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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!
It's a reality of life that power outages just happen. You can lose your power for an hour, you can lose it for a day, you could even lose it for a week. And if you're a homeowner who during a storm loses your power, it's very much an inconvenience. Can't watch TV, air conditioning doesn't work. But if you own a mobile home park and you've got a water well or a lift station or a packaging plant, it's way more than just an inconvenience. It can cause really dire business issues. This is Frank Rolfe with the Mobile Home Park Mastery Podcast. We're gonna talk about losing power, but yet gaining the power over your power using a generator. Now, what is a generator? A generator is a way to basically be your own power company, create your own electricity. We all see the ads for it all the time for Generac. It's a company, they even sell them through Costco, that has generators already pre-wired, already built in, that seamlessly turn on when the conventional power turns off. And that's a great idea if you can afford it. If you have the fuel source, you could perhaps put in a backup Generac or similar generator such that when you lose your power, it magically just turns on. But not everywhere do you have the natural gas connection needed for a Generac, nor the ability to install the propane tank needed for a Generac. In fact, in many mobile home parks, to actually get power down in the form of a generator, you have to use an actual gasoline-powered generator, the kind that you go down and carry in your pickup truck or in a car. Now, it doesn't have to be randomly assigned like that. You could already have the generator down there in position, ready to go. Someone would have to manually start it up and keep it gassed up. But having a generator at the ready is obviously, if you've got those key items of a water well or a lift station or a packaging plant, it's a really wonderful idea. Because if you don't have backup power generation for your water well, what happens? Your people have no water, no way to drink, no way to bathe, no way to flush a toilet. That's not good.
If you lose your power and you've got a lift station, what happens? Well, that sewage keeps pouring into the lift station and the stuff that it was pushing uphill starts going backwards, and next thing you know, that lift station will be overrun with sewage. You will literally have a sewage spindletop, like out of an old 1920s movie where someone hits it big and the oil just shoots in the air. You'll have the same thing happening with sewage. And where that sewage goes could be a real problem. I know of a park owner who has a lift station right there on the beach on Pacific Coast Highway. If that thing ever had sewage come over the top, it would go onto the beach, it would go in the ocean. The pending litigation from that would wipe the park out. So got to be able to get that lift station going again. You can't have that thing shut down. And of course, a packaging plant is another potential sewage catastrophe, because without electricity, that packaging plant cannot process your park sewage. So the sewage is gonna keep pouring into the packaging plant, but you've got to get it treated. And you can't get it treated through UV light, chlorinator, and all the different fan blades and devices unless you have power. So how much power do you need? If we need a generator to make sure these items can't go out, how much power do we need? Well, your typical water well, to run the pump, you need about 5,000 to 7,000 watts of power. For a lift station, you need typically up to about 10,000 watts of power.
And for a packaging plant, you need a lot. You need up to 50,000 watts of power. So how do you do that? How do I get something that can handle that much power? A lot of these household devices you see advertised on TV or things at Home Depot, they don't go that big. They only have enough juice to typically run maybe your lights, maybe your television. But now we're talking commercial-grade amounts of power. So what does that cost? Well, to buy a new 10,000-watt generator, if you were to go down and buy it at the place that sells new ones, that's gonna set you back about $5,000. But here's the deal. You can often buy those at pawn stores and places like that for about $400 to $700. So now we have a very affordable device that I can buy, I could keep in the office storage area, I can move it on a pickup truck, and that would have enough juice to at least cover my water well and potentially even my lift station. Now, when you get up to the 50,000-watt category, though, it becomes really expensive. A brand new 50,000-watt generator will set you back about $30,000. But you can sometimes find them again on the used market for $7,000 to $15,000, which again, sounds like a lot of money, but it sure beats the alternative if it were to go out. Now, the Generacs that we talked in the front end, people don't realize they actually make models that can do commercial-grade power generation. Now, a Generac is something that runs on natural gas or on propane. So you'll have to have access to one or the other, and not every city will give it to you. Because often, if when you got those private items like your lift station, there's no natural gas down there as far as your mobile home park. And in some cities, you're not allowed to bring in propane if you have access to natural gas. So the two fuels that Generac runs on may be impossible.
But if you do have natural gas or access to propane, those are gonna set you back when you get to the commercial-side cost ones. Those are gonna be about $15,000 to $20,000 installed. And there's really no available used market for those that I have ever seen. So as a result, you have a pretty big upfront hit. And on the propane side, you have to have 60 gallons of propane to run one of those per 24-hour period. So you'll have to make sure you have a propane tank big enough to get it. And you'll also have to think through now, how the heck am I gonna get propane trucks down in there to refuel that in the middle of the weather issue? Maybe with flooding and stuff, the propane tank can't get there. So for many people, the one that you feel the safest with is the one that you control, the good old original gasoline-powered generator. Because your manager or maintenance person should have the good logical sense enough to be able to go get gasoline and put the gasoline in it and start it up and run it. Now, here are some tips on generators, which basically are based on common sense. The big one is when you need them, they're not available. Most stores do not stock a lot of generators. A Home Depot, a Lowe's might have in their total inventory at that location maybe a couple. I can't imagine they would ever stock more than four or five of them based on how much they cost and how little they're sold. But you better believe those fly off the shelves fast when the big storm hits. Because everyone who has a credit card with a big enough credit line to buy one is gonna run down and get it, and there won't be any just minutes after the storm leaves. So if you're gonna go the generator route, you got to do it upfront. You have to do it well in advance of the storm.
Same is true of trying to get one cheap. The used market on those moves even faster in the event of a storm. They're gobbled up and gone within seconds. So the best time to buy a generator is when you don't need it. Also, if you do get a generator, there's no purpose to it unless you show the manager how to use it. Otherwise, it's a great, awesome piece of hardware, but it's basically just yard art unless someone knows how to effectively turn it on and connect it and run it. But for any park owner that owns a water well or a lift station or packaging plant, you need to start seriously considering having that backup ability to generate power. Because you can have a plan B. You can have this safety blanket at the ready when you need it, but you have to start pondering it and put it into practice before that terrible time happens. This is Frank Rolfe, the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.