All Forum Posts by: Jim Johnson

@Walter Pape 

That is correct. @Matt R. is saying, maybe he will complete his post into something that is not a one liner and explain himself. So for me to be honorable, do I need to be on a stipend. I have never heard this before and I am curious as to what it means? <-- Moving on --> For me I really do not care so much how others do things- the question is, can I respect diverse views and can I respect people for having them. I grow tired of the name calling, or belittling snide jabs. Is someone really 'stupid' or an 'idiot' because they look at a subject in a way other than mine? To quiet someone do I need to resort in questing their intelligence? I see people that call themselves experts brow beat people that have different views. I really think the story behind why people believe what they do, or the experiences the values and morals are set in is fascinating. There is so much to be learned in the purpose of actions. We tend to pass judgment on what people do, with no back story on the why... in the long run, I get to choose who I hang with. There are many people I respect as business people, but I would not choose to have them over on my Saturday and gill on the deck with them. In turn, I have many very close friends I do not agree on politics with, or how we operate our businesses, how we spend our money etc- that I love hanging on the deck with- because while we do not always see eye to eye on issues- we totally see eye to eye on respecting each others views and why we have the views. In fact- thinking about this- I know several people I almost agree with on every subject but I do not hang with them because they choose to undress anyone the thinks different. Hmmmm... even though I agree with their view- it is how they defend it, and why they defend it that is so repulsive. Remember- I am dating myself here- when in basketball a foul was called and the player that did the misdeed would right away raise their hand... now they all point fingers... I like people that can call fouls on themselves I guess... 

I do not think the rule is based on home owners pulling homes out- the rule is rooted in the professional dealers pitting one owners cash against another for their profit. 10 or 15 years ago this problem did not exist. I brainstormed this issue and found several ways around the the first right. Here is the easy one. 

In a park that has a first right modify your 'contract' to look like this. Lets play with numbers so it is real.

Day 1) Dealer offers $10,000 for a 3/2 singlewide. Seller says yes. Dealer and seller sign a partnership agreement that once the home is moved to the next location the seller will receive a check for the amount. Partnership agreement (bad term, it is not really a partnership, it is a contract) states the dealer as part of the agreement will cover all expenses to market the home which could and probably will include moving the home. This is sort of like a really strong, and odd listing agreement. 

Day ) Dealer contacts park owner 2 who says 'I will send you a check to get that home into my park- here is $3,000'. Or maybe they front half now, half on set up... whatever. Then after the home is moved- park owner 2 has 2 checks ready- one for the home owner who is about to sign the title to park owner #2 for- $10,000. The second check to the Dealer for $5,000

End of the day- the first right is never in play because the home moved, thus severing the space lease agreement. 

Marc- if this really bothers you you need to think out of the box. There are lots of solutions just like the one I gave, that do not involve needing some law changed. We have enough laws. This law does not effect the seller except when a Dealer is involved. That counter offer cuts into your take. Its business- you have two choices when the situation on the battlefield changes- make a strong counter move that neutralizes your opponent, or fold. If you put the energy into brainstorming a solution and not discussing the problem- you would have been done with this topic before it started. You would have posted something that said- Fellow BP'ers- here is how I solved getting around a park owners First Right inserted into space lease agreements'... 

last point here- I have lots of people that work for me- professionals in the office, regional park oversight people, managers, home rehab crews, maintenance and even virtual contractors... I have a big rule. If you come to me with a problem, you must bring a solution to the table as well. Something to say you have thought this through and this is a solution, or part of a solution. Be proactive, think on your feet, find action solutions AND reaction solutions. Learn from what goes right, and goes wrong and adapt from every deal. My saying around the office is- your a part of the problem or a part of the solution- which is it. Some people make things happen, some people watch things happen, some people wonder what happened... to work for me- your probably in the 'make things happen' box... 

so what box are all of you int? Not a answer to post for me, or anyone else... it is a question you ask in the shower, or in bed late at night. Do you brainstorm problems or solutions?

Mark,

Sounds like a good private discussion...

I want to open a topic that is based more in purpose than product. The 'why' we do things. On most boards I see people asking what is legal and illegal. While that is a worthy topic, I am perplexed to note that seldom are we discussing the Ethical and Moral side of the issues- aside from the legal ones. It seems, people want laws to rein in what other people do. Over time we will 'law' ourselves into some corner where there is no escape. When I see someone express a 'ethical or moral' argument, the people that do not agree stand on the law- like if it is not legal it is ok. When I see people bend the law, I see the opposed stand on a loophole to justify their stand. It seems when it comes to respecting another persons ethical and moral stand, in general as a society we have a really hard time doing so. Almost like, there is only one way, and other way is flat wrong. Here is a simple but personal example for me. I do not speed. Period. Not 10 over- not 5 over... I do not do it. I happen to respect the speed limit and for me- that is that. I also do not begrudge you from speeding. I stay in my right or middle lane, and just go the speed limit. So more info- I also happen to drive a very, very high performance sports car. The kind all of my friends say- if they drove the car one day they would have a ticket for sure- no questions. A joke between my son and I is how many people get really, really, really mad at people that drive the speed limit. I have had people get out of their cars to cuss me out because I was driving 55 in a 55. I have some on video- you would think I ran over all of their pets on purpose and did an OJ slow speed chase to get away. In fact, I just respect the law. Easy example right- the law is clear- though most people 'bend' it- for reasons I am not really sure of, nor do I really care so long as they are respectful of me obeying the law. Now a more grey example- I choose to not bend or break my marriage vows. These are not laws, but something different. Can an argument be made there is no law that says if your married you are to act certain ways and refrain from certain acts... yep. In court for instance I would loose every time. What is wrong for me, and most- is legal. Not every issue is about legal, or not legal... in fact the issues that shape our character, that fiber people stand on and say- he / she is that 'kind' or 'type' of person... they have nothing to do with laws- they have everything to do with where we operate inside of the laws. There are many, many business people I respect because they are savvy, smart and really know their stuff that I would never do business with. Not because the violate the law- but because the law is their boundary, making their actions predictable but for me- not tolerable. I would like to see more encouragement here, and in other forums, meetings and business dealings to respect each other. To try to understand where someone is coming from, not just bash what people are doing. The name calling and generalizations serve no meaningful purpose except to put people down, stifling people that might post for fear of being attacked by someone that thinks differently.  No one is right all of the time- and I am just thinking if people are fully educated on all viewpoints and the morals and values that drive them, and we all respectfully listen- we will all make better calls in business and life in general. In the end there will be people that agree to disagree... and that is ok...

For the record though- I am a win - win guy. If crossed I will find a way to stop the bleeding- but not at the cost of my ethics, morals, values or crossing the law. I will do everything in my power to stop the bleeding and make sure it does not happen again. 

Back in the day- it was just home owners that moved the homes around. Today I am guilty of pulling homes out of other parks to put into my parks- so I understand the game. That said- here is what I do...

If I find a home and put it under contract- the next thing I do is offer it at that price to the park owner. So I will hand them my contract so they can buy the home. I understand the game on the park owners side, and some want the homes, some do not. I will pull the homes not wanted, and I will let the owners keep the homes they do want. It is the same way I would want to be treated if someone came into my park. Now note- I do NOT raise the price, not a cent. Again, I lead with the way I want to be treated. Now in return- when these park have a home they want pulled- guess what- they call me. They ask me if I want it. Doing good business is not always about making money, sometimes it is a much larger effort that involves moral, ethical and a win - win approach. A statement I use all the time is- everyone drives home in a limousine. 

I know one community in Indiana that got so upset at a dealer who was targeting their community, well in short they tied that guy up with legal cases, most probably having no merit, he went broke trying to defend himself and lost everything. He was dealing homes between parks and I think they just got fed up with it. 

Remember- a home might have a cash value of $10,000, but the value to the community is about 7 times the space rent. So a park with space rent of $500 per month- is $6,000 per year- is a value of $42,000- give or take... pull 10 homes like this and you have lowered the value of the community by over $400,000... dealers make a margin or spread on a deal- a few thousand per deal- park owners play the CAP rate game- the stakes are much higher... when there are more home sites than homes, the game starts playing rough.

A side note- as some here might know, and the rest will now learn, prior to getting into owning parks I was a lonnie dealer. I have done 100s of mobile home deals- and I financed them all. I still hold a huge portfolio of notes. Well- after getting into parks I mentored a lonnie dealer. One night he was going to head across town to look at a home- and he needed the cash to purchase it. So I fronted him $10,000 to buy 2 homes. Which he did, like $5,500 for one and $4,500 for the other. He then proceeded to want to flip the same homes to me, to pull into one of my parks for $10,000 each. Ya know- if he wanted an extra $1,000 each I would have done it. I needed the homes, but he used my leads, my money and now wanted me to pay him $10,000 more than I would have paid myself for the same homes. I did not buy them, and I also stopped mentoring him. He claims its just business- and that is true I guess. Well- then maybe I should have charged him for the mentoring... 

So two answers here-

Someone must still pay the past due space rent- the old owners or the new owners. The idea in an agreement like this is I get paid, the seller can get rid of the home, and we are not adding on attorney fees and court costs that serve on one. 

Now back to the topic at hand... so as I read that text- the owner of the home presents a contract to the park owner- who can choose a few things. Match the price, pay off the home owner and then do whatever they choose with the home. Second- reject the new owner based on the qualifying process- in effect saying they can sell the home- but that person can not be a resident or the home must be pulled out. Third- The park can let the home be purchased to the new owner. In every one of these cases the person selling the home is not effected- except in the case- someone wants to buy, is not approved so they do not buy. That is the case in all well run parks though. I am guessing this clause was put in place to prevent homes from being pulled out of parks by known dealers. 

But back to the topic- how is the homeowner harmed? If you will pay $5,000 for the home, and the park will also pay $5,000 for the home- the homeowner is whole either way. 

I am clearly looking at this from the side of the park owner- what am I missing?   

Hmmmmm... I would be interested in seeing the space lease agreement and / or the first right agreement. Any wild chance you have copies? I want to comment- but from a fully educated position. 

Marc, As a park owner I use these on a limited basis. Lets say someone wants to sell the home, they are moving and can not pay space rent- or worse- lets say they are behind on space rent and they are needing to sell as a way to get out from under the debt. I will sometimes exchange a first right for not prosecuting back space rent. The back rent is still owed, but the home is tied to it getting paid. So if the home was going to sell to someone that was going to pull it out, they would need to pay the back space rent or, I might choose to give the homeowner the same money, less the back space rent, and keep the home in my park. A first right does not set a price, an option would. So this would really only affect the home purchaser- but not the sellers ability to get top dollar for the home. The home owner would not know if the first right was going to be tripped until the park owner had an offer to meet. I can see how it would feel a bit like a rug being pulled out from under your feet. So I am guessing your purchasing homes and moving them- working off that premise... you can make sure everything is paid and up to date- then move the home, then buy it from the owner. So now the owner is moving the home and the park would have a very hard time stopping someone from moving their home. If challenged the park would loose unless they had a restrictive lien on the home. So you pay for the move, then as soon as the home is in the new park, change the title over to your name.