Mobile Home U

[Slimprofits]

Re: Mobile Home U

Around here, the terms mobile and manufactured appear to be interchangeable (in classified ads, the yellow pages) when they're located in a "mobile home park" (slang term = Trailer Park), but when they're on stand alone land parcels they're exclusively (in RE listings) referred to as manufactured homes. edit: I just remembered that I've also heard of the buildings in the latter scenario referred to as "prefab" in MLS listings.

[shiny!]

Re: Mobile Home U

Around here, the terms mobile and manufactured appear to be interchangeable (in classified ads, the yellow pages) when they're located in a "mobile home park" (slang term = Trailer Park), but when they're on stand alone land parcels they're exclusively (in RE listings) referred to as manufactured homes.

Same here. The RE listings give the technically correct term.

[LazyBoy]

Re: Mobile Home U

Agreed.

I've had some big opportunities to make some quite considerable profits over the past decade+ BUT it would have meant preying on this segment of the population.

The working poor.

I'm ALL for making money. But I feel compelled to do so with a clean conscience.

We're fortunate to not have the problem of losing sleep at night worried about making payroll or the mortgage payment.

We choose not to lose sleep at night worried about the morals/ethics of our bank balance.

Predatory capitalism….I'm not a fan….I can't stop it….but I can choose not to participate in it.

OK. Serious Business Ethics Question from someone who's never owned a business or been a landlord and has no interest in either: When does it become predatory and when is predatory bad?

Certainly the tone of the article is predatory -- the stuff on how easy it is to raise rents vs the tenants ability to move.

But haven't we all been taught to expect businesses to charge what the market will bear? With enough marketing you can sell $15 headphones for $300. If the park on the other side of town raises their rates, aren't you "leaving money on the table" if you don't?

So, looking forward to raising prices on the poor because they can't afford to move is wrong. But where is the line? What do they teach in B-school?

[Milton Kuo]

Re: Mobile Home U

OK. Serious Business Ethics Question from someone who's never owned a business or been a landlord and has no interest in either: When does it become predatory and when is predatory bad?

Certainly the tone of the article is predatory -- the stuff on how easy it is to raise rents vs the tenants ability to move.

But haven't we all been taught to expect businesses to charge what the market will bear? With enough marketing you can sell $15 headphones for $300. If the park on the other side of town raises their rates, aren't you "leaving money on the table" if you don't?

So, looking forward to raising prices on the poor because they can't afford to move is wrong. But where is the line? What do they teach in B-school?

Your headphones example is not predatory because headphones are a discretionary purchase. People will not be harmed if they are unable to afford to purchase a pair of headphones.

My opinion of what predatory businesses are are businesses, typically with some monopoly aspect to them, that offer a product or service that is nearly impossible to live without. Banking, even discounting the mortgage fraud leading to the 2008 crash, has many predatory behaviors such as with all the dirty fees it charges people for exceeding the credit limit on a credit card and excessive overdraft fees. I would argue the unregulated telecommunications companies (mobile phone service and Internet service) are somewhat predatory businesses.

In the case of this article, where else are the people people living in mobile home parks, who are perhaps one misfortune away from living in a tent city, going to move if their rent is raised to intolerable levels? It's one thing to charge more if the places are made nicer, which it seems these owners are doing. Likewise, it is still a business and a tenant who does not pay rent has to be evicted. Perhaps these guys won't be slumlords but once you get enough people into the business and especially if they buy these things using bank loans, it's almost guaranteed they're going to be slumlording.

[BK]

Re: Mobile Home U - USDA offers loans for manufactured homes

Yes, the USDA (they do such a great job with milk) they expanded into home loans and loans for manufactured homes.

The USDA loans are often sold through brokers..

http://www.usdaloanagency.com/what-is-a-usda-loan/

http://mymortgageinsider.com/usda-mortgage-loan/

[lakedaemonian]

Re: Mobile Home U

OK. Serious Business Ethics Question from someone who's never owned a business or been a landlord and has no interest in either: When does it become predatory and when is predatory bad?

Certainly the tone of the article is predatory -- the stuff on how easy it is to raise rents vs the tenants ability to move.

But haven't we all been taught to expect businesses to charge what the market will bear? With enough marketing you can sell $15 headphones for $300. If the park on the other side of town raises their rates, aren't you "leaving money on the table" if you don't?

So, looking forward to raising prices on the poor because they can't afford to move is wrong. But where is the line? What do they teach in B-school?

For me it's having the ability to look my children/wife in the eye and say I did the right thing.

It's being able to sleep at night knowing we're not carrying debt, we're sitting on enough liquid resources to outrun pretty much all of our existing business competitors, and being able to say we didn't rip anyone off.

Some of that is very hard to quantify, but I think of it in terms of a personal ethical/moral dosimeter.

At times I've been incredibly ruthless and borderline psychopathic in competing against peer and near-peer business opposition.

But for one business I own in particular, I ensure my staff treat our customers as if they were selling to my own family. Period.

While we are leaving some easy-ish money on the table, we go out of our way to ensure our customers are aware of our effort to act in what we think is our mutual interest.

By doing so, we have been able to achieve a comfortable level of profit as a result of far lower than average customer acquistion costs from referrals.

If we didn't get the cheap referrals, maybe we would be left with no choice but to clip the customers harder or close up shop.

For us, a positive reputation and perception in the eyes of our customers enhances the bottom line.

But what if it didn't?

Then you run into that philosophical argument about the question of whether or not there is such a thing as a selfless act.

In general...and all things being equal.....I'd rather profit a little less and sleep a bit better.

Maybe that has nothing to do with ethics/morals and just shows that I place a higher value on sleep?

[LazyBoy]

Re: Mobile Home U

Your headphones example is not predatory because headphones are a discretionary purchase. People will not be harmed if they are unable to afford to purchase a pair of headphones.

My opinion of what predatory businesses are are businesses, typically with some monopoly aspect to them, that offer a product or service that is nearly impossible to live without. Banking...
unregulated telecommunications companies...
mobile home parks...

Agreed. We could add Western Union, payday loan shops, pawn shops, the lowest N levels of apartment rentals, and maybe credit card companies? What about health care for the uninsured?

Partly I was asking how a park manager, for example, sets a price that is profitable but not predatory. I guess there's no B-School formula of X% or Y$. It's personal:

For me it's having the ability to look my children/wife in the eye and say I did the right thing.

And now that we've identified some areas that tend toward predation, what do we do? Can we count on empathy from the business owners? Does The Market sort this out? Or does this lead to low income housing or even Basic Income?

Maybe I've seen too many movies about the good, old days and the bad, new days. But I wonder if questions that used to be answered with "provide good service" or "good value" are answered with "maximize profit" now. Aren't we all taught that greed = good in capitalism and business?

How strong and how prevalent is the "maximize profit" belief system? Are most small businessmen non-predatory purely by virtue of the business they happen to be in? If you took 10 small businessmen in non-predatory businesses and had a discussion about this (or put them in charge of a MHP), how many would think that anything but maximizing profit was stupid?

[Wiley]

Re: Mobile Home U

"The Market" is alive and well in MH parks. If the park owner doesn't raise rents to capture his loss due to inflation then the value of the home owner's mhome will go up. If the park owner raises the space rent then the owner's homes value will fall or stay static disregarding other factors (demand, conditions, etc).

If the park owner raises rents too far then home values fall below loan levels and people default. Owner is left with half empty park.

Most all park leases have cpi clauses. It is all concentual.

I don't consider the other examples predatory either. Now with less regulation all the examples would be cheaper for the poor.

[shiny!]

Re: Mobile Home U

In the case of this article, where else are the people people living in mobile home parks, who are perhaps one misfortune away from living in a tent city, going to move if their rent is raised to intolerable levels? It's one thing to charge more if the places are made nicer, which it seems these owners are doing. Likewise, it is still a business and a tenant who does not pay rent has to be evicted. Perhaps these guys won't be slumlords but once you get enough people into the business and especially if they buy these things using bank loans, it's almost guaranteed they're going to be slumlording.

I don't know what the laws are in other states to protect mobile home owners, but in Arizona the Mobile Home Landlord Tenant Act provides some protections against predatory landlords:

There are no limits on what a landlord may charge for rent. But if a park imposes rent increases not previously agreed to in a rental agreement which, taken together with all other rent increases the preceeding 12 months exceeds 10% plus the year's Metropolitan Phoenix Consumer PRice Index ("CPI") percentage, if they choose to vacate, is eligible for relocation fund assistance. A.R.S.
§ 33-1476.04(A).


Rent cannot be changed during the term of a rental agreement except as provided in the agreement. Increases in the park’s costs of utilities, taxes and insurance, however, can be prorated and immediately passed through to tenants if substantiated in writing and the rental agreement so provides. A.R.S. § 33-1413(I).


Guest fees may not be charged unless the guest stays for more than 14 days in a calendar month, and they cannot be charged if the person is occupying the tenant’s home on a temporary basis to provide necessary live-in health care to the resident as directed by a physician. A.R.S. §§ 33-1413.02, 33-1413.03, and 33-1414(A)(5).


Late fees cannot exceed $5 per day if rent is not remitted by the sixth day from the due date. A.R.S. § 33-1414(C).


Mobile Home Relocation Fund


A tenant can obtain money fromthe Relocation Fund in the case of a Park Closure; Redevelopment of Park; Qualifying Rent Increase; Change in Age Restricted Community Use; or for Rehabilitation of pre-HUD home in order to relocate home (for Rehabilitation purposes only, the home owner’s income must qualify). The Relocation Fund is administered by the Arizona Department of Fire, Building and Life Safety. A.R.S. § 33-1476.02
.
Each owner of a mobile home located in a mobile home park who does not own the land the home is located on will be assessed 50 cents per $100 of taxable assessed valuation of his or her home which shall be deposited in the Relocation Fund. A.R.S. § 33-1476.03.


Park Closure or Redevelopment: Landlord must give tenants 180 days notice of the closure or redevelopment; (2) The tenant can collect, from the Relocation Fund, the lesser of the actual moving expenses or $5,000 for a single-wide or $10,000 for a multi-section home OR the tenant may abandon the mobile home in the park, and collect an amount equal to one-fourth of the maximum allowable moving expense for that home from the fund if the tenant delivers to the landlord the current title to the home with the notarized endorsement of the owner of record together with complete releases of all liens that are shown on the title and pays all property taxes due on the home; if the mobile home was ground set in the mobile home park, the tenant may collect up to $2500 additionally for the cost of removing a ground set home; (3) The landlord must pay $500 for each single-wide and $800 for each multi-section home into the Relocation Fund in the case of a park closure. A.R.S. § 33-1476.01

Of course there are predatory landlords, but they can only be so greedy before better-run parks will take away their business. For every predatory landlord who ruins his park and drives out his tenants there is a park buyer who will buy that run-down, half empty park for a song and turn it around.

There are a lot of companies buying mobile home parks who don't have a clue how to run them. They've managed apartments or condos and erroneously think they know how to manage mobile home parks. They quickly discover how hard it is. I've seen new, green park owners raise the rent as high as the law will allow. Their park empties out as tenants move down the street to similar parks that charge less. Within a few years the park is half empty and up for sale again.

[shiny!]

Re: Mobile Home U

Partly I was asking how a park manager, for example, sets a price that is profitable but not predatory. I guess there's no B-School formula of X% or Y$.

In addition to recurring costs like mortgage and interest, insurance and taxes, you factor in the cost for major infrastructure improvements. Does the park need repaving, new sewer lines? You factor in the cost of upcoming large repairs like pool resurfacing or roof replacement. You look at your neighborhood and what similar parks in your area charge. By similar I mean similar amenities, similar ages of homes, similar star rating. Then if you're smart you try to undercut your close competitors by charging near the low end of the rent spectrum for your market. Can you do that and turn a profit? If so, you're golden.

It's amazing how many buyers fail to do due diligence or they fail to understand their market. Last week I was talking to a manager of a low-income all-age park in Phoenix. A very stable older park in beautiful condition. She had steady 98% occupancy for years. Many of her tenants have lived there for decades.

The park was just sold to new owners in Chicago. Apartment managers, this is their first MH park. They've drawn up new lease agreements demanding 3 months rent in advance. Her tenants can't come up with that kind of money; they're moving out. Other parks are offering them move-in incentives. She begged and pleaded with the owners to reconsider their policy, but they won't listen. Occupancy is down to 92% and falling. She's good at sales but can't find home buyers with the scratch to come up with 3 months rent. She just gave her 2-week notice.

[flintlock]

Re: Mobile Home U

Agreed.

I've had some big opportunities to make some quite considerable profits over the past decade+ BUT it would have meant preying on this segment of the population.

The working poor.

I'm ALL for making money. But I feel compelled to do so with a clean conscience.

We're fortunate to not have the problem of losing sleep at night worried about making payroll or the mortgage payment.

We choose not to lose sleep at night worried about the morals/ethics of our bank balance.

Predatory capitalism….I'm not a fan….I can't stop it….but I can choose not to participate in it.

Thats pretty much how I feel about it. I get kind of a dirty feeling about working for some of these characters. Most could care less about quality or safety. Its usually just about the price and getting things working so the tenant has no reason to hold back rent. Most will hire unlicensed and unqualified people to do work and I usually only get called in when they screw something up. Not really my target market. I don't feel like I'm on some higher moral plane or that they should be restricted, I just don't really want to be around them. Especially those renting to the poorest and most ignorant. I've seen tenants left in freezing temperatures for days because the landlord didn't want to hire a real contractor and instead wanted to wait until they could give it a shot themselves on the weekend. People with babies in the house. But not all landlords are slumlords. I know a few good ones too.

[flintlock]

Re: Mobile Home U - USDA offers loans for manufactured homes

The image of manufactured homes depends to some degree where you live. In my area, they are pretty much trailer parks and are restricted to certain areas. After so many years they can no longer be moved and so they end up congregating in run down parks. Go to parts of Florida for example and they are quite pleasant communities. I usually call them mobile homes or doublewide/singlewide as that is what the people living in them call them. They newer ones being built today are a huge leap in quality over the old ones I work on. But I would argue a lot of the "savings" on these are in the initial cost and not necessarily in the buyers best interest in my area. Here in Tornado alley, there are other drawbacks too. But they would not exist if they did not make economic sense, at least to some degree.