Wednesday, March 10, 2010

Park Difficulties

Lately, I've been screening buyers for a mobile home that was recently purchased 2 weeks ago. Finally, I found a good family to work with - we are going through the application process right now. (When it comes to screening buyers, my philosophy is quality over quantity).

Usually, there are 2 steps for potential buyers to complete when working with me for a future mobile home (aka Lonnie Deal). They have to go through both my application process as well as the park's.

If there is an application fee for the park, sometimes the buyers would like to know if they've passed my application process first before they apply and submit an application fee to the park. I understand their position completely, so I do work my application first (if requested) and if they pass they submit theirs to the park. So, there are 2 different screening processes.

(Note: A fellow investor told me I'm that doing double work as the parks do their own screening. But, I have learned that I need to do my own due diligence and not depend on the park when screening buyers. Yes, it takes an extra step and more paperwork but at least I will have the confidence to know that I have screened the buyers myself).

Well, I received the application and required paperwork from the potential buyers. I went ahead and started to verify all the information today. Surprisingly, I got a very fast response back from the buyers' employer today who confirmed and supplied all the information I needed in terms of work information and income. (Usually, when I contact the employer to do the employment verification for the job it takes a couple days).

So, everything looked good and verified for the work and income information. Now, I just needed to confirm their rental payment history.

In this case, the potential buyers were living in another park (not too far away) and had their home paid off free and clear - their expense was only lot rent. They wanted to move out of the current park they were living in into this park - they had been looking for a long time for a mobile home in this park.

Their plan was to give the home to a relative and/or sell it for a quick sale. (Note: I only work in high end parks now. In my experience, the high end parks tend to attract the kind of clientele that fit my personality. I find the more lower end parks really don't fit my personality (comfort level) and are much more difficult to find buyers who fit my critiera. The reason I do not work lower end parks is because of this experience).

In any case, I know the manager of this park where the potential buyers are currently living. Now, this manager has a reputation among investors as well as the park managers in the area to be a very difficult manager to work with. So difficult, that I chose not to do business in this particular park. (Honestly, I did not enter this business to make things harder on me. If a park manager is difficult to work with, I tend to stay away from working that park).

I call the park to verify the rental payment history of the potential buyers. While on the phone, I could already feel the tension in the air. The first question that was asked was which tenants and if I had a written authorization to release the information from the tenants. I said, "Yes," and sent it over.

So, the park received it. Guess what? Well, now the park manager refuses to verify any kind of rental payment history with these tenants because she says they don't rent from the park. Meaning the tenants do not rent a home from the park, they own and just pay lot rent. I say, "Ok, I just want to verify they have been paying lot rent on time."

Well, you know what? The park manager says they don't verify that because they are not renters of the park. They know what I'm talking about - they are just being uncooperative. I guess they are doing everything they can not to let these people leave. Plus, a lot of the residents (who are families) of that park have been calling me asking if I have any mobile homes available in other parks. I know people want to leave that park because it's so difficult to work with the manager. (I guess a good source of potential buyers, eh?)

To make a long story short, I don't get the confirmation I need to verify the rental payment history. I call my park asking what they need to verify the information. They tell me if this park the potential buyers are living in are uncooperative, all we need to verify is proof of payment (i.e. checks, money order, etc) that the lot rent was paid and received on time for the past year.

So, I call the potential buyers and tell them the news. They are more than cooperative. Now, I have to go meet with them today and they will supply me with all the paperwork I have requested to get the info we need verified.

Wow, what an adventure this business can be! Hopefully, I can get this all wrapped up and move on to the next deal. Once this closes, it'll be another nice and relaxing cash flow payday for many years to come!

p.s. Here's a pic:

Happy investing!


marilyna said...

Do they have a lot of vacancies in that park? I wonder if the owner of the park knows his manager is running off his tenants. You have to wonder what that manager thinks she's accomplishing by being so difficult.

Mobile Home Gurl said...

Hi Marilyn,

Most of the park is full, they have some vacant lots. In fact, they've asked me to bring in homes there (though they have not offered any incentives).

In this case, the park manager is also the owner - it's been in the family for years. It's really an ego thing - wanting to be in control. A fellow investor has some homes in there and the park manager constantly calls for maintenance issues. Some parks are more micromanaging in nature.

In one of the parks, the owner calls me for skirting and lawn maintenance issues. It's really a training exercise with some parks - some would rather deal with me than the homeowners but I have to remind them that it's the homeowners that are responsible for following the rules of the park. I try not to get involved with homeowner/park issues.

Overall, I would say it all boils down to personality. If my personality does not mesh with a park manager and/or owner and vice versa, it's really hard to work together. So, I tend to stick with parks where the manager/owner is easy to get along with. Hope this helps, thanks for stopping by!

Anonymous said...


Great site! I have begun to do some Lonnie Deals in Georgia. Is there anyway you can go into the specifics of some of your good/bad deals in terms of purchase price, rehab, holding costs, sale, interest, payments, etc? It would be great to see the returns your getting on some of these deals. Thanks