MOBILE HOME PARK MANAGEMENT


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BETTER MANAGEMENT = HIGHER VALUE
When it comes to Mobile Home Park Management, there is a saying: “As is the management, so goes the park”. What does this mean? Simply put, a well-managed Mobile Home Park will generally out-perform a poorly-managed one. We see it all the time. Our view is that a good park with a bad manager is far more likely to fail than a bad park with a good manager.

GOOD PEOPLE
Mobile Home Park management involves many things & many people. Depending upon the size of the park (generally measured in number of spaces), it may require a full-time onsite staff which could include a Manager, Assistant Manager, Maintenance/Operations Manager & Landscaper. Larger parks could require more than this. Conversely, smaller Mobile Home Parks may run quite nicely with a part-time Manager who lives in the park.

MOBILE HOME PARK MANAGEMENT:
THE FULL SPECTRUM

But, Mobile Home Park Management goes well beyond the Manager or other onsite employees, they’re just the beginning. Here at CCI Real Estate, our in-house Mobile Home Park Management division, CCI Property Management manages over 40 parks. Our full-time professional staff performs a full range of services for our Mobile Home Park Investor-Clients. These include, but are not limited to:

* SETTING UP the Accounting Systems, Rent Rolls, Procedures, etc.

* HIRING, TRAINING & MANAGING the Onsite Staff (ie: Mgr, Asst Mgr, Maint Mgr)

* COLLECTING RENTS, payroll & bills, collections & evictions (if needed)

* Provide MONTHLY STATEMENTS & usually Monthly Checks to the owners.

* Perform “VALUE ENHANCEMENT”, which could include:
Fill Vacancies, Raise Rents, Pass-thru Utilities, etc.
Reduce Expenses, Prop Tax, etc.
Problem-solve & avoid problems by doing it right
Repair & Improve Park
Expand (ie: more space and/or more units)
Raise NOI (Net Operating Income) & Increase the VALUE!

MOBILE HOME PARK MANAGEMENT:
RESELL AT A PROFIT

At this point, with the park producing excellent POSITIVE CASH FLOW & HIGH RETURNS, many of our Investor-Clients choose to keep them & enjoy the income. Others elect to RESELL the park at it’s new, INCREASED VALUE for the profits. Many of these Investor-Clients reinvest these profits into yet another Mobile Home Park with great UPSIDE POTENTIAL, & they just keep doing it again & again. Some have worked with us for years & we have bought & sold numerous Mobile Home Parks over the years to them & for them, managed them in between & helped them build the kind of PASSIVE INCOME that most people only dream of. Some are rich today because of it. For a few examples of this, check out our

Mobile Home Parks recently bought & sold at a profit.

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THE NUTS & BOLTS OF MOBILE HOME PARK MANAGEMENT
This is an incredibly complex subject filled with an infinite variety of circumstances & situations. It would be impossible to address every aspect of Mobile Home Park Management. However, we will do our best to give you the best of what we’ve learned through years of experience buying, selling, refurbishing & managing numerous Mobile Home Parks all over the country. In addition, we’ve owned Mobile Home Parks ourselves (and own now) & nothing teaches you more than being in the position of ownership. In that time, we’ve seen it all & we’ve learned some valuable lessons.

PERSONNEL / EMPLOYEES
MOBILE HOME PARK MANAGEMENT:
MANAGING SMALLER PARKS

As stated earlier, the size of the park generally determines the number & duties of employees. A small park with 20 spaces or less might only require a part-time Mobile Home Park Manager to collect rents & show empty units. Typically, they’re usually given free space rent & no cash compensation if the job is small enough. But there is every variation on this. This works especially well if there are empty sites anyway, because now you’re paying your manager with a site that would have otherwise been empty, making it almost free to you. Of course, it will be his job to fill up all those empties. On a small park like this, any landscaping/maintenance is either done by an outside lawn care outfit for a flat monthly fee, or someone in the park does it for $100-150/month or so. The key with a small park (with all parks for that matter) is to keep expenses low, because there isn’t much income to work with & payroll is one of the biggies. Some owners get cheap & pay their part-time managers less than a month’s space rent. In the end, it all has to make sense & everyone has to be happy with the arrangement. If you bend your manager over too hard trying to say a little money, you could lose a good manager, or lose his enthusiasm for the job, anyway. Sometimes it’s worth paying a little more.

MOBILE HOME PARK MANAGEMENT:
MANAGING LARGER PARKS

Larger Mobile Home Parks pose their own set of problems. Just managing 60 or 100 or more tenants, collecting that much rent at the first of the month, solving that many problems in the park, etc. demands a full-time onsite Mobile Home Park Manager who is more than capable of handling just about anything. Depending on the size of the park again, you may only need the one person doing Mobile Home Park Management, Maintenance & Landscape work for a 20- to 40-space park. But be careful not to overload or overwork him. If he gets hurt, or if he just burns out, you could lose a good manager. On a larger park, 40+ spaces, you will probably need a part-time or full-time Maintenance person & possibly a Landscape person to help them with mowing the lawns, tree trimming, picking up leaves, etc. At some point, an Assistant Manager becomes necessary to replace the Manager 1 or 2 days a week for his days off. Some parks are larger still, or have other amenities that need to be maintained, such as swimming pools, spas & jacuzzis, clubhouses, laundry rooms, showers, rest rooms & more. You need the right people for the job, people who are capable of doing it, will do it faithfully, are good with people, and above all are honest.

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MOBILE HOME PARK MANAGEMENT:
WHERE DO YOU FIND GOOD PEOPLE?

We get asked this all the time. Managers leave, maintenance people don’t work out, cut backs must be made, but there always seems to be someone looking for a good person to work in their Mobile Home Park. Where do you go? Of course, CCI Property Management has a “Hot List” of dozens of people that we’ve worked with over the years that we can call in, permanently or temporarily as a “pinch-hitter” until a permanent manager can be found. In every case, they have a track record with us, and of course we do a thorough background check on every employee we hire in this capacity. But what can you do, if you don’t have a long list of trustworthy replacements? Here are a few pointers:

1.) LOOK WITHIN THE PARK. We often find the perfect Mobile Home Park Manager already living in the park, especially in smaller parks. They already know everyone, are familiar with the park & hopefully have some feeling of pride in it. Often the ‘busy-body’ type work out well as managers, just make sure they have the people skills.

2.) RUN ADS ON CRAIGSLIST. It’s free so go for it. In fact run more than one, each emphasizing different features & uses different keywords. This may attract different people. Keep running your ads every few days, as they get bumped farther down the list as new ads come on. You should get lots of calls, so be prepared with a list of questions & what you’re going to say & ask of them.

3.) HEADHUNT OTHER PARKS. Some Mobile Home Park owners look for other well-run parks where the Managers are being underpaid or are unhappy for some other reason. Then they try to recruit them to their park, with a better deal, or a better situation.

4.) WORD OF MOUTH. You’d be amazed at the good people your friends & family already know who would be perfect Managers for your park. Spread the word, tell everyone, chase down leads, make calls. Tell the pastor of your church, the people at your workplace, your friends on the golf course. You may get lucky.

MOBILE HOME PARK MANAGEMENT:
RULES OF HIRING

This is the best of what we’ve learned, having hired hundreds of employees over the years. We’ve had great Managers & terrible ones; highly-qualified Maintenance People & completely incompetent ones. Glean what you can from it:

1.) Everyone is on their BEST BEHAVIOR on the job interview. Don’t presume that everything they tell you is true, or that they are really as good or as nice as they say they are.

2.) CHECK EVERYTHING OUT. If they tell you they used to work somewhere, call the place & find out. Not just the stuff written on their application either, anything you can pick up in conversation. See if everything they tell you adds up. 3.) CHECK THEIR REFERENCES. But remember, past employers will often lie, just like past landlords, as a way to get rid of the person & dump them on you. It happened to me & I ended up with the worst of all management nightmares. Their friends & fellow workers will also lie for them. Its very hard to get to make sure you’re talking to real people. Get the names of past employers, then instead of using the phone numbers they provided you, look them up for yourself & call.

4.) ALWAYS DO A BACKGROUND CHECK. With Mobile Home Park Managers handling your money & your property, it’s a MUST! Don’t bypass this crucial step. Line up a place that can do it for you & get the form from them that the applicant will need to fill out & sign to authorize it. It’s also important with other employees, such as maintenance people, who are in your tenants yards & represent you in the park.

5.) PAYROLL EVERYONE! Don’t do any “under-the-table” deals, not even in exchange for the free rent. Unless they are clearly an Independent Contractor (which is very hard to make stick, these days), they need to be treated like any other Employee, with Payroll Taxes taken out, matched & paid by you, Unemployment Insurance, etc. Without it, when you let that person go & they apply for unemployment insurance, the Labor Board will quickly determine that none was paid for & an investigation of your business will be opened in favor of the employee. This can cost you a lot of money.

MOBILE HOME PARK MANAGEMENT:
WORKERS COMP FOR EVERYONE

If an employee (or someone you considered to be an Independent Contractor) gets hurt on the job, he’s going to try to file a Workers Comp claim to pay his medical bills. He’ll come to you for the info on who to contact. If you don’t have it, your best bet is to pay his medical bills out of your pocket to prevent him from going to the Labor Board. Then get him to sign a release once he’s recuperated. Then get Workers Comp right away. A workers comp claim can pass right through a corporation & drop directly on you personally, and bankruptcy won’t stop it. There is no escaping it.

MOBILE HOME PARK MANAGEMENT:
GET A CONTRACT

Have a contract with everyone you hire. If they’re supposed to be an Independent Contractor, make sure they really are, according to the law, then draft an Independent Contractor Agreement & both of you sign. If he’s going to be an Employee, then get an Employment Agreement signed. The law will generally side with the poor, down-trodden employee over the greedy employer every time, if there is no contract. WMA or a similar Mobile Home Park Owners’ Association can provide you with a good one, you can copy a good one from someone else, or do like I did & pay a high-priced labor law attorney to draft one for you. But get one! And use it every time. TIP: Make sure it contains the words “Employment at Will”. This means that it can be terminated by either party any time, without cause or notice. Without it, you could be required to keep that employee on for a lot longer than you wanted.

MOBILE HOME PARK MANAGEMENT:
DON’T GET KINKY!

It’s easy to get into a situation with your Manager that is less than “Kosher”. Paying him under the table, paying his wife so he can keep his unemployment, working them more than the law allows, or doing non-permitted construction, are all practices that can come back & bite you. When your Manager is on good terms with you he learns all the dark secrets of your business. Then, when you have to let him go & he hates you, he may try to use that knowledge against you. Keep your nose clean with your managers & don’t confide to much to them about the inner workings, especially if there is anything you want to keep a secret.

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TENANTS & RENT COLLECTION
MOBILE HOME PARK MANAGEMENT:
A LEAK-PROOF SYSTEM

When running Mobile Home Park from a distance (ie: you’re not there every day), one of the most crucial needs you will have is to make certain that all the rents get collected & deposited into the bank. This seems obvious & over simple, but it’s not. There are so many things that can happen & they often do. We’ve had managers who swore the money was stolen before they could deposit it. We’ve had managers who skillfully & systematically stole money from the park every month for 10+ years & never got caught (until we came in). We’ve caught managers red-handed, only to have them turn on us & sue or make some other kind of trouble. It’s all there, it happens, and it’s happened to us at one time or another. That’s important to know, because we have the experience to spot it, hopefully, before it happens next time, and even more importantly, has forced us to come up with systems that prevent this sort of thing happening in the future.

MOBILE HOME PARK MANAGEMENT:
HONESTY IS THE BEST POLICY

First & foremost, you need an honest Mobile Home Park Manager. Finding one through people you know, checking references & doing a background check are good ways to find an honest manager. But they are by no means guaranteed. Always remember that while most people are good, the bad ones won’t tell you they’re bad, and in fact will usually tell you they are very good, and be very convincing. Let’s face it: to be able to steal, they have to be able to lie, and if they’re good at it, you might not realize it. That’s the whole point! Many Mobile Home Park Owners who think they’ve hired a good one, or already have a manager in place & want to check them out, will “shop” their managers. They’ll send a friend in to rent a space for cash & see what happens. If they report it right away, they pass. If the money doesn’t show up as it should, they fail. Shopping can also be done to check on your Managers’ effectiveness at taking calls, handling questions & renting spaces. Bottom line: An honest manager is crucial to your operation.

MOBILE HOME PARK MANAGEMENT:
SET UP GOOD SYSTEMS

Honest manager or not, every Mobile Home Park needs good Operating & Accounting Systems in place. It doesn’t have to be fancy, especially in smaller parks with only a few spaces, or parks with permanent tenants & no turn-over, it can be as simple as a Rent Roll and in Income & Expense Statement at the end of each month. On larger parks however, or parks with lots of turnover (like RV Parks), management is more involved & needs a more comprehensive system. There are several good accounting systems out there, online or as software, such as Quicken. If you like these & are already familiar with them, then you may choose to use them for the accounting. But they do nothing to address the ever-changing Rent Roll. Programs like Rent Manager are specially designed for running Mobile Home Parks & Apartment Complexes. But a system is only as good as the people using it. If it’s not being fully utilized, or if errors are made that go uncorrected, or information is left out, then the system is worthless. The onsite Mobile Home Park Manager should know how to use the system from his end & be able to do only those duties on it that are his to do. Then you must constantly check & recheck to see that it’s being done & that it all makes sense. Call the manager once in a while with a question on it, both to sharpen his understanding of it, but also to let him know that you’re watching. Always, always check to make sure everything matches, rent roll vs. rents collected vs. bank deposits, at least once per month.

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MOBILE HOME PARK MANAGEMENT:
MAKE A LIST

Sometimes the simplest solutions are the best. You need to design a program of Maintenance & Operations for your park, then put it into a logical written format, then boil it down to checklists. A checklist for the Mobile Home Park Manager might include Running Craigslist Ads every few days, collecting rents & keeping books current, collecting past due rents by a certain date, and other management duties. The Maintenance Manager’s list may include mowing the lawn twice a week, cleaning the showers & rest rooms daily, leaf blowing once a week & treating the pool once a month. Whatever it takes to run that park on an ongoing basis must be systematized & made into a simple checklist that you give to your Manager & one for your Maintenance person, etc. If the park is looking good & running smoothly, leave it at that, but if it starts to slip, insist that they fax their checklists to you each week.

MOBILE HOME PARK MANAGEMENT:
KEEP IT CLEAN

Obviously, a clean park will look better than an untidy park. But it goes beyond that. First off, a nice, clean tenant, the kind we all want, may not move into a park which is unkempt. The untidy tenants never seem to mind though, so you end up with a park full of untidy tenants, making the situation far worse. Keep the park clean. Mow the lawns, pull weeds, trim trees, haul away the junk & debris, clear old abandoned units, fix fences, sweep the gravel off the pavement once in awhile. If your Manager can’t handle all this, bring someone else in. Depending on the size of the park & the size of the job, you may choose to hire someone within the park to do the needed work in exchange for all or part of their rent. Or you can hire an outside Yard Maintenance Company and/or tree company to do it, but it could be expensive this way. But whatever you do, make sure it’s legal & you’re not going to get yourself in trouble if they fall off a ladder.

MOBILE HOME PARK MANAGEMENT:
CLEAN-UP DAY

But a big part of the burden falls on your tenants. Many allow their trailers to get run down, let their yards to get cluttered, have a non-running car or two & a funky lean-to made out of old doors for a patio cover. You need to get on them & make them clean up their sites. It should be in your Rental Agreement and/or your Rules & Regulations to keep their sites clean. If it’s not, then draft a new one with a clause in it that addresses this, then have your Manager get everyone to sign the new one (always give the tenants a copy). One approach is to get hard-nosed & tell your tenants they have 14 days to clean up their homesite, or you’ll do it for them & charge them for it. You may need to do this with some of the more difficult cases. But another, more friendly approach that works very well is to give all your tenants notice that you will be providing a special dumpster on a certain date for everyone to use to get rid of all their junk & clean up their yards. Anything left after that that is in violation of the Rules & Regs will cost them.

MOBILE HOME PARK MANAGEMENT:
ONGOING MAINTENANCE

Some things just need to be maintained all the time, or at least sometimes & checked often. Many owners get cheap on this step, thinking they’re saving money. But in the long run, it often ends up costing them money. Every mechanical system in the park needs some sort of maintenance or at least monitoring. Don’t wait until it breaks! Another key area is in the maintenance of any Park-Owned Units. Many parks include Mobile Homes or RVs which are owned by the Park & rented out to tenants, almost like apartments. These need to be inspected every 3 months, put it right into their lease agreement. Tell them it’s for their health & safety, and it is, but it’s also to check for damage, water leaks, bad floors, roof leaks & of course...bad tenants. Make sure this vital step is taken on a quarterly basis or this is one maintenance issue that will cost you more money, in the long run. By the way, we figure a rule-of-thumb of about $1,000 per year to maintain a Park-Owned Mobile Home, so if you have 6 of them, budget in $6,000 per year to maintain them, IF you keep up with this quarterly inspection process. More if you don’t.

CONTACT US FOR MORE INFO
Mobile Home Park Management is a huge undertaking, as you can see above, and this is by no means the whole story. It's not possible to include everything you will need to know to manage your Mobile Home Park properly. CCI PROPERTY MANAGEMENT does this all day, every day. Call me with your Mobile Home Park Management questions, Andy Tallone at (925) 323-2134, or email me at info@mobile-home-parks-forsale.com



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