I am always moved to write when I look around my real world environment and see smart businesses at work. Today is just such a day.
I own my own mobile home and my house is parked in one of the nicest, if not the nicest, mobile home parks in town.
I moved into this park two years ago, and one thing that attracted us to it was that all lots were large and spacious. Of course, we also realized that our yard actually consisted of our lot and the lot next door that had not been utilized in years.
Two months ago, the old park owners sold to some mobile home park management outfit in Dallas, Texas. Right away, they let us know that our lot rent would double. We honestly began to consider whether we would actually pull out of the park, given the pure absence of services and the higher levels of lot rent. The previous management had pretty much offered us NO services.
Time has begun to change our perception of these new people. Services are improving… so much so that we are thinking about staying at this location, even with the higher lot rents. We now have trash service for the first time ever, and we no longer need to do the landscape maintenance ourselves. Although these new services don”t fully justify the complete rent hike, it is looking more promising now.
SMART MOVERS
But, the increased rent and services is not my point in writing this article today.
I am actually impressed with these new folks on the basis of the maneuvering that they are doing. I am impressed with how they have changed the profitability of this mobile home park from their point of view.
For the first few weeks they were here, it was very annoying. Every afternoon for a few hours, we lived without water. That was a real pain. But, after four weeks of repairing water lines that were running to each lot, they were done with the water work.
A few people pulled out of the park, and a couple of people moved into the park as they were adding new water and sewage lines to the empty lots in the park.
Last Friday marked a major milestone in the growth of this neighborhood. Signs began to pop up indicating that people could buy mobile homes for very reasonable rates. In fact, they could buy their homes with a down payment equal to half of what I put down myself.
Then on Saturday, the exodus began in earnest. Four new mobile homes were moved in on my street on Saturday. Two more rolled in on Sunday. Monday brought four more into the park. Every day since last weekend, we have watched four new homes a day roll into the neighborhood.
On Tuesday, we went through the park and counted the new lots they had readied for new homes. This park with about 50 homes in it already, was prepared to receive another 74 new homes. We figure this park will be packed with new homes in just about two more weeks.
THE FINANCIALS
Prior to the takeover, this park was generating about $8250 per month in revenues. The increase in lot rents moved revenues to $16,000 in revenues. I think most of us will bite the increase, especially since services have increased dramatically as well.
When all is said and done, this park will be sporting 125 mobile homes instead of 50, thus increasing revenue to $40,000 per month, once the new ones have sold to new families.
The most amazing thing about this whole process is that it seems our new management team have an agreement with a particular mobile home manufacturer. The manufacturer can permit their homes to sit in the parking lot at the manufacturing plant, or they can place then into a mobile home park where the park will operate as a seller representing the manufacturer.
The seller/park can make a commission off of the sale of the homes, and they can have an immediate additional income from the buyer in the form of lot rent.
IN CONCLUSION…
I am just impressed at the smartness of our new management company.
We have not yet decided whether we will sit it out here or move to another location. It is still likely that we will move our home to another location; we just have not decided when. Our lot rent is now equal to our house payment; and I”m a cheapskate. 😉
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