Owner Threatens To Close Park If Rent Increase Is Not Approved

The owners of Besaro Mobile Home Park in Freemont, California have appealed in state and federal court the blockage of their attempt to raise rents by as much as 40%.  If the appeal fails, the owners’ attorney says that they will close the park. Read more »

LET’S GIVE UP ON THE STAR SYSTEM

By Frank Rolfe

When I first got into the manufactured home community business, everyone was obsessed by the concept of a “star” system – 1 for poor, 2 for mediocre, 3 for average to good, 4 for better and 5 for best. Owners would love to outdo each other by boasting “my property is a four-star, how many is yours?” Of course, the system was highly flawed, and there was definitely star inflation (people always seemed to add a star or two to their score), but it made for some apparent meaning to somebody (I’m not sure who). Unfortunately, unlike the hotel business, which takes it’s star system seriously, and has many independent judges who allocate them and promote the highest winners, the manufactured home community star system has long been a joke, and about as accurate as a world atlas printed before WWII. Read more »

FIVE STAR CASHFLOW

People often ask me how many stars my park has. I always tell them that I’ve got a five-star cash flow. That totally confuses them, and allows me to change the subject.

I’m not shy about talking about the “mysterious” star system, only I’m confused as much as everyone else as to how to truly rank you park in such a subjective system, and why the heck anyone would care anyway.

I’ve found that most of the people who ask me this question are total beginners. They think that the system really means something, and that a five star park is worth more (like a five star hotel room). Now I defiantly rank a Ritz Carlton over a Ramada Inn, but it’s not that easy in the park business.

The star system revolves around basic structural differences and amenities between parks. However, it leaves off the three most important comparison points: LOCATION, LOCATION AND LOCATION. I would rather have a one star park in a great location than a five star in a desert. I have seen five star parks in location only accessible by a burro, and I don’t see much pride of ownership in such a property. Some of these parks have more amenities than customers.

I propose that we re-think the star system to something tangible and objective – CAP RATE. In that event, most of the old, 10 unit per acre parks will be fives all day long, and the empty five stars will plummet down to ones. Until that time, I suggest you answer the “how many stars is you r park?” question with “mines got five star cash flow!”