Need Advice About PM and Potential Deal - Posted by Kristi (KPC)

Posted by Dr. B. (OH) on October 05, 2003 at 19:39:38:

I already lost my JOB with a hospital corporation last summer. This isn’t our father’s world anymore.

Fortunately I started Lonnie deals a year ago and began DIVERSIFYING by dealing in several parks.

For non-MH business, I recently had several corporations sign MY contracts for services.

Happy Trail(er)s,
Steve

Need Advice About PM and Potential Deal - Posted by Kristi (KPC)

Posted by Kristi (KPC) on October 02, 2003 at 15:30:33:

Hello there everyone:

I apologize if this is a long post but I really and truly need some advise here. I just finished reading DOW and Making Money with mobile homes and have been reading this post for over 2 weeks now. Anyway, I spent the last couple of weeks meeting, preparing a business plan, flyers, cards, marketing, touring parks, meeting with residents etc and reaally thought that I was prepared but recent dealings have shown me that I don’t know what the heck I am doing.

Anyway, I’ve been courting this one PM with donuts, etc. for the past two weeks. I’ve visited her like 3 times and called twice and was really starting to think that she was warming up to me and ready to play in her park. I guess you can say that since her park own 700+ mobile homes and is a very nice park indeed, I really wanted to make a good impression so I’ve been kinda kissing up. Anyway after all that, she still hasnt given me the green light to deal in her park and is waiting for approval from her supervisor.

In the meantime however, I’ve been viewing several homes from desperate sellers in her park. One is willing to give me a DW, 2/2 1980 (needs lots of work) if I will just pay her back rent 420.00 and the other one is 6 months due on her rent (2400), wants 1000 to move, and wants me to take it off her hands.

The only problem is that the PM knows my intentions, I told her and now she has begun eviction proceedings on the one that owes 2400 bucks. She told me that although she would like me to deal in her park, she has to get permission from her supervisor and will let me know. She also told me that the price for the one home will be 4900 (covering lot rental fees and I guess attorney fees, etc). She just said, “They owe 4900 so I just want you to know.”

My question is, do any of you pay such fees and is this PM trying to get over on my newbieness? I mean, I offered to pay back lot rent for the one that is 6 months because it is a 1985 Nova in great shape, needs little work and I thought I could flip it quick but not back lot rent and attorney fees. She also stated that if they allow me to deal in this park, that there could be more deals in the near future. In addition, I am wondering, should I pay this amount or just say forget it, move on?

I mean I’m trying hard to do Lonnie deals but I honestly think this one could go for 10000 on a note (I’ve got 20 prospects) and 50% of all marketing calls want to live in her park and about 30% of all calls for purchases come from this park too. This is a BIG park.

Any advice would be most appreciated.

Thanks guys.

Kristi
AKA
KPC

Re: Need Advice About PM and Potential Deal - Posted by Chuck

Posted by Chuck on October 03, 2003 at 14:28:32:

If the person working in the office doesn’t have the authority to grant you permission to work in the park, your in the wrong park.

This one is obviously corporate-owned… whatever made you think they’d let you play in their mud? …or for free?

Chalk the donuts up to “learning expenses”… and re-read the books, you’ve totally missed the lessons they teach.

I smell a rat - Posted by Dr. B (OH)

Posted by Dr. B (OH) on October 03, 2003 at 11:59:55:

Kristi,
Your smart for wondering if you’re going to be the gopher for the PM.

Paying the back lot rent owed is common, though you should try and strike a deal discounting 50-80%. Or paying up to X months’ back rent and no more.

The business about starting eviction on someone you would buy out is fishy. I would ask why. Perhaps acting like you need their help to understand all this e.g. “…price for the home is $4900…” would make her less defensive. YOU SHOULDN’T BE PAYING THEIR ATTY FEES. She shouldn’t be setting the price unless your statement about the park OWNING 700+ homes is true. If they actually own the homes, then you need a different park.

By the way she should be able to get “permission” from the supervisor in 3 days not 2 weeks. I would ask to talk with the supervisor so you can explain that you are for real and want to help the park.

You may be able to find out who her “supervisor” is or who owns the park through one of the people selling their homes. I would spend about 2-4 more hours on this, if no progress, move on.

Happy Trail(er)s,
Dr. Steve Billmann

Re: Need Advice About PM and Potential Deal - Posted by Tony-VA/NC

Posted by Tony-VA/NC on October 05, 2003 at 10:19:39:

Chuck,

My first Lonnie deals were done in a corporate owned park of some 500 spaces. The corporate head allowed the PM to conduct business in the park and their only concern was lot rents.

They hated vacant homes, lost lot rent, vacant spots etc. Over time the corporate manager asked to meet me and I found him to be quite sharp. He even helped me close 2 deals that day that the PM was not quite as hot about (emotions with the sellers overcame the need to ensure lot rents).

Corporate parks are little different than other parks. There are risks involved with 55+ parks, small mom and pop parks etc.

Anytime we are dealing with investments that are on the land of another, we have some risk. Lonnie’s system of buying only single wides (reducing possible moving costs), the very low outlay of cash (quick return of investment) etc. help to limit the risk.

But in any park, as you pointed out in this scenario, managers may change, the park may be sold etc. and you will have to start all over again to establish the relationships.

With larger, corporate parks, the turnover of managers can become a hassle. But in time the new managers find the same corporate motivation and learn that the established Lonnie dealer in the park is an asset.

None of the corporate owned parks I have dealt with cared to do Lonnie deals. It is not necessarily a wise use of their time, effort and cash. We often assume that the park owners are foolish for not fixing up older homes to sell. This is not always the case. There are many reasons why a park benefits from Lonnie dealers and that benefit must be proven and conveyed to whomever is control of the park.

Small, privately owned parks are not always easy to deal in either. These owners are in total control and often know it and in many cases like to prove it. I find that corporate parks have less of this muscle flexing but my experiences may not be typical.

I simply have not found any one type of park to be more or less risky. This is a people business. If we can work with the people in charge, we have a chance. If those people move on or are replaced, then we need to know how we can react.

The market doesn’t change but the dynamics may in any park.

Tony

Re: Corp. parks - Posted by Glen Socal

Posted by Glen Socal on October 04, 2003 at 12:05:26:

Chuck–

You wrote: “This one is obviously corporate-owned… whatever made you think they’d let you play in their mud? …or for free?”

A General PM for a corporate park gave me permission to work in one of his parks–no problem. He’s delighted to have some help with turn-over and to maintain lot rents.

I merely went up the ladder to him and explained how my services would help his parks. He said, “Sounds good, just keep me informed, and don’t pull any units out of here.”

The PM doesn’t have problem with it either. I think that some PM’s want to control more than others. Maybe I just found one that is OK with it.

““Chalk the donuts up to “learning expenses”… and re-read the books, you’ve totally missed the lessons they teach””

I guess Kriti is meeting some resistance, but isn’t it worth her while to pursue this avenue till it’s done?
A 700+ park with good prospects is hard to walk away from!

Glen

Re: I smell a rat - Posted by KPC

Posted by KPC on October 03, 2003 at 12:44:01:

Dear Dr. Steve:

Thank you very much for writing back and confirming that I wasn’t just being paranoid and that I do in fact have reason to be concerned. I will definitely conduct some more research into this matter and will also inquire about the sudden increase in the payment, once I became interested in the property. I will inquire about the sudden increase in fees and try to receive a discount for the payment of back lot rent. That actually makes a lot of sense. Since this was my first deal, I just didn’t know how to proceed with further negotiations or what indeed was common.

As for the statement of owning 700+ properties, I meant that the park owns land (dirt) for 700+ spaces, sorry about that. The majority of people who live in the park - own their own homes or are financed through some other third party. Hope this clarifies.

Anyway thanks again for the advice and I’ll let you know what I find out.

Kristi

Re: Need Advice About PM and Potential Deal - Posted by Chuck

Posted by Chuck on October 05, 2003 at 10:33:54:

Quite right… which brings me to my point… if your going to work in a park… ANY park… you (ideally) should have a “working agreement” in place with the management and the owner… even if it’s just a one-page statement that grants you the right to do what you do (as opposed to a extended legal document)… and (hopefully) this “agreement” would be fully transferable (called it a grandather clause) should the property change ownership… so that your time, efforts and investments are protected.

CYA - cover your a$$ets

Re: Corp. parks - Posted by Chuck

Posted by Chuck on October 04, 2003 at 12:40:19:

IF your actually working a corporate park, then your the first person I’ve ever heard of (via this forum) who’s doing so.

To be honest, your probably in there because this particular PM is just smart enough to see you as a benefit… you make him look good… you bust your a$$ with the problems that he’d rather not handle… and he keeps his job without any extra work load.

IF your ok with that, then fine… but I’d almost wager his corporate bosses have no knowledge of your existance AND that if there was a change in on-sight management you’d be history in a heartbeat. That raises anumber of concerns as to the state of your investments… or at least it would for me.

Basically what I’m saying is that unless you have a letter from corporate giving you permission to work there, you ain’t got diddly… and they could wreak all kinds of havoc with your invesments if they choose to.

As for Kristi… I wouldn’t have spent another 5 minutes in that park after learning that the PM didn’t have the authority to give her permission to work there… there are simply way too many parks out there that would welcome her with open arms… and they won’t eat 2 dozen Krispy Kreme’s before telling her no… or throwing her a bone… or their worst case senerio… that was just plain rude and I have no doubt someone had a good laugh at her expense.

As Greg pointed out below… all the motivated buyers and sellers in the state are for naught, if the PM isn’t on your side.

Kristi, sounds like you are rarin’ to go… - Posted by Greg Meade

Posted by Greg Meade on October 04, 2003 at 09:50:37:

but it sounds like this pm won’t be much help. completed 4 deals and working on fifth and the one common thread with ALL the deals, is I had a pm or owner who was on my side. All the motivated sellers (or buyers) in the entire state won’t overcome the burden of a pm who doesn’t want you playing in their park.
here in FL i have started looking for pms and owners who want to partner up to fill their parks…FL runs an average of 20% or better empty. FL has been hit very hard with repos and removals the past three years. A typical deal for me is having the pm beg me to leave the 20 year old mobile in their park. Reduced or no lot rent til sold, almost instant approval of buyers. And really, this is the crux of the problem…you can buy all the homes you want, but the pm has final say in approving your buyer and in the meantime, holding costs are ascalating.
Maybe sit down with the pm and flat ask, can i deal in your park? Be willing to qualify and guarantee lot rent on sold units. sounds like you have a very positive attitude and there are many parks out there! Good Luck!!!

Re: Corp. parks - Posted by KPC

Posted by KPC on October 04, 2003 at 13:42:22:

Hey Chuck:

Actually the donuts weren’t Krispy Kreme, they were munchkins from Dunkin Donuts - I only save the Krispy Kremes for those park managers who guarantee in writing that I can in fact do deals in their parks. LOL! That said, I do appreciate your advice and plan on implementing some of your ideas in the near future. For instance, I will inquire further about this particular park, will review Lonnie’s books a bit further and WILL keep asking questions from experienced investors (like you) so that I can and WILL succeed in this business. My mottoes are, “One monkey don’t stop the show”, “If at first you don’t succeed, try and try again” and “If you aren’t allowed to play in one park, find another one, cause this business will work if you work it and if you have a PM willing to work with you!”. That said, I’ll keep you posted after I do more research, have a few more meetings with the PM, her supervisor AND their boss, and get our agreement in writing–so that the laugh stays with me when I am cashing all my checks from my clients! In the meantime, have a great day and thanks for the advice.

Kristi

Re: Corp. parks - Posted by Glen SoCal

Posted by Glen SoCal on October 04, 2003 at 13:33:45:

Chuck–

Thanks for your response.

I’m probably missing something.

The organization (MH parks) I referred to owns 5 parks. There are PM’s for each park. There’s a general manager (who I termed General PM) who oversees the operation of the 5 parks.

I may THINK this is a corporate park. Maybe it’s NOT corporate. I was making an assumption based on the organizational structure.

I haven’t had a problem with the PM, yet. It was the General Manager who liked my proposal. I met the General Manager through the ‘sales coordinator’ at the park I visited. BTW I haven’t done a deal in this park yet.

You wrote: “”“To be honest, your probably in there because this particular PM is just smart enough to see you as a benefit… you make him look good… you bust your a$$ with the problems that he’d rather not handle… and he keeps his job without any extra work load.”""

I was wondering why I’d be doing any extra work on a Lonnie Deal in this park as compaired to another park. Can you explain why I would be working harder in a corporate park?

You wrote: “”“As for Kristi… I wouldn’t have spent another 5 minutes in that park after learning that the PM didn’t have the authority to give her permission to work there…”"" -and- “”“that was just plain rude and I have no doubt someone had a good laugh at her expense.”"

She hasn’t been shut down yet. And it’s possible that no one is laughing. Maybe the PM will come around, and the pay-off could be HUGE!

Again, I’m probably missing something which is very obvious.

Thanks for your insightful posts,

Glen

Re: Kristi, sounds like you are rarin’ to go… - Posted by KPC

Posted by KPC on October 04, 2003 at 13:28:04:

Thank you very much Greg for writing back and taking the time to respond. Your message made alot of sense and I do think that I will do some more research and then will sit down with the PM and ask her what the deal is. I mean, it makes no sense for me to jump through hoops to get her on my side. After all, she should be. I also have no intention of being taken for a ride either and do believe tahat paying reduced lot rent makes the most sense. Like you said, I am offering her park a service (a very valuable one) and if she isn’t willing to let me play then there are plenty more PMs out there who will. One thing is certain though, I will keep you posted and really and truly appreciate your assistance. Have a great day and thanks again for writing back.

Kristi

Ignore negativity - Posted by Brian (Savannah)

Posted by Brian (Savannah) on October 24, 2003 at 06:33:45:

Wow…hats off to you Kristi. You not only tolerated a semi rude response but retorted with professionalism and flair. I certainly wouldn’t give up on that park. If you did one deal and grossed $1000.00 the donuts would be paid for and the amount of education you would walk away with would certainly push you up another rung. You have a great attitude and at the risk of sounding condesending…Im proud of you…I know you’ll succeed.

Brian

Re: Corp. parks - Posted by Chuck

Posted by Chuck on October 04, 2003 at 14:31:37:

You wrote: “”“To be honest, your probably in there because this particular PM is just smart enough to see you as a benefit… you make him look good… you bust your a$$ with the problems that he’d rather not handle… and he keeps his job without any extra work load.”""

“I was wondering why I’d be doing any extra work on a Lonnie Deal in this park as compaired to another park. Can you explain why I would be working harder in a corporate park?”

You wouldn’t be doing ANY extra work compared to a non-corporate park… you WOULD however be doing part of the PM’s (of the corporate park) job for him.

It’s (technically) his responsibility to do (what you are asking him to let you do)… he’ll be paid regardless of how it gets done… you get to deal with his little headache makers.

So “you bust your a$$ with the problems that he’d rather not handle… and he keeps his job without any extra work load”.

Makes one wonder who’s the smarter fellow, doesn’t it?


You wrote: “”“As for Kristi… I wouldn’t have spent another 5 minutes in that park after learning that the PM didn’t have the authority to give her permission to work there…”"" -and- “”“that was just plain rude and I have no doubt someone had a good laugh at her expense.”"

“She hasn’t been shut down yet. And it’s possible that no one is laughing. Maybe the PM will come around, and the pay-off could be HUGE!”

I’m far more inclined to believe that they’ll shut her out. It’s not in their best interest to let her play in their mud… a (corporate) park that large (typically anything over 300-spaces) usually has it’s own internal sales force… in other words, they do their own “lonnie-deals”.


FYI - I used to co-manage a corporate park… I speak from first-hand knowledge.

Re: Corp. parks - Posted by Glen SoCal

Posted by Glen SoCal on October 04, 2003 at 16:01:34:

Chuck–
Thanks again for your response.

You wrote: “”"So “you bust your a$$ with the problems that he’d rather not handle… and he keeps his job without any extra work load”.

Makes one wonder who’s the smarter fellow, doesn’t it?"""

Yes, the General Manager seems like a smart guy. At least smarter than I am at the moment!

“”“It’s not in their best interest to let her play in their mud… a (corporate) park that large (typically anything over 300-spaces) usually has it’s own internal sales force… in other words, they do their own “lonnie-deals”.”""

That doesn’t seem right to me. The sales coordinator only handles the MHs they take for delinquencies, MHs that are offered to the park for purchase, and purchases outside the park where the MH are moved to their in-park vacancies. That seems to cover it.

But I would be buying units that ‘I solicited’. The park sales coordinator says that the park could do the same, but they have ‘bigger fish to fry’. read: insult. Geeeezz. She mentioned that they would make money on the paper, but it wasn’t their focus. They were primarily concerned with lot rent.

The General Manager probably thinks, ‘more the merrier’. I told him exactly what I was planning to do with Lonnie Deals. He was all for it as long as I didn’t pull any units out. He said he just wanted the place performing at 100% if possible.

And wouldn’t the word get out to the rest of the park residents about shutting out competition? Goes something like this…: “What? You can ONLY sell your MH to the park sales-coordinator!!? You mean, they won’t approve a buyer if the Park doesn’t sell it!? Get my lantern! Where’s my pitchfork!?”

This park has about 350 spaces, plus there are 4 more parks in the group. I think that the General PM sees that I would be an asset. A, busting his A$$, asset", that can keep the lots paying rent in his park, all without a conflict of interest to him, or the park.

I know this thread is getting long, but I’d appreciate your thoughts on this again. Why would the General Manager allow me to work in his park if it seems like it would be against their best intere$t? It seems like they would be leaving money on the table, doesn’t it?

Thanks again, Glen

Re: Corp. parks - Posted by Chuck

Posted by Chuck on October 04, 2003 at 17:08:33:

The bottom line is very simple.

As soon as the right person realizes that your costing them money (as in a overlooked, in-house, captive audiance, revenue stream… that won’t require much in the way of additional expenses to impliment)… your gone… along with the PM, the GM and probably your investments.

Welcome to the corporate world of manufactured housing.

Next.

Re: Corp. parks - Posted by Glen SoCal

Posted by Glen SoCal on October 04, 2003 at 18:32:31:

Chuck–

Thanks for your welcome to the ‘corporate world of manufactured housing’. It’s very chilling though.

I didn’t think about people getting fired when they find out a Lonnie Dealer has been in their park.

The GM and CEO/owner of the 5 parks I referred to are long time friends. So there won’t be any firings at that park. This is probably an unusual situation.

I was being a bit of a Pollyanna. I’ll have to be more aware of the consequences to employees of corp. parks next time.

Thanks again for your insight. I’ll search the archives for some of your earlier posts.

Thanks again, Glen

Hold on there guys… - Posted by Dr. B (OH)

Posted by Dr. B (OH) on October 04, 2003 at 20:10:02:

I work in two parks owned by separate corporations. One PM probably doesn’t tell the corporate people anything about me.

The other has been bragging about me for a year. The corporate GM has recently thrown me a park acquired '73 14 x 70 home for $750. After putting $1450 in it, I sold it for $10,400, $2K down and 233.33/mo for 36 mo.

Last week I met the majority owner of the corporation (8 large parks in 2 states and counting). He said “I’m wondering if you could bring some homes into the park and do your thing. All we want to do is rent spaces and run the park.” “Maybe we could partner on some deals, I bring them in and you rehab & sell and we split the profit.” Dang, what better investment partner than the majority shareholder of the corp!

Happy Trail(er)s
Steve

Re: Hold on there guys… Part 2 - Posted by Chuck

Posted by Chuck on October 05, 2003 at 09:29:48:

I need to clarify something I stated in the “part 1” post.

Just because this small corp that your working in allows you to do lonnie-deals there today, does NOT mean that they will allow you to do them in the future.

What if this small corp, which is comprised of several parks who were once themselves “independant”, should someday be intergrated into a much larger corp? Wouldn’t there be a high probability of “change of method”… new and leaner management, and operating procedures… that could place your investments at risk? You could suddenly find yourself being treated like a red-headed step-child.

(sigh)

I can sleep now because I’ve given you fair warning of the larger picture.

Can you?