We cap the enrollment at just 20 people, and only have a couple tickets left.

This is the last time that we will be holding the event in Dallas in 2010, so if you are convenient to the D/FW Metroplex, this is the event you want to hit to save on travel expense!

For more information call (800) 950-1364 or go to www.Mobilehomeparkstore.com.

What makes this event so exciting is that almost half of it is held in the field – in actual mobile home parks. You will walk around everything from no-star to 5-star parks and learn how they work and learn the difference between a good deal and a bad deal.

“We really like doing this event in Dallas, as Frank and I have owned so many mobile home parks over the years here and really know this market well” said Dave Reynolds. Some of the parks that will be toured are ones they have formerly owned, as well as ones that they currently own.

For more information go to www.mobilehomeparkstore.com, or call (800) 950-1364.
Frank & Dave’s Opinion of This Story:

If you buy a mobile home park without attending this Boot Camp, you have made a serious mistake. This event will pay for itself many, many times over. We have actually had people who took the Boot Camp and turned around and dropped the deal they had under contract before they showed up, in order to pursue better deals that we showed them how to find. Others have found great deals immediately following the boot camp, using the principals we taught them.

The 236 space park has a long history of battles with the city over rent increases, which has strict guidelines regarding such increases. Besaro’s owners claim that the city has hindered them from catching up in their rental rate with the two other parks in the city.

Currently, Besaro’s lot rent is $669 while the other two parks are $715 and $782. The owners are asking that their rent be raised to $895.

The park was allowed a major rent increase in 2001, but a judge blocked further increases on the grounds that park expenses had not gone up, and that the park’s annual profit in excess of $1 million was satisfactory.

Besaro was developed in the 1970s, and is owned by the heirs of the four original owners.

Cheryl Warner was discovered to have deposited tenants’ rent money into her own account while serving as manager at the 178-space park. The theft was discovered in 2008.

The manager had tried to put the money back in the account “but it snowballed out of control and she was in over her head” said her attorney Phillip Heithecker. She claims to have needed the money to support an adult daughter who was seriously ill.
Frank & Dave’s Opinion of This Story:

It’s a shame this owner did not read any of our stuff – he’d have known the dangers of accepting cash rents. The park has said that they will no longer accept cash after this fiasco – but it’s a little late now. Frank found a manager once, during due diligence, that had stolen $30,000 in rents over a relatively short period. But this manager had that one beat by a mile. The next time you think your grandmotherly manager would never do such a thing, just remember this story.

The noise level at Leisure Lake is currently at 78 decibels. The wall will lower that sound level to around 60 decibels. A normal conversation is at a level of about 60 to 70 decibels.

This section of Highway 101, including the sound wall, will cost about $20 million. The park has 134 lots.

The city arts commission has also proposed to decorate the wall with 40 inch medallions depicting scenes of Petaluma history and culture.

“We’re ecstatic about it” said Carol Pederson, the manager and resident of the park. “We were afraid it was going to be put on the back burner. It’s a godsend for us”.

Work on the project should begin in 2011.

Frank & Dave’s Opinion on This Story:

Just further evidence of the new “love” city government has for mobile home parks. Somehow, mobile home parks have become the new favorite child of city hall. We think it’s because they have finally realized that mobile home parks are a far better form of affordable housing for cities than low-cost apartments. We just hope that low-cost apartment owners are ready for the same scrutiny and scorn that park owners had to endure for decades.

Glenn Whitaker, the owner, says that he is closing the park because he is in bad health and the park is as worn out as he is. The sewer lines are bad, and few of the residents pay their rent – and he doesn’t hassle them because he knows they can’t afford to pay it.

“Well, I’ve known Mr. Whitaker for 40-something years…his health’s not good and it’s time for him to retire” said resident Fred Case.

Whitaker has offered to bring in a moving company for the tenants at a reduced price.

Frank & Dave’s Analysis of This Story:

The next time your tenants complain about a rent increase, this is your argument. If the park does not make money, if it cannot pay its bills, it will go out of business and they will have to move out. If this park cash flowed, it would not be closing down. It is in your tenants’ best interests to make sure that the park’s financials are healthy – for their own sake. Remind them of this.

It is this last 25 percent that will often make or break the deal. This is usually the money that is left over after you make your loan payment and cover the other operating expenses. So what is a manager/owner to do to make sure that these slow paying residents get motivated to pay?

Here are a few strategies I have used. Of course, make sure that any of these programs are legal in your state. If you have any other thoughts I will post a followup in the next newsletter.

1.Rent Discounts. Using a rent discount program, I set the rent a little higher than I typically would and then reward those that pay on time. For example, I might set the rent at $220.00 per month and for all of those residents that have paid by the 1st of the month, they will receive a discount of $20.00 for a total of $200.00 per month. Taking this program further, I have had a rent schedule that goes something like this: Rent of $200.00 by the 1st, $220.00 by the 5th, and $240.00 by the 10th and so on.

2.Late Fees: Whether used in conjunction with the discount program or as a stand alone program, this program will charge late payers a penalty for not paying the rent on time. In most of my parks, this will be a late charge of $20.00 to $25.00 if the rent is not paid by the 5th of the month.

3.Taking Credit or Debit Cards: In the world of plastic, many people do not carry cash or checks anymore and by adding this convenient payment method you may be able to increase collections. Many times in the past I have had someone fall behind and in order to avoid an pending eviction, one of their relatives will call with a credit card to catch up the balance. I have even taken this to the point that a few of my residents have their credit or debit card on file and we automatically charge them on the first of each month.

4.Send out Invoices: Even if the rent is exactly the same every month and there is no utility billing, sending out an invoice is a good way to get your rent bill on the pile, so to speak. People are more apt to pay the bills with an invoice first. Using self-addressed stamped envelopes are also an option. In the world of high tech, you might even be able to accomplish sending out the invoices via email. By using a mail merge on excel and word this can be done within minutes. There are also software specific programs out there that will do most of the work.

5.Sending out Late Notices: It is important to send these out on time every month so your residents know that you haven’t forgot about them. You should be persistent and follow-up with phone calls and in person visits. This way they know you mean business.

6.The 3,5, 7, or 10 day notice: If they have not paid then send them the legal notice to pay or vacate. This should spur some action and after a few times of having to pay court costs, the residents will get the picture that they have to pay. The rent bill should go to the top of the list. The longer you let the resident go without paying the less likely they will be to get caught up. If they don’t have the rent money in May, then they probably won’t have the May and June rent in June and so on.

Collecting on delinquencies is probably the least enjoyable part of managing a mobile home park but ranks up there with the most important parts. When you find the strategy that works best you should follow it every month like clockwork. You want the residents to pay their rent before they pay on their cell phone bill and other un-necessities.

When I first got in the mobile home park business, I was very inexperienced in collections. My natural instinct was to be nice to my customers and never offensive. So when I first encountered customers who would not pay their rent, I did not want to offend them by filing evictions. Instead I tried phoning them or sending reminder letters. Time marched on. After they promised to pay several times and still never did, I realized my methods were not working and that I would need to “toughen up” and change my ways – and I started filing evictions as soon as I could once they had failed to pay on time.

You know what I discovered? I discovered that this was the best thing for all parties involved. Here’s why:

Some people need strong direction. Just like kids in school, some people need a firmer hand. Your filing of eviction may be the trigger that the tenant needs every month to pay his rent.

Once you let a tenant get more than one month behind, they are doomed. I learned early on that most mobile home and trailer park residents have great trouble saving money, or showing a surplus from their paycheck. If you let them get more than one month back (and one month is pretty bad too) they will never be able to get caught up. You are actually doing them a disservice if you let them get behind. They can adjust their spending priorities or borrow from relatives and get current if you get tough early on. Think of your own mobile home park mortgage. If you let yourself get three months behind, could you get current overnight?

Being tough on collections trains all of the tenants on the correct spending priorities. Those priorities should be their taxes, housing, auto payment, insurance, gasoline, utilities, and then all the other fun stuff like cell phone, beer, etc. Not to sound like there is some great “bettering the world” angle here, but maybe their lives will be better because you taught them this lesson.

It is not fair to the other tenants if their neighbors don’t pay rent but still get to live there for free. Not only will everyone stop paying eventually when the word gets around, but it is just not morally right. Being tough on collections, believe it or not, is the only fair way of dealing with the issue.

If the tenants don’t pay you and you can’t pay your bills then the park will shut down and nobody will have a place to live, or they will have to spend $3,000 moving their trailers to a new mobile home park.

Most everyone flourishes in consistency. If the tenants know the rules of how things operate, they are better at meeting the rules and feeling secure. This is true in any enterprise or relationship. If the tenant knows the rent is due on the first, late on the 5 th, and they get evicted on the 15th, then they know what to do. When you make payment plans and are soft one month and tough the next, everyone is confused and unhappy.

It is also important to remember that a tenant who does not pay their rent on time, but does ultimately pay their rent, is your most profitable customer, assuming you have a significant late fee. You should not become discouraged if many people do not pay on time-you should be enthused! Those late fees are straight profit.

So don’t be afraid to be tough on collections. You are really just following the natural order and it will be a win/win solution for everyone!