How did you fill your mobile home park?

Question

Hi guys.

I’ve recently closed on my first mobile home park in South Carolina. I’ve had it about 2 weeks and am looking to strictly rent out the lots.

However, as expected, the demand for this is much less as people have to pay to move their homes.

I’ve called on all of the mobile home distributors in the area, posted on Facebook marketplace/Craigslist, and investor Facebook groups.

But still, I have been unable to find someone to move in

Given this, how have you been able to fill your park up by renting out the lots?

Frank Rolfe · Answer

We own around 20,000 lots and still only get in about 100 "organic" move-ins per year (that's a rate of around .5%) -- and even then it's mostly in just a hand full of really hot markets like near Austin.

To fill lots in most parks you have several options based on your capital and the level of demand (and the credit quality of customers). Here's the list from cheapest to most expensive:

1) Market to RVs and have them fill lots. Costs zero. Problem is that they are not counted as quite as valuable by lenders or future buyers because they can also move out at the drop of a hat.

2) Have a dealer bring in homes and sell them in position inside your park (free to you).

3) Have a Lonnie dealer bring in homes and sell or rent them in your park (free to you).

4) Bring in organic homes (you're already doing this, but it costs around $5,000 because you have to pay for the move).

5) Bring in used homes, renovate them and sell them in your park (cost could be $15,000 to $25,000).

6) Bring in new homes and sell them in your park (this could be zero with 21st Mortgage's CASH program but without that program around $30,000 to $40,000).

You're best bet is to try all of these and see what works. Once you get one out the door, bring in another. Over time the most natural fit will fill the park.

Chris Pellicone · Answer

Your best bet will be to search for used homes. Moved them in/rehab/and sell off.

Ken Rishel · Answer

First Things First - Know What Will Work For You

Marketing Research Basics

Market research can be daunting to those lacking a formal education in marketing. There are plenty of pitfalls for the unwary. In the manufactured housing industry for those selling homes to consumers, the problem is amplified by serious limitations on the amount of money available to conduct such research. What follows is a method to protect against pitfalls and to limit the amount of money necessary to conduct a valid and useful study.

Rule # One – Hire an Expert as a Consultant

The person you want in this role is someone with academic credentials behind their name. Market research is an endeavor based in science, so someone with the proper background is key to avoiding pitfalls. You do not want to hire them to do the work, but to verify and validate what is being done. Approached correctly, the consultant will give you what you need for less than two days in fees.

Talk to your prospective consultant and be upfront with them about what you are looking for from them. Some may not be interested in the very small project, but they may be willing to refer you to someone who is that they have confidence in. Even if they cannot or will not make a referral, you may learn something before you move on to the next prospective consultant.

Here is a sample conversation:

Mr. Expert, I need some help with a market research project I am trying to do in house because what we do, and the scale we do it on, is not large enough to fund having a marketing consulting company do it for us. Our budget is extremely limited. So here is what I would like to discuss with you.

We want to hire someone like yourself who is an expert in marketing to look over our plan for market research and make suggestions of changes we should make. Once it is done, if we have the funds available, we would also like you to look over our conclusions. We’re hoping that doesn’t take more than a day of your time and we could spend around $_________ for that. Does that sound like something you would be interested it?

That gets you started, and maybe off to the races.

Rule # Two – Understand what You are Doing

The market research process consists of six discrete stages or steps. They are as follows:

• Step 1 - Articulate the research problem and objectives
• Step 2 - Develop the overall research plan
• Step 3 – Collect the data or information
• Step 4 – Analyze the data or information
• Step 5 – Present or disseminate the findings
• Step 6 – Use the findings to make the decision

The third step of market research - - Collect the Data or Information - entails several important decisions. One of the first things to consider in this stage is how the research participants are going to be contacted. There was at time when survey questionnaires were sent to prospective respondent via the postal system. As you might imagine, the response rate was quite low for mailed surveys, and the initiative was costly.

Telephone surveys were also once very common, but people today let their answering machines take calls or they have caller ID, which enables them to ignore calls they do not want to receive. Some companies have issued pre-paid phone cards to consumers who are asked to take a quick survey before they use the free time on the calling card. If they participate in the brief survey, the number of free minutes on their calling card is increased.

Methods of Interviewing

In-depth interviews are one of the most flexible ways to gather data from research participants. Another advantage of interviewing research participants in person is that their non-verbal language can be observed, as well as other attributes about them that might contribute to a consumer profile. Interviews can take two basic forms: Arranged interviews and intercept interviews.

Arranged interviews are time-consuming, require logistical considerations of planning and scheduling, and tend to be quite expensive to conduct. Exacting sampling procedures can be used in arranged interviews that can contribute to the usefulness of the interview data set. In addition, the face-to-face aspect of in-depth interviewing can result in exposure to interviewer bias, so training of interviewers necessarily becomes a component of an in-depth interviewing project. Intercept interviews take place in shopping malls, on street corners, and even at the threshold of people's homes.

With intercept interviews, the sampling is non-probabilistic. For obvious reasons, intercept interviews must be brief, to the point, and not ask questions that are off-putting. Otherwise, the interviewer risks seeing the interviewee walk away. One version of an intercept interview occurs when people respond to a survey that is related to a purchase that they just made. Instructions for participating in the survey are printed on their store receipt and generally; the reward for participating is a free item or a chance to be entered in a sweepstakes.

Online data collection is rapidly replacing other methods of accessing consumer information. Brief surveys and polls are everywhere on the Web. Forums and chat rooms may be sponsored by companies that wish to learn more from consumers who volunteer their participation. Cookies and clickstream data send information about consumer choices right to the computers of market researchers. Focus groups can be held online and in anonymous blackboard settings. Market research has become embedded in advertising on digital platforms.

There are still many people who do not regularly have access to the Internet. Providing Internet access for people who do not have connections at home or are intimidated by computing or networking can be fruitful. Often, the novelty of encountering an online market research survey or poll that looks like and acts as if a game is incentive enough to convert reticent Internet users.

Characteristics of Data Collection

Data collection strategies are closely tied to the type of research that is being conducted as the traditions are quite strong and have resilient philosophical foundations. In the rapidly changing field of market research, these traditions are being eroded as technology makes new methods available. The shift to more electronic means of surveying consumers is beneficial in a number of ways. Once the infrastructure is in place, digital data collection is rapid, relatively error-free, and often fun for consumers. Where data collection is still centralized, market researchers can eliminate the headache of coding data by inputting responses into computers or touchscreens. The coding is instantaneous and the data analysis is rapid.

Regardless of how data is collected, the human element is always important. It may be that the expert knowledge of market researchers shifts to different places in the market research stream. For example, the expert knowledge of a market researcher is critically important in the sophisticated realm of Bayesian Networks simulation and structured equation modeling -- two techniques that are conducted through computer modeling. Intelligently designed market research requires planning regardless of the platform. The old adage still holds true: Garbage in, garbage out.

What Can Go Wrong?

Despite the fact that market research can be an intensive and expensive initiative, the users of market research insights may not use the findings accurately, appropriately, or completely. Some of the reasons for this are discussed below, as a prelude to considering the attributes of good market research.

Market Research is Not Fact-Finding

Managers and business decision-makers may not always hold informed perspectives with regard to market research. For some, who have limited exposure to research design and scientific theoretical background, market research is a fact-finding endeavor, at best. They request market research in a particular and often familiar format. But they can fail to understand the need for a thoughtful consideration of the research problem to be addressed.

When market researchers return with the deliverables that have been requested, often after protracted protest and attempts to explain the inadequacies of such a misconceived plan, they are often discouraged. Questionnaires are cobbled together, samples are thrown together, and interviews are poorly conducted. Finally, reports filled with limitations of the research and requests for additional funds and more time are disseminated. Is it any wonder that such a manager concludes that fact-finding is of limited usefulness, just as he always suspected?

You Get What You Pay For - Even in Market Research

The caliber of market researchers, as in most professions, will reflect their perceived value to the company that hires them. When market researchers receive low pay and market research is seen as a clerical activity, the research outcomes are very likely to reflect the results of New Coke. The Coca-Cola Company did not identify the research problem accurately since the marketing team at Coca-Cola was focused on taste and not on brand. However, consumers of Coca-Cola are highly engaged in their brand and, as such, they were not eager for change to their favorite beverage.

Using our strategy, a community owner or retailer should approach the head of the department at a nearby college or university that offers undergraduate and/or graduate degrees in marketing with a proposition that benefits everyone. Professors are always looking for real world projects to challenge their students. The retailer or community owner has a need to have market research done, the professor has a need for an engaging project, and the students need experience. Everyone can win if the students do the actual research with the professor guiding them, and with a true expert setting up the initial work and reviewing the results.

If It’s Tuesday, It Must Be Belgium

Timing is everything in market research, too. Sometimes research findings are produced too late for the changes in the market. Occasionally, the findings are erroneous. When business managers or decision-makers are impatient for a market research project to conclude, they may apply pressure that results in premature release of data and inconclusive findings. It is reasonable for managers, business decision makers to expect accurate, and conclusive research findings. However, it is not always reasonable for them to expect those outcomes yesterday-or tomorrow. As well as they are able; market researchers must press for a collaboratively developed research plan that will specify a reasonable end date.

What Can Go Right? Criteria of Good Market Research

• Scientific Method - When a quantitative research approach is used in market research, the principles and procedures of evidence-based, empirical methods are employed. These include systematic and careful observation, appropriate sampling procedures, hypothesis formulation and testing, prediction and forecasting, and pilot testing. Even when the market research is qualitative in approach, proven, established, and conventional research methods are employed.
• Research Creativity - Market research must be innovative and keep up with the disruptive technologies that overtake the creation and sharing of information, including market research information.
• Multiple Methods - Some of the strongest and most credible market research uses multiple approaches to a research problem. The confidence of consumers of market research is increased when the research outcomes are confirmed through multiple methods.

• Interdependence of Models and Data - The interpretation of market research stems from the underlying models, theoretical perspectives, and philosophical groundings that guide and inform the type of data that is collected and the methods used to gather and analyze the information.
• Value and Cost of Information - Market researchers strive to estimate the value and cost of information. The perceptions of the research consumers play an important part in this valuation as their willingness to accept and act on the outcomes has value, even though it may be difficult to quantify. For quantitative market research, the validity and reliability of the data add to the valuation; for qualitative market research, the trustworthiness of the information has value.
• Healthy Skepticism - Market researcher are alert to the havoc that marketing myths can perpetuate. Market researchers are known to express a healthy skepticism for glib assumptions conveyed by managers and other consumers of market research about how the market works. Market researchers are aware of and guard against the conventional wisdom, particularly from sales teams who assert that market research cannot tell them anything new about their customers or potential customers. How does a market researcher know when to use a qualitative approach and when to use a quantitative approach to a study? Is one approach really better than the other?A choice between research methods rests fundamentally on a set of decisions about the questions a researcher wants to answer and the practicality of gathering the kind of data that will answer those questions. The first step is to look for an obvious fit.Although there are a number of soft differences between the two types of methods, there is one very important distinction. Quantitative research is deductive and hinges on the presence of a hypothesis, which is identified before research begins. Qualitative research is inductive and does not require a hypothesis in order to start the research process.Let us take a closer look at this important difference, and dig a bit deeper into three key terms that help define quantitative and qualitative research.

A choice between research methods rests fundamentally on a set of decisions about the questions a researcher wants to answer and the practicality of gathering the kind of data that will answer those questions. The first step is to look for an obvious fit.

Although there are a number of soft differences between the two types of methods, there is one very important distinction. Quantitative research is deductive and hinges on the presence of a hypothesis, which is identified before research begins. Qualitative research is inductive and does not require a hypothesis in order to start the research process.

Let us take a closer look at this important difference, and dig a bit deeper into three key terms that help define quantitative and qualitative research.

• Deductive research
• Hypothesis
• Inductive research
• Quantitative Research ConfirmsQuantitative research looks at the general case and moves toward the specific. This deductive approach to research considers a potential cause of something and hopes to verify its effect.

Quantitative Research Confirms

Quantitative research looks at the general case and moves toward the specific. This deductive approach to research considers a potential cause of something and hopes to verify its effect.

Since the phrase cause and effect is part of nearly every child's history of parental lectures, we are all familiar with the concept. In research, cause and effect is all about the strength of the relationship. If a very strong relationship exists between two variables, the cause and effect relationship may be said to be highly probable or highly likely. There is still room to say that the effect does not occur as a result of the cause, but this is considered not very probable.

The following is an example of a deductive market research approach that seeks to measure differences in online purchasing behavior and use of website shopping carts:

General Cause The purchasing behavior of Internet shoppers who regularly place items in their online shopping cart but do not complete many purchases differs from the purchasing behavior of Internet shoppers who do not use the cart to hold items they never buy.

Specific Effect Internet shoppers who habitually place items in their online shopping carts but do not complete the purchases are 75% more likely to return to the same websites and complete a purchase within 7 days.

Research Finding Retaining the online shopping cart contents for 10 days when a consumer leaves a website before completing a purchase is good business, and means a high probability of future purchases by that consumer on the visited website.

Hypothesis - A Tentative Assumption

A hypothesis is a tentative assumption in the form of a statement or a question that a research effort is designed to answer. In quantitative research, there are two hypothesis statements. One hypothesis is called the null hypothesis, or Ho. A researcher does not expect the null hypothesis to be true. At the conclusion of the research process, the researcher will analyze the data collected, and then will either accept or reject the null hypothesis. Researchers refer to the process of confirming a hypothesis -- the assumption -- as testing the hypothesis.

The second hypothesis is called the alternative hypothesis, or Ha. The researcher assumes the alternative hypothesis is true. Rejecting the null hypothesis suggests that the alternative hypothesis may be true -- that is, the chance that there is an error in the data that would make the alternative hypothesis not true is acceptably small, by scientific standards. Hypothesis testing in quantitative research is never absolute.

For a study about online purchasing behavior, one example of a null hypothesis could be:Ho = Internet shoppers who place items in the cart before leaving the website are no more likely to return and complete a purchase than Internet shoppers who do not place items in their cart, but also return to the website.

An example of a corresponding alternative hypothesis could be:

Ha = Internet shoppers who leave a website before purchasing items they have placed in their cart are more likely to complete a purchase on the same website in the near future.

Qualitative Research Explores

Qualitative research begins with the specific and moves toward the general. The data collecting process in qualitative research is personal, field-based, and iterative or circular. As data are collected and organized during analysis, patterns emerge. These data patterns can lead a researcher to pursue different questions or concepts, in a manner similar to rolling a snowball downhill.

Throughout the data collecting process, researchers typically record their thoughts and impressions about the emerging data patterns. Qualitative researchers gather data about their research in several different ways or from many different sources. This expanded view of relevant data is called triangulation and is a very important way of ensuring that data can be verified. When the data set is considered large enough or deep enough, the researcher will interpret the data.

The example below suggests several ways that a qualitative researcher might triangulate data and move the research project from specific data to general themes, and ultimately to a research conclusion or finding.

Specific Consumer Interviews Consumers convey the reasons why they leave items in online shopping carts and why they do not complete online purchases.

Specific Website User Observations Researchers observe consumers engaged in online shopping who report what they are thinking as they shop.

General Researcher Field Notes Researchers record ideas that emerge during the data collection process, such as: Online shoppers tend to treat shopping carts like the dressing rooms in actual shops, where leaving items behind is just part of the shopping experience.

Research Conclusion Online shoppers engage in window shopping as evidenced by the practice of leaving items in the online shopping cart; this consumer behavior contributes to feelings of familiarity with an online store which tends to draw the consumer back to make purchases at more opportune times.

Marketing Terms

Structural Equation Modeling

Market research gains its accuracy from the use of mathematics. This is the primary method of modeling used by all professional market researchers. Further information on Structural Equation Modeling may be found in the book by R. H. Hoyle entitled Structural Equation Modeling.

Direct simulation models.

These are specialized models based on attempts to directly imitate the market (for example, via the behavior of individual customers) using a synergy of stochastic and deterministic rules.

These models were popular 20-30 years ago but are less popular now. The reasons are the lack of predictive power, huge number of parameters in the models and impossibility of their validation.

Standard statistical models.

All standard statistical models and methods can be used in market research. Most commonly, the following statistical models are used:– various types of regression,– ARIMA and other time series models,

– Bayesian models,– models and methods of multivariate statistics; especially, structural equation and multinomial response models, conjoint, factor and principal component analyses.

Models of consumer purchase behavior.

Several types of statistical models are used for modeling consumer purchase behavior including brand choice. The following three basic models (and some of their extensions) have proved to be the most useful: Mixed Poisson processes, the Dirichlet model and Markovian models.

Dynamic models for modeling competition, pricing and advertising strategies

The majority of the models are so-called differential games or simpler models still written in terms of differential equations. The models are deterministic and the statistical aspect only arrives through the assumption that the data contain random errors. Statistical modeling part is therefore negligible in these models. Alternatively, in some Markovian brand-choice models mentioned above, there is an option of inclusion market variables (e.g. promotion) into the updating rule for the buying propensities. These models are proper stochastic models but they are often too complicated (have too many parameters) and therefore difficult to validate.

Statistical components of inventory and other management science models

Inventory and other management science models applied in market research are typically standard models of Operations Research. Despite these models often having a large stochastic component, they do not represent anything special from the statistics viewpoint.

Stochastic Process

In probability theory, a stochastic process /stoʊˈkæstɪk/, or sometimes random process (widely used) is a collection of random variables; this is often used to represent the evolution of some random value, or system, over time. This is the probabilistic counterpart to a deterministic process (or deterministic system). Instead of describing a process that can only evolve in one way (as in the case, for example, of solutions of an ordinary differential equation), in a stochastic or random process there is some indeterminacy: even if the initial condition (or starting point) is known, there are several (often infinitely many) directions in which the process may evolve.

It is important to understand that a marketing expert must also have a very strong background in higher mathematics. If the expert cannot handle, ordinary differential equations for example, they truly have no ability to conduct any kind of market research program unless, they are in charge of a team doing the research and another member or members of the team are doing the requisite modeling.

Conclusion

Market Research is both necessary and affordable, but it needs to be done in a scientific and professional manner or the results will be haphazard and unpredictable. Using the suggestions in this paper, a community owner or retailer can afford doing it correctly. A community owner or retailer who is considering hiring a consultant to help them with their marketing may find this paper useful in vetting the claimed expertise of the consultant. This paper covers only the very basics of what a marketing expert should know about market research – and, there is a whole lot more they should know regarding the actual implementation of the marketing effort. If they have little or no understanding of the material contained herein, perhaps that should be a warning sign before proceeding.

HB Jenkins · Answer

Thank you for this awesome list of creative ways to fill the park and sharing your experience. Congrats on owning 20k lots, wow!

How did you fill your mobile home park?

Most Popular Reply