The owner, Amnon Dabach, has tried to resurrect the finances of the park through a series of rent raises, which have taken the lot rent from $195 per month to $375. This has resulted in new complications, as many long-time residents are having trouble keeping up with their payments, and have turned to government assistance.

“A lot of people have moved out” said Sheri Dube, a community resident. “Five years ago the rent was $195. Now it’s $375 for no extra services”.

Without sufficient cash flow, the owner has refused to put any additional funds into the park, so the manager can only mow sporadically when she can get the mower to start, and will often take a rowboat out into the once manicured ponds to try and fish out debris.

“There are a lot of things I’d like to see different” said Manager Samantha Dama.
Frank & Dave’s Opinion of This Story:

Whether or not you believe in global warming, you have to acknowledge that the hurricane season is growing stronger every year. This year, there are expected to be seven major hurricanes. If you are looking at buying a coastal park in the hurricane zone, you have to look at the potential downside of a hurricane hitting your park. If  you do not have the capital or the constitution to deal with a calamity like that, you should probably not buy a park in a hurricane-prone area. There are many Pink Citrus stories out there. Unlike tornadoes, which are pretty random, hurricanes threaten the exact same areas over and over. And, unlike tornadoes, hurricanes don’t just wipe out a small, manageable area; they wipe out entire cities and employment bases.

Argus bought the property in 2007 with the intent to redevelop it into a single-family home subdivision. Those plans fell through when the credit markets collapsed. Now it will seek to re-start the development effort, and is trying to join forces with large single-family builders such as D.R. Horton and Pulte.

Argus had planned to keep the park operating, but after declining occupancy, it had started to post losses as high as $500,000, and racked up over $300,000 in repair costs.
Frank & Dave’s Opinion of This Article:

This is not the first bungled real estate development that ruined a perfectly good mobile home park. While the owner might be O.K. at single-family development, they obviously don’t know much about running a mobile home park – except how to run it into the ground, in our opinion. There is no way that this mobile home park could post a $500,000 operating loss with only 30 residents – even if none of them paid the rent. Everyone needs to stick to their specialty.

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.

Despite criticism by many groups claiming that the government is creating a nightmare by allowing these trailers to be sold without any oversight as to what they are actually used for, the government has decided to move ahead with the sale, since it has spent $220,000,000 in storage fees on these units over just the last three years.

Building inspectors in Fenton, Missouri recently found Katrina units, sold to be scrapped, being used for housing at a mobile home park.  “What if Toyota ordered a recall, then simply put a sticker on its vehicles saying that they were “unfit to drive” before re-selling them?” said Becky Gillette of the Sierra Club.

The sale is under review by the Justice Department.

Frank & Dave’s Analysis of This Story:

You have to hand it to the U.S. government. Where else can you find people dumb enough to spend $220,000,000 just to store trailers. That works out to $40 per month per trailer, which is what a normal retail self-storage facility would charge. Do you think they might have asked for a volume discount? That’s $40 per month for a vacant field with no infrastructure. too. We remember when Katrina hit and the government was renting every available lot in Louisiana for about $600 per month when the market rent was $150 – and then never used most of the lots but kept paying anyway. Now you know where the federal deficit came from.

You will need to be especially observant, after the auction is completed, to make sure any park-owned home you buy does not have the “sticker” and is O.K. to be used as a dwelling. We imagine some special designation will be made on the title. But it’s one more thing to worry about when you are looking at trailers to buy.

However, the Brick Township Council has voted to make the Laurelton Mobile Home Park a “redevelopment area”. Under this designation, the city has broad powers, including forcing the current owner to sell to a developer. But the council is not approaching re-development as an opportunity to get rid of the park. On the contrary, they are trying to find a way to keep the park. “We want the developer to balance the needs of all three parties – the developer, the residents and the town” said Council President Anthony Matthews.

One proposal includes re-zoning the front of the park to commercial and allowing a retail center to be built there, with a redevelopment of the park as part of the agreement. All of the proposals include putting in new water and sewer lines to the park. The city is starting the process of cleaning up the park by delivering roll-off dumpsters to the park within the next few weeks, so that tenants can begin to move the junk out of their yards and into the dumpsters.

Frank & Dave’s Analysis of This Story:

The new-found love for mobile home parks has been a continuing theme in city hall recently. When faced with the necessity of affordable housing, more and more cities are looking on mobile home parks as a much more satisfactory housing type than apartments. Why is that? Maybe it’s because the tenants are home-owners rather than renters. Or maybe it’s because mobile home parks are easier to redevelop way down the road, since they have no structures to worry about. In any event, we’re just glad they’ve had a change of attitude.

First a quick history of how we got to this point. You probably remember all those ads a few years ago for 110% mortgages with no credit check? Or mortgage rates from 1%? Well, those didn’t exactly work out. In fact, as you probably already know, it resulted in the largest residential mortgage meltdown in U.S. history. Today, something like 25% of Americans are upside down in their mortgages. And around 10% of them are already in some form of default. Many of these borrowers are blaming the mortgage companies for leading them blindly into such a financial mess. Whether you buy onto that argument or not, it wasn’t hard for Washington to see this as a great political opportunity to show their extreme concern for the people (of course, not enough concern to actually do anything to fix those 25% of Americans who are upside down in their mortgages). So they came up with a terrific public relations concept: The Safe Act. This piece of legislation is supposed to protect all of us from the evil mortgage companies that seek only to enslave us into bad loans.

Here’s how it works. To enter into a mortgage, the individual doing the lending has to be licensed under the Safe Act. And they have to abide by certain covenants and restrictions on what they can and cannot lend on and how much they can charge. Somehow, this is going to stop mortgage abuse (kind of like how prohibition stopped drinking). The reality is that it causes all lenders to go through a pain-in-the-neck licensing process, pay about $1,000 in fees, and be subject to perpetual CPE classes.

Great, who cares? Well, if you sell mobile homes and carry the paper, then you better care, because you fall under the Act. While nobody knows for certain yet whether or not “rent-to-own” programs are included, the standard old sell and carry paper sure is. So you need to immediately contact your local Manufactured Housing Association and find out how the process works in your state. You do not, however, need to attend any expensive event to tell you about the Safe Act. Opportunists have popped up everywhere. You can get all the information you need for free from your state association.

Should you panic? No. First of all, the Act is so new, that many states have been able to buy time for it to actually take effect, so you may not already even be in default. Secondly, there will no doubt be a ton of lawsuits and case law to come, and the Act will probably morph into all kinds of things in the days ahead. But you need to know what’s going on, and if you need to begin the process to get licensed. Does everyone have to? No. If you sell no homes, or just rent homes, or sell homes for cash, then the Safe Act should have no effect on you. It only pertains to creating mortgages.

And there may be some help on the way. There is a huge push from the single-family housing industry to amend the Safe Act to not include any lender who is creating a mortgage on his own property. Apparently the geniuses in Washington forgot that there is a sizable market of individuals who buy stick-built housing and then sell and carry paper on them. And this credit market is among the few still making loans. So restricting the moms and pops of the world from creating home mortgages is a pretty stupid idea if the goal is to help keep home ownership within the grasp of many Americans. If the Safe Act was amended to exclude this group, and only focus on true mortgage companies who create loans on things they don’t own, then just about all mobile home park owners would be excluded from the law.

So don’t lose sleep over the Safe Act. Get the facts from your state manufactured housing association. Stay calm. Evaluate your position. Then act appropriately. If you only have a home or two to sell, maybe you should just sell them for cash and be done with it. You do have options.

And when it comes election time, you might remind your local candidate of how much you appreciate his hard work on the Safe Act – and kick him safely out of office!

Frank & Dave’s Analysis of This Story:

There will be more stories like this in the months ahead, as troubles in the commercial real estate financing market are finally dealt with. Would this be a good mobile home park deal? It might be. Most banks have absolutely no desire to be in the mobile home park business. Could you get a loan on it? The first source might be Wachovia. They might be most interested in just putting this loan back into the “performing” category.

All of the mobile homes in the park were destroyed, including the park office. Following the flood, the park had to replace all of its infrastructure at a cost of nearly $200,000.  The park now has 11 occupied lots, after the rebuilding.  “I think it was a freak thing” Amrozowicz said. “It hadn’t happened in a hundred years. I don’t think it’s ever going to happen again”.

Frank & Dave’s Analysis of This Story:
Can you handle this? Complete loss of income, $200,000 out of pocket, and then only 11 units occupied, down from 35? If not, don’t buy a park in the floodplain. Maybe it won’t happen again. But would you invest your life savings on that gamble?

Most mobile home park owners today have vacancy problem, thanks to chattel mortgage crisis that began in 2000. It is not uncommon for a park that was full in 2000 to now be at 60% occupancy due to repossession of homes. If you have been waiting for the mobile home dealers to fill you back up, you are probably depressed and making no progress. So here are some ideas to get you back in action at increasing occupancy;

First of all, you need to locate the folks in your area that have grown to absorb some of the demand that is left unaddressed by dealers. There is still a lot of demand to rent or buy used mobile homes, even if the dealer structure has become a non-player. Most of the time these new “Dealers” are individuals who buy and sell or buy and rent old mobile homes specifically in parks. You need to find these people and get them to bring homes into your park. Two ways you can find them are to 1) talk to local mobile home movers and ask if they have had any mobile home moves with these individuals (they normally remember them because they have more than one) 2) go to competing mobile home parks and see if you can spot any for sale signs that have the same phone numbers. This is a giveaway that they are not selling there own personal homes, but rather it is a business. Offer these entrepreneurs free rent until they get their home sold or rented in your park, or whatever incentive it takes to make your park their new home base.

Another source of homes is to “steal” them from competing park that is doing a lousy job of keeping their tenants happy. Remember that ‘mobile’ means they can be moved. Of course it is not cheap to move a mobile home, so you will have to pay some or all of move cost to get them to move to your property. But it is well worth it. Even at the cost of $3000 for the move, you will get your money back in a year if the rent was $250 per month. Be sure not to ask people to break their lease, only to move to your park if their lease is up and they have the option of moving. Once you get one to move, and they are happy, it is not hard to convince their friends. It is amazing how many park owners give no thought to the resident’s retention and just assume they are their slave forever.

A final idea is to convert your vacant lots into something that is wanted, and that can be tapped with a small capital outlay. For example, consider opening a section of your park as an RV park. A small dedicated RV park within a mobile home park can really work if the location is right. And it is possible to test and, if failure, abandon the project with little or no downside. Or you might consider opening a park and store facility for RVs, boats and cars. Try and see what is in demand, and see if you can deliver on it.

In these tough times, it is essential to be creative to fix your occupancy!