The distance between my house and my first manufactured home community was only 15 minutes of drive time. Even worse, I decided to office out of that property for the first year, to learn the business first-hand. What a colossal mistake that was! What I learned from being that close to my community was that perhaps the best thing when you own a property is to be 1,000 miles away from it, or farther. Why?
Contrary to what you may try to convince yourself, your physical presence at the manufactured home community you purchased has absolutely no value-add. This is not that type of business. Sure, the owner of the Italian restaurant you enjoy so much goes table-to-table to make sure that every diner is 100% happy, and it wouldn’t be the same without him. He gets there at 5 AM to make sure the freshest food is purchased, oversees that the sauces are perfect, makes sure the waiters are dressed impeccably, and then watches for any problems until closing time. But you have no such contribution. You rent land to the resident, and make sure the common areas are mowed and the utilities working. That business model does not need you to help out. The sooner you acknowledge your lack of importance, the better.
Familiarity breeds contempt
When the owner hangs around the property too much, the typical end result is that many residents hit them up for personal loans, or to let them not fully obey the rules. And many owners, given that pressure from near-professional systems users, will give in. That gets communicated throughout the property and next thing you know nobody is paying rent on time or following minimum standards. Unless you can say “no” without a second thought, and stay aloof from your residents’ constant attempts to loop your into their woes, then it’s best you stay 1,000 miles away.
Too much attention to meaningless items
In my first community, I was there every day from 9 to 5. After a couple weeks, I was completely bored. So I started overthinking everything that I did. I decided the laundry buildings would look better if they were painted green and not tan.
As a result I painted them. Then I decided I didn’t like that particular shade of green, so I had them re-painted again. Did
anyone care? Not in the least. The residents were perfectly happy when the buildings were tan, and thought I lost my mind when I changed the green out that second time – and they were right.
Greater focus on the systems
When you are 1,000 miles away, you have to focus on working your systems. And that’s what is really important for your success. Any owner would be better off focusing simply on the five gauges of the successful owner’s dashboard – collections, occupancy, property condition, water usage, and budget/actual/difference – rather than the trivial items that fog your visibility when you’re too close to the property. With no distractions, you can really give quality time to your property from 1,000 miles away, while the owner that lives nearby often gets too distracted and that only hurts the returns.
The quality of the deal is far more important the geographic proximity
This is one of the biggest reasons why you are best off being 1,000 miles away from your property: it allows you to cast a
bigger net. Setting the requirement that you will only buy a manufactured home community that is near your home is extremely limiting. As a result, you’ll miss out on a ton of better opportunities that are farther away. Any owner is better off with
a community that has a great location, strong infrastructure and good economics that is 1,000 miles away rather than one that is lacking in these areas but is located 15 minutes away. Finding the right property is a volume business, and you simply get more volume of deals to look at when you draw a circle 1,000 miles from your home versus one that’s only 10.
It’s actually easier to succeed with a manufactured home community that is 1,000 miles away than one that is close to home. Being physically separated requires you to focus on the key profit drivers and allows you to avoid petty distractions. And when you throw in the fact that you can cast a much bigger net in finding that perfect property, the evidence is overwhelming that distance and success are not correlated.
Frank Rolfe has been a manufactured home community owner for almost two decades, and currently ranks as part of the 5th largest community owner in the United States, with more than 23,000 lots in 28 states in the Great Plains and Midwest. His books and courses on community acquisitions and management are the top-selling ones in the industry. To learn more about Frank’s views on the manufactured home community industry visit www.MobileHomeUniversity.com. This article originally appeared in the Manufactured Housing Review, subscribe for free here.