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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!
Anyone who has ever meandered through the business section of any bookstore knows that listing to your customers is a vital part of having a successful business. And in mobile home parks, obviously the residents in those mobile homes are our customers, and we wanna know their viewpoints and act on those accordingly. But how do you best do that? This is Frank Rolfe, the Mobile Home Park Mastery Podcast. We're gonna talk all about listening to your customers, making decisions based on that input to better your business. Now, the first thing I can tell you is that most people, most adults who have a reasonable idea of gut instinct and common sense, they alone can see many of the problems that residents face. It's rare that you can take someone into a mobile home park, stand there at the entrance, look down the street, say, okay, what's wrong with this picture and not have them tell you.
And we can all tell a poorly run business. We can tell when we go in the office that it's bad. We can see that the manager isn't there, that the manager isn't dressed appropriately, that nothing good is going on. And right then you should spring into action because don't for a minute think your residents don't see that. So a lot of what's wrong with any mobile home park, you don't need resident input per se to know what's going on. Instead, you yourself know what's going on. Often you don't act on it because you hate to spend the time and the trouble to find a replacement manager. Or maybe you hate to acknowledge that you need to put a little extra capital into fixing things, but 9 out of 10 times, we don't really need a formalized process to get that residents input because we already know what we're doing wrong as a business.
However, the first starting spot, if you really wanna listen to your customers to make your business effective is you've got to put in a helpline program. Now, what's a helpline? It's just that. It's a phone number or an email that your residents can reach out to in times of trouble or to make observations or just let their voices be heard. It's important that you do it both in a phone format and an email format. Some people just don't like to reach out and call people, particularly younger residents, we find they are more part of a new form of society that prefers to communicate via text and other issues. So you definitely want to have both phone and email options and you distribute this to all the residents. And here's an important point, don't let your manager be the one that distributes it because it's prone to them not doing so, particularly the bad managers who don't want you to know what's going on.
So instead from a central office or your home or your coffee table, if that's your central office, send all the residents an announcement of the program, a refrigerator magnet that you can get printed online insanely cheaply with that phone number and email that every day forward they can go to if they have a problem. You've now instituted the helpline. Now, what do you do as calls come in off the helpline? How do we make sure we're listening to residents who are giving real and viable and truthful information from those that are not? And of course, the first stop you would have whenever a resident communicates to you, a problem is you look up to see if that resident is current on their rent. Because oftentimes a resident who is not current on their rent has an ulterior motive. What they're trying to do is they're trying to spin their nonpayment of rent to some other issue, even though it doesn't exist to try and buy time for nonpayment of rent.
Or perhaps they're just mad at the manager for saying, Hey, you gotta pay your rent, or you can't live here anymore. That's a pretty common attribute of a no pay, no stay collections policy. And also look at the rules violations. Make sure that resident isn't already violating rules and being put on notice because again, they would then have a vested interest, a grudge in the information that they share with you that may be inaccurate simply 'cause they're trying to promote their own issues that are not really truthful or not really a part of your business. But what normally happens often in a mobile home park when it comes to hearing from the residents and a key feature to knowing that the information is in fact correct, is when it comes in volume. Mobile home parks have lots of customers. That's a unique part of the business model and one that makes it attractive to people.
If you own a little strip shopping center on a highway, you might only have three tenants, but a typical mobile home park in America averages about 80 residents. So if there is truly a problem going on in the mobile home park and you institute a helpline program, you should get feedback from more than just a single resident. I've never seen a case where there was some legitimate problem, whatever it might be, that you didn't get a lot of identical calls from various residents. It's kind of a safety in numbers program. It's kind of a democracy where you have more than one vote, but many votes pouring in, and you can then quickly see what the issue is. So if you have your helpline, you have your phone number, you have your email, and suddenly let's say you get three or four calls or emails almost immediately, maybe over a two-day period about some terrible thing that the manager has done, well then you probably really do have a problem and you better act on that immediately. But if you just get one in and the one that comes in is from a resident who's already a month behind on their rent, you would have to beg the question, why just one? Why are we not getting more input? And what is the true motive of the person that calls or emails? Because it may be an issue that is something that they're trying to manipulate with but isn't truly factual.
Also, when people call in or email regarding issues with the manager particularly, you need to always back the manager first. The whole point of the helpline is to allow residents to get around the typical chain of command. In most mobile home park structures, what you have is you have the owner who talks to the manager and the residents who talk to the manager, but there's no system for the resident to talk to the owner, only the manager, the manager filters all information. That's a dangerous position because a manager who's gone bad can basically screen out your visibility of the problem. That's not good for your business at all. So it's very, very important. However, when you do get calls or emails that say that the manager is doing something incorrectly, that before you simply call up the manager and scold them and say, you stop this immediately.
Whatever this thing is you're doing, you need to do a little investigation of what's really happening. Now, how can you do the investigation? Well, you can go out to the property yourself, but based on where you're located and where the property is, that can be a difficult climb. But you could go on Craigslist and you could go ahead and probably pay someone $50 to do almost anything you need if it's going out to the property to check on the mowing or whatever this problem is from the caller. If it's a behavioral issue or something else on the part of manager before you make a snap decision of what to do, I would contact your insurance agent. We always recommend Kurt Kelly at mobile insurance out in the Woodlands in Texas, for example, who's very knowledgeable on mobile home parks in particular, and get the input of the insurance company as to what you should do next.
I would also refer to whatever your state laws are on employment. Most of which you can find readily online if you just seek it out. But make sure that you think thoroughly before taking action. Nobody likes being treated poorly. And there are many cases where you have a great manager doing a great job, and whatever the resident's observation is, whatever that input is might be false and you'll feel really foolish and downright stupid if you act on information that is incorrect if you take knee jerk actions without getting all of the correct information to make a smart decision.
Now, mobile Home Park residents often share like all customers their own perspectives, but at the same time, their perspective may not be that which you share from a business. Many residents will have input of things that they'd like to see done on the property, which are just economically impossible. You may have people who phone in or email in suggestions such as building an Olympic swimming pool, putting in a nice rubberized jogging path. So it's not uncommon to get kind of strange input from people, but you also have to filter that through the realities of business. We can't give the customer everything they want, even though we like to as owners. That's simply economically unattainable and mobile home park rents are so insanely inexpensive that we don't really have the economic viability to make kind of lavish choices. I remember at a mobile home park event years ago, there was a speaker there from the Ritz-Carlton, and they said that every manager in the Ritz-Carlton has the ability to do up to $2,000 a day of give backs to unhappy customers.
Can you imagine what would happen in a mobile home park under that program? You would go absolutely bankrupt. So with our rents, unlike the Ritz-Carlton's rates, which are insanely high, maybe $500 a night on average with a mobile home park on the other hand, where the average lot rate is only maybe $300 a month, you can't bend over backwards and you can't deliver all of the dreams that some residents have. But at the same time, your goal is to try and provide a great environment for the majority. And any mobile home park owner who really listens to customers, who enacts a helpline, who goes and takes all the trouble to check every incoming complaint or observation or suggestion thoroughly, you can definitely provide a great place to live. This is Frank Rolfe, the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.