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HOW TO REALLY FILL YOUR VACANT LOTS
Written by Frank Rolfe and Dave
Reynolds, MobileHomeParkStore.com, LLC
I
can remember when a good, well-located community could fill seven or eight lots
per month with nothing more than some flyers at a manufactured home dealership.
To even say such things today dates you as someone from the dinosaur age. And
unless you’ve been in a cave, you know that you are lucky to fill one lot per
year in that manner today.
So how do you fill vacant
lots in your community? Well, a lot differently than you did in the past – and
it takes a whole lot more effort. But you’ll find that once you put your program
together, it will turn your life and spirits around to see new homes coming in
to those old, dusty lots.
If you have been reading
this magazine at all for the last seven or eight years, you are pretty familiar
with the industry “chattel crisis”. Basically, it was the sub-prime mess of
today, only fully focused on manufactured homes. People bought homes they could
not afford, and they went back to the lenders in record numbers. As a result,
lenders don’t do “easy” lending any more on manufactured homes, and the sales
have suffered enormously as a result. Dealers that were selling 10 or 20 houses
a month in 1998 are now lucky to sell 2 or3. And very few of those homes end up
in land lease communities – they almost always end up on private land. So to
fill your vacant lots, you have to forget about those dealerships filling you
up, and take control of your destiny yourself.
These are my ideas for
filling up your vacant lots in the real-world of today:
·
Become the #1 community for new home
dealers. Am I contradicting myself?
No, those dealerships do sell an occasional unit that goes into a land
lease community, so you can’t ignore them altogether. To get any fill rate from
these guys, you have to make sure that you have a 100% closing rate on any
inquiry for a lot. Make sure that you have flyers at every dealer, as well as an
attractive “move-in special” program to entice customers. And call each sales
manager or salesman periodically to let them know you really want their
business.
·
See if those same dealers would want
to move some inventory into your community and sell it on location.
When I went to buy my stick-built house, I choose a location I wanted, and then
inspected the available inventory for sale on MLS. Why shouldn’t manufactured
home buyers do the same thing? Instead of having some used or new inventory
gathering dust on the sales lot, see if the dealership would have any interest
siting a couple units in your community and advertise them as a “location sale”.
That’s how every other form of housing is sold. We convinced a dealer in
Oklahoma to try it, and he sold six units in this first year! You will probably
have to give the dealer free lot rent until the unit is sold – that’s a small
price to pay.
·
Locate those individuals who like to
buy and sell or rent manufactured homes, and see if they will bring in inventory
to your community. Sometimes
referred to as “Lonnie deals”, named after Lonnie Scruggs who wrote the book
“Deals on Wheels”, these are transactions where someone purchases a manufactured
home and then re-sells it or rents it for a profit. Many of these homes begin
life in the older inventory section of a dealer, or on private land, and are
then initially moved into a community. Make sure that your community is where
they go. You can find these “Lonnie” individuals by driving through other
communities looking for “For Sale” or “For Rent” signs that share the same phone
number, or by asking the local dealers and home movers. We have one individual
who has brought in about 40 homes to date under this system. Again, you will
have to give the “Lonnie” individual free rent until it sells. Big deal.
·
Bring in homes yourself, and then
rent or sell them. It’s not that
difficult. You buy them from a dealer, or from a broker, or even new from a
manufacturer. You then either sell them or rent them once they are set up in
your community. Two things to watch out for in this scenario 1) you must get a
dealer’s license in most states and 2) it takes a lot of capital. Just bringing
the home in, setting it up, and skirting it can cost about $3,000.
·
Convince residents from competing
communities to move over to yours.
I’ve left this idea for last, since it causes hard-feelings between community
owners (and rightfully so!), and can cause a dangerous catch-22 situation where
community owners are constantly trying to steal each other’s customers. There
are two times in which I have used this system, and both were special situations
that were not quite as bad as just going after the other guy’s tenants. The
first is when a competing property is being closed down for new development. In
those events, the minute you hear about it, go to the community that is being
shut down and tell the manager or owner that you want all of his customers and
are willing to pay for the whole move, or part of the move, just to get their
business. I once scored 35 homes out of a community closing for the development
of Home Depot using this very approach. Normally, the owner of the community
that is closing is more than happy to have an option to send his folks. The
other time that it is proper to consider trying to obtain customers en masse is
when there is a community that is truly doing a terrible job, and the residents
want out badly. The reasons can be numerous – frequent water or sewer outages,
poor management, a location that has become unsafe, the list is endless. You
normally find out about such an opportunity when several tenants come to your
property suddenly, wanting to move over. In those cases, I tell folks to tell
all their friends that we would be happy to take them, or even send a flyer
letting people know that if they want to move their home, we would love to have
them. You can sometimes pick up 10 or 20 new residents by doing this.
Until industry sales
improve, these proactive steps are essential for filling your vacancies, and
getting your community on a strong financial footing. Don’t wait by the phone
for a dealer to call – put this plan into motion today!
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