Issue link: https://read.dmtmag.com/i/60637
COMMUNITY MANAGEMENT PERSPECTIVE It's a lot easier to hire a manufactured home community manager than to get them to behave. Many managers lack the direction – and constant oversight – required to get them to do their job, and keep you out of harm's way. So here are some techniques we've developed tomake sure that our managers make us money, as opposed to losing money and creating expensive liability. Garbage in/garbage out Step one in getting yourmanager to behave is to train them. How can you expect your manager to do what you want themto do if you don't tell them exactly what that is? Too many community own- ers hire the manager and stick them in an office and expect themto perform. Sometimes, through some miracle, the manager is able to pull it off. But more often, an untrained manager is a loose cannon that can causemore damage than good out of no fault other than poor direction. We have found that it takes about two days to train the manager in exactly what our procedures are, and to do so in enough depth that they can remember it after you leave. Make sure they understand "Fair Housing" Step one in training the manager is to educate them on the laws of Fair Housing. This task can be made simpler by obtaining a free copy of the Fair Housing Handbook from the U.S. govern- ment andmaking the manager read it. One of the worst things that can happen to a community owner is to be embroiled in a Fair Housing case. Yet howmany times have I had amanager tellme, during due diligence, that they don't allow fami- lies with kids, or certain minority groups? Appar- ently, many of these managers have never heard of the concept of Fair Housing. Don't let this happen to you. How To Make Your Manager Behave By Frank Rolfe Don't let the manager handle cash If you don't want the manager to embezzle, then don't accept rent in cash. Even a goodman- ager may get tempted when they have bills to pay and they see $20,000 per month go through their hands in cash every month. Only accept checks and money orders, for the protection of your res- idents and the best interests of your manager. In addition, an office that handles cash becomes an immediate target for crime that might end the ca- reer of your good manager. Try the Friday Fax One good tool we've developed over the years is the "Friday Fax". Basically, the manager sends us a report each Friday that tells us everything that went on that week, including who still has not paid, any homes sold or rented, all lots that are still vacant, and any other issue of significance. This structure makes the manager accountable week-by-week and makes them reflect on what they've accomplished. It also pins down theman- ager frommaking wild claims that "I'mrenting lots like crazy" when you can see in black and white what the real results have been week after week. Mystery Shopping is a great idea It's a good idea to "mystery shop" – call your manager posing as a customer – frequently to see what they are really saying and doing when a cus- tomer calls. We do this weekly on all communi- ties that have managers that deliberately never answer the phone, or will say that they are "sold out" when there's three homes sitting there, are deliver horrendous sales speeches like "we've got some old trailers that are pretty run-down if you want to come out and look".More than once, the mystery shopping has resulted in the removal of managers that we thought were doing a good job. Create awards for good performance Having a very tangible, easy-to-understand bonus systemformanagers is a good idea when you need above-normal performance in one area. For example, if you several homes that came with the purchase of the community and you want to un- load them fast, nothing empowers the manager like a significant bonus – we normally pay around $250 for each home sold or rented in that case. Or if you have RV lots that are gathering dust, you might try a commission based on occupancy. But don't reward managers for doing their regular job, or for events that they don't control – that just builds up a culture of over-compensation. Don't be afraid to move on One of the best ways tomake yourmanager be- have is to fire them when they don't.Many com- munity owners foster bad behavior by not doing anything about it. Your managers must be ac- countable and bad performancemust not be toler- ated. We have purchased way too many communities where the real reason that they re- quire a turn-around is that the owner refused to fire the manager that was running the property into the ground. As StanleyMarcus (the founder of Neiman Marcus) once said "take your mark- downs on people and merchandise as soon as pos- sible". Conclusion Management is the most essential part of the businessmodel with any givenmanufactured home community. You cannot afford to have bad man- agers running your business. Take a proactive ap- proach to making your managers behave, and you will be richly rewarded with bothmoney and peace of mind. APRIL 2012 9 THE JOURNAL