There are over 60,000,000 Americans with household incomes under $20,000 per year. To this giant market, a mobile home is the only form of detached housing that they will ever be able to afford. And, as a result, the demand for mobile homes has never been higher. But how can you take advantage of this opportunity?
The Basics of Affordable Housing
Before you can begin to invest in mobile homes, you must first understand your customer. For those families with household incomes under $20,000 per year using the government's own ratio of housing cost to income of 33% their housing budget is around $500 per month. At the same time, the average cost of an apartment in the U.S. in 2010 was around $1,030 per month. The point is that this market segment is extremely thankful to find something that they can afford, and is not very discriminating on the quality of the product. They are looking for basic shelter literally a roof over their head, a solid floor, running water and sewer, and heat in the winter. These customers are not expecting fine carpets, hardwood floors, upscale cabinetry. As a result, a successful investor in mobile homes will not focus on providing more than the basics. That is not to say that the home should not be clean and attractive. But the American obsession with upscale bathrooms and kitchens has no place in affordable housing.
And before you think that this customer is different than you and I, look around you. If you earn $10 per hour or less, you are in this segment. And that is a giant pool of jobs in America today. Almost everyone who works at the grocery store, McDonald's everywhere you go earns in this range. And as America's economy continues to decline, this number grows.
Why Mobile Homes Are The Answer to Affordable Housing
Mobile homes are the lowest cost form of detached housing to build. It costs less than $30 per square foot to build a mobile home, as opposed to around $100 for a stick-built home. And used homes often sell in the area of $10 to $15 per square foot. HUD has controlled the construction standards of mobile homes since the 1970s, with the goal of keeping costs at a minimum. If there's been a way to shave costs, it's been done.
The other key is the quality of life that a mobile home can provide the resident as compared to other inexpensive housing options. Unlike an apartment, the customer has nobody banging on their walls or ceiling. They have a yard. They can have a pet. Basically, mobile homes allow residents to have self-respect, and a neighborhood feel that supports a healthy lifestyle.
Why Mobile Homes Are Easy To Renovate
Mobile homes have some unusual attributes that other forms of housing do not share. One is that they have no permanent foundation. A mobile homes foundation is nothing more than a steel chassis, to which the wooden floor is attached. There are so slabs and no piers nothing expensive to settle or crack. Leveling a mobile home costs in the hundreds compared to a stick-built homes thousands. All utilities run in a common trough as opposed to the myriad of wires and pipes in a stick-built home. This makes it easy to locate and repair the water, sewer and electric pipes and lines.
One of the most unusual components of a mobile home is the fact that none of the walls are load-bearing. A mobile home is structurally similar to a shoe box the walls and roof are the only components needed to make it stand up. This gives you much more freedom in renovations, as virtually all internal walls are simply cosmetic.
An Unbelievable Amount of Demand
If the U.S. is in a recession, you would never know it if you run an ad for a mobile home for sale or rent. Even in a small market, you should receive 30 to 50 calls a week in response to your ad. At a mobile home park in Pueblo, Colorado recently, the number of calls exceeded 150 in one week. Why all the calls? Because there is a huge, unsatisfied demand for affordable housing. But that's not the whole story. The other cause of the giant demand is the poor quality of traditional apartment offerings. Have you seen an affordable housing apartment complex recently? Anyone who thinks that mobile home parks are unattractive has not visited apartments. The true crime center of most cities today are the lower-income apartment developments, with drug dealers standing out in front and prostitutes, gangs and drug addicts living inside. This is a horrible environment for any family or individual to live in, and many buyers and renters of mobile homes are fleeing from these terrible situations. In fact, most cities now view aging apartment complexes as their #1 problem- not trailer parks.
Healthy Numbers
Mobile homes are an attractive investment due to very attractive numbers. Essentially, it is easy to sell a mobile home for much more than you paid for it. A mobile home that you buy and renovate for $8,000 can be sold for $15,000 and a home that costs $12,000 can be sold for $30,000. You can buy them relatively cheaply because most people do not want to invest in this asset type. At the same time, there is a huge supply/demand gap, so you can price them high without much competition. The important fundamental and the one that needs to be your guide in every decision you make is to stick with the business model of affordable housing. You have to construct the monthly payment , including mobile home park lot rent, to not exceed around $500 per month. This is what the customer can afford. If you place the consumer in a position of having a bigger monthly obligation than they can afford as was just demonstrated in the sub-prime mortgage meltdown you will end up in endless defaults. This serves no one, as you are constantly having to clean and re-sell the home and your customers are denied the affordable housing, and long term benefit, that they are searching for.
Gaining Knowledge In This Niche
There are two websites that contain a large amount of information on this investment sector. One is www.Mobilehomeparkstore.com and the other is www.MHBay.com which together make up the largest portfolio of websites for the industry. There is also a new site that contains a vast assortment of articles and tips on investing in mobile homes at www.Mobilehomer.com .
Conclusion
Affordable housing is going to be one of the key investment sectors in real estate in the coming years. Get in now, on the ground floor. You can obtain spectacular returns and -- equally important -- provide nice housing to hard-working Americans who need it badly. This is a giant market, and one that you will be hearing a lot more about in the future.
Monday, September 12, 2011
Tuesday, August 23, 2011
How to Handle the Impossible Tenant
Which Type Are They?
For the sake of simplicity, I’m going to divide problem tenants into two groups: 1) behavioral and 2) verbal. “Behavioral” problem tenants take actions that jeopardize the welfare and aesthetics of the community. “Verbal” problem tenants do their damage by harassment of the park management.
Both types are not conducive to a well-managed, profitable park, and must be immediately disarmed and/or removed from the property. However, in many cases, the proper steps can cure their issues and make them a normal, paying tenant again.
“Behavioral” Problems
The first type of behavioral problem is the tenant who engages in criminal activity. The most common of these is manufacturing/dealing in drugs. Signs of this type of behavior include a constant stream of cars dropping by the house – normally at night – for very short intervals, as well as people milling around in the street at night, in the vicinity of the mobile home.
The important step here is to do nothing yourself, but to only take action through the local police department. You should never get directly involved with this type of tenant, due to risks of physical harm to you and potential liability. Call the police department and tell them what you have been observing. If there really is something to what you suspect, the police will take care of it.
But if the police fail to take action, then your next step is to non-renew the tenant’s lease. Assuming that the tenant is on a month-to-month agreement, you can simply not renew, and they have to move out at the end of the next full month. Even then, it is smart to have a local attorney file this notice and to handle any subsequent legal action to evict them.
The Tenant Who Won’t Keep Their Property Up
Equally disruptive – but not as scary – is the tenant who refuses to keep their property in an acceptable condition. Debris everywhere in the yard, a house with a paint job that you can hardly tell what the original color was, or grass that is 3’ tall. It is impossible to ask the rest of the park community to keep up their property when you allow this individual to get away with murder. So what do you do?
The first step is to notify the tenant in writing that they are not in keeping with the park rules. This assumes that your park has rules; if not, you need to adopt some immediately. It is essential to keep everything in writing so that you have a legal paper trail in case you should have to go to court for any reason.
Give the tenant a detailed request of what needs to be done to be in compliance with park rules, as well as a timetable to complete the work. Of course, they will rarely meet this deadline, but it’s the critical first step to show the court that you are trying to be reasonable.
Once the deadline has passed – and the clean-up has not been completed (or probably even started) – then you have two choices: 1) non-renew the tenant’s lease or 2) take matters into your own hands. To take matters into your own hands, I’m suggesting that you clean up their yard, mow the grass, or re-paint their house at your own expense. You can then either bill the cost back to the tenant, or just write it off. How do you choose what to do? The key is the tenant. If your tenant is old and infirmed, then they simply do not have the ability or funds to make the needed repairs. If they have paid their rent like clockwork for the past several years, why cut off that income stream by evicting a good-paying tenant? If, however, the tenant is young and able to do the work themselves – but too lazy to do it – then you might want to bill it back to the tenant to send a clear message that breaking of the rules is not tolerated. You might break the charges up into several monthly installments to make it more affordable. But you cannot let people continue to ruin the park for everyone.
The Verbal Problem Tenant
These are the tenants who complain continuously about anything and everything. They don’t necessarily disturb the other tenants – their aggression is focused on the park management. I have had these type of tenants who will call at 11 PM and then again at 6 AM; they have virtually no boundaries.
These are much easier to dispatch than the behavioral problem tenants. You simply have to turn the tables on them. Here’s how.
When the tenant calls to complain, tell them “you are clearly unhappy living here, you really should move to a mobile home park where you would be happier.” This throws the tenant off immediately, as they think that their power over you is that you don’t want to lose them. When you let them know that you don’t care about their rent anymore, they are now in a position of weakness. In addition, it costs around $3,000 to move and set a mobile home. So for them to move, they will need to come up with $3,000 cash. Who’s in a position of weakness now?
Conclusion
Problem tenants can be solved. Don’t let a tenant ruin your day. Take action and turn the tables on them. It’s good for you, and it’s good for the community
For the sake of simplicity, I’m going to divide problem tenants into two groups: 1) behavioral and 2) verbal. “Behavioral” problem tenants take actions that jeopardize the welfare and aesthetics of the community. “Verbal” problem tenants do their damage by harassment of the park management.
Both types are not conducive to a well-managed, profitable park, and must be immediately disarmed and/or removed from the property. However, in many cases, the proper steps can cure their issues and make them a normal, paying tenant again.
“Behavioral” Problems
The first type of behavioral problem is the tenant who engages in criminal activity. The most common of these is manufacturing/dealing in drugs. Signs of this type of behavior include a constant stream of cars dropping by the house – normally at night – for very short intervals, as well as people milling around in the street at night, in the vicinity of the mobile home.
The important step here is to do nothing yourself, but to only take action through the local police department. You should never get directly involved with this type of tenant, due to risks of physical harm to you and potential liability. Call the police department and tell them what you have been observing. If there really is something to what you suspect, the police will take care of it.
But if the police fail to take action, then your next step is to non-renew the tenant’s lease. Assuming that the tenant is on a month-to-month agreement, you can simply not renew, and they have to move out at the end of the next full month. Even then, it is smart to have a local attorney file this notice and to handle any subsequent legal action to evict them.
The Tenant Who Won’t Keep Their Property Up
Equally disruptive – but not as scary – is the tenant who refuses to keep their property in an acceptable condition. Debris everywhere in the yard, a house with a paint job that you can hardly tell what the original color was, or grass that is 3’ tall. It is impossible to ask the rest of the park community to keep up their property when you allow this individual to get away with murder. So what do you do?
The first step is to notify the tenant in writing that they are not in keeping with the park rules. This assumes that your park has rules; if not, you need to adopt some immediately. It is essential to keep everything in writing so that you have a legal paper trail in case you should have to go to court for any reason.
Give the tenant a detailed request of what needs to be done to be in compliance with park rules, as well as a timetable to complete the work. Of course, they will rarely meet this deadline, but it’s the critical first step to show the court that you are trying to be reasonable.
Once the deadline has passed – and the clean-up has not been completed (or probably even started) – then you have two choices: 1) non-renew the tenant’s lease or 2) take matters into your own hands. To take matters into your own hands, I’m suggesting that you clean up their yard, mow the grass, or re-paint their house at your own expense. You can then either bill the cost back to the tenant, or just write it off. How do you choose what to do? The key is the tenant. If your tenant is old and infirmed, then they simply do not have the ability or funds to make the needed repairs. If they have paid their rent like clockwork for the past several years, why cut off that income stream by evicting a good-paying tenant? If, however, the tenant is young and able to do the work themselves – but too lazy to do it – then you might want to bill it back to the tenant to send a clear message that breaking of the rules is not tolerated. You might break the charges up into several monthly installments to make it more affordable. But you cannot let people continue to ruin the park for everyone.
The Verbal Problem Tenant
These are the tenants who complain continuously about anything and everything. They don’t necessarily disturb the other tenants – their aggression is focused on the park management. I have had these type of tenants who will call at 11 PM and then again at 6 AM; they have virtually no boundaries.
These are much easier to dispatch than the behavioral problem tenants. You simply have to turn the tables on them. Here’s how.
When the tenant calls to complain, tell them “you are clearly unhappy living here, you really should move to a mobile home park where you would be happier.” This throws the tenant off immediately, as they think that their power over you is that you don’t want to lose them. When you let them know that you don’t care about their rent anymore, they are now in a position of weakness. In addition, it costs around $3,000 to move and set a mobile home. So for them to move, they will need to come up with $3,000 cash. Who’s in a position of weakness now?
Conclusion
Problem tenants can be solved. Don’t let a tenant ruin your day. Take action and turn the tables on them. It’s good for you, and it’s good for the community
Monday, August 15, 2011
15 Ways to Increase RV Usability
It’s that time of year when families who own recreational vehicles (RV’s) and camping equipment begin to book their camping trips for the summer. Holiday camping has to be done well in advance. Before the snow has melted in most parts of the USA, families are dreaming of lakes and fishing, hiking, fairs, camping on the beach and nights by the fire, staring at the stars in the night time sky.
The Internet has made searching for and contacting campgrounds easy, with some campgrounds even experimenting with online booking. The Internet experience for web site users wanting to book a campground is similar to booking hotel rooms. Prospective guests are excited and hoping for a pleasant stay. Any information a web site offers to help them make choices and imagine themselves snuggled in sleeping bags increases the likelihood that they’ll call.
Thoughtful Design Pays Off
Online booking applications should work flawlessly. Poorly functioning site search or booking systems lead to web site abandonment. Photos should accurately portray the size of living space and what comes with it. In the case of a campground, that includes pull-through spots, fire pit and picnic table. Guests want to know what the camp store and swimming pool look like and whether or not they’re well maintained and staffed.
Many camp grounds are family run and privately owned. A budget for their web site may not exist. Some campground web sites are little more than print brochures adapted to the web with little understanding that a web site requires a new approach because it’s used differently. Try to invest in someone with experience in web design and travel oriented web sites.
The network of KOA (Kampgrounds of America) campgrounds use the same yellow and black color scheme and share resources such as maps, directories and booking applications. The similarity between KOA camping sites is helpful for KOA members who only book with these campgrounds because they get a discount.
Sadly, some of the worst web sites in the travel industry come from campgrounds. This includes state parks that have camping facilities. However, there are exceptions. Some campground businesses invest heavily in photos of their grounds and some offer videos of events they hold or on-site attractions.
Usability can’t be underestimated for campground web sites because their demographics are quite wide in scope. For example, there are retirees who travel from campground to campground. Some of them have cognitive (memory) issues with varying degrees of severity. Complicated navigation is aggravating when the navigation moves around from page to page or suddenly disappears altogether. Their hands may not be as steady, making some drop down navigation menus difficult for them to use. Eye sight problems for them include requiring reading glasses. If your web page font sizes can’t be increased in their browser, they will be frustrated. If they can increase the font size and your layout changes as a result, they may not be able to use the site.
Will these retired folks be using the Internet? You bet! Many of them stay in touch with their families and grand kids via email and cell phones and use the latest GPS gadgets, Google maps and the latest gizmos in their big rigs such as automatic levelers.
Families who book campgrounds will have interests that may surprise you. Their kids have iPods and video games. Some family members will want to bring their laptop. Most will have cell phones. If you’ve ever looked inside a family motor home of a tech bunch, it’s a mass of dangling cell phone chargers and cables. Campgrounds that offer wireless access, TV cable hookup and electric may want to promote this information on their homepage as a value proposition right away rather than tucking it inside an “Amenities” page.
Campgrounds that put their tent people away from noisier motor home guests may wish to note this on their web site.
To make your campground web site user friendly, try adding the following:
1. Make sure your site shows the area site map, with all the buildings, roads, camp sites, showers, etc. Offer a choice in how to access it online by letting visitors download it as a PDF or printing an image or sketch.
2. For campers who can not see, can’t download PDF’s or have images turned off because they’re on dialup, an audio description of the grounds would be helpful.
3. Be consistent with your colors, page layout and navigation.
4. Put your phone number at the top and bottom of every page and make it large enough to find quickly.
5. Watch your contrasts. Many camping sites have colored backgrounds with colored text, which make them hard to read. Text that’s all in boldface is difficult to read online.
6. Keep your copyright year up to date. Otherwise it may appear as though you’re no longer in business.
7. Communicate anything and everything that’s customer service oriented. Sometimes what you offer is the difference between someone booking your campground or the one nearby.
8. Make it easy for out of towners to make arrangements by posting links and/or phone numbers to car rental offices, vets, pet boarding facilities, beach tourist information such as beach passes, discount retail shops, camping supply stores, service stations that can handle RV’s (must have lifts for them), organic food and health centers.
9. Put testimonials on your camping site from previous guests.
10. Describe a typical day at your campground. This gives site visitors an idea of the environment, which helps them make educated choices.
11. Place all “call to action” prompts in highly visible spots like above the page fold and make them stand out. For example, a button for “Book Here” or “Reserve Now” and underlined embedded links within text that reads, “Stop by our calendar of events.” Avoid animation and blinking text.
12. Promote extra touches like your dog walk area, handicapped accessible camp store, locally made gifts, bait and tackle shop and dumping station on the premises.
13. Offer a way to stay in touch such as an email list or newsletter for regulars. Include coupons for return visitors to use, such as one free child admission or free pile of wood.
14. Place any sales or limited specials on the homepage. While your rates will likely not change much, there may be incentives to offer such as lower gas prices in the area, biodiesel, merchandise specials from the camp store, and fireworks for sale.
15. Display photos of staff and owners, a welcome message from the owners and office hours for reservations. Make sure emergency contact numbers are easy to find for guests who may run into trouble on their way there and need to alert you of any delays in their arrival time.
A user friendly, descriptive, customer experience oriented, persuasive web site will increase camping reservations. They’re a tool that many potential guests rely on, but they may not answer every possible question someone may have.
Once I booked a trip for my family looking for a peaceful weekend getaway and I chose a new campground based on their web site and its ease of use. However, we later learned that this particular campground has speakers set up all around the camping area and the owners made very loud announcements every few hours, starting at 8am in the morning. One day everyone in the campground was scolded for not putting their trash out properly.
There are some things even a web site can’t help us with.
The Internet has made searching for and contacting campgrounds easy, with some campgrounds even experimenting with online booking. The Internet experience for web site users wanting to book a campground is similar to booking hotel rooms. Prospective guests are excited and hoping for a pleasant stay. Any information a web site offers to help them make choices and imagine themselves snuggled in sleeping bags increases the likelihood that they’ll call.
Thoughtful Design Pays Off
Online booking applications should work flawlessly. Poorly functioning site search or booking systems lead to web site abandonment. Photos should accurately portray the size of living space and what comes with it. In the case of a campground, that includes pull-through spots, fire pit and picnic table. Guests want to know what the camp store and swimming pool look like and whether or not they’re well maintained and staffed.
Many camp grounds are family run and privately owned. A budget for their web site may not exist. Some campground web sites are little more than print brochures adapted to the web with little understanding that a web site requires a new approach because it’s used differently. Try to invest in someone with experience in web design and travel oriented web sites.
The network of KOA (Kampgrounds of America) campgrounds use the same yellow and black color scheme and share resources such as maps, directories and booking applications. The similarity between KOA camping sites is helpful for KOA members who only book with these campgrounds because they get a discount.
Sadly, some of the worst web sites in the travel industry come from campgrounds. This includes state parks that have camping facilities. However, there are exceptions. Some campground businesses invest heavily in photos of their grounds and some offer videos of events they hold or on-site attractions.
Usability can’t be underestimated for campground web sites because their demographics are quite wide in scope. For example, there are retirees who travel from campground to campground. Some of them have cognitive (memory) issues with varying degrees of severity. Complicated navigation is aggravating when the navigation moves around from page to page or suddenly disappears altogether. Their hands may not be as steady, making some drop down navigation menus difficult for them to use. Eye sight problems for them include requiring reading glasses. If your web page font sizes can’t be increased in their browser, they will be frustrated. If they can increase the font size and your layout changes as a result, they may not be able to use the site.
Will these retired folks be using the Internet? You bet! Many of them stay in touch with their families and grand kids via email and cell phones and use the latest GPS gadgets, Google maps and the latest gizmos in their big rigs such as automatic levelers.
Families who book campgrounds will have interests that may surprise you. Their kids have iPods and video games. Some family members will want to bring their laptop. Most will have cell phones. If you’ve ever looked inside a family motor home of a tech bunch, it’s a mass of dangling cell phone chargers and cables. Campgrounds that offer wireless access, TV cable hookup and electric may want to promote this information on their homepage as a value proposition right away rather than tucking it inside an “Amenities” page.
Campgrounds that put their tent people away from noisier motor home guests may wish to note this on their web site.
To make your campground web site user friendly, try adding the following:
1. Make sure your site shows the area site map, with all the buildings, roads, camp sites, showers, etc. Offer a choice in how to access it online by letting visitors download it as a PDF or printing an image or sketch.
2. For campers who can not see, can’t download PDF’s or have images turned off because they’re on dialup, an audio description of the grounds would be helpful.
3. Be consistent with your colors, page layout and navigation.
4. Put your phone number at the top and bottom of every page and make it large enough to find quickly.
5. Watch your contrasts. Many camping sites have colored backgrounds with colored text, which make them hard to read. Text that’s all in boldface is difficult to read online.
6. Keep your copyright year up to date. Otherwise it may appear as though you’re no longer in business.
7. Communicate anything and everything that’s customer service oriented. Sometimes what you offer is the difference between someone booking your campground or the one nearby.
8. Make it easy for out of towners to make arrangements by posting links and/or phone numbers to car rental offices, vets, pet boarding facilities, beach tourist information such as beach passes, discount retail shops, camping supply stores, service stations that can handle RV’s (must have lifts for them), organic food and health centers.
9. Put testimonials on your camping site from previous guests.
10. Describe a typical day at your campground. This gives site visitors an idea of the environment, which helps them make educated choices.
11. Place all “call to action” prompts in highly visible spots like above the page fold and make them stand out. For example, a button for “Book Here” or “Reserve Now” and underlined embedded links within text that reads, “Stop by our calendar of events.” Avoid animation and blinking text.
12. Promote extra touches like your dog walk area, handicapped accessible camp store, locally made gifts, bait and tackle shop and dumping station on the premises.
13. Offer a way to stay in touch such as an email list or newsletter for regulars. Include coupons for return visitors to use, such as one free child admission or free pile of wood.
14. Place any sales or limited specials on the homepage. While your rates will likely not change much, there may be incentives to offer such as lower gas prices in the area, biodiesel, merchandise specials from the camp store, and fireworks for sale.
15. Display photos of staff and owners, a welcome message from the owners and office hours for reservations. Make sure emergency contact numbers are easy to find for guests who may run into trouble on their way there and need to alert you of any delays in their arrival time.
A user friendly, descriptive, customer experience oriented, persuasive web site will increase camping reservations. They’re a tool that many potential guests rely on, but they may not answer every possible question someone may have.
Once I booked a trip for my family looking for a peaceful weekend getaway and I chose a new campground based on their web site and its ease of use. However, we later learned that this particular campground has speakers set up all around the camping area and the owners made very loud announcements every few hours, starting at 8am in the morning. One day everyone in the campground was scolded for not putting their trash out properly.
There are some things even a web site can’t help us with.
Wednesday, August 3, 2011
Equity Lifestyle Fires Starting Gun for the Next Round of Acquisitions
The biggest news story in the manufactured home community business came on May 31, 2011 – so mark that date in your calendar for some type of anniversary celebration. That’s the date that Equity Lifestyle Properties announced that it was buying 76 communities from Hometown America for a staggering $1.4 billion price tag.
So why’s this such a big news story? For a bunch of reasons.
Sam Zell is no idiot.
Sam Zell did not make the Forbes 400 list by making bad purchases. In fact, his reputation at making smart buys is legendary. And he is very good at market timing. He got his start buying apartments in down cycles and riding them to the top. For him to make such a bold move signals that he believes that the market for manufactured home communities has hit bottom and is about to rise. Based on his reputation, most investors would not want to bet against him.
The size of the gamble.
Equity Lifestyle is a large, publicly traded company. Sure, they can take small gambles on all types of things. But $1.4 billion is not a small gamble. I bet a dollar on the slots at the airport coming back from the MHI convention (and I won $1.50), but I wouldn’t have bet $1,000 in a million years. So for someone of Zell’s ability to bet that type of money, you have to assume that he feels really, really good about his bet.
Supporting evidence is coming from all types of sources.
I received an email this morning that describes upward pressures on apartment rents. Why? Because people are losing their homes in droves, and the job market is lousy. But I thought that one item in the letter was particularly interesting: “19 years of continually more aggressive government intervention toward home ownership is about to reverse itself”. I think that’s maybe the most important point of all. The government is showing signs that they are going to abandon taking a proactive stance to help Americans obtain and retain mortgages on homes. That alone will sink home ownership and force families into more affordable alternatives.
And manufactured home communities stand to gain as much in this regard as apartment owners.
Our economy is 100% lousy, and Americans need more affordable housing.
The average two bedroom apartment rent in the U.S. is now over $1,000 per month. Yet around 20% of the U.S. population has a household budget under $20,000 per year. The growing sweet spot in U.S. housing is for options in the $500 to $700 per month range. And that’s exactly what manufactured home communities deliver. You can’t get any type of detached housing for anywhere near the low cost of manufactured housing – and that is never going to change.
Think that our job market and wages are going to improve? Then you must not read the papers – or the forecasts by most economists. I like their tacos, but a job at Jack-In-The-Box is not a high paying career, yet how many folks with decent jobs are having to fall back to that type of work?
Conduit debt for manufactured home communities is returning rapidly.
A vital component to a return to lofty real estate values is the availability of institutional debt. And that is making an appearance through good old fashioned conduit financing. Indeed, I attended a dinner in which a conduit lender announced that they would be doing around $100 million in conduit debt in 2011. This is a big part of the picture, and has been quietly coming on stage over the last six months.
Zell would not have made his bet without knowing that the financing market was also returning.
The biggest factor of all – INFLATION.
If you read a lot of economic reports (don’t forget that I was an economics major in college), you’ll see that just about everyone is on board with the projection of growing U.S. inflation. And what’s the most successful hedge against inflation historically? You’re right, it’s real estate. If inflation comes back with a vengeance, like most people are projecting, just owning real estate will appear a genius stroke. And when everyone figures out about the inflation problem – and the articles in the news are everywhere – the value of all real estate will rise as a hedge against the declining dollar.
There is no doubt in my mind that Zell reads these same publications.
So what can you do to take advantage of this situation?
If you already own a manufactured home community, then just smile because you won. If you don’t have one, then buy one before everyone else figures it out (but don’t make a stupid buy in your haste to do so).
I’m not much of a gambler, but I feel strongly enough about Zell’s bet that I’ve been matching it. I bought 3,000 lots over the past year. And so have a lot of other investors. Everyone’s been buying quietly. But now that Zell has fired the starting gun, we can all come out of hiding and reveal what we’ve really been up to for the past year or two, and start jogging along behind him. And I’m sure that on May 31st of each year I’ll make a toast to the great manufactured home community gold rush.
Q
So why’s this such a big news story? For a bunch of reasons.
Sam Zell is no idiot.
Sam Zell did not make the Forbes 400 list by making bad purchases. In fact, his reputation at making smart buys is legendary. And he is very good at market timing. He got his start buying apartments in down cycles and riding them to the top. For him to make such a bold move signals that he believes that the market for manufactured home communities has hit bottom and is about to rise. Based on his reputation, most investors would not want to bet against him.
The size of the gamble.
Equity Lifestyle is a large, publicly traded company. Sure, they can take small gambles on all types of things. But $1.4 billion is not a small gamble. I bet a dollar on the slots at the airport coming back from the MHI convention (and I won $1.50), but I wouldn’t have bet $1,000 in a million years. So for someone of Zell’s ability to bet that type of money, you have to assume that he feels really, really good about his bet.
Supporting evidence is coming from all types of sources.
I received an email this morning that describes upward pressures on apartment rents. Why? Because people are losing their homes in droves, and the job market is lousy. But I thought that one item in the letter was particularly interesting: “19 years of continually more aggressive government intervention toward home ownership is about to reverse itself”. I think that’s maybe the most important point of all. The government is showing signs that they are going to abandon taking a proactive stance to help Americans obtain and retain mortgages on homes. That alone will sink home ownership and force families into more affordable alternatives.
And manufactured home communities stand to gain as much in this regard as apartment owners.
Our economy is 100% lousy, and Americans need more affordable housing.
The average two bedroom apartment rent in the U.S. is now over $1,000 per month. Yet around 20% of the U.S. population has a household budget under $20,000 per year. The growing sweet spot in U.S. housing is for options in the $500 to $700 per month range. And that’s exactly what manufactured home communities deliver. You can’t get any type of detached housing for anywhere near the low cost of manufactured housing – and that is never going to change.
Think that our job market and wages are going to improve? Then you must not read the papers – or the forecasts by most economists. I like their tacos, but a job at Jack-In-The-Box is not a high paying career, yet how many folks with decent jobs are having to fall back to that type of work?
Conduit debt for manufactured home communities is returning rapidly.
A vital component to a return to lofty real estate values is the availability of institutional debt. And that is making an appearance through good old fashioned conduit financing. Indeed, I attended a dinner in which a conduit lender announced that they would be doing around $100 million in conduit debt in 2011. This is a big part of the picture, and has been quietly coming on stage over the last six months.
Zell would not have made his bet without knowing that the financing market was also returning.
The biggest factor of all – INFLATION.
If you read a lot of economic reports (don’t forget that I was an economics major in college), you’ll see that just about everyone is on board with the projection of growing U.S. inflation. And what’s the most successful hedge against inflation historically? You’re right, it’s real estate. If inflation comes back with a vengeance, like most people are projecting, just owning real estate will appear a genius stroke. And when everyone figures out about the inflation problem – and the articles in the news are everywhere – the value of all real estate will rise as a hedge against the declining dollar.
There is no doubt in my mind that Zell reads these same publications.
So what can you do to take advantage of this situation?
If you already own a manufactured home community, then just smile because you won. If you don’t have one, then buy one before everyone else figures it out (but don’t make a stupid buy in your haste to do so).
I’m not much of a gambler, but I feel strongly enough about Zell’s bet that I’ve been matching it. I bought 3,000 lots over the past year. And so have a lot of other investors. Everyone’s been buying quietly. But now that Zell has fired the starting gun, we can all come out of hiding and reveal what we’ve really been up to for the past year or two, and start jogging along behind him. And I’m sure that on May 31st of each year I’ll make a toast to the great manufactured home community gold rush.
Q
Friday, July 29, 2011
Budget Your Vacation
Sure, a vacation sounds good to you! A free or low-cost vacation sounds even better. But there are a few important points to remember when choosing vacation packages. If you don't think economically, and even cautiously, then your next vacation could actually turn out to be an extravagant bill you can't afford. Consider a four important points.
1.All Inclusive Trip?
You probably know of game shows where the contestant wins an all-inclusive trip to some place exotic. That's the key word to look for: all-inclusive. This usually means that the flight, the hotel stay and entertainment, and sometimes even the rental car are all included in one hopefully low bill. If your vacation does not say all-inclusive then you may be paying only for the flight or the hotel stay. Low-cost tickets to Disney land may sound like a good deal, but can you afford to fly the whole family, stay at a high priced hotel and get around town in a rental car?
2.Comparing the Costs
Some cautious vacationers have done the math on their own – and found some savings to boot. An all inclusive-vacation is convenient and sometimes can offer you a lower price in one combined subtotal. However, if you can find voucher coupons and don't mind investing some hours of research, you may be able to put together a vacation yourself with a subtotal that still beats the all-inclusive plan.
3.Will You Enjoy It?
This is particularly important for honeymoon vacations and family vacations. Older adults and young children tire easily, so plan a trip that your entire traveling party will enjoy. If you plan a trip just for the kids, it will be a long and expensive vacation for the adults. You may plan a trip that sounds fun to you, but what will your children do in the meantime? Will your honeymoon vacation take into consideration both the bride and groom's interest? Or will the two of you be so busy enjoying “room service” that you don't even get to see all of the popular sightseeing spots? One way to maximize the fun is to make a list of what your entire traveling party wants to do on the vacation and plan a trip accordingly. Sometimes a vacation that is actually enjoyable, and doesn't cause any frustration or disappointment, ends up being the most convenient.
4.Can You Afford The Full Vacation?
While some all-inclusive vacations take care of your every need, others merely will pay for the hotel stay and airfare. That means you still have to pay for food, entertainment and other vacation supplies. Can you afford to eat out every night? Does the hotel charge extra for food and beverages? If you cannot afford all of the vacation, then you may want to buy regular grocery supplies ahead of time and limit your outgoing dining to maybe once a day, or only a few times a week.
Ask yourself if you can indeed afford your vacation. If you're on a tight budget, then start planning well ahead of time.
Article By Adam O’Connor, www.RVTravelPro.com
1.All Inclusive Trip?
You probably know of game shows where the contestant wins an all-inclusive trip to some place exotic. That's the key word to look for: all-inclusive. This usually means that the flight, the hotel stay and entertainment, and sometimes even the rental car are all included in one hopefully low bill. If your vacation does not say all-inclusive then you may be paying only for the flight or the hotel stay. Low-cost tickets to Disney land may sound like a good deal, but can you afford to fly the whole family, stay at a high priced hotel and get around town in a rental car?
2.Comparing the Costs
Some cautious vacationers have done the math on their own – and found some savings to boot. An all inclusive-vacation is convenient and sometimes can offer you a lower price in one combined subtotal. However, if you can find voucher coupons and don't mind investing some hours of research, you may be able to put together a vacation yourself with a subtotal that still beats the all-inclusive plan.
3.Will You Enjoy It?
This is particularly important for honeymoon vacations and family vacations. Older adults and young children tire easily, so plan a trip that your entire traveling party will enjoy. If you plan a trip just for the kids, it will be a long and expensive vacation for the adults. You may plan a trip that sounds fun to you, but what will your children do in the meantime? Will your honeymoon vacation take into consideration both the bride and groom's interest? Or will the two of you be so busy enjoying “room service” that you don't even get to see all of the popular sightseeing spots? One way to maximize the fun is to make a list of what your entire traveling party wants to do on the vacation and plan a trip accordingly. Sometimes a vacation that is actually enjoyable, and doesn't cause any frustration or disappointment, ends up being the most convenient.
4.Can You Afford The Full Vacation?
While some all-inclusive vacations take care of your every need, others merely will pay for the hotel stay and airfare. That means you still have to pay for food, entertainment and other vacation supplies. Can you afford to eat out every night? Does the hotel charge extra for food and beverages? If you cannot afford all of the vacation, then you may want to buy regular grocery supplies ahead of time and limit your outgoing dining to maybe once a day, or only a few times a week.
Ask yourself if you can indeed afford your vacation. If you're on a tight budget, then start planning well ahead of time.
Article By Adam O’Connor, www.RVTravelPro.com
Tuesday, July 19, 2011
Flag that Sign!
“Flagging a sign” is an imperfect art that allows you to get a read on the height of your proposed billboard visually from the street. It is normally done one of two ways”
By Crane
To accomplish this, you need a tape measure (100’ fiberglass) and a red towel. You also need a 75’ or so skyhook crane. You attach the skyhook crane ball to the tape measure, and tie a red towel around the cable just above the ball. You then lift up the crane until the ball is at the bottom of the proposed sign face. What you have done is to create a fairly accurate indication of the sign face in mid air – so that you can see if the sign is tall enough.
You now get in your car and drive by the imaginary sign from both directions several times, to study the height. You also take pictures that you can then use to stick a scales white rectangle on the show potential advertisers what the sign will look like.
By Fiberglass Surveying Pole
To do this, you need to buy a 50’ fiberglass surveyor’s extension pole at a survey equipment store. You telescope the pole vertically in sections that snap in place, about 5’ at a time. Before you begin, you tie a red rag to the top of the pole, and then extend it vertically to the bottom of the sign face.
You then have someone hold it while you drive by it several times in you car, all the while taking pictures. The pole is bound to flex, so the measurement is not nearly as accurate as the crane.
It is critical that the pole be of fiberglass construction since it might hit the power lines and you could be electrocuted if it is of a material that conducts electricity. You also need to put you foot beside te pole to reinforce it from slipping when the wind blows. Many an amateur pole holder has had a bad accident when the pole slips and, like a giant lever, hits you in a very sensitive spot with a lot of force.
Now what do you do if the sign is too low? First, see if it is legal to make tit higher. Some states allow you to exceed the legal height when it is starting from below the grade of the road. Is it possible to make it too high? Absolutely, if the sign is too high, it will be above your windshield just when it is meant to be read.
Flagging the sign also will help uncover and tree or other obstructions that you need to negotiate now before the sign is built. If the neighbor has a tree that blocks you, call them and ask if you can trim it, or pay them to trim it. You don’t want to make tat call after the sign is built. The sign is always bigger in real life and will probably make the neighbor mad. Further, once the sign is up, you have less negotiating room and the neighbor may want to blackmail you.
So remember, Flag That Sign!
For more information on billboards and more, visit www.nicheinvestmentnetwork.com!
By Crane
To accomplish this, you need a tape measure (100’ fiberglass) and a red towel. You also need a 75’ or so skyhook crane. You attach the skyhook crane ball to the tape measure, and tie a red towel around the cable just above the ball. You then lift up the crane until the ball is at the bottom of the proposed sign face. What you have done is to create a fairly accurate indication of the sign face in mid air – so that you can see if the sign is tall enough.
You now get in your car and drive by the imaginary sign from both directions several times, to study the height. You also take pictures that you can then use to stick a scales white rectangle on the show potential advertisers what the sign will look like.
By Fiberglass Surveying Pole
To do this, you need to buy a 50’ fiberglass surveyor’s extension pole at a survey equipment store. You telescope the pole vertically in sections that snap in place, about 5’ at a time. Before you begin, you tie a red rag to the top of the pole, and then extend it vertically to the bottom of the sign face.
You then have someone hold it while you drive by it several times in you car, all the while taking pictures. The pole is bound to flex, so the measurement is not nearly as accurate as the crane.
It is critical that the pole be of fiberglass construction since it might hit the power lines and you could be electrocuted if it is of a material that conducts electricity. You also need to put you foot beside te pole to reinforce it from slipping when the wind blows. Many an amateur pole holder has had a bad accident when the pole slips and, like a giant lever, hits you in a very sensitive spot with a lot of force.
Now what do you do if the sign is too low? First, see if it is legal to make tit higher. Some states allow you to exceed the legal height when it is starting from below the grade of the road. Is it possible to make it too high? Absolutely, if the sign is too high, it will be above your windshield just when it is meant to be read.
Flagging the sign also will help uncover and tree or other obstructions that you need to negotiate now before the sign is built. If the neighbor has a tree that blocks you, call them and ask if you can trim it, or pay them to trim it. You don’t want to make tat call after the sign is built. The sign is always bigger in real life and will probably make the neighbor mad. Further, once the sign is up, you have less negotiating room and the neighbor may want to blackmail you.
So remember, Flag That Sign!
For more information on billboards and more, visit www.nicheinvestmentnetwork.com!
Thursday, July 7, 2011
Secrets to Successful Ads
Secrets of Successful Ads
Throughout my life, I've seen billions of ads. Several of these ads are good, and several are bad. Since advertising is expensive, it is important for us learn how to produce successful ads so we don't waste any money on bad advertisements. This article will show you the secrets of producing successful ads.
Secret #1 - Simplicity
This is a very powerful yet most overlooked rule of design. The truth is that a clean, crisp, non-cluttered ad will outperform a clutter, hard to read ad.
The main purpose of an ad is to get people to purchase your product or service. The next objective of an ad is make
people want to learn more about your product or service.
Secret #2 - Focus on a Benefit
Benefits sell, features do not!
People want to know what's in it for them. They would rather know how your product can help them (benefits) instead of what your product can do (features.)
For example, let's say you are a real estate agent and your company has just won the best real estate award possible. I know you're proud of the award and you should be, but please don't make the award a big part of your ads. People that are buying or selling property would rather know that your agency will list their property on-line for convince and to time-savings.
Secret #3 - Appeal to your target market
Don’t try to make your ad appeal to everyone. Design your layout so it will appeal to your target market. Your ad response rate will be greater this way.
Remember each of us is in a different stages of life, and we all want different things. Once you find out what stage of life your target market is in, then you can make your ads reflect their emotional status.
Secret #4 - Emotional Appeal
Design your ads in a way that will show consumers how your product or service will make them feel. This is a very effective marketing technique because ads us subliminal messages that will make us feel a certain way about your product or service.
Kay's Jewelers ads are a good example of this technique. These ads always show happy people that exchange jewelry, hugs and kisses. When we view or hear these ads, we feel warm, loving, and happy. After seeing these ads several times, we start to associate warm, loving and happy feelings towards Kay Jewelers.
Secret #5 - Eye Catching & Unique
Ever since I was little, I was always told to "color inside of the lines" and "you have to color apples red instead of blue." When I colored things the same way every else did, my work got lost in the crowd because it looked the same as everyone else's.
In advertising the rules have changed. It's ok to be different; in fact it's great to "think outside of the box." Some of the best advertisements are so effective because they are completely different from all the other ads.
Decide what is the single most important part of your ad. Then find a way to make it stand out more than anything else. Arrange the ad so the human eye will see the most important item first, then the second most important item, and so on.
Secret #6 - Colors
According to psychology.about.com, "Psychologists have suggested that color impression can account for 60% of the acceptance or rejection of that product or service." The human eye is attracted to the colors red and yellow before any other color. Yellow backgrounds with black text is the most effective color combination.
Each color has different meanings to different cultures. For advertising purposes, it is extremely important to design your ads in a way that appeals to your target market. Try to choose colors that will compliment the message you are sending to your consumers.
Secret #7 - Copy
Use as little words as possible. Try to use words that catch attention like powerful, amazing, shocking, and revealing.
Be sure the copy you use will be legible for your audience. Use fonts that are clear, easy to read and big enough for each particular ad.
Also be sure your ads have a smooth flow. Viewers may get confused if your ads constantly jump from one topic to another.
Secret #8 - Creditability
An ad will not be effective if no one believes it. You can have the most creative, colorful, and eye-catching ad, but if people read your ad and say "Yeah, Right," than your ad will not be profitable. For example, an ad that says "Earn $100,000 a week with XYZ product" will not be as believable as an ad that says "Increase your sales by 20% with XYZ product."
Secret #9 - Problems Sell
People always want help with things and are always looking for easier ways to do things. Make your ads help them and solve a certain problem your consumers have.
Try to start your ads with a question that allows your product to be the answer. Here are a common few examples:
· "Is your cold keeping you up all night?"
· "Are you tired watching your weight?"
· "Do you want to be your own boss?"
· "Is your cellular phone bill as low as possible?"
· "Are you unhappy with your current internet service?"
Secret #10 - Call to Action
Don't forget to tell people what you want them to do after they see your ad. Don't be afraid to come right out and say "Order Now," "Call Today!" or "Visit our web-site at www.bpsoutdoor.com."
Secret #11 - Advertiser Recognition
Don't forget to put your name and / or logo on all your ads. Make sure they are big enough to be seen. There's nothing worse than seeing a great ad and wondering who the advertiser was.
Secret #12 - Tie it all together
Make sure your graphics, words, slogans, and so on make sense when used together. If your viewers have to ask what your ad has to do with your product than it won't be effective.
Secret #13 - Memorable
Successful ads make a lasting impression on everyone. Give your ads something special and unique that will help make your ads memorable.
Good examples of this are: The AFLAC duck, the "Whats up?" telephone commercials, Wendy's "Where's the beef?" from the 80's, and Verizon's "Can you hear me now?" commercials.
Secret #14 - Repetition
Your ads will look more professional if you use the same fonts and colors as often as possible.
The average person must see an ad 7 times before they remember it. Once you've found an ad that produces results, use it everywhere and as often as possible. This will brand your ad into consumers’ minds.
Throughout my life, I've seen billions of ads. Several of these ads are good, and several are bad. Since advertising is expensive, it is important for us learn how to produce successful ads so we don't waste any money on bad advertisements. This article will show you the secrets of producing successful ads.
Secret #1 - Simplicity
This is a very powerful yet most overlooked rule of design. The truth is that a clean, crisp, non-cluttered ad will outperform a clutter, hard to read ad.
The main purpose of an ad is to get people to purchase your product or service. The next objective of an ad is make
people want to learn more about your product or service.
Secret #2 - Focus on a Benefit
Benefits sell, features do not!
People want to know what's in it for them. They would rather know how your product can help them (benefits) instead of what your product can do (features.)
For example, let's say you are a real estate agent and your company has just won the best real estate award possible. I know you're proud of the award and you should be, but please don't make the award a big part of your ads. People that are buying or selling property would rather know that your agency will list their property on-line for convince and to time-savings.
Secret #3 - Appeal to your target market
Don’t try to make your ad appeal to everyone. Design your layout so it will appeal to your target market. Your ad response rate will be greater this way.
Remember each of us is in a different stages of life, and we all want different things. Once you find out what stage of life your target market is in, then you can make your ads reflect their emotional status.
Secret #4 - Emotional Appeal
Design your ads in a way that will show consumers how your product or service will make them feel. This is a very effective marketing technique because ads us subliminal messages that will make us feel a certain way about your product or service.
Kay's Jewelers ads are a good example of this technique. These ads always show happy people that exchange jewelry, hugs and kisses. When we view or hear these ads, we feel warm, loving, and happy. After seeing these ads several times, we start to associate warm, loving and happy feelings towards Kay Jewelers.
Secret #5 - Eye Catching & Unique
Ever since I was little, I was always told to "color inside of the lines" and "you have to color apples red instead of blue." When I colored things the same way every else did, my work got lost in the crowd because it looked the same as everyone else's.
In advertising the rules have changed. It's ok to be different; in fact it's great to "think outside of the box." Some of the best advertisements are so effective because they are completely different from all the other ads.
Decide what is the single most important part of your ad. Then find a way to make it stand out more than anything else. Arrange the ad so the human eye will see the most important item first, then the second most important item, and so on.
Secret #6 - Colors
According to psychology.about.com, "Psychologists have suggested that color impression can account for 60% of the acceptance or rejection of that product or service." The human eye is attracted to the colors red and yellow before any other color. Yellow backgrounds with black text is the most effective color combination.
Each color has different meanings to different cultures. For advertising purposes, it is extremely important to design your ads in a way that appeals to your target market. Try to choose colors that will compliment the message you are sending to your consumers.
Secret #7 - Copy
Use as little words as possible. Try to use words that catch attention like powerful, amazing, shocking, and revealing.
Be sure the copy you use will be legible for your audience. Use fonts that are clear, easy to read and big enough for each particular ad.
Also be sure your ads have a smooth flow. Viewers may get confused if your ads constantly jump from one topic to another.
Secret #8 - Creditability
An ad will not be effective if no one believes it. You can have the most creative, colorful, and eye-catching ad, but if people read your ad and say "Yeah, Right," than your ad will not be profitable. For example, an ad that says "Earn $100,000 a week with XYZ product" will not be as believable as an ad that says "Increase your sales by 20% with XYZ product."
Secret #9 - Problems Sell
People always want help with things and are always looking for easier ways to do things. Make your ads help them and solve a certain problem your consumers have.
Try to start your ads with a question that allows your product to be the answer. Here are a common few examples:
· "Is your cold keeping you up all night?"
· "Are you tired watching your weight?"
· "Do you want to be your own boss?"
· "Is your cellular phone bill as low as possible?"
· "Are you unhappy with your current internet service?"
Secret #10 - Call to Action
Don't forget to tell people what you want them to do after they see your ad. Don't be afraid to come right out and say "Order Now," "Call Today!" or "Visit our web-site at www.bpsoutdoor.com."
Secret #11 - Advertiser Recognition
Don't forget to put your name and / or logo on all your ads. Make sure they are big enough to be seen. There's nothing worse than seeing a great ad and wondering who the advertiser was.
Secret #12 - Tie it all together
Make sure your graphics, words, slogans, and so on make sense when used together. If your viewers have to ask what your ad has to do with your product than it won't be effective.
Secret #13 - Memorable
Successful ads make a lasting impression on everyone. Give your ads something special and unique that will help make your ads memorable.
Good examples of this are: The AFLAC duck, the "Whats up?" telephone commercials, Wendy's "Where's the beef?" from the 80's, and Verizon's "Can you hear me now?" commercials.
Secret #14 - Repetition
Your ads will look more professional if you use the same fonts and colors as often as possible.
The average person must see an ad 7 times before they remember it. Once you've found an ad that produces results, use it everywhere and as often as possible. This will brand your ad into consumers’ minds.
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