Issue link: https://read.dmtmag.com/i/549054
AUGUST 2015 9 THE JOURNAL guest editorial by Michael J. Power Based on my experiences here are a few ob- servations on what it takes to fill homes and sites with people today and to make your resident base stable. If you are a Community Owner or Dealer and selling homes you might find it interesting to know that I purchased over 750 Mobile Homes to fill vacant sites in my communities a few years back. Here is what I found that works best in "Family" Commu- nities: Step 1. Explore to understand the market you are in, what you have to offer and compare it to the needs of the local market includ- ing who your end user buyer/occupant is and what they want. Remember the old axiom, "All Real Estate Markets Are Local" 2. Target what you offer in a Mobile Home (bedrooms, payment, terms, etc.) to what the needs of your potential customers are (local market) and what they can bring to the table. In other words "What is your local MHC com- petition pricing their homes at? (Total Entry Cost plus Total Monthly Payment) Here's what you are looking for: (All of this plus what you learn from doing Step One.) a. Stability first: Employment Stability, Past Housing Stability, Ties to your local area, Ties already living in your community (friends, relatives and the like). b. Down payment amount and the re- sources to fund their move. (truck rental, se- curity deposits for water, sewer, electric, cable, etc.) c. Older cars, nice looking but with no or minimal monthly payments on auto loans. New cars and big payments are often deal breakers when it comes to collecting rent down the road. d. Weed out recent criminal history or old felonies for violent crime or drug sales. In fi- nancial hard times old habits come back. Watch out for pedophiles. Six good people will move out for every pedophile that slips through the cracks and into your community. e. Credit score. Ask yourself this: "If I evicted everyone in my community who pays on time AND has a credit score below 500, how many residents will I lose? Today, 80% of Americans have negatives on their credit." f. Two stable pay checks in the home. Jobs or combined with Social Security. Alimony or child support from a spouse counts as zero as it is far from stable. It could be gone in a heart beat if the spouse loses a job or either party gets a new love life. g. Children can be a stabalizing factor (if there are two working adults) and here is is why? Once a child has two months in a neigh- borhood they make friends and bond faster than Mom and Dad. If you create an atmosphere that is safe and clean with 100% curb appeal then the child will help you out. "Mom, we can't move my best friend Johnny lives down the street." One word of caution: Children are expensive so the more children the more income needed by your prospect to be a stabalized, long term resident. h. If you are selling homes and doing the fi- nancing and are NOT SAFE Act compliant then you need to stop today and understand what the ramifications are before you sell an- other one. i. The Security is in the "person" not the security deposit. So if you find the right peo- ple then adjust your security deposit (if you need to) to make a NOW deal. Personally, I would rather have a good bet with a small deposit than a bad bet and a big deposit. If you are a Bank, credit is everything as that is the only way you can process the mass of ap- plications. If you are a Community trying to fill sites and keep them filled, then stability out performs credit 10 to 1. 3. You will be successful if you have the fi- nancial capacity to buy homes and the ability to "execute" on your plan. A national, regional or local image building campaign will do little for you as your competing local park owners will likely be poor managers and their communi- ties/parks won't show well when people do a "Drive Thru". So make sure your community looks better than the rest in town. Not a pool or play ground. Just the ba- sics. No junk, no clutter and no litter ... and for heaven's sake no crime, drug dealers hanging out on the corners or loi- terers. So don't wait for a national image building campaign, instead do what you are doing best to create your own local "image" and consider the suggestion listed here. Make your Community or your Dealership stand out in your area and spend all your free time hunting for financing and for investors to fund homes because without them you are doomed. This is on the ground, hand to hand com- bat. I may be all wet but that is my opinion and in 30 years financing drove the MH market and poor management dragged it down. So it is... ready, .... set..... execute. Michael Power has 22 years in the Manufactured Housing Industry as a community owner/operator, creator of the "Complete On-Site Manager" and consultant to both newer and experienced commu- nity owners and banks nationwide. He can be con- tacted at Linked-In: http://www.linkedin.com /in/mhcinvestor, My Blog: http://www.mobile- home.com/wordpress/michael_power, Web Site: www.mhcinvestor.com The Security Is In The Person "NOT" The Security Deposit Based on my experiences here are a few observations on what it takes to fill homes and sites with people today and to make your resident base stable. T J