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This issue of the MobileHomeParkStore.com and MHBay.com Newsletter includes:

1. MobileHomeParkStore.com $1,000.00 Reward
    

2. How to Prepare your Mobile Home Park for a Recession
    

3. How to Accept and Love your Mobile Home Park Utilities
    

4. Mobile Home Park Bootcamp in September
    

5. Comments
    

6. Questions and Answers with Dave
    

7. Tell us what you think and send us your articles!

MOBILEHOMEPARKSTORE.COM OFFERS A $1,000 REWARD

TO ANYONE WHO CAN PROVE THEY MADE $1,000,000 THROUGH BUYING AND SELLING USED MOBILE HOMES


MobileHomeParkStore.com has offered $1,000 to anyone who can prove that they made $1,000,000 through the process of buying and selling used mobile homes in other peoples mobile home parks.

“Our intention” says Dave Reynolds, founder and owner of MobileHomeParkStore.com, “is to point out to individuals that the reality is low returns and a lot of work and headaches with used mobile homes in other people's parks. The real money in the mobile home industry is in ownership of mobile home parks – not mobile homes”.

Reynolds says that he cannot make the same offer for mobile home park owners, since there are hundreds of immediate winners.

“I don’t really expect anyone to claim the reward, since I don’t think anyone has ever come close to making a significant amount of money buying and selling used mobile homes. I think people get interested in the idea because of its low entry level cost – at least on paper. However, the real cost of buying and remodeling even a few used mobile homes is comparable to what you would need for the down payment for a real mobile home park, which can make you many, many times more money” says Reynolds. “Buying and selling used mobile homes is like building model airplanes, as compared to owning mobile home parks, which is like owning and flying real airplanes. Why do a cheap imitation when the real money is in the real thing?”

Reynolds says he may increase the reward over time, just to hammer home his point. Is he worried about someone stepping forward? “I actually would welcome it, because I myself am actually curious if such an individual actually exists – or if it is more like Bigfoot”.

HOW TO PREPARE YOUR MOBILE HOME PARK FOR THE COMING U.S. RECESSION

Unless you’re George Bush, you probably already realize that we are heading into a national recession. And if you agree that we are heading into economic trouble, then it is worth your while to make preparations to survive – and prosper – during this cycle. It’s important to remember that it takes time to make adjustments in your business plan, so you should start making these changes immediately.

Focus on Affordable Housing

The universal desire during a recession is to keep costs low. Consumers are looking to find the cheapest housing they can. Instead of focusing on bringing in newer homes that look nicer in your park, instead concentrate on older, uglier ones that can be sold or rented cheaply. Remember that old, ugly houses have no monthly mortgage payments – and that means that your customer only has to pay lot rent to survive. You will have a more solid, bill-paying tenant base with older, paid-for homes.

Be Tougher Than Ever on Collections

When money is tight, your tenants have to pick and choose which bills to pay. You must never let them think that the rent can be delayed or missed. You must keep the big club of eviction dangling over their heads at all times. Never miss a beat on getting out your demand notices and filing evictions. And keep pressing with writs of execution – don’t delay because you are worried about losing tenants during a recession. These folks are not going anywhere. They can’t afford to move their homes but they can afford to pay your lot rent. At minimum wage, you can still afford the average mobile home lot rent of $200 per month or so. So be relentless and keep your tenants’ priorities straight.

Keep Raising Rent Annually

Some park owners make the mistake of delaying or eliminating the annual lot rent increase during recessions. The problem is that you still need that annual increase to cover the increased costs of running the park, plus ever greater cash flow to meet your budget and reward you for taking the risk of buying a park. There is no way that a tenant is going to be pushed over the edge by a rent increase of $10 to $20 per month. However, if you do not keep the rent escalating, you may soon find that you are losing your battle and having reduced net income annually. If you do not raise the rent a little every year, you will have to make a huge jump down the road, and that will be much more offensive to your tenants.

Cut Costs

Question every bill you pay. Do you really need that extra phone line? Can you mow the grass every two weeks instead of weekly? Never write a check without thinking of at least three different methods to cut that cost. Often , such as the power bill, there is not much you can do to about it. However, a lot of times, you do have some discretionary control over what you spend, especially in repair and park maintenance categories, as well as administrative and office costs. Although you do not want to live you life that way, it does not hurt to role-play the penny-pinching miser out of a Dickens novel. By focusing on cost control, you will spread that gospel throughout your organization.

Approach Loan Renewals Well In Advance

One of the big hurdles of a recession is the sudden disappearance of the usual banks and other lenders. In a world in which Indymac can fail, why not your lender, too? In that type of environment, you need to allow yourself extra time to line up a loan. If your current loan expires in two years, you might want to attack that problem starting now. It might take you two months to get our loan package perfected, another two months to find the right lender, and four to six months to put the deal together. So what’s the other year for? Just in case that lender falls apart right before closing, and you have to start all over again. I would much rather pay a slight pre-payment penalty on my existing loan from starting early, rather than be unable to find a replacement loan and end up in foreclosure.

Never Pre-pay For Anything

You have to look at all other businesses that you do business with very cautiously. In a recession, anything can happen. Businesses that have been around for decades can suddenly disappear overnight. So never pay for any project until it has been completed. I have actually had cases, during recessions, where the contractor disappeared in the middle, or even the end, of a job. One time, I had a guy build a brick and stone entry to a park – really fancy – and he disappeared when the project was 95% complete. We never saw him again. Prior to running off, he had wanted me to pre-pay him for the project, but I had refused to pay him until it was done. By refusing to pay until completion, I ended up with a virtually free, fancy entry. So where did the guy go? I have no idea. Maybe he ran off because he owed so many people money.

Be More Aggressive on the Acquisitions Side

Some of the best mobile home park buys in history have been made during recessions. That is the exact time when all of the planets come into alignment to make the ideal buy. So start watching and listening for real distress mobile home park deals. You may see pricing that you never dreamed you would see. And that is why it is more important than ever to keep yourself out of trouble, so that you can reap the rewards that only a recession can bring.

Conclusion

Recessions are terrible things. However, once you get used to them, they are like a big rain storm. You want to make sure that you have a big umbrella when they hit, and make sure you don’t step in a big puddle. But when they’re over, everything is cleaner and smells better, and if you have put yourself in the proper position, you may end up with some great parks you bought for a penny on the dollar.
 

Mobile Home Park Due Diligence Manual - Every Park Investor should Have a Copy!

HOW TO ACCEPT – AND LOVE – YOUR MOBILE HOME PARK UTILITIES

When you first buy a mobile home park, you are a little terrified of your water and sewer system. “What if it breaks down?” you worry. “Can I afford to fix it?”. “Will my tenants get mad and leave if the water goes out for a couple days?”.

One of the key things to remember is that each mobile home park’s utilities has its own personality. Just like people, all utility systems have their own strengths and weaknesses. The key to living with your utility system is to recognize it’s unique “personality” and to accept it for what it is. Here are a few of the different utility systems and their typical strengths and weaknesses:

Metal Water Lines

Burying metal in the ground is not a great idea. Metal rusts. So metal water lines are a time-delayed disaster. But how much time do you have? In some cases, a whole lot. I have seen metal water lines that have virtually no corrosion despite the fact that they’re 50 years old. If you think about it, virtually all the water lines you can think of (unless you live in a brand new subdivision in a town that was entirely built in the 1990s) are made of metal. And everything seems to be O.K. Sure PVC is better, but metal can be just fine. And there’s nothing you can do about it. Can I sleep at night with metal lines? You bet I can. I have had little trouble with all my metal lines, and I can definitely be proud of them with all their faults.

PVC Water Lines

If you have PVC water lines, you are a very, very fortunate person. There are very few parks out there that have them. They are the best. Nothing else can compete with them. Before you get too excited, make sure that the whole system is PVC. A lot of times, the park owner has retrofitted PVC onto metal lines where they come out of the ground. To have a PVC system, it has to be 100% PVC – below and above the ground.

Clay Tile Sewer

This was the standard design from about 1900 to the 1970s. Most of what you see out there is clay tile. It’s basically sewer pipe that is ceramic – it looks like pipe made out of the same stuff as the flower pots at the fancy nursery. And it is really a pretty good system. I have had many clay tile sewer systems, and I was not worried about them when I went to sleep each night. The biggest weakness with clay tile is tree roots. The clay tile pipe does not fit together so tightly that tree roots can’t find a way to get into such a terrific water source. So when you have clay tile, you will be doing a lot of rooter roto repair calls. But that’s a manageable expense. The other weakness with clay tile is its inability to survive jetting of the lines. When you “jet” a line, you spray extremely high pressured water down the sewer lines to push any debris into the city main line. The high pressure spray can often cause a cracked pipe to cave in. When we discontinued jetting our clay tile lines, we had no further cave-ins.

Cast Iron Sewer Line

These are very rare systems. Of course, they are easy to work with. They don’t cave in. They can deteriorate over time, theoretically, but I’ve never actually seen that happen. We’ve only had one of these systems, and the only fault it had was a series of “bellies”, where the flow was slightly uphill in places to it would not drain properly. You would never lose sleep over a cast iron system.

Thin-Walled Plastic Sewer Line

This is the bad boy of the sewer pipe world. This is the crazy, undependable cousin of real utility lines. This junk will cave in all the time – sometimes in 50 foot segments. Having this type of sewer system is like inviting a mass murderer over as a house sitter. It might be O.K. or it might be a catastrophe. It’s like the crazy gun slinger in a spaghetti western who might shoot you or smile at you. Living with that type of uncertainty will drive any sane person nuts. The only thing you can do with this type of system is “tough love”—if it can’t work properly, then replace it. And make sure you budget for this eventuality when you buy the park. If I was looking at a park built with this junk, I wouldn’t touch it unless I could re-pipe the entire park into PVC, and still have a great return on investment. And that’s probably where you are going to end up, either replacing the system at one time or in sections over time. I can’t sleep well with this stuff.

PVC Sewer Line

This is the Cadillac of the industry. It is, if properly installed, flawless. Whoever invented this stuff was a genius. I can think of no weakness with PVC. If you have a full PVC sewer system, then you are very lucky indeed.

Conclusion

Like people, water and sewer systems come in all types of shapes and sizes. But that does not mean that certain types are to be avoided or discriminated against. It is possible to accept the type you have, and be happy with it. You just have to understand the character flaws, and work around them.

Mobile Home Park Bootcamp - Don't Miss your Spot at our September Bootcamp. 

Comments from our 1st Bootcamp - June 20, 2008

Dave and Frank,

We wanted to drop you a note thanking you again for an outstanding Boot Camp. Given the high-quality of your other materials, we had very high expectations for the course, and you greatly exceeded our expectations. It was obvious that you had invested an immense amount of time preparing for the course, and the selection of topics and quality of the materials, which were filled with much new information, was outstanding. At the start of the course, you mentioned that you both operate this business by the “golden rule”, only selling products that you would buy yourself. We feel that you have easily achieved this goal. Thanks again

Again, we have been so impressed and grateful for the quality of your information and your generosity. It is not surprising to us that you both have been so successful in your business endeavors. If there is anything that we can do for you (e.g., act as a references), please do not hesitate to ask.

Thanks again for a great seminar,

Steve and Rebecca

Hi you guys! We wanted to thank you so much for all the effort and planning that you put into the bootcamp this weekend. You gave us so much "real" information that we can put to use immediately, as well as tons of things to file away for the future. We have been working on reading all the great books that were included with the bootcamp and find them to be packed full of information PLUS so much fun to read after meeting you both!

THANKS AGAIN FOR EVERYTHING!

Patrice A.

Hi Dave,

I just wanted to thank you again for the awesome time at the bootcamp! I originally read Deals on Wheels and thought that was my ticket to a new life so I spent the last six months working on my dealers license. I have almost read all of your materials and I would say they are the best out there.

Thanks Again
Tim L.

Dave,

I just wanted to send you a quick note to say thank you so much for the excellent MHP Bootcamp! I think that you guys did a phenomenal job, and it was far above and beyond anything that could have been expected- thank you very much!

Again, thank you so much. I think the weekend completely OVERdelivered and I was so impressed – thank you!

Jamie S.

Hi Dave

I like to say thank you & Frank for all you did. It was very good and I appreciate every bit of it. The extra material on top of all material we had gotten before was very nice of you. I wish you and your familly best of luck. Again thank you very much.

Jeff Z.

Dave:

The bootcamp was outstanding! I couldn’t think of how to improve it. I have no complaints whatsoever. The weekend gave me the confidence to go forward and I know when I find the right opportunity I will be ready to pull the trigger.

Doug P.

Dave & Frank,

The event last weekend was terrific in all respects. I was able to see and hear various experiences and the consequences. It provided me with clarity about past mistakes (rental homes) and how best to plan for the future.

I know you were concerned about staying on schedule with the book material. To me there was actually two seminars - one in Denver and the other when I get home to re-read the material. I have never paid $3k for a class yet felt that it was an excellent value. In addition, both of you speaking simultaneously was a very dynamic format.

Jim B.

Dave and Frank,

I wanted to personally thank you for the excellent job you did on your first bootcamp.

Having attended and organized similar events, I can say without a doubt that you did your homework by going above and beyond what was expected of the attendees.

From the materials, which included cds, handouts, spreadsheets, forms, guest speakers, binders to writing equipment, you did a first-class job. Even the vans were new! The fact that great meals were included was also impressive.

Doug M.

Are you a manufactured home owner or community owner with homes or lots for sale or rent?

If so, then you can list your new and used mobile homes for sale or rent and lots for sale or rent for FREE at MHBay.com