Marketing to attract new home owners to park with vacancy

10 Replies

Hi,

I'm brainstorming with a family member who is part owner of a mobile home park in Ohio that has about 100 lots. The park is the nicest one in the area, we just need to fill the empty lots. We've thought about about direct mailing residents at other parts advertising an incentive to move, it just seems a bit unethical or in bad taste if nothing else. Poaching tenants feels wrong, what do you think? We have good relationships with other local park owners and wouldn't want to damage their business just for our gain. We have a dealer we refer new buyers to, but we just don't get enough calls on them. When they do call and find out the new home payment and lot rent combined would be a nice mortgage payment, they often lose interest. Most of the tenants have been there for a decade or more and the population is aging. We really need to start filling these empty lots to avoid getting behind the ball. We've done some lease to owns in the past but are trying to get more owners in, not more rental homes.

So, does anyone else have strategies to attract owners that's worked well? 

Thanks for any ideas!

We own a park in Gulf Shores AL near the beach and demand is good from test ads at $745 combined per month for a brand new 3/2 single wide.  I suggest you put up several blind (no address) test ads in craigslist.  Harder in zillow rent manager at different prices and advertising rental, and ownership with lot rent to see what your market is looking for.  Hopefully home ownership....

I posted here in another thread that radical change has come to the new home market in the last 12 mo and even in the last months.  At the wholesale level direct from manufacturs a park can buy a nice 14'x80' 3/2 for $19k  Yes I'm not fibbing.  A 16'x80 3/2 for $24k plus hauling to your park from what ever factory is closesd plus set up plus septic and utilities.  So maybe add $10k to the home price all in.    Contact Clayton homes which now owns some 30 brands in all price ranges.

The best part we learned at the Birmingham Clayton home show was that century 21 has partnered with Clayton to offer community (parks) 100% financing of new homes, including hauling AND setup, zero out of the communities pocket excepting for placing the water, septic, electric, roads in place.  We used to have to buy the home with cash as well... No more.

PM me for the Century 21 "community CASH" program contact if it isn't googleable.

Century will finance to the tenant you find and screen, then they qualify and the loan is to the tenant to avoid the community hasseling with Dodd Frank issues.  Its a win win.

Bottom line:  buying used homes, moving and fixing is no longer economic vs this new home model.  The old tale of advertising to poach homes from other parks also never worked in any volume plus you give up too much to get them to move.  Better off raising your lot rent a BUNCH, putting a new home in with tenant paying the mortgage.  That is the best of all scenarios.

If you do some searching on the Mobile Home University forum there are some strategies that many large operators have used to get Lonnie Dealers to help fill up their Parks in conjunction with the strategy @Curt Smith mentioned.

People are very polarized in their opinion of Lonnie Dealers, and the biggest risk is ensuring that the tenants they screen are high quality and long term - in alignment with your Park standards and rules.  This creates a win/win scenario, but you need to be careful with whom you partner.

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@Jeffrey H.  Agreed re lonnie dealers.  Our park in Gulf Shores AL has a lonnie dealer owning half the homes, he pays the lot rent, he collects home rent from his tenants.  He's top shelf, very competent, high quality and will step in and do "the right thing".  We are lucky!

It can work out.  The tough situation is that you put ads in craigslist to attract lonnie dealers to put their own homes in your park and you get a mix of a few folks...  You're bound to have a range of quality.  Guess you'd have to get references of other parks they have homes in and talk to those park owners...  Just due dilligence.

But it can work out, so I would not shun or turn away folks who approach you out of hand.

Originally posted by @Tucker Long :

Hi,

I'm brainstorming with a family member who is part owner of a mobile home park in Ohio that has about 100 lots. The park is the nicest one in the area, we just need to fill the empty lots. We've thought about about direct mailing residents at other parts advertising an incentive to move, it just seems a bit unethical or in bad taste if nothing else. Poaching tenants feels wrong, what do you think? We have good relationships with other local park owners and wouldn't want to damage their business just for our gain. We have a dealer we refer new buyers to, but we just don't get enough calls on them. When they do call and find out the new home payment and lot rent combined would be a nice mortgage payment, they often lose interest. Most of the tenants have been there for a decade or more and the population is aging. We really need to start filling these empty lots to avoid getting behind the ball. We've done some lease to owns in the past but are trying to get more owners in, not more rental homes.

So, does anyone else have strategies to attract owners that's worked well? 

Thanks for any ideas!

 Poaching is always wrong, and, if you pick the wrong park, you may find you have bit off more than you can chew.

Everyone is going to have a slightly different take on this, but I would want to be sure I had the sales talent available to close any leads generated into homeowners. It is a waste of time and money to do otherwise.

I would also get serious about doing real marketing research before I advertised. What you discover will help you focus any advertising or any method of lead generation to people who will buy, can get financed on what you have to sell, and who remain in the community. I am a very big believer in selling the  lifestyle over selling the box. To do this means having to figure out what a community has to offer a prospective resident that fits in the community and home

Even a one star community has things to offer and the type of resident who would fit in that community well may be more than satisfied with what those things are. While I personally have very little experience with one star communities, I have friends that do. One of the success stories I have heard is access to a garage where the resident can do minor repairs on their own vehicles.

The point is, you need to match what you have to offer with potential residents that would enjoy or need whatever you have to offer. To do that well, you need to know your potential market. The amenities and the prospects you can convert to residents need to match as surely as the combine price of the home and the lot rent need to fit your target resident's budget.

Some of what you should do will be based on the volume of need. If you need to fill 50 spaces in a 100 pad park, you can and should commit considerable resources to market research, marketing plan, advertising, etc, and quality of sales effort. If you need to fill three spaces, you must figure out how to do it effectively for far less money.

The real answer is everyone's solutions are going to be different because their problems are different.

Originally posted by @Curt Smith :

@Jeffrey H.  Agreed re lonnie dealers.  Our park in Gulf Shores AL has a lonnie dealer owning half the homes, he pays the lot rent, he collects home rent from his tenants.  He's top shelf, very competent, high quality and will step in and do "the right thing".  We are lucky!

It can work out.  The tough situation is that you put ads in craigslist to attract lonnie dealers to put their own homes in your park and you get a mix of a few folks...  You're bound to have a range of quality.  Guess you'd have to get references of other parks they have homes in and talk to those park owners...  Just due dilligence.

But it can work out, so I would not shun or turn away folks who approach you out of hand.

 When we educate Lonnie Dealers and help them set up their financing properly, we also teach them not to put the "cart before the horse". By that I mean that we teach them to establish formal relationships with community owners prior to buying homes so they know what the community owners they are working with want - or don't want in the way of homes.

This even works with existing homes in a community they might buy as a FSBO. The small community I just bought, I bought in part because I have a vision for change. In that vision, I want to remove every home in the community sooner or later - depending on the current resident's actions and reactions as to when and how. In this community, I would welcome Lonnie Dealers to buy any home in there - as long as they move it out of there which is contrary to the way I would feel anywhere else. If they wanted to bring a home in, it would have to meet my specifications. It is important for Lonnie Dealers to have a formal working relationship (contractual) with the communities they are working in for both the Lonnie Dealer and the Community Owner because it provides advantages to both, and eliminates angst.

If both know the other's concerns and plans, the relationship can and should work quite well. 

So, if I were going to advertise on Craig's List or anywhere else for a Lonnie Dealer, I would advertise for a meeting of some length first so as to determine if we were a good fit for each other. I would not enter into any agreement without written agreements and without having taken the measure of the Lonnie Dealer while we were talking. Frankly, they should feel the same way as there are some community owners I would never do business with as a Lonnie Dealer no matter what they say. It does work both ways.

Originally posted by @Curt Smith :

I posted here in another thread that radical change has come to the new home market in the last 12 mo and even in the last months.  At the wholesale level direct from manufacturs a park can buy a nice 14'x80' 3/2 for $19k  Yes I'm not fibbing.  A 16'x80 3/2 for $24k plus hauling to your park from what ever factory is closesd plus set up plus septic and utilities.  So maybe add $10k to the home price all in.    Contact Clayton homes which now owns some 30 brands in all price ranges.

 This has been a game changer for many community owners. Deals vary depending on what part of the country the community is in, but thanks, in part, to what George Allen started with a national meeting in Elkhart, Indiana at the RV/MH Hall of Fame several years ago, the manufacturers have responded to the need for Community Series Homes that has often eliminated the need for used homes - which are in pretty short supply anyway.

Adventure Homes of Garrett, Indiana have 16x80s that invoice at less than 20K. CAVCO through its Fleetwood Homes subsidiary is also very aggressive in a number of states. All of them have inventory finance available, and all of them are looking at, or getting involved in financing the homeowner's purchase of new homes. The CASH program has gotten better for those cash strapped community owners.

Curt is right. Radical change is already here.

Just a few points from an inexperienced wannabe MHP investor (who just went through boot camp).  Poaching is definitely off the table unless it's from a park that is going down in flames.  If that's the case, game on.

The Clayton partnership is with 21st Mortgage.  You can contact Ryan Howerton there (www.21stmortgage.com).  They also do financing of existing homes with 5% down and a mortgage in excess of $10k.

Re Lonnie Dealers: they can be a huge help to your park, just be careful with letting one have too many homes in one park as they can hold a lot of power over you.

I believe good Lonnie dealers do exist but they are scares and they do change the formula of your business. In a scenes they become a junior partner in your business. I do not want partners.

Best option is to bring in homes yourself and sell them. Most people are inherently lazy and prefer to let someone else, the community owner, do the work. 

Originally posted by @Thomas S. :

I believe good Lonnie dealers do exist but they are scares and they do change the formula of your business. In a scenes they become a junior partner in your business. I do not want partners.

Best option is to bring in homes yourself and sell them. Most people are inherently lazy and prefer to let someone else, the community owner, do the work. 

 Greg,

Part of the difference is you are in Canada which has major differences regarding the financing of manufactured homes. Smaller community owners are not in a position to form a separate company and then license it and to become or hire an MLO, let alone meet all the compliance burdens for 3-10 deals a year. By setting up a joint venture relationship correctly with a Lonnie Dealer there are legal methods for time conveyance of a home without all the licensure and compliance issues beyond those they are already responsible for.

Now, if the community is large enough to have the right volume, which varies from state to state because of different lending license requirements, I would absolutely agree with you.