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.

# of Mobile Home Park Lots:115 RV Spaces

Price:Auction 8/26

Contact Person:Dan Falls

Contact Phone:866 921 8883

Contact E-mail:Dan.Falls@williamsauction.com

Description:The Spokane RV Resort is a vacation destination for RV fulltimers and weekend explorers alike. Located adjacent to the Deer Park Golf Club in Deer Park, Washington, the gated 17.80+/- acre resort won Woodalls® 5W rating for both facilities and recreation in 2010 and attracts RV golf and outdoor enthusiasts from throughout the United States and Canada. There are numerous amenities available along with gorgeous mountain and golf course views.  The Spokane RV Resort Remains Open for Business

Link:www.williamsauction.com/deerpark (display)
http://www.williamsauction.com/deerpark?utm_source=RVParkStore&utm_medium=enewsletter&utm_campaign=spokane (actual)

New Sale / Finance Model For Parks and Communities
A very smart, experienced, knowledgeable community owner wonders if, because of the lack of financing, the new way to sell a park/community is for the owner to finance/manage/oversee the sale.  Here’s what his situation is:  For a couple of years he tried to sell his park.  The market was falling and lending was constricting.  After a few deals fell through, he was approached by a buyer and the deal they struck was that the owner/seller would still collect the rent and pay the bills, but the buyer/manager would bring in homes, refurbish homes, market, sell and manage the park.  They have a formula for pricing and executing the closing.  In the meantime, the buyer/manager must meet certain benchmarks for keeping the occupancy stable and ideally increasing it.  It is like a contract sale except that it gives the owner/seller a degree of oversight and safety.  The owner/seller has the right to cancel the agreement if the benchmarks aren’t met, i.e., the occupancy decreases.  Is this the new model for selling a park or community?
Living Smaller
Residential real estate agents report that homebuyers today want a smaller home.  Maybe this is an opportunity for community owners.  Realtors say that baby boomers entering retirement, young adults delaying marriage, and the economy still not doing well, results in homebuyers embracing the idea that less is more.  People are questioning how much “stuff” they really need and paring down and de-cluttering homes.  Less stuff also makes a home feel more spacious.  Perusing the covers of shelter magazines indicates that consumers want to de-clutter, de-junk and re-think what they really need.  For community/park owners that belong to the local real estate board and network with  residential agents, there may be some opportunities—especially for a current homeowner wishing to downsize.  They will have cash from the sale of their home.
Abandoned Homes Solution
A community owner finds that by giving away an abandoned home (after the community owner goes through the legal process to obtain title to the home), they are able to get these homes back on the rent roll.  They require the new homeowner to skirt, side, paint, landscape or whatever tasks are needed to bring the home into compliance with community guidelines.  Once the home is in compliance on the exterior, the new homeowner gets the title.  This  community owner says often the prospective homeowner is a current resident that has doubled up with another resident and just wants their own place.
Best Bets 2010
From the Urban Land Institute Emerging Real Estate Trends for 2010
“Buy or hold multifamily.  It’s the only place with a hint of hope because of demographic     demand.  Scarce new construction (developers can’t get financing to build) sets the stage for a strong rebound in any economic turnaround. There could be a shortage of apartments by 2012″.
Could help the demand for homes in communities?
For Rent
A regional manager says that rental homes have added a huge amount of time to the workload of the onsite manager.  The rental homes are a harder business (if the owner is interested in doing it right).  Advertising (Craiglist, newspaper, website) brings in say 50 calls for one home.  Of those, the manager may show the home 20-30 times, take 10 applications and approve one.  That’s a lot of time to rent one home.  On the one hand there is a market, but going through the screening process, really whittles down the list.
HouseLogic.com
A website sponsored by the National Association of Realtors gives homeowners information on owning, maintaining and repairing a home.  Quite a bit of the information will be useful to Manufactured Home homeowners, for example, looking for signs of energy leaks, how to make an insurance claim, and even how to use green household standbys for cleaning.  Any government programs for tax credits (i.e., energy) are described.  It’s a resource for your residents.
Decent Momentum In New Homes For Communities
An account executive for Clayton Homes is having “decent momentum” on sales of single section homes in Western states.  The community is focused on the $26,000—$30,000 price point plus set up.  What’s interesting is that community owners are putting more money into sets for landscaping, more poured concrete for parking, patios, and sidewalks, and more elaborate decks.
Teach Resident/Homeowner
A Midwestern community owner strives to teach his residents the concept of saving money and paying down more on their home mortgages and contracts.  Homeowners haven’t been taught about compounding and discounting.  They don’t realize that by paying an extra $50 per month on a $15,000 loan at 9% they will shorten a 10 year term by 3 years.  This benefits the community owner, too because the more equity the homeowner has the less likely he is to abandon the home.  Anything the manufactured home business can do to dispel the notion that our homes don’t appreciate in value, helps everyone in the MH business.
Insurance On Manufactured Home Rentals
A community owner with a considerable number of rental homes says that he can’t afford to insure the homes and that many other community owners don’t either.  Is this the next black eye for the MH biz waiting to happen?  Headline:  “Fire Destroys Mobile Home—Landlord Has No Insurance”.

Joanne M. Stevens, CCIM
Park and Community Specialist
NAI Iowa Realty Commercial
Brokering mobile home parks & manufactured home communities throughout the U.S

Although the loan has been sent to a special servicer, it is not currently in default.”The company made to request to implement certain amendments to the loan” said Jennifer Ludovice, an ARC spokesperson. “Due to the structural impediments inherent in CMBS debt, it was necessary for the loan to be transferred to special servicing to facilitate this process even though the loan is not in default.”

Frank & Dave’s Opinion of This Story:

Virtually everyone in the industry has been following the ARC story for over a decade. ARC came on the scene over a decade ago and rapidly bought their way up to 55,000 lots – often seemingly with abandon. Farallon took a huge risk taking over ARC, and this is the news story that will probably garner the most attention in the industry for the next several months.

This is the event in which Frank & Dave, who have owned and operated over $100 million in mobile home parks over the past decade, show you the shortcuts, tricks and insider secrets that you need to know, in a real-world setting -out in the field inside real mobile home parks. It is a complete three-day immersion in the mobile home park business, from how to find parks to buy to evaluating them, negotiating them, doing diligence on them, financing them, closing on them, and operating them.

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

Frank & Dave’s Opinion of This Story:

If you don’t go to our Boot Camp before buying your first park -you’re crazy. We make up the cost of the Boot Camp within the first few minutes of negotiating your contract, or the first month of operations of the park. The biggest names in commercial real estate come to this Boot Camp before jumping off into the park business.

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.

MobileHomeParkStore.com
Currently we have over 1,200 mobile home parks listed for sale.  You can read articles from Frank Rolfe & Dave Reynolds and other industry professionals.  Looking for a broker, appraiser, insurance or other service?  There are hundreds of vendors listed on the site.  Would you like to take your investment skills to a new level?  Look into our educational materials.

MobileHomer.com
Are you a “lonnie dealer”, mobile home broker or mobile home park owner?  Our new program – The Mobile Homer can help you.  We have updated the lonnie deal model by bringing park owners & lonnie dealers together.  By forging this relationship we have made mobile home investment more profitable with fantastic incentives.  Park owners benefit from the program by having home investors fill lots.

MHBay.com
Our site dedicated to mobile homes for sale.  List a mobile home for sale here for free.  Find mobile homes, mobile home financing, insurance & more.

MobileHomeParkForum.com
Have a question?  All you have to do is create a username & password for free & you can start asking & answering questions.

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The City of Poway had purchased the mobile home park in the attempt to stabilize rents, with around 1,000 citizens living in the park. The second highest bid for the property was only $28 million — $10 million less than Hometown’s bid. Even then, the city will only post a $2 million profit from the sale, which they have held for since 1991.

The residents had hoped the city would take the $28 million bid, as that bidder had offered to sell the lots to the tenants. “We’re not happy with it at all” said Joe Banks, one of the Board of the Directors of the park, and a resident. “We feel the city is not keeping the best interests of the residents at heart. The best interest would be to let us own the land beneath us”.

Frank & Dave’s Analysis of This Story:

No offense to the folks at Hometown America but ” what were you thinking”? For their nearly $40,000,000 investment, they’ll own 397 spaces – at roughly $100,000 per space. The current rent at this park is $770 per month. If there was a 15% expense ratio at the park (which is probably too low), then it’s a 7.8% cap rate at 100% occupancy and 100% collections. You can’t raise a $770 lot rent up too much, in our opinion. Is 7.8% as good a return as you can get in this economy? Hardly. We wouldn’t even look at this deal at this price. The second highest bidder at $28,000,000 was correct – they were at least bidding a 10% cap rate. Just another example of the stupid bids people make at these auctions.

“Until now, there has never been a successful roadmap to investing in mobile homes inside mobile home parks” said Dave Reynolds. “To invest in mobile homes, it is essential that the park owner offer certain incentives and formulas to help share the risk and ensure that the experience is a profitable one. Only at the MobileHomer.com can you obtain the list of participating mobile home parks that will make your investment a winner.”

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

Barry gave “Four Key Strategy Areas” that, if adapted by a community owner would have a big improvement on the   bottom line and the growth prospects for the community.  The four key areas are things anyone can do now without a lot of cost, but the clincher is changing the     mindset.  As you read Barry’s list, think about what kind of a community business you would have if you adapted even one of these.

1)  Market Niche Focus

When you bought your first community, were you more knowledgeable then about where your customer was coming from?  Were they coming from apartments?  What was their reason for moving into your community?  Where would they have lived if they weren’t in your community?  Are community owners as up-to-date on housing choices in their local markets as they need to be in order to compete?  Maybe not, suggests Barry.  We need to address the new realities of the housing market. Has our niche changed?  Do rents need to go up or down?  Has our market changed?  To rent sites and sell and rent homes, the community owner needs to adapt to a changed and changing marketplace.  In my market, for example, the demand is for rental homes, but not so much for buying homes.

2)  What is My Plan?

Barry says that we need to be realistic and figure out if we can afford to address the new market realities.  What he is suggesting is that community owners need to know the following about their customer:

• What is the credit profile of the customer I am willing to finance?
• Can they make a down payment?
• What is the age of the home?

What is the plan for the capital to finance the homes?  Two important things Barry noted are:

• Community owners need to be in compliance with the law to finance homes.
• Many owners are running out of cash to finance homes.

(In conjunction with financing of homes, Warren Buffet noted in his 2009 annual   report that unless reasonable financing becomes available, manufactured housing demand will continue to shrink).  To finance homes we need systems that are effective, efficient and compliant.  Do our homebuyers know that they are building equity in their home and how much their equity is? Do they know, assuming their buyer passes the tenant screening for the community, they can sell their home and move on?  On this last point I’m    guessing probably not.  Residential real estate agents do this all day for site-built homeowners, but in the community business, residents don’t get much support from anyone when it comes to figuring out their options, equity being one.  Which may be one reason for the customers’ not buying in a community to begin with.

3)  Resident Pride

We need residents that feel proud about living in the community and want to stay.  This can be accomplished by having management structures in place to retain existing residents.  The retention system needs to include activities for residents and keeping the appearance up.  The rules need to be enforced firmly but politely.   Residents that are under water on their home’s value are no more stable than a renter.

4)  Financing Homes
Community owners need to get creative and think of ways to raise capital to buy more homes and finance them.  The Manufactured Home business is starved for  capital for the consumer to purchase a home.

There is plenty of capital piled up on the sidelines and investors are looking for investment opportunities.  For a well run income producing operation, there are investors.  One idea is to take on a partner, perhaps in a minority position.  Barry said that today a chief worry for the communities is that community owners may not be able to afford to keep up their communities. In addition to rising real estate taxes and operating costs, the cost to buy, fix up, market and finance homes in communities may mean that some, perhaps many, owners simply won’t be able to afford to be in the community business.  Hard choices about selling their community may be in store for some.

MONEY IS COMING BACK TO REAL ESTATE

Dr. Peter Linneman, Chairman of the Wharton School of Finance and economist for NAI states that not only is the money coming back to real estate, but that:

• Multi-family real assets will rebound first, before office, retail, industrial.

• We are at the top for cap rates.  Translation—prices have hit bottom.

• Little has changed in the economy in the first quarter of 2010 but the psychology of the recession has changed.  It’s been said that investors and consumers are mentally   either in fear or in greed.  During the boom years spending and taking risks were the so- called greedy behaviors. When the recession set in, greed quickly turned to fear.  Thus, the tightening of credit. According to Dr. Linneman, how people feel has changed.    Investors and consumers are edging from fear to courage, and from inaction to more  aggressive behavior.  The pendulum is beginning to swing toward greed.

• No new multi-family, including communities, are being developed.

• Pent up demand is and will continue to build.  One reason is the millennium generation coming out of college.  Because it is so tough for young people to find a job in the current economy, many are moving home or doubling or tripling up with friends.  Once they get jobs, they will be moving into their own homes.

• Inflation will be a factor.  As household formation picks up, rents will increase and so will home prices.

• Another recession will occur in 7 to 10 years.  Dr. Linneman says that when debt is cheap and/or easily available it mostly benefits sellers, not buyers.  If you are an owner that is wondering when is the best time to sell, you may want to think about…

      a) selling soon before capital gains taxes go up and interest rates go up, or

      b) waiting for another 7 to 10 years for the next “bubble” and sell at the top of that cycle.

• Interest rates will rise faster than cashflow. Prices of real estate will not go up as fast as interest rates.

• Real estate taxes will go up.

Distressed Buyers

CNBC, the cable business channel held a conference in Vancouver this year. They said that there are more distressed buyers than distressed sellers, meaning there are more buyers wanting to make investment in real estate that produces a cash flow than there are properties available.       Certainly for the park and community business there is a dearth of parks and communities available for investors to  purchase.

Water Usage & Water Cost

A midwest community owner knocks on doors in his community with a plumber in tow.  He asks the resident if he and the plumber may check the faucets, toilets, etc. for leaks. They fix the problem on the spot and charge the resident.

Switching From Investing in Communities to Apartments

A long time investor in communities said recently that he is now buying apartments, not communities.  The simple reason is financing.  Investing in communities is nearly impossible if there are community owned homes.  With apartments, the lender doesn’t lend on the real estate and not the apartments.  It’s a one stop shop for getting a loan.  With rehabbing, selling or renting homes and financing homes, he says that a manufactured home community has become a tougher business.

Murder Headline Misleads Readers

The following was a “Letter to the Editor” in the Cedar Rapids Gazette:

Regarding this March 11 headline, “Man Charged in Mobile Home Death”

I wonder why the editors focused on the type of residence in which the death occurred. Had the alleged murder occurred in a single-family home of traditional  construction style, would we see that in the headline, “Man charged in single-family home death”?  I think the implications being made here are rather irresponsible and are attempting to lead the reader to some unsubstantiated  conclusions. If there is a point the editors would like to make regarding crime and             socioeconomic status or lifestyle or  whatever, the opinion page is the proper place for such discourse, not the front page. In addition, I believe it was a young woman who died, not a mobile home.

Homes Moving Out

A community owner reports that some residents are getting heavy handed when it comes to getting the community owner to buy their   manufactured homes.  He says that a few residents have threatened to move their homes out if the community owner won’t buy their home

Joanne M. Stevens, CCIM

Park and Community Specialist

NAI Iowa Realty Commercial

Brokering mobile home parks & manufactured home communities throughout the U.S