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Visit us at www.mhps.com This issue of the MobileHomeParkStore.com and MHBay.com Newsletter includes:
The owner of this doublewide called my park managers and asked if we had space for a nice doublewide home. He said yes and we were glad to hear we had a home moving in. However, my manager drove by the house and here is a picture of the so-called nice doublewide. Anyone have a vacant space for it? Needless to say we are glad it never made it to our park.
SELLING THE LAND LEASE CONCEPT TO
POTENTIAL RESIDENTS For the third time in as many years, in conjunction with the annual Manufactured Housing Institute Congress in Las Vegas, the National Communities Council of MHI held a one-day forum for community management and operations. This year’s theme was “Maximizing Profitability in Parks and Communities”. Many tools to succeed, grow and prosper were presented. (For information and dates regarding next year’s Congress as well as other items of interest, see www.manufacturedhousing.org.) Community owners tend to believe that residents or prospective residents of parks and communities think about and understand the benefits of leasing rather than owning land. Many owners haven’t thought through the process of “Why does someone lease versus own land?”, and even fewer home sales people are equipped to competently explain the advantages and can make the case for leasing versus owning. Fact is, many sales people will end up agreeing with the prospective residents that it is better to own rather than lease land. Most sales people have never received any explanation or training as to why the land lease is an excellent concept. Joe Adams, PHC owner of the Housing Marketplace, Inc. gave an impressive and enlightening presentation on how to market, communicate and reinforce the advantages and benefits of leasing land versus owning. A little bit about Joe. During his career, Joe has been a manufacturer and retailer. As a retailer, he directed sales and marketing at 15 communities in Florida where sales of homes exceeded 180 per month. That is a lot of home sales by anyone’s standards! To learn more about Joe Adams and his sales training business go to: www.TheHousingMarketPlace.com or phone: 828-891-3911. To order the complete “Selling the Benefits of Leased Land” training program with slides and synchronized audio go to the website or call Joe. BASIC PREMISE Consumers today are worried about a great many things. For you in the community business, this means:
Understanding these premises is key to effectively making the case to the consumer for leasing land in a park or community. Community owners and managers are in the position of needing to be very proactive in addressing the consumers’ fears, especially their unspoken fears. In making the “sale” of the land lease or the home and land lease, the successful community operator will anticipate and prepare for what is on consumers’ minds. It is time for us to stop telling prospects what we want to talk about and anticipate and engage the prospect in a way that helps them make a good decision about housing. SHOPPERS FEARS What are consumers worried about today? Sadly, the list is long and includes everything from the economy with job layoffs, the weak American dollar, the sub-prime fallout and rising gas and food prices to the war, global warming and natural disasters. The Baby Boomers who are starting to retire worry that Social Security won’t be available to them and that their health care costs will spin out of control. Knowing that your customer is carrying a heavy load and preparing them with solid information regarding their home-buying decision is an important service. As they relate to the park or community, the consumers’ fears are that:
Maybe it’s time for us to think more about what the consumer is worried about and how our communities and homes will help make their life better. BELIEF THAT OWNING LAND IS RIGHT In this country we are acculturated from birth that it is better to own than to rent. As with many beliefs, we don’t always question or analyze them to see if they are right for us and our situation. That is why we in the community business need to present compelling information and logic if we expect the prospect to understand the benefits of leasing land. THE BENEFITS OF LEASED LAND So, how do you explain the benefits of leased land to the consumer? Joe offered the following insights: 1. Market leased land as a good investment. Financially you can make a sound case that by leasing rather than owning, the consumer is dollars ahead. There is no cash outlay for the land. 2. Sell the sense of security and control with leased land. 3. Favorably compare the costs of leasing the land versus owning. 4. Build value in the monthly rent. As you can see, it will take time and research to prepare the facts for a customer. And while Joe didn’t say it, you get the sense that we in the community business have been winging it for a long time. One of the highlights of Joe’s presentation was his use of customer/resident testimonials. Joe uses a wider range of advertising and marketing than the average business and most community owners don’t have unlimited ad dollars. But these testimonials work very effectively on community websites, direct mail, brochures, newsletters, etc. Resident quotes for sales and marketing:
“Why tie up my money in land when other investments could supplement my monthly income?” “I use the monthly cash from my investments to offset my living expenses.” “By having the cash, we have the freedom to invest where we want.”
“I cannot control the rate of return on land.” ”Owning the land offers no financial security unless we sell it or borrow against it.” Joe had some good ideas for obtaining testimonials, but he believes the best way is to have a third party tape a 10 to 15 minute conversation with a resident about the community, owning vs. leasing, etc. Maybe only one or two sentences will be used, but that is all that is needed for a testimonial. Be sure to have the customer’s prior permission for you to use anything said in the conversation for your marketing. USE CHARTS AND ILLUSTRATIONS As a park/community owner, you need to develop charts and illustrations demonstrating the customers’ savings by not investing in land but rather investing those same dollars into a CD or similar vehicle with compounding interest. Find the actual lot costs in your market and use average rates of return on investments like CDs. Design a Microsoft Excel (or similar) spreadsheet to enter various lot costs, interest rates and number of years to show the return on their money. Your customer needs to be well-armed with this information when he gets negative feedback from well-meaning friends, family and co-workers about moving into a park or community. Develop charts and illustrations to compare monthly living expenses and savings on leasing the land vs. owning. Include savings on making interest payments on the land, real estate taxes vs. personal property taxes, assessments to improve the land, utilities included in the site rent , lower utility bills of energy efficient manufactured homes. BE PREPARED WITH THE RIGHT QUESTIONS TO ENGAGE THE CONSUMER Examples: Why do so many people live on leased land? Are homes in leased land communities a good investment? What are some of the differences in leased land versus deeded land? Do homes hold their value in leased land communities? What services are included in the lease fee? Finally Joe reminds us that stating the services included in the monthly site rent is not the same as RELAYING THE BENEFITS. It has to be communicated in a way that the customer can clearly see what is in it for him. Remember - people rarely change their opinion about anything without an overabundance of information. Joanne M. Stevens – Park & Community Specialist 116 Third Street SE Direct 319-378-6786 Fax 319-365-9833
www.JoanneMStevens.com A specialist in consulting and brokering for mobile home parks and land lease communities throughout the U.S., Joanne’s experience in the Manufactured Housing Industry includes:
HOW TO SPOT CRIME IN A MOBILE HOME PARK By Frank Rolfe Unless you have spent time in law enforcement, there are certain signs of crime that you would never notice as a result of your sheltered existence. However, there are important crime signals that every park owner should know, but that nobody will tell you due to political correctness. So here they are: Shoes don’t grow on power lines. Have you ever noticed a pair of tennis shoes hanging from a power line? That is the universal sign for “drugs sold here”. When someone is wanting to buy drugs in the mobile home park, they look for the hanging tennis shoes. In really bad parks, you will see tennis shoes hanging from power lines on every street in the park. Real tears don’t have dark blue outlines. Have you ever seen a tenant with teardrop tattoos coming out of their eyes and going down their face? Those are jail-house tattoos, and every tear drop represents a family member who died while they were serving time in prison. A guy with ten teardrops means he was probably in jail for murder, since 10 family members died while he was in there. Or maybe he was in jail ten times and one family member died during each term. Any way you cut it, teardrop tattoos are bad news for tenant quality. You should be very wary around this type of clientele. Real tattoo parlors have some type of quality control. Have you seen folks with incredibly amateurish tattoos covering there entire backs, necks, arms and chests. These are jail-house tattoos. With nothing else to do, they give each other tattoos. Think the artwork is bad? Check out the verbage. They need to teach more grammar courses in jail. Tenants standing out in front of their homes are seldom admiring them. In parks with a lot of drug activity, you will see tenants milling about in the street in front of their homes. Sometimes, they will just be standing there with their hands in their pockets for hours. They are selling drugs to cars that pass by. Those weren’t star maps they were exchanging for cash. Those bright lights beaming out of the shed are not a Mickey Rooney drama production. Often, driving through a park at night, you will see very bright lights beaming out of the cracks around doors and windows (there’s aluminum foil over the windows). What’s that all about? It’s called a “grow-lab”. They grow marijuana in sheds (and sometimes homes) using lights so bright they replicate the sun. These homes will have incredibly high electric usage – and it’s not from the A/C. Nobody can be that popular. Do you have a tenant that has an endless line of cars driving to his house and then quickly leaving? No, he is not just a party animal – he’s dealing drugs. Real teeth don’t look like toothpicks. Have you ever met a tenant with teeth that look like little slivers? That’s a side effect of someone taking “crank”, a very strong, illegal drug. When you meet a tenant who has teeth that look like toothpicks, and is very fidgety, you have met a crank addict. That smell is not from cooking – not exactly, anyway. Have you ever encountered a really bad smell in a mobile home park, but you’re sure it’s not from a rotting body or a sewer leak? That may be the smell of a drug lab manufacturing meth. It has a nasty, burnt trash smell. Maybe I’m wrong – maybe they just burned the turkey while basting it in gasoline. With some tenants, the answer is “all of the above”. When you find a tenant or home has one of the above attributes, you will often notice that many more apply. You see the tennis shoes on the power line. Then later that day, you smell a terrible smell coming from the house, and notice the tenant hanging out in the street. He has tear-drop tattoos on his face, and lousy tattoos on his back. And when he smiles, you notice that his teeth look like jail bars. Yep, you’ve got a crime problem on your hands. Conclusion It’s not fair to profile people. But there are certain signs of past bad behavior, and current bad behavior, that you have to be vigilant over. When you experience some of the items mentioned above, it might just be coincidence. Or maybe they have served their time and are now respectable members of society. Or just maybe you are the landlord to the next John Dillinger. 5-23-08 5-22-08 5-22-08 5-14-08 5-7-08 (3 days after posting on the site) 5-7-08 5-5-08 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 Q&A with Dave Question:
Hi Guys
I have found a newer park about 7
years old 15 double wides.
Permits up to 60 pads all underground utilites.
Park sewer and water,
paved roads.
I am a residential appraiser and
am having trouble to determine the value of
the 45 permitted vacant sites.
Currant owner will not allow children and has
had a long illness.
I am very
interested to purchase the park but those vacant
pads are holding me back.
Do you have any words of wisdom
to this condition?
Thanks Dan Answer:
Dan, Question: Hi. I am currently looking to purchase
a mobile home park-anywhere from 2 trailers
to 50+. The
properties I have contacted so far say they'll do owner
financing. They will agree to a land contract with 20%
down. I have brought up a lease option but
none of them are
agreeing to it. I'd like to know whether I am approaching
the sellers the right way or if I just have to play the
odds-1 in a 100 say yes to l/o. I don't have
20% down
payment lying around at this point since I'm a newbie. Thank
You. Hannah Answer: Hannah, Question:
Sir,
i have read your article,
and i have a few concerns. My father
currently owns a mobile home park in Aiken
SC. it has 14 units all park owned, with
room for 17. he is getting older (although
he refuses to admit it) it is in dire need
of many repairs and perhaps replacement of
newer homes. What do you feel would be the
best way to go about making this a more
profitable way of making income producing
property for him. to the best of my
knowledge he still allows people to rent
from him on a "handshake" with no viable
lease. people are constantly taking
advantage of his kindness. he wont allow
section 8 tenants in, due to the fact that
he believes they will
ruin the homes. i tell
him they ruin them anyway at least section 8
will hold them accountable. he owes
approximately $90,000 on the land. with the
tenants paying approximately $365-375 per
month. any information would be greatly
appreciated.
best regards,
David
Answer:
David,
If this were my park, I would immediately sell the homes off to the renters thereby creating a lot rental park. They can continue paying rent until the home is paid in full. Then the residents will own the homes and pay lot rent only. If your father would do this and create a lot rent of somewhere in the $175 per month range he will be out of the repair business and the renters will be owners and would be more likely to take care of the homes and pay the rent. Creating more stability. Hope this helps. Dave Question: Hi Guys, Answer: Neville, Mobile Home Park Bootcamp "Immersion in Reality" With Dave Reynolds & Frank Rolfe June 20th, 21st, 22th. Denver, Colorado Less than 5 tickets left!
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Visit us at www.mhps.com or www.mhbay.com Until Next Time! Dave Reynolds |
October 22nd - 24th
Columbus, OH
