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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!
When you buy or operate a mobile home park, you're often thrust into the position of being a political animal. And none of us really want to be there. We just really want to be in the affordable housing business and provide a great product at a good price. But sadly, a lot of times today in America's politically charged world, being a mobile home park owner has some degree of political nature to it. And it's imperative if you want to be successful in buying or operating mobile home parks, to understand the directions that you are given, often by a zoning official or by a city inspector as to what they want you to do. And in this Mobile Home Park Mastery podcast, we're going to look into what the three generic types of requests you may be given by City Hall to understand what is important and then what is not quite as important. So the first thing that sometimes the city will give you, and this can come during due diligence or after you already own a park, is suggestions. Now, suggestions are just that, they're just friendly ideas of things that they believe might benefit you and your customers.
And the tone is typically kind of helpful. It's not really scolding, it's not very negative. They might say things like, "You know, you might have better issues with traffic speed in your mobile home park if you added a couple speed bumps," right? They're not asking you to definitely add the bumps, they're not demanding it. They're simply saying, "You know what, speed bumps might helpful slow people down and that might make things more safe." And typically suggestions are not actionable and there really is no need for a follow-up. So if I'm walking through a mobile home park in due diligence with the code enforcement officer and he says, "You know, I think it would really be nice if you could add some stepping stones between the parking pad and the deck and stairs of the mobile home. It might make things a little more clean. It might keep mud from being tracked into the homes." And there's nothing wrong with that. Those are just helpful suggestions. So suggestions people should not freak out about.
You should just say, "Oh, okay. Well, the city is trying to be friendly, trying to be neighborly," and that's fine. But then sometimes suggestions can then turn into requests. Now, a request is a different kind of animal because now what's happening is the city is typically gathering information and that can often lead down the path to further problems with the city. So you have to be a little alarmed when you get a request from the city. So a request might be, "How many times has your sewer backed up this year?" It's questions that you typically might get in a deposition or something potentially. And it's a warning. It's typically a preamble to escalation. So when you get a request, they're actually asking you to do something that you have to follow up on. And when you do follow up on that request, you need to be prompt and courteous because the way you handle that request may well be what saves you from going to the next level. So often city employees are living for the weekend, they're trying to follow orders from above, and someone has told them to find out some bit of information about the mobile home park.
And they're calling you because they don't know the answer. And they're wanting that input. And if you give it to them quickly and honestly and with a cheerful attitude, and they give that back to their boss, the boss may say, "Oh, okay. Well, I really don't think there's a problem." But about the worst thing you can do if you get a request from City Hall is to ignore it or refuse to give it. I know of someone one time who then, when given the request, said, "I don't know. And don't you dare come in the property, because remember, I'm private property." Where do you think that takes things? Obviously, the inability for you to be cordial and neighborly in response to a request is a trigger to them. There's something terrible going on behind that entrance of the mobile home park. So when you get the request from the city, you want to be nice, friendly, neighborly. You want to have the best mobile home park community in the macro community, and you always want to obey their orders.
But then what sometimes happens when you own or buy a mobile home park is you get demands. Now, a demand is a very serious thing because a demand has consequences if you don't follow it. So when you get a demand, you need to document and build a chronology over how you came to this moment. What is the city demanding that you do, and how did we get there? What were the steps along the way? What led us to suddenly have this next step in the process? And the demand might be something like, "You can't use that mobile home park vacant lot." So therefore, don't even think about it. Or even worse, you might have brought a home in on it and they say, "Oh, you can't use that lot." Now, what's going to happen when you get to the demand stage is, you can't really do it on your own is the sad truth. Because the way we're set up politically in America when you have issues with City Hall is you're going to have to escalate it one notch up, and you'll have to pay for that.
And that's typically in the form of getting an attorney. And not just any old attorney, but what's called a municipal lawyer. This is someone who is used to working around the politically charged atmosphere of City Hall. And once you bring in that attorney, the attorney can then talk to the city's attorney on an equal footing. So then we can get a dialogue going as far as what the city is wanting, what they are demanding, and what you are willing and able to give back to them. And when you figure out what your response is to the demand, you're going to have to respond in writing and fully document it. Because it's possible, just possible, that this may even go to a next level. And beyond demand would certainly become probably litigation. Now, nobody in the mobile home park business wants to have litigation. It's never been something that I know of any buyer or owner of a park to dream of having some kind of legal problem with City Hall. But it can happen from time to time.
Now, the good news is that a good municipal lawyer can help steer you away from having that conclusion. Because a good municipal lawyer will be able to talk to City Hall and say, "Well, look, City Hall, now, you know there's this law, and there already is this precedent that they can use that vacant lot. It falls under the grandfathering laws, and that was affirmed by the Supreme Court back in 1974." And often the city attorney, when learning of these facts or focusing for a moment, says, "Oh, yeah. Yeah, you're right. Okay. Yeah, they can use that lot." But who you choose as that municipal lawyer in the case of the city demand, that can be the most important part of the puzzle. Because your municipal lawyer is kind of your quarterback. It's kind of almost the whole team. So you have to select wisely. Now, how do you find a good municipal lawyer in the event of a problem with the city, a demand from the city? Well, you could call your state mobile home association and find out what lawyers are members of the association and call them up and interview them and see who has in the past had an issue like this which they successfully navigated. But it's very hard to solve demands on your own. Now, if you feel like you're good on your feet, you could go down and meet with the folks at the city.
If you want to take that gamble, of course it's a gamble, because it might be you're not as good at one-on-one encounters as you think you are, but you might be able to go down and talk them through the issues and not have to bring in the city attorney. If, for example, you had old sewer line and they thought that the sewer line needed to be replaced, and they demand that you do, claiming that it's old Orangeburg and needs some form of replacement, you might be able to go down and negotiate with them. And, for example, get it where you phase it in over time, and maybe that better meets your budget, so that might be a solution. But in general, when you get a demand from City Hall, what you need to do is you need to go ahead, bite the bullet, spend a little money, and get an attorney who can successfully defend your interests. Now, the worst thing you can do though, is bring in a city attorney when it's only in the form of the suggestion or the request. Then you're jumping the gun in a big, big way.
Because when you bring an attorney into a situation at City Hall, it typically makes them believe there's so much more than they even know about at this point. It's kind of like these cases you have right now where someone is a suspect in a murder, but initially they're just one of many, many hundreds of potential suspects, but they suddenly hire an attorney and won't talk to the police. It comes off almost as an admission of guilt. So when you get the suggestion and the request, pretty much the worst thing you could do would be to bring in your lawyer who immediately goes to City Hall or goes to the city attorney and causes a big stink. That'll only cause you problems. But when you get the suggestion or the request, don't freak out. Think about what they're asking, answer honestly, answer promptly with a cheerful attitude, and often that will get you in the clear. But if it comes into more of the demand stage, then your best course of action often is to bring in someone who is more knowledgeable than you are on the laws in that state, county, or city. Because often that's what you'll need to get what you're trying to achieve. This is Frank Rolfe, the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.