Best Practices - Posted by Shawn Sisco

Posted by Dr. B. (OH) on June 07, 2011 at 18:13:52:

I frequently run into this problem even though I have competent people working for me. I recently took on 4 extensive rehabs, a bank repo, 2 of my own repos, and moving a home needing rehab from land to a park. My focus: Lonnie Deals.

I’m beginning to think that spending the EXTRA $500 to $1500 in labor costs per home and $500 in landlord-friendly repairs is ultimately worth it because they get finished faster, down payment sooner, and monthly payments sooner. Of course my costs take longer to recoup this way but I repo 50% of my homes. With up front landlord-friendly repairs the resale goes faster. The sooner I start the churning, the sooner the home gets paid for.

In the past 7 wks, we finished both my repos, one of the extensive rehabs (now sold), got the home on land into the park, 2nd extensive rehab and bank repo will both be finished this Friday or Monday.


Best Practices - Posted by Shawn Sisco

Posted by Shawn Sisco on June 03, 2011 at 11:12:19:

What findings have you added to your ?Best Practices? list?

I request that all poster participate, and post your findings.

We can all benefit from each others findings, I would think that a brief explanation of your operation should be included, (example: low end rental, lot fee MHP, Lonnie deal in a non- owned park).

Topics can run the gamut, from home repairs, maintenance, and cleaning to Park infrastructure, to selling techniques, and scripts, tenant screening, accounting and time management.

Sales Agreement gotcha - Posted by Steve-WA

Posted by Steve-WA on June 06, 2011 at 23:23:41:

there is a blurb in my sales agreement that states:

“If default of the terms and conditions of the promissory note occurs, all rights and title immediately revert to the seller.
If purchaser remains on premises, they will be considered a tenant with a rental value of $XXX.00 per month. All charges and fees are considered part of rent due. Surrender of the premises does not exempt the purchaser/tenant from amounts past due.”

the “XXX” amount for rent is usually note payment + lot rent.

This allows the investor to process the deadbeat as a rental tenant; not a MH park eviction, but a straight rental eviction. I am evicting them from what has now become a rental home, not them and their home from the park.

A couple of years ago I got the opportunity to test this before a judge; he had to take a day to think about it, but came back in my favor. I got the writ, but then the deadbeat found religion and paid all she owed.

I just served another Eviction Summons and Complaint for Unlawful Detainer on a girl - hope I get the same judge!

Re: Best Practices - Posted by Rick Ewens

Posted by Rick Ewens on June 05, 2011 at 08:39:31:

Our Best Practice with long distance management / ownership of 500+ mobile home park spaces, 41 RV spaces and 80+ rent to own / retail contracts is.
#1 Operational tracking and accounting software - Rent Manager. I learn something new every day about how to track, analyze and refine business operations with Rent Manager.
#2 We utilize desk top check deposit machines and credit card processors for efficiency.
#3 We have professional management of our web site for maximum exposure and business promotion.

Re: Best Practices - Posted by Glen(OH)

Posted by Glen(OH) on June 03, 2011 at 20:20:39:

I have found over the years that homes serviced with propane are a real headache. Here is the typical scenario: Johnny and Susie have scraped up enough to put $1000 down on the home plus the park deposit and first month?s rent. They now have to come up with another $1000 (actually $989 as of last week) to fill the propane tanks and pay the new customer service fees. Halfway through the winter they need another fill and can?t come up with the funds to do this. They either run space heaters, kerosene heaters, or hit the road. If they do the latter and you are lucky, you scramble to winterize the home or pay for the fill yourself. If you are unlucky, as I was on one occasion last winter, they leave with no heat on the home and don?t notify you or the park. Soon you get a call from the manager telling you that water is running out the back of your new soon to be repo.

What is my best practice? I now only buy homes that are heated by natural gas or electric. The utility companies in my area are very hesitant to disconnect service in the winter for any reason.

I would still consider propane units but I apply new risk/reward criteria. The home must be priced so I can afford to upgrade the electric service and install an electric furnace or be such a steal that I am willing to risk the propane predicament.

My operation is far from perfect so I?m looking forward to other posts to get some new ideas.
Shawn, thanks for coming up with the topic!

Glen (OH)

Re: Sales Agreement gotcha - Posted by Tony Colella

Posted by Tony Colella on June 08, 2011 at 09:54:25:

Steve, you might want to refer a new judge to the previous judges ruling. Any documenation would certainly be important if you have any but I would guess the judge probably did the research and just rule. See what you can document from that eviction to submit to a new judge in the event a challenge occurs (meaning the tenant/buyer actually shows up in court). Keep the documents and don’t present them unless the topic or concern comes up.

You would then say something like, “your honor, Judge Jones ruled on this very topic on this date and found the contract to be valid and gave me possession of the home.”


Focusing on one target at a time - Posted by Tony Colella

Posted by Tony Colella on June 05, 2011 at 16:26:55:

Rick Ewens reminded our group about how important focus is to the investor. The examples he gave can be expanded upon and recently I found myself looking at properties I had no business considering and here’s why.

I have been blessed with very little vacancy for most of my portfolio’s lifetime. This does not mean that I didn’t have my bad times or I did not put the wrong people in the wrong house just to get payments in. I still do that I am afraid. Most of my tenant base has been with me for many years. I have spent my time and money fixing up homes and in many cases repeated that cycle again and again.

I have 1 home that has been my nemesis for 3 years. I began setting this home up in 2007 and never finished it. It has probably been 90% done for years and every (and I mean EVERY time) I go near it my vacancy gets hit somewhere else. I end up with 3 move outs or rehabs at one time and off I go again. This cycle has repeated itself for over 3 years. It did so again this year. I really dislike this house.

Over the past few weeks I have spent free time wondering if I should gaze over fences to seek other potential opportunities like perhaps buying a fixer upper stick built. As I began to think of what I could do to a home I was shocked back to reality by the image of Rick Ewens smacking on the back of the head while yelling “focus.”

Now Rick’s topic on his “focus” had little to do with my daydreaming of stick built rehabbing, but what it did remind me was of the doublewide nightmare that has haunted me for 3 years. I am ashamed to say that this home has sat that long. I would estimate tens of thousands of dollars in lost rent because I have not finished what I started on this project. Thankfully it is only one of two! Actually the other one is a real old singlewide right next door and only been down for much of this year. (Quite a ball of fire ain’t I?).

Don’t get me wrong, I have worked hard on the other properties keeping them full and have, over time, just about completed the Stage one of Landlord Friendly repairs in the remainder of the portfolio. Money and time were well spent on those units and a stick built property I sold but my inability to finish that doublewide is inexcusable (ever hear of hiring a COMPETENT contractor instead of doing it yourself Tony?). Now is my time to focus as best I can on that home and not spend my time rehabbing a new property. Seems obvious right?

Here is what I know. For the small portfolio investor it is dangerous to get caught up in the buy mode. Investors of this size get hurt when they get too many units, too fast and cannot afford to complete the turn around on one enough to move on to the next. The snowball effect occurs. The properties go downhill. The rental income goes down hill but the cost to change all this continues to climb with each added vacancy. By adding more units we compound the problem.

For people operating on a larger scale and with well capitalized investments, it may not be necessary for them to complete one project before moving on to the next. For folks like Rick it makes sense to establish the cash flow of one property and set up a team to complete the infill while he aquires more properties and installs more teams. For the smaller players like me there isn’t much of a team put in place. The recipe for disaster gets worse if you are undercapitalized (while things have been tight I have not truly experienced this problem yet but I know many others have).

As I imagined myself thanking Rick for the reality jolt I had to wonder if I was alone in this. I decided I might just not be so I wrote this post.

Sometimes it is best to do more with less. For me this means completing the properties that I have before moving on. Focus on cutting expenses that repeat themselves and increase my landlord friendly repairs.


Re: Best Practices - Posted by Dale

Posted by Dale on June 07, 2011 at 01:36:52:

Having started out with single family homes and then into apartments for 10 years the mobile home parks seemed to be a vacation compared to apartment management. Over the years here are some things that helpe us out.

  1. We didn’t always know what we were doing, but accidently stumbled into the right solutions.
  2. One simple plan: retirement is around the corner.
  3. Keep your money out of other people’s hands - you can manage it better than they can.
  4. Manage your own properties to maintain the curb appeal and keep from being ripped off by a dud manager.
  5. Never get so caught up in the buying process that you get yourself over-extended and when things turn sour you lose everything.
  6. Like the song says - take it one day at a time. Yesterday is gone, the future has not arrived so concentrate on the here and now of daily living.

LG - “Life is Good”!


Re: Focusing on one target at a time - Posted by Chris in FL

Posted by Chris in FL on June 19, 2011 at 20:36:05:

Right, FOCUS! That is first. I focus on the most pressing issues first, then those I can finish quickly and be done with. However, no way I would tolerate a SFH project taking a year.

Second: How many units do you have total? I have 30 SFR, adding more all the time, and I have little problem getting it all done, and having plenty of spare time. I hire a fair amount of handyman help, some contractors, etc., but also do a lot myself, and I manage all properties and oversee all work myself.

Back to my question: How many units do you have total? If not many, you are making excuses and need to just “get 'er done”. If many, might be time to hire a personal assistant, to multiply your time and productivity? Or try out multiple contractors/crews, to find one(s) you can use all the time, that need little to no supervision. Good book towards this end: The E-Myth Revisited - Michael Gerber.

Alternatively, I think some people keep taking on more and more for no reason. They may have all the wealth and income they can use in their lifetime, and keep pushing for more, and never spend any time enjoying life. At some point, for me, my RE is a means to an end - not an end in and of itself. It is so I can have financial freedom, spend time with my family, and just generally enjoy life. Good book towards this end: The 4 hour work week - Timothy Ferris.

Hope that helps any finding this situation occuring in their lives…

Best wishes,
Chris in FL