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Welcome to the Mobile Home Park Mastery Podcast where you will learn how to identify, evaluate, negotiate, perform due diligence on, finance, turn-around and operate mobile home parks! Your host is Frank Rolfe, the 5th largest mobile home park owner in the United State with his partner Dave Reynolds. Together, they also own and operate Mobile Home University, the leading educational website for both new and experienced mobile home park investors!
The mobile home park business is not really technology driven. There's not a lot of new wave AI types of things that reflect what we do in buying or operating mobile home parks. But a mobile home park turnaround is very similar to, in fact, a rocket ship. And we all saw the Artemis rocket take off recently to go to the other side of the moon. And you noticed on these rockets there's different stages that propel them into orbit that all have their one unique feature, their one unique goal as far as the trajectory of that rocket. And in many ways, mobile home park turnaround is just like that. This is Frank Rolfe with the Mobile Home Park Mastery Podcast. We're going to talk about the stages of a turnaround. Now, I've been doing turnaround mobile home parks since my very first one, Glenhaven, back in 1996. So for 30 years now, I've been turning around mobile home parks. They don't always start off in the same spot. Some are much nicer than others. Some the turnaround plan is much easier, but all of them follow the same typical kind of trajectory. And I thought we should go over what those stages are.
So stage one of a mobile home park turnaround is the law and order stage. And the main focus on this stage is simply to restore order to a mobile home park that often mom and pop have let just completely go asunder as far as what the requirements are on the tenants. So you're going to have to enact no pay, no stay on rent collection. If someone will not pay you the rent, okay, but you can't live here and not pay the rent. Something mom and pop never drew the line in the sand on. People didn't pay them sometimes for years, they let them keep living there. You can't do that. You have to file eviction. You have to retrain the people that the rent is due once a month, and if they don't pay it, you will evict them. No more complicated than that. You also have to enact no play, no stay when it comes to the rules. If they don't want to play by the rules, then they have to leave. Mom and pop never had that. People could have three non-running cars, six hound dogs. Mom and pop never did anything to them.
They might occasionally say, "Hey, try and clean up your act when you can." But over the years, it just got worse and worse. And then everyone looked at their neighbors and said, "Well, I'm not going to follow the rules if they're not." So if people don't follow the rules, then once again, you have to non-renew their lease and kick them out. And stage one for most people is often the most unpleasant because it's the one where you have to be the tough guy, the bad guy. But this is kind of tough love, right? Because people need to live in a certain amount of law and order in their lives to have a successful, happy quality of life, and you have to be the player to create that. So you start off with stage one, the law and order phase, and then you go to stage two. Now, stage two is all about aesthetics because you're trying to make the park the best park it can be. And not all parks look the same when we're done. In fact, no two parks look identical when you're done. You work around all of the attributes of that property.
Some of them have beautiful trees and things and others don't. But that doesn't mean you can't make even the worst-looking mobile home park in America look better. So how do we do that? Well, we put in a new entry. We prefer three-rail white vinyl fencing with matching sign designs and maybe feather flags down the entrance. Get your common areas looking as good as they can. Make sure that the roads are patched, looking attractive, trees are trimmed, property well-mowed. Stage two, the aesthetic stage, is mostly about your own ideas on streetscaping and just making it look visually appealing. And then once you've cleaned it up, because at this point now, when we've gone through stage two, we've kicked everyone out who won't pay the rent or follow the rules, and now in stage two, we've made the thing pretty. So then we go into stage three. And stage three is the marketing and sales phase. Because probably you're going to have, with most mobile home parks today, you're going to have some degree of vacancy. You may have vacant... Excuse me, park-owned homes or you may have vacant lots. But either way, we want to fill those because that's a lot of money being left on the table by those things being vacant.
We're in a huge affordable housing crisis in America. There's really no excuse to have vacancy today. Any lot that you haul in a used or new home should sell very rapidly. Any home you have, a park-owned home sitting in there needing renovation, if you put the money into renovate it, it should pretty much fly out the door. But in the marketing and sales phase, what we're doing is we are unabashedly promoting the property. We are literally summoning our inner P.T. Barnum, the guy that said without promotion, nothing happens. You have to promote the park. You have to build a website for the park. You need to have SEO for the park. You need to have Facebook for the park. You need to have everything. Promote the living heck out of the property. Why? Because there's no reason not to. There's no downside to everyone in town knowing if they want the best quality affordable housing in that whole market to come to your property. That way, you will always stay full. And marketing is basically nearly free today. You don't have to run TV ads or radio ads. Most successful mobile home park marketing today costs very, very small amounts of money.
Signs in windows, signs in yards, a banner on your frontage to the street, Facebook Marketplace ads, tear sheets in laundromats and washaterias. These are the things that drive customers to your property. And in stage three, it's all about getting the property completely full. And then we move on to stage four. Now, stage four, I would call the cruise control stage or maybe autopilot since we're talking space travel. Because in stage four, we've turned that park around. We've reestablished people paying the rent, following the rules, cleaned it up, made it attractive, got everything completely full. So now what are we doing? What we're doing is we're going to go and maintain all these hard work things we've built. We want to make sure that those stay in position. But when you get to stage four, normally what happens is we have to have a management change because in stage four, the manager doesn't have a lot to do. Stage one and stage two and stage three, there was a whole lot going on. Vendors going in, getting bids on things, fixing things, painting things, sawing things, selling things. But now we're on autopilot and all we have to do is maintain what we have.
Sure, someone might move out. Okay, well, we'll have to resell that home. Yeah, that tree over there might die. Once a year, let's go in and chop down the dead tree. But on a day-to-day basis, there's not a whole lot to do. And that's why often when we hit stage four, what we do is we have a changeover and the manager becomes just one of the residents in the mobile home park who can kind of serve as our eyes and ears as to what's going on there. Because when you get to stage four at autopilot, the one skill that you have to have to maintain the park in such good condition are people skills. And frequently there are residents in your mobile home park, they have nice homes, they drive nice cars, and they know everybody, and they're very, very good with people. Let's say, for example, there's someone in your mobile home park and everything about them looks great, and they are retired, and they used to work in the shoe department at Foley's department store. They'll probably have a pretty good idea of things like customer service, mediating disputes, solving those kinds of issues, because that's really what your park desires. And the other part of stage four comes from what's called pride of ownership and sense of community.
And that's pushed along further by a manager with good people skills. Because in any turnaround where you've really hit Nirvana is when the people do all of the work themselves without your prompting or cost. And you can feel it at any mobile home park turnaround. You'll go by the mobile home park and you'll say, "Wow, that house is painted, but I didn't paint it. Look at that, that shed's painted. I didn't do that. Oh my gosh, that person is landscaping. They've planted bushes in their yard. I didn't do that." That's because all Americans typically at some point like to keep up with the Joneses. We're all very much into our image and how we associate with other people. And in the final stage of the turnaround, the people take the ball and they run with it. You have once again empowered them to have pride in where they live. You have been the grain of sand that creates the pearl as far as their sense of community and trying to have a happy and successful existence in that community. And that's the point in which really your liftoff of your turnaround has finally gone full circle and been completed.
Because you've taken everyone from often a position of mom-and-pop management, which was not very good, and people were suffering in that mobile home park because there were those few who wouldn't follow the rules. And now you've got everyone on an equal playing field, and suddenly the sky's the limit as to how high that quality of life can be. This is Frank Rolfe with the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.