tools now built for these tasks such as buildertrend.

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@Ivan_ilych to put things into better context, I have no equity in my day job. Yes I can earn great cash flow from my position, but once I leave this company I will not be getting a large check like I would from selling a park. I believe that I can make more money in the MHP ownership realm and I am basing that on the numbers from owning just one park. I don’t want to give up this cash flow, I want to trade it for something that will help me become more successful in 10 years, not just give me basic financial modeling skills.

Also, I ran the numbers on how much in assets I would have to bring in for my job to equal what I am making from my park and it’s not even close. I would have to bring in about $41 million dollars in annuitized assets to equal what I make from my park. It would take most advisors at least a couple of years to bring in that number if ever at all and I did it in about 4 months of work towards my MHP. You’re right, it’s not rocket science.

I am very curious about this calculation. How did you “run the numbers?”

And, while I’m at it, if you are “serious” about what should you do to best prepare yourself for MHP ownership, I would suggest construction.

Much of the promotion in this industry neglects the fact that, over time, you will have to rebuild your park piece by piece. How much does a MHP cost to build? You should know and know how to do it, so you can supervise your most important maintenance & repair – the infrastructure.

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No problem Brandon:

  1. I split everything that I bring in with my team 50/50: $41,000,000/2 = $20,500,000

  2. I assumed a 1% annual fee (industry standard): $20,500,000 x 0.01 = $205,000

  3. I get paid on what’s called a “grid rate” which is 38% of the fee based revenue: $205,000 x 0.38 = $77,900 annual (gross).

That’s almost exactly what I make from the park (gross). That’s not an insane amount of money by any means, I just wanted to illustrate that the opportunity cost of putting so much time into my finance career isn’t really worth it based on these numbers.

I appreciate the advice on construction and can see how that would be relevant.

Sorry I wasn’t clear - I did not mean to ask why you would want to own assets vs work as someone’s employee for a living. What I meant was - why do you want to switch jobs if being a financial advisor is doing well for you? Being a stenographer or appraiser will also eat your time just like your current job. So if you need to keep bringing in cash to pay your personal bills or to save money for more parks (which it sounds like you do, otherwise you wouldn’t be asking us if you should become a stenographer) - why not just keep doing the same day job you are already doing, while you keep saving up money for more parks and running what you have?

I got it. I don’t necessarily want to do something else. I really just wanted to see if there were any options where I could spend my time more constructively and still make a decent living. No, I wouldn’t give up this job to be an appraiser. In all likelihood I will continue with this until I have enough parks to wean myself off of working for someone else.

Like the guys above said, running a MHP is not that hard. Most of it is just common sense. Steel City David said it best; soon you will have a PhD in it. For your day job, do whatever you can that will bring in the most money as long as you can. Also, keep your living expense in check as long as you can; build up your war chest, for the day will come when you understand the value of having a large reserve account – some day a hard rain is go’n a fall. Ivan talked about the dirty side. If you are not up to speed on that, I recommend you go to Lowes and Home Depot and buy their big, richly illustrated books on how to do things and make them your reading material for awhile. Take a basic class on bookkeeping.

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@Randy_CA

Thanks for the advice. I’ll go to Home Depot and check that book out. As far as bookkeeping, I have QB Online and that is ridiculously easy to use.