Re: How To Deal With PM … Part 2 - Posted by Tony_VA
Posted by Tony_VA on January 04, 2001 at 07:23:41:
Hi Rainy, as always, you have an interesting perspective. It is good to have your input here that shows how PM’s work.
I would have to politely differ on the approach to the PM, as an investor.
Many new investors are nervous about dealing with park managers initially. Your suggested method would certainly keep things informal and distant enough to remain comfortable for the new investor.
Why I differ is this. As an investor, we need the park manager as an allie, not just a mechanism in the machine. As a Lonnie style investor, I value the park managers very highly. I would hazard a guess that 90% of my buyers and sellers come as the result of park manager referrals. If I were to remain a night drop applicant, I would never have received these referrals.
This business is a people business and unless I can establish a rapport with the manager in the park, my deals are done there. Yes, your method would get me permission to buy homes in the park but it would not get me the referrals to the motivated sellers necessary for my business to prosper.
I need to locate motivated sellers. I need to help my parks get rid of tennants who are constant slow pays and bad neighbors. I need to be one the park calls when they end up with a home they do not want. I need to be the one the park refers people to when their court date is tomorrow and they will lose their home and have no money to move with etc. The point is, I need the park mangers trust that I CAN and WILL solve problems for them and their tennants and assist in bringing in new tennants that the park manager approves.
Your suggested method of buying homes for a grand and selling them to a broker for $2500 may have it’s merits but it is not the investment I prefer. To each his own right! Actually it would seem to me that your method would be a good side business for a park manager. You know which homes need to go. You have contacts with brokers all the time and know which brokers and dealers need lot space and when. You would have little holding costs because you could sell before you buy. The average Joe could buy the home and offer it to a Broker but there is not guarantee it will close quickly and lot rents may eat it up profit fast. In my area dealers are hesitant to purchase homes in this fasion because they may not be able to sell quickly due to the financing cut backs in the market. The dealers don’t want to fork out $3k for an older home and have to move it (usually to the dump). Now I could see Conseco looking for such an arrangement with parks to market their huge inventory of repo’s in hopes that local Brokers can sell the homes. But let’s face it, if Conseco, or a dealer, brings a newer home into a park to market, they are going to want concessions from the park in regards to lot rent. They would need to deal directly with you, not a middleman investor. If they cannot get the concessions from you they need, the deal is off and the investor is stuck with an older home that you, the pm, may or may not let stay in the park. Since you don’t know this investor, other than from his application, you have not rapport to go on and little reason to look out for his business interests.
So long story short, I still recommend that new investors establish a rapport with a park manager over time and use this relationship to benefit both parties. As you have proven, we can learn a lot from park mangers.