Mobile Home Park Management (out of state investor)
Real Estate Agent · Chattanooga TN · Member since 2016 · 34 posts · 9 votes
If I were to invest in a mobile home park out of state, then how should I go about the management aspect? Are there property management companies that I can hire? If so, any recommendations?
@Ben Bymaster as you consider buying a park out of state, you will want to consider your options for both onsite and offsite management.
As it relates to the onsite manager, the common generic strategy is to interview the existing tenants to find a capable, trustworthy, willing person to be your manager. That strategy works best if the park is too small for a serious onsite team and you have the ability to watch over the manager. However, don't expect to get much more than a person who collects rent, interacts with the other tenants, and puts eyes and ears on the park. I would not suggest this generic strategy for a larger park, parks with a lot of park owned homes, or parks that need a lot of work.
For value-add parks with vacant park owned homes, vacant spaces, and one that may have been previously poorly managed and in need of a lot of work, the generic strategy above will not allow you to move the needle much. The best approach is to hire a full time onsite management team capable of performing all the duties of management, home sales, managing maintenance and repairs, and the implementation of software systems and processes that will eventually have the park running like a Swiss watch. This kind of management team will cost more money of course, so a smaller park may not be capable of affording that kind of horsepower. Usually, the break even point tends to be about 40 lots before a full time manager is warranted. If you can afford a great onsite manager, particularly one who has experience turning parks around, they will make your life a LOT easier and will be well worth your money.
As it relates to offsite management (3rd party management) we have found that this solution only works if you have a a park that is already stabilized and running at or close to efficiency. However, if you choose to go this direction, make sure to find a company who specializes in parks and is familiar with all the state regulations. Hiring a 3rd party PM company without intimate knowledge of parks is a recipe for brain damage. If you have a park that requires heavy lifting to fill spaces, sell homes, complete major capital improvements, etc, I would not recommend a 3rd party. They just don't have the ability to move the needle at the park, nor will they care as much as you do as the owner, so you will be left disappointed with their lack of performance.
If your focus is to acquire value-add parks that require a lot of work, I would suggest YOU become the expert and take the role of offsite manager, overseeing the onsite manager. That will allow you to stay engaged with the property, move the needle, and give you the freedom to acquire more parks. This will require you to learn all the ins-and-outs of parks, to include filling up spaces, renovating homes, selling homes (along with licensing requirements), carrying paper, crafting the correct leases and notices, establishing the right park rules, proper tenant communication, metering of utilities, and the list goes on... You can gain that experience through education, mentorship, and running a park yourself of course, but the goal is to become the expert at determining and executing the right strategy for a park.
As it relates to management, just remember that your ability to move the needle will be directly related to the quality of the onsite manager, and YOUR ability to provide the proper leadership, goals for the park, and resources/support to help your onsite staff achieve them.
All the best,
Jack
@Ben Bymaster. I think the best way to do this would be to buy a large enough park that can have on-site management. If it’s third party off site management you will likely have more difficulties
Interested in this as well.
@Ben Bymaster as you consider buying a park out of state, you will want to consider your options for both onsite and offsite management.
As it relates to the onsite manager, the common generic strategy is to interview the existing tenants to find a capable, trustworthy, willing person to be your manager. That strategy works best if the park is too small for a serious onsite team and you have the ability to watch over the manager. However, don't expect to get much more than a person who collects rent, interacts with the other tenants, and puts eyes and ears on the park. I would not suggest this generic strategy for a larger park, parks with a lot of park owned homes, or parks that need a lot of work.
For value-add parks with vacant park owned homes, vacant spaces, and one that may have been previously poorly managed and in need of a lot of work, the generic strategy above will not allow you to move the needle much. The best approach is to hire a full time onsite management team capable of performing all the duties of management, home sales, managing maintenance and repairs, and the implementation of software systems and processes that will eventually have the park running like a Swiss watch. This kind of management team will cost more money of course, so a smaller park may not be capable of affording that kind of horsepower. Usually, the break even point tends to be about 40 lots before a full time manager is warranted. If you can afford a great onsite manager, particularly one who has experience turning parks around, they will make your life a LOT easier and will be well worth your money.
As it relates to offsite management (3rd party management) we have found that this solution only works if you have a a park that is already stabilized and running at or close to efficiency. However, if you choose to go this direction, make sure to find a company who specializes in parks and is familiar with all the state regulations. Hiring a 3rd party PM company without intimate knowledge of parks is a recipe for brain damage. If you have a park that requires heavy lifting to fill spaces, sell homes, complete major capital improvements, etc, I would not recommend a 3rd party. They just don't have the ability to move the needle at the park, nor will they care as much as you do as the owner, so you will be left disappointed with their lack of performance.
If your focus is to acquire value-add parks that require a lot of work, I would suggest YOU become the expert and take the role of offsite manager, overseeing the onsite manager. That will allow you to stay engaged with the property, move the needle, and give you the freedom to acquire more parks. This will require you to learn all the ins-and-outs of parks, to include filling up spaces, renovating homes, selling homes (along with licensing requirements), carrying paper, crafting the correct leases and notices, establishing the right park rules, proper tenant communication, metering of utilities, and the list goes on... You can gain that experience through education, mentorship, and running a park yourself of course, but the goal is to become the expert at determining and executing the right strategy for a park.
As it relates to management, just remember that your ability to move the needle will be directly related to the quality of the onsite manager, and YOUR ability to provide the proper leadership, goals for the park, and resources/support to help your onsite staff achieve them.
All the best,
Jack
@Jack Martin I know this is thread is a bit stale, but you hit on points that I have questions about. How do you suggest finding an onsite teams and offsite managers (for the right park) with the right experience? I have been doing google searches without success. I also called the local manufactured housing association without success. Any suggestions would be appreciated. Thank you
@Adam R. you can run ads in the same way you would if you were hiring someone for any role in your business. Park managers and maintenance roles are career choices that folks have made and many times they have decades of experience running parks. For examples, go to any of the jobs/hiring websites and search for those jobs. There you should see what others are doing with their ads to hire staff, how much they are paying, etc.
All the best,
Jack
@Jack Martin Thank you. I was able to find a number of examples on glass door. Do you know of any third party management companies that do tenant screening specifically for MHP? I would prefer using a third party that is aware of the laws and has processes in place to protect personal information of tenants. Is this something any third property manager could do with the onsite property manager handling the day to day MPH specific issues? Thank you
@Ben Bymaster I agree that whether you should use onsite or offsite management depends on the size. At some point size will dictate whether onsite management is needed. A couple of things to remember. Do your due diligence. Verity what the city requires of it's parks...many are different and can have some crazy rules/expectations. Also, if you're considering off site management, ask do they have their own hourly employees for maintenance? Do they drive their trucks/ their employees? Are they insured? Hope this helps. Good Luck!
Hi @Ben Bymaster! Great question and you got some fabulous responses above. @Jack Martin's reply should be very helpful for you.
For small parks, say, well under 100 lots, you can sometimes find a current park tenant to take the reins. Like Jack said, don't expect them to do much more than collect rent and a few other administrative tasks.
Here's how I would go about this: around the time of closing, I would drive around the park and look for the most well maintained mobile home. The one with the grass cut neatly and landscaped, and with no couches on the porch :) . Go to their door and ask them if they would interested in becoming an administrative park manager. Tell them you're taking over the park and you're out of state.
You could pay them something like this: free lot rent, plus $5 per month, per tenant who pays on time. That's just an example of course. For someone who works at Taco Bell or is retired, this could be a wonderful opportunity for them.
For somebody who's really inspired, perhaps you could have them contract with lawn care and maintenance services and more. That's where I would start with a small park. Good luck and happy investing!