Comedian John Oliver on Mobile Home Perils
Investor · Phoenix, AZ · Member since 2014 · 230 posts · 122 votes
Comedian John Oliver on Mobile Home Perils
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Real Estate Investor · Ste. Genevieve, MO · Member since 2009 · 363 posts · 944 votes
7yJohn Oliver is not a newscaster, he's a comedian.
Not sure how I went from the New York Times calling me "the best thing going in affordable housing at a time when the nation's need for low-cost places to live has never been greater" in 2014 to being the brunt of a roasting from a comic on HBO, since we haven't changed our business model in over 20 years.
The truth is that when you upgrade and invest millions of dollars in old mobile home parks, the rent has to go up significantly. It's either that or simply bulldoze them and sell the land for a higher use. This is no different than when apartments, hotels or any other asset is redeveloped. And, in the same vein, there's no doubt that some residents will be displaced. But the vast majority of residents are happy to pay more rent for a nicer place to live.
With the median apartment rent in the U.S. standing at $1,200 per month and the median single-family home at $1,450, it's hard to believe that any sane person would consider the median lot rent in the U.S. incredibly high at $285 per month. If a 5% per year rent increase sounds too high -- which is about normal at most parks and equates to about $15 per month -- then can somebody explain to me how anything from Obamacare to cable TV rates are survivable?
Don't get your facts from a HBO satire show. If you are really interested in affordable housing, do some factual research. The reason that so many private equity groups are quietly buying mobile home parks is that it's probably the best business model on earth. It took the industry 60 years to get in this position, and it gutted out some terrible decades to come out on top in terms of providing the least expensive detached dwelling in the U.S. at the very moment that our country's housing market priced nearly 50% of the population out of the ability to be a homeowner. I didn't create these market forces, I simply invest in them.
61 Replies
- Rental Property Investor · Harrisburg, PA · Member since 2018 · 369 posts · 406 votes7y
Originally posted by @Brian Spear:
The real issue is redevelopment & constricting the supply of MHCs. More MHCs are torn down each year than are newly developed. Dr. Esther Sullivan was mentioned earlier, and she points out the issues with redevelopment in her recent book.
Anyone interested in investing in MHCs should pick it up and read it. After turning the last page, the majority of investors would understand that investing in MHCs is a good thing for society at large - as it helps preserve the country’s affordable housing stock.
Dr. Sullivan’s research chronicles the hardship families face when manufactured housing communities are redeveloped, which occurs when the highest-and-best use of the land is no longer a MHC. When original owners sell to redevelopers, residents are evicted and forced to relocate.
The point she drives home is exemplified in one of our communities in GA — Country Oaks. Had we not gone in, increased rent, & improved the community, it would have eventually been redeveloped into a higher-and-better use. At that point, all residents inside the MHC eventually would have lost their homes to redevelopment. After our turnaround, the mayor wrote a letter of recommendation outlining our our positive impact on the community:
Our team has never — and will never — redevelop a manufactured housing community that we own. Affordable housing is in short supply, and we should all do our best to keep the current stock that has been developed.
Brian -
I have no investment in any part or parcel of an MHC, but am following this post with interest. Your post here is very well stated and comes from an obvious place of experience. My 5 siblings and I were raised by a single mom also and I saw mine do whatever she had to to keep us fed and clothed with a roof over our heads. What you are doing with your investments is commendable!
- Rental Property Investor · Brookhaven, MS · Member since 2017 · 186 posts · 108 votes7y
Just a comedian that in reality knows little to nothing about the subject he's talking about. He's just wanting to get some laughs, as with liberals these days, let's bash the person that bought the park and provides housing opportunities for people. He used a broad brush to paint the entire industry which was unfair. The real issue is that in many areas there is a shortage of affordable housing and the government doesn't solve it, they only make it worse.
- Investor · Sevierville, TN · Member since 2015 · 121 posts · 674 votes7y
Frank Rolfe has most definitely saved thousands of families from being displaced, because if his company didn't buy these parks & raise the rents to market, the park would be torn down & redeveloped into a higher & better use.
Part of the reason MHP owners are constantly ripped on for rent raises is the fact that, unlike apartments who are on yearly leases, mobile home residents are typically on month-to-month, so instead of increases being staggered throughout a year (like apartments), all the residents get the increase at the same time.
These problems are not the result of the companies buying the parks; if the original mom & pop owners of the parks simply raised rents with inflation, we wouldn't have this scenario where park lot rents are hundreds of dollars beneath the market rent. This leads to a situation like we're seeing where the new owners are vilified for preventing the property from being torn down by raising rents.
- Rental Property Investor · Brookhaven, MS · Member since 2017 · 186 posts · 108 votes7y
Originally posted by @Abraham Anderson:
Frank Rolfe has most definitely saved thousands of families from being displaced, because if his company didn't buy these parks & raise the rents to market, the park would be torn down & redeveloped into a higher & better use.
Part of the reason MHP owners are constantly ripped on for rent raises is the fact that, unlike apartments who are on yearly leases, mobile home residents are typically on month-to-month, so instead of increases being staggered throughout a year (like apartments), all the residents get the increase at the same time.
These problems are not the result of the companies buying the parks; if the original mom & pop owners of the parks simply raised rents with inflation, we wouldn't have this scenario where park lot rents are hundreds of dollars beneath the market rent. This leads to a situation like we're seeing where the new owners are vilified for preventing the property from being torn down by raising rents.
Exactly. And, in most cases, mom and pop because they haven't kept up with the times on rents they've attracted disrepair, vacant homes, and tenants that are not interested in making the neighborhood they live in better. And no investor is going to pour money into something that he/she can't get an ample return based on the risks/work often associated with these properties.
- 7yNed J.Pro MemberInvestor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
Let clear up a huge FACT here.....yes John Oliver is a comedian.....but do you really think he comes up with all the material and does all the research and writing to come up with the piece? Of course not....he likely has dozen of producers and staff than do all the research and writing.....so stop discounting the material as reliable and truthful solely based on the fact that the info is being presented by a comedian. If you want to refute something, then come up with a better argument.....
And if you want to bring in the "liberal vs conservative" side of things....how about the conservatives not having this high and mightily attitude that they are all mother Theresa and do a service for the poor and unfortunate out of the goodness of their heart and those people should just shut up and be grateful for even having a roof over their head..... those people are lucky to have the "opportunity" to live in the park they own........ oh please.....
MHP owner are in it for the $$...... nothing wrong with that...... we are ALL on here to learn how to make more $$....but there are ethical and unethical ways to make $$ in ANY business. This piece just pointed out that there can be a very seedy element to the MHP model than some take advantage of. I would agree that it MAY be a broad stroke that doesn't represent a majority of the MHP market industry but pretending it doesn't exist and all the parks out there are run ethically and are a great service to the lower income occupant is naive
- Member since 2019 · 39 posts · 48 votes7y
Mr. Speer - It is so much more than distasteful to disparage mobile home residents. By making them "other", one can distance themselves from the fact these are people - fellow citizens. As previously stated, no one in this park (Akron Mobile Home Park) expects the rent to stay the same. We understand costs go up, capital improvements need to be planned for and so on. The problem here is that SCI's business model includes raising the rents immediately upon purchase to apply directly to the bottom line. SCI tries to defer as many expenses in terms of maintenance as possible to the tenants and then to add insult to injury, drop the ball on maintenance...and on billing practices...and on even failing to familiarize yourselves with the community. Promotional literature about the park and the greater Akron community is riddled with errors, citing restaurants that don't exist, non-existent malls and so on. We got a good laugh out of that one.
While I am surprised that you shared your personal story on this, I am glad that you keep this in your mind as you build your business. I guess I am wondering what would have happened to your family had your rent increased as ours did. My rent was supposed to go from $290 to $425. I had owned my place less than 3 months when this first letter arrived with the threat of eviction with it. Other owners with smaller homes were facing even worse. Their rent was going from $265 to $425. What would your mother have felt? Would she have felt the fear and anger that we have? How would she have felt about inaccurate water bills, sketchy maintenance, dangerous road conditions, and the continued threats that drove us all to sleepless nights? In the end, I think we deserve better and I think you would have deserved as much yourself had you been faced with this.
- Investor · San Diego, CA · Member since 2015 · 89 posts · 89 votes7y
@Gail Travers I'm so sorry you're going through this. I had a similar experience in Los Angeles in an apartment I lived in that was under rent control. The original owner lost the building, then it went through a series of new owners, and finally to an owner who was a just a mean person and wanted "market value" for the apartment. The new landlord wanted a 20% increase in one year when rent control only allows 3% per year. I had just started my teaching career and was a single mom in a one bedroom apartment and couldn't afford the increases. I went to the city and the landlord rescinded the huge increase and added the 3%. That was when they began their war to get me and my son out of the apartment. It was ugly and horrible. I couldn't sleep, I didn't know what to do, I couldn't find another place to live near my work. I thought I was safe in a rent controlled apartment. I wasn't! I really hated landlords at that point and vowed to never treat anyone like that.
Fast forward to now, and I'm a landlord with several rentals and considering buying a MHP. I always remember what it was like being a tenant, and do my damn best to provide a quality living experience at a reasonable price. I love investing in real estate, and love learning the business! BUT... I am shocked by some of the stuff I've seen in this space. My husband and I went to the Frank and Dave MHU in Chicago a few years back. We had the ick factor when we left, and haven't pulled the trigger on a park yet. We still may, but prices have gone way up due to the money that can be made in the MHP model.
In our MHP research, we have seen many parks, and met many folks in the business. Some are genuinely good actors. But whatever the motivations of the players, there is a huge problem with prejudice and bigotry against the poor and the residents. This prejudice, even when subtle, tints the treatment of residents and the way we as owners manage our business. It can be really overt, like Frank's comments, or it can be really subtle, like removing a playground or pool because "those people" **** everything up and it's too costly to maintain (even when the ROI is way over 20-30%!) in the park.
Human greed is a powerful force and I am susceptible to it as well. But when I get that ick factor in some deal I want to pursue, I try to force myself to remember when I was the resident dealing with the greedy landlord. I think we can all do better to remember when we all feel good about our business, including the residents who literally have to live with our decisions, we will all do better in this space. I don't want to give John Oliver any more material for his jokes! Not all landlords are ********!
- Real Estate Appraiser · Isabella lake, CA · Member since 2018 · 628 posts · 491 votes7y
Nice to see some people with good ethics and doing well by doing good.
It is possible, it is the way to go. ;>)
- Bozeman, MT · Member since 2012 · 12 posts · 17 votes7y
I'd be willing to bet not a single person in this thread who has said disparaging things about Frank Rolfe actually knows him personally. I do know Frank and I can tell you he is the antithesis of how he was portrayed in that video. He's an incredibly caring, down-to-earth, helpful educator who has given a lot to the real estate industry in general. Is he a capitalist? Of course! Just about everyone on this site is. And for those landlords on here who are bashing him, I'd like to know if you rent your properties at rental rates significantly below market value. No? Well, Frank doesn't believe in gouging people, but he does believe in keeping rental rates at a price comparable to other properties in the area. Just like everyone else investing in real estate. I've been to his boot camp and I listen to his mentoring call every single week and I've never once heard him advocate taking advantage of residents. It's just not what he's about. The whole waffle house comment was a reference to the stability of the income and bank's desirability to lend on parks. If we're going to get angry at park owners for raising rents to market then we have to spread the anger evenly. Let's get mad at Under Armor for raising the price of shoes comparable with Nike. Damn that Ford for jacking the price up after Toyota and Chevy did. Does it suck when prices go up? Of course it does, but it's the way of the world. It's inflation. We can't expect 1995 prices in 2019. And let's try to keep our cool when we're shown a slanted satirical 5 minute piece that takes small strategic clips of video taken over the past decade and tries to paint someone as the devil.
- Flipper / Landlord · Tyler, TX · Member since 2016 · 255 posts · 126 votes7y
Everyone disparaging MHP investors needs to move on. This is an investment website, that's what we are here for. Its a dog eat dog world, get over it.
If you don't like that then leave BP, because you are obviously not an investor. - 7yMike ReynoldsPro Memberconstruction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
Originally posted by @Chad S.:
I'd be willing to bet not a single person in this thread who has said disparaging things about Frank Rolfe actually knows him personally. I do know Frank and I can tell you he is the antithesis of how he was portrayed in that video. He's an incredibly caring, down-to-earth, helpful educator who has given a lot to the real estate industry in general. Is he a capitalist? Of course! Just about everyone on this site is. And for those landlords on here who are bashing him, I'd like to know if you rent your properties at rental rates significantly below market value. No? Well, Frank doesn't believe in gouging people, but he does believe in keeping rental rates at a price comparable to other properties in the area. Just like everyone else investing in real estate. I've been to his boot camp and I listen to his mentoring call every single week and I've never once heard him advocate taking advantage of residents. It's just not what he's about. The whole waffle house comment was a reference to the stability of the income and bank's desirability to lend on parks. If we're going to get angry at park owners for raising rents to market then we have to spread the anger evenly. Let's get mad at Under Armor for raising the price of shoes comparable with Nike. Damn that Ford for jacking the price up after Toyota and Chevy did. Does it suck when prices go up? Of course it does, but it's the way of the world. It's inflation. We can't expect 1995 prices in 2019. And let's try to keep our cool when we're shown a slanted satirical 5 minute piece that takes small strategic clips of video taken over the past decade and tries to paint someone as the devil.
Agree. I dont know Frank but there are always two sides to a story.
- Member since 2019 · 39 posts · 48 votes7y
The ick factor with Mr. Rolfe is what he says and writes about the people who live in manufactured homes. It comes from his words. He is responsible for the cringe we all feel when he talks about residents - the captive audience with no where to go who are grateful to just have a roof over their heads. You know, the irresponsible people who end up in parks because they are less than the rest. I owned a site-built home for 30 years. Suddenly, I am less than I was? That does not describe me or my neighbors.
I am interested in the "dog eat dog world" comment. That has not been my life experience. I believe strongly in the American character taught at school and home through the years. In my 66 years of living, I have met far more contributors to the common good than takers.
The parks that have been bought, torn down and the site redeveloped represent a commodity lost to people who need affordable housing. That doesn't make the predatory practices of investors who buy parks, jack up the rent so no one can afford to stay and make millions off of the only option for ownership lower income people have any less egregious. Both models result in the loss of affordable options! Both models are bad! I am interested also in the idea that investors pour millions of dollars into these communities to make them wonderful. That has not been our experience.
- WorldWide · Member since 2016 · 1k+ posts · 1k+ votes7y
Originally posted by @Jon Huber:
Definitely now following this thread... reserving my comments. I think I just want to listen.
Same here, but I wanted to mention something about the media, especially the "late night comedians". Just recently Jim Jefferies has been exposed by Avi Yemeni (one of this guests) for editing the videos to make it look like Avi was saying something he was not (Avi had a hidden cam of his own). Be mindful of what is getting placed into your craniums.
- 7yAlex BekezaBusiness MemberLender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
Maybe nobody should every do value add investments so properties around our country just rot. Guys, please stop renovating properties because its making them charge rents supported by the market and its not cool ok?
**Only because I know BP all too well I'm leaving this sarcasm disclaimer here**
I've spoken to SO MANY great people through Bigger Pockets who genuinely want to purchase a small mobile home park, make it a nicer place to live, and bring the rents up to market to make it a worth while investment. I'm definitely failing to see them as evil. Sadly, you cannot be protected from market forces like this. You have to own your situation and do the best you can. I've even spoken to some MHP investors with incredibly generous re location packages for tenants. I've probably spoken to 100 + MHP owners or potential owners and can't think of one who was out to harm anyone or even looked down on their tenants. Another thing nobody is mentioning is that often times that lot rent goes up as the tenant converts from a POH to a lease to own scenario! It's a win win for anyone who can afford where they live.
I'll cap my mild rant here but worth mentioning that @Abraham Anderson and @Brian Spear nailed it.
Investor Property Loan5306 Reviews - Member since 2019 · 39 posts · 48 votes7y
"Mobile homes provide the largest source of unsubsidized affordable housing in the United States (CFED 2016). The ubiquity of the mobile home park in the American landscape and the insecurity of life for residents there begs a fundamental question: How have we allowed one of the country's largest sources of affordable housing to also be one of the most risky?" This question is posed by Esther Sullivan in her ethnographic study Manufactured Insecurity. Dr. Sullivan answers that question at length in her book, and it is worth the money and time to buy and read the book before investing in a mobile home park.
I can only speak from my own experience. Since our park was purchased, there have been zero improvements or investments in the park. In fact, we would argue that things are on the way downhill here. The rent, however, was raised immediately upon purchase. It is not like the park was purchased, improved and then the rent raised to help pay for those improvements. We are simply an investment opportunity for our owners. If there are great owners out there who have improved living for their homeowners after purchasing as an investment, we have yet to meet them. In fact, a park near here has homes for sale for $100 due to the difficulty people have experienced living under the new owners. Mobile home park investing has made people rich, no doubt about that. It has also created tremendous stresses on the home owners who have been affected and by doing so, created stresses on the surrounding community. No one expects the rent to stay the same forever. Gradual increases are expected. Instead, we are in a state of crisis.
- Investor · Roanoke, VA · Member since 2012 · 1k+ posts · 374 votes7y
I think lots of the issues with the MHP investing is the slumlords spend many years milking these communities then when they finally sell they are in such bad condition the new owners have to raise the rent immediately and save money for a time period to make much needed repairs, lots of current park owners in my area hv ran their parks in the ground and they let anyone in them that can fog a mirror, once they finally do sell it’s a good idea to get rid of some of the bad tenants, lots of times it has nothing to do with how much money the tenants make or don’t make, lots of parks in my area hv tenants that can most definitely afford to pay the increases in lot rent, but they trash their homes, and their lots they sit on.
Nobody wants to live in a trashed park ever, it has nothing to do with their income
As far as the video from a comedian talking about any investor in any niche, slumlords are horrible for any type of investing in real estate
I would reserve judgement about Frank and his communities until you go talk to the residents in his parks and see how they feel
- Member since 2019 · 39 posts · 48 votes7y
That is not the case with our park. It was well taken care of by the previous owner. They were not slumlords and were well thought of in the local village in which our park is located. The preventive maintenance that used to be done is absent since our purchase. The community has a lack of senior housing and for many people, this park has been an excellent choice for older people in the area. That is until we were purchased by Sunrise Capital Investors.
Manufactured Home Parks represent a different type of investment. It is not like buying a rundown house, fixing it up and then selling it for a profit. We own our home and the former park owners here had a reputation for taking good care of the park. I have never suggested investors "let properties around our country rot." The bigger issue is how do we, as a country, deal with homelessness and the lack of affordable housing for seniors and families and all citizens? Our homes are not subsidized, we pay our way, positioned ourselves in a community we could afford. Our rent includes taxes and many of us quality for the NYS STAR program, reflecting that fact (just as we did when we owned our site-built homes). Why does it make sense that people become millionaires from our modest lifestyle? As I have lamented before, we are prey, sitting ducks, low hanging fruit for get rich quick investors. We have watched another park in our community fall apart from this type of scenario. As the rent goes up, the value of the homes go down. So, the home owners investment goes down the drain. How is this right? There are few protections for manufactured home owners and right now, investors are taking advantage of that.
- Investor · Roanoke, VA · Member since 2012 · 1k+ posts · 374 votes7y
The good news is if the rent goes to high and the new owners are not taking care of the park the way you or any other tenants think it should be, you can always take your home and go to another park or just sell your home and move to another park
Good luck to you in the future
- Member since 2019 · 39 posts · 48 votes7y
Or, mobile home owners can form associations, lobby politicians for legal protections and right of first refusal when a park owner decides to sell, become active in groups fighting for tenants rights, educate themselves on resident owned communities, work collaboratively with other parks under similar attack, build strong neighborhoods and do the real work of saving affordable housing by keeping it, well, affordable.
- Rental Property Investor · Lindale, TX · Member since 2019 · 37 posts · 9 votes7y
@Frank Rolfe People will always pile on when it comes to successful people. What’s the word?.....jealousy.
- Real Estate Investor · Ste. Genevieve, MO · Member since 2009 · 363 posts · 944 votes7y
Here's what a legitimate journalist had to say about the industry. He spent a week living in one of our properties and interviewed virtually all of the residents. He was a skeptic, just like John Oliver. The only difference is that he actually researched what he wrote about, and kept an open mind. The writer was Gary Rivlin from the New York Times, no less, the same guy that wrote the book "Broke USA, How the Working Poor Became Big Business". Not exactly a pro-business author, right?
Anyone who has posted anything negative about me or the industry owes it to themselves to read his fact-checked journalism on the subject. Then draw your own conclusions.
Here's the article https://www.nytimes.com/2014/03/16/magazine/the-cold-hard-lessons-of-mobile-home-u.html
And, yes, Rivlin wrote that my partner and I "are the best thing going in affordable housing at a time when the nation's need for low-cost places to live has never been greater". How did he reach that conclusion? Because every single resident he met in the park was happy, despite 40% rent increases to justify large capital improvement projects in the property. He was also impressed with the product and the sense of community -- it far exceeded his expectations as a Manhattan high-rise dweller who had never set foot in a mobile home park before.
John Oliver has his place in the entertainment industry, and making people laugh is an admirable trait. But he's paid $2 million a year not to report the news but to parody it. Don't confuse the two.
- Member since 2019 · 39 posts · 48 votes7y
Oh Lord, where to start?? I read the Times article. The best part was when Mr. Rolfe suggested investors stay out of New York due to their tenant friendly laws. As a New York resident, I heartily agree!! Stay out!! Squeezing every cent of money out of people at the other end of the economic spectrum is not noble nor helpful nor admirable. It is predatory! I find the colorful stories of Mr. Rolfe's experience in mobile homes cheap shots and lacking in any respect for the hand that feeds him. I don't think taking 40% - 50% of someone's already meager income makes them happy. It is better than homelessness, I guess, so that IS something to be happy about. Always a good day when the kids get to eat and have their own bed to sleep in. Could be worse - we could all be in shelters. Pretty low bar for determining how "happy" tenants feel.
Also, just to address the John Oliver show, his team had the help of Esther Sullivan on their research team...you know, she literally wrote the book on manufactured housing and what is happening to this last pool of unsubsidized homes. John Oliver and his team did their research.
Lastly, since our purchase by SCI, there have been zero improvements in this park. It is a mistake to think that owners have any altruistic ideas about the people who live in their parks. It is about making a big return on a small investment, displacing as much of the expenses as possible on tenants and farming out the maintenance to a low paid employee who is available 24 hours a day to meet the needs of the park.
- Rental Property Investor · El Monte CA · Member since 2018 · 134 posts · 66 votes7y
There will always be little pus**s out there, f@%$ them. Instead of using that time to building there business up, they spend it on trying to bring someone down. Frank is the homie. Hes put in that hard work thats why hes on top, not because hes cheated people. Hes done way more good then the haters talking about him. The proof is in the pudding.
- Member since 2019 · 39 posts · 48 votes7y
There will always be people looking for affordable housing. In the United States, that is a vanishing commodity. Mr. Rolfe's persistent imaging of people who live in mobile homes as "other" and his negative stories about how those people live allows MOST (not all, I am sure) investors to feel justified squeezing every single penny they can from people who have very little. After all, where else can they go? The notion that "there is a lot of money to made off the poor" is a persistent theme in MHU and throughout the industry of podcasts and literature about mobile home investing.
As noted by Esther Sullivan in her acclaimed study, "Despite its devalued image, the mobile home park proves profitable for a range of players, from everyday individual investors to small businesses moving evicted homeowners to national corporations selling to low-income buyers getting their first taste of a manufactured America Dream. A political economy of poverty operates within these various corners of the mobile home park empire, where the needs of residents and the insecurity of their housing tenure offer sites for interested parties to extract surplus value."
I call this predatory because it seeks to exploit others. I call people who buy parks, jack up the rent, fail to invest in the park in any way, and use threats of eviction as a continual assault to keep the tenants in line, predators. Investors, like Mr. Rolfe, target the growing class of American working poor. "You cannot build a business model around poor white trash. It won't work; you need poor but paying tenants." Mr Rolfe's words. Again with the ick factor.
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