This past week I attended the 2020 Louisville Manufactured Housing Show. The Louisville show features over 3000 people and represents some fresh ideas for MHP in 2020. It’s a big deal. I love this event because it allows me to catch up with all the other people in the industry, and chat with vendors about MHPs.
This year I contributed to the seminar “Issues Eating Companies Alive.” I discussed some steps to help recoup costs after paying too much for an acquisition. If your debt coverage is thin — and you’re having a hard time with cash flow — these creative solutions can help generate some income.
You paid too much for your acquisition. What do you do now?
Overpaying is probably the most common issue I hear from buyers, even on parks that I have sold them, and I knew they weren’t overpaying. There’s a phrase out there: suck it up buttercup. You got yourself into this, let’s talk about how we get you back into a proper position. You paid what it’s worth, and now you have to figure out how to live with the price you paid.
But how can you make good on a bad investment? Should you sit on it and hope that it starts gaining value again? Probably not. Selling it outright seems like a bad idea since even if you sell it for more than you bought it, after closing fees and broker’s fees, you might be out a few bucks.
Here’s some wisdom I’ve gained about recouping the loss.
Fill Your Vacant Lots
The obvious solution is to fill your vacant lots. But how? Well, you’re probably going to need to come out of pocket and buy a home. If you aren’t using any of the manufactures programs like the CASH program, expect to shell out 30-40k to get a new home in your park. After that, get a qualified renter, or someone willing to buy the home. That’s the quickest way to overcome how much you paid for the acquisition. If you fill up five lots like that, you’re probably not going to be worried that you overpaid a little at purchase.
Install New Meters
If you haven’t started billing utilities back to your tenants, consider coughing up some money and installing new meters. The utility expense can easily be 15% to 20% — and sometimes higher — of your total operating costs. If you can bill that cost back, that’s going to improve your cash flow quickly. And it will make it easier to sell the park in the future. If you are in a state that has rent control, be sure to discuss with the municipality or your legal counsel if this bill-back constitutes a rent increase.
Think Outside the Home
One of the more creative ways I have seen people using vacant space is by renting out a vacant trailer or space as a bodega/convenience store for the park. Adding a little shop where people can get some easy household things is a great way to improve park quality of life while adding to your bottom line. Be careful though, depending on where you’re zoned; this may be an illegal solution. Check with your local municipality to make sure everything is above board before starting this project.
Avoid Bad Deals Before They Happen
The easiest way to avoid bad deals is not to make a bad deal. Make sure you always do your due diligence before buying a property. It’s harder to feel buyer’s remorse if you check all your boxes before making a sale. Working with a qualified MHP expert will help reign in any impulsive decisions.
Jason Sirotin: Hello and welcome to The Mobile Home Park Expert podcast. I’m Jason Sirotin here with Glenn Esterson as always. Glenn, how are you?
Glenn Esterson: I’m excellent. Happy new year.
Jason Sirotin: Happy new year.
Jason Sirotin: 2020, so thank you everybody who’s been listening and happy new year to you all. I hope that you have a year filled with success in this crazy, awesome business. Today’s show, we’re going to be talking about, Glenn’s going to be attending the 2020 Louisville Manufactured Housing Convention at the Kentucky Exhibition Center, January 15th through the 17th. He’s on a panel Thursday morning, the 16th at 8:00 AM. I saw what kind of topics they were going to be talking about. Glenn and I was like, “Man, there’s going to be other people on the panel. I don’t know if we’ll be able to hear all of what Glenn has to say.” I’m unable to attend unfortunately, so I thought maybe today if you’re cool with it, we can go through the topics that the panel had. The panel folks that put it together came up with. Just get your opinion and chat about it.
Glenn Esterson: Yeah, I think that’s a great idea. I think there’s a lot of guys who aren’t going to make it to the exhibit themselves. It’s only a 45 minute panel and there’s three of us on the panel. It’s going to go pretty fast. I think it makes sense to talk about a few of these things a little bit more in depth. So yeah, that sounds like a great idea.
Jason Sirotin: Awesome. Okay, so let’s get into the very first topic. This is something we’ve touched on before, but what happened?
Glenn Esterson: Well, before-
Jason Sirotin: Yeah, go ahead.
Glenn Esterson: Before we get started on the topics, let’s give a little background on this Kentucky-
Jason Sirotin: Oh, please.
Glenn Esterson: … Louisville Manufactured Housing Show. It’s the largest in the country. Last year, about 3,500 people attended and it’s where all the new homes get exhibited. You get to hear some pretty exciting in depth panels, some that deal specifically with the retailing side of selling the homes to the tenants and the service involved in there. What’s going to be different this year in at least as they’ve informed to me, when I was asked to be on this panel is I would be the first broker speaker at this convention and talking from a broker’s perspective for these issues eating companies alive. Those is kind of a big deal for me because I’ve never been a speaker at a large audience like this. I’ve done plenty of little shows but this is a big one. This is the nation’s biggest one.
Glenn Esterson: They’re saying this year is going to have even a larger roster list than last year did. For the guys that liked these conventions, if you have time next week to get out there, this might be a real interesting show to see. There’ll be about around a thousand plus community owners there from what they’re telling me. It should be an interesting place to network and see all the new homes that are coming out and see all the other vendors that are there with their new products. That’s kind of the background on the show.
Jason Sirotin: I will say I just came back from Louisville and it is a pretty fun place. If you like bourbon, there’s so much bourbon. It’s crazy. If you have time, you should definitely do the bourbon trail there. It’s pretty cool. But, Louisville is a really fun city. All right, Glenn. You paid too much for your acquisition. What do you do? This is the very first topic listed on the panels’ notes and I really want to know like if you do buy high, what do you do? Do you just sit?
Glenn Esterson: There’s a phrase out there, suck it up buttercup. You got yourself into here, let’s talk about how we get you back into a proper position. Because overpaying, probably the most common thing I deal with my buyers. Sometimes, even on parks that I have sold them and I convinced them it’s not overpaying. You paid what it’s worth, now you have to figure out how to live with the price you paid. There’s a little bit of clarity that probably needs to be defined in what means paid too much. But, let’s just go with the conventional thing. Like, “Hey, the price that I bought this thing at is a bit too frothy as the market turns and my debt’s running up and I can’t get refinanced at the rate that I need to be at.” That’s when I would feel like maybe you paid too much for your acquisition.
Glenn Esterson: What you would do from there, my opinion is you really got… This is already post all due diligence and post-closing and you’re the owner of this park. So if you miss this, all the steps that we’ve talked about throughout the whole season that we’ve been in and what the books were written about, and you still find yourself in this position, you own the park, your debt coverage is a little thin and you’re having a hard time with cashflow on that park, what can you do? Selling is probably not the greatest option because you might get what you paid for it. Maybe even a little bump, but after closing fees and after aggravation and broker’s fees, all of these other things, you’re probably going to be out a few bucks. You got to have that taste in your mouth.
Jason Sirotin: Yeah.
Glenn Esterson: So if you park-
Jason Sirotin: Yeah, go ahead.
Glenn Esterson: Go ahead.
Jason Sirotin: Well, I was going to say, and from a brokers position, right? You don’t know exactly where the market’s going to go. Somebody could easily do what they think is a good deal with you and then the market turns. Then, they’re in a situation where they’re a little upside down. It’s like things that are out of your control.
Glenn Esterson: Yeah. In 2007, everybody insisted that these were reasonable pricings, even up until the part of 2008. Six months later, 12 months later, it was everybody realized, “Oh, I think I paid too much.” Now, what do you do? Because that’s going to happen again and again. Even in the best of markets, it happens. We get a little ambitious and a little ahead of ourselves. You find yourself there. Hopefully, you bought a deal, it’s got some upside left there. Hopefully. If you bought a fully stabilized deal and everything’s maximized, it’s a slightly different conversation or maybe it’s a largely different conversation, although there’s still options. But, let’s just talk about the typical C-grade mobile home park with X a handful of park owned homes, a handful of vacant lots, public water and things like that.
Glenn Esterson: The obvious solution is always fill your vacant lots. Don’t go pressing rents, you’re going to press too hard and you’re going to offend your base. You might have a negative fallout. First things first, fill your lot. How are you going to fill those lots? You’re probably going to have to come out of pocket and buy a home. You might be able to qualify for the CASH program and get some homes delivered to you and not having to come out of pocket except for the delivery and set up with about eight to 10 grand for most things getting delivered and set up. But if you have to come fully out of pocket, you prepare $30, $40,000 to bring a nice new home into your park. If you’re lucky and you can find a good use home for $10,000, it might make sense but you’re still going to have to pay the transport costs. Maybe your buddy, Bob, has a truck in the middle of the night that can pull it over and you can save a few bucks.
Glenn Esterson: But at the same time, let’s talk about how most people are going to do it. Most people are going to have to still pay a significant transport fee and significant setup fee. Listen, they’re doing all of that themselves. Once you fill that lot, once the home’s there, it’s almost assuming you’re not in some terribly tertiary challenged market. It’s almost certain that you’ll be able to get either a renter or ideally a person that’s qualified enough to buy that home and get a mortgage from one of the lenders that will loan on these mobile homes. That immediately is obviously going to give you more cashflow. That’s the quickest way to overcoming how much you paid for your acquisition. Because every lot you had, it’s going to add X amount of dollars with value $25 to $50,000 per lot. This from the lot rent portion for most $300 to $400 a lot rent markets. That’s going to that’s going to add up nicely. You fill up five lots, you probably not going to be worried that you overpaid for the interim until you have it.
Glenn Esterson: Again, remind yourself when you’re selling that you overpaid and you could’ve had a better spread, but this would be the obvious solution is filling the lights.Now, if you haven’t raised rents in years and the rents are still far below market and you’re not in a rent control state, it might be appropriate to push the rents. But, I would really suggest not doing the, “Hey, I’m $100 below market so I’m going to raise rents $95.” That is going to offend your tenant base. I would really recommend never going more than five or 10%, always limiting that rent bumps is somewhere around $40 maximum. Be very cautious when deploying that. But if you have vacant lots, fill those first. If you have some money to spare the park to pretty it up before you raise the rents, always a good idea. Those are a couple of things you can do-
Jason Sirotin: Yeah. Even if it’s something superficial, just to give people a sense of you’re not just there to take more money, you’re actually doing something good and a little goes a long way when it comes to sprucing.
Glenn Esterson: Exactly. If you’re lucky enough not to have already had your utilities being built back to your tenants, you might want to cough up some money and go get some new meters put in and start building back out that water because that could be a massive savings on your income. Often the utility expense can be% 15 to 20%, sometimes higher of your total expenses. If you can build that back and make that a wash, that’s going to easily help you have a better cashflow. You’re not going to care again in the interim as much about your overpaid. Especially if you’ve got a decent park and good location, the market will work itself out, assuming we don’t go into World War III tomorrow and everything.
Jason Sirotin: Yeah, it could change.
Glenn Esterson: There’s so many things stand as they are. The market’s in good areas. We usually catch up and help you absorb some of that overpay you did on your acquisition. Plus, these three things we just talked about are the obvious things. If you get in a little bit too much over your head and you buy one of those fully stabilized deals and the market is not able to support higher rents and all that kind of stuff and the water’s already all direct bill and the tenant homes are all completely tenant owned and you’re in a rent control state, your life’s going to be a little bit harder. You’re going to have to find a better way to absorb that upside. I was talking with my partner, Charlie, the other day about a similar situation that we’re looking at a couple of deals in New York and they’re maximized, right? They’re below market, but with the rent control, they can never get to market right now. They’re a good $140 below market. And so one of the ways-
Jason Sirotin: What do you do in situations like that as a broker?
Glenn Esterson: Yeah, it’s a challenge. Right? Because you have a very stable operation there, you’ll just never catch up. Now with the 3% limit, that’s all you’ll ever be able to grow. That’s okay. 3% on a $500 rent, $15 a year growth paid, that’s reasonable. Especially when there’s, like in this park, there’s 260 spaces or so. It’s a challenge because their average rent in that park is 380 and the market up there is a good 520 or so, 500, 525 somewhere in that range for other similar A-plus looking parks out there.
Glenn Esterson: One theory or one idea that we were discussing is how would you maximize profits on here? Even though the park’s so big, you’re never going to be able to transition the whole park the way that we’re going to discuss. If you could even just get five or six people a year to sell those homes back to you. Okay. Because maybe they’re moving to another state, they’re tired of the cold weather, whatever it is. You convince them to sell the home back to you and then, you can reset the lot rent for that lot market rent. These homes up there, they’re nice homes. You know what I mean?
Glenn Esterson: There’s a recent sale that was like $68,000 for the home. You’re going to have to be prepared to cough up a good bit of money to be able to exercise that upside. But if you do it five times a year, that value, that $120 delta between where they were in lot rent and where the market rent should be, there’s no gouging there on your current tenant base. That’s all on the new guy and he’s going to run into that situation everywhere. You could really get back to the market rents slowly, but then $120 delta is going to give you a substantial return on that initial purchase of that home. You’re going to have to dig in deeper once you overpay. You have to outlay some more cash. But, that’s one additional way that we think would be successful for some people at some parks.
Glenn Esterson: Now, I cannot speak to the validity of that statement. I can only speak in theory that it seems like that’s a way to dig yourself out on a stabilized deal that you overpaid on in a rent control type of state. There’s some people in California that do it pretty regularly and that is a potential way to help mitigate that overpaying on the stabilize deal like thing.
Jason Sirotin: Got you.
Glenn Esterson: There’s other clever ways to do things. Maybe there’s a way to put in a small bodega convenience store, the little shop in there that people can get some easy household things.
Jason Sirotin: That’s smart.
Glenn Esterson: You got to start thinking further out of the box now. Right?
Jason Sirotin: Are you allowed to do that in a residential space?
Glenn Esterson: Well, I can’t promise the answer to that. I’ll say that in many parks I’ve seen, especially in the Latino parks and even in my park that I had brief while, we let people use one of the vacant trailers as a little bodega. Somebody paid us a lot rent for the thing and they’re able to sell their wares of whatnot out of there. I see it more and more in Latino parks, especially in the South. I don’t know if it’s allowed, but sometimes it happens.
Jason Sirotin: That’s really cool. It makes sense. It becomes a convenience for everybody else. It’s like little convenience store in the middle. I think, Glenn, just so we can hit on all these topics, I think that’s a really good transition point to one of the other things you’ll be discussing at the panel on January 16th at the Louisville Manufactured Housing Convention in Kentucky, which is your overcoming building and zoning issues and earning the respect of municipal officials. [crosstalk 00:15:43] We’ve talked about that a lot.
Glenn Esterson: Yeah, we’ve talked about that a lot. As you can see, it’s still a very popular topic because it’s one of the hardest parts of your due diligence process. I tell you guys a lot, you got to do this from the beginning. As soon as you think you’re going under contract, go talk to that municipalities, go start being nice with them. Go start making friends. Go down there and go uncover what you can through the friendly office person who’s probably really going to give you a weird look at first and give you a hard time about the information you want. But once they soften up, they’re going to be your best resource.
Jason Sirotin: Got to break that ice.
Glenn Esterson: You have to break that ice. You have to go down and earn their respect because chances are you’re buying out of state and you’re looking at a park that’s maybe a little defunct and already has a bad taste in municipals now that maybe somewhere in the back room, they have it looking at something that they might try and not exist in their municipality anymore. Coming from out of state and going into this new situation with this defunct park, you’re going to have to really show them that you’re there to do good and then that you’re there to improve the property. You’re going to keep your word about it and you’re going to want to lay out what you want to do. While you’re laying out what you want to do with your improvements with them, you want to ask them each step along the way, is this allowed? If not, what can I do in this situation?
Glenn Esterson: You want to double check with them that the grandfather zoning that’s most likely in place keeping that part together. It doesn’t have some weird rules that cancel out some of the clauses for the grandfather clause. Like switching out an old home with the new home. Some parts that can switch out your whole setbacks and really make you go through a really rough year of figuring out what do. I’m actually working that with a tenant right now outside of Charleston. He had a park that the city is trying to shut down. This nice little park that was performing whole lot rent can now not be re-rented as it is as those tenants move out. He has to transition it, which means he has to rebuild the entire park. It’s a real, real shame because that’s going to be a lot of extra money and it’s going to be a real hard time to get done.
Glenn Esterson: Had they done their inspections upfront with the municipality and ask certain questions about these setbacks and about these other little zoning things, they would have more insight and maybe be better prepared. In this case, they got caught in a situation where they weren’t prepared for. Other things the municipality can help you with is really understanding how you can improve your property. Maybe if you did all the improvements that you said you were going to do, maybe you have a good taste put in their mouth and maybe they’ll let you expand your park a little bit, especially if there’s vacant land and some affordable housing needs in there. That’s a big deal. That’s going to really help you with your valuation if you can expand that park even by five or 10 lots.
Glenn Esterson: Earning the respect to the municipal officials is one of the most important things. And yet, one of the most overlooked things.
Jason Sirotin: Yeah. It’s all part of that initial due diligence phase that we’ve talked so much about. If you don’t get out there and get to know the people and learn about all of the things that the seller might not be telling you even. Right? Like sewage plans or nearby waste problems and toxic water, who knows. But if you don’t go out and you don’t reach out and you don’t try to make friends with people, you’re going to have a long road ahead of you because those are the exact people you don’t want on your bad side. They can make your life very difficult.
Glenn Esterson: Exactly. Very difficult. I went through it. It ain’t easy and I never got any love or respect out of it. I still had to comply and it left a real bad taste in my mouth. I sure wish I could have, from the beginning, worked with them instead of a cause and effect type of thing that now I have to work with them.
Jason Sirotin: Yeah.
Glenn Esterson: That would be my advice. As I’ve said many times, get in front of those guys. The moment you think you’re going under contract and talk to them about your plans, be nice to them. You might want to send them a thank you card or something every now and then because the lady or the gentleman that’s working the front desk there, they deal with so many jerks that you can be the guy that’s not a jerk, you’re going to have a better time with them.
Jason Sirotin: Yeah. There’s a reason why this panel is called Issues Eating Companies Alive. Right? These are like the real major problems that are affecting a lot of people. I want to jump into the next one, Glenn. It’s who owns the home you rent space to? Why is that important and why is it hurting a manufactured housing companies?
Glenn Esterson: Well, we talked about this a lot. Park owned homes versus tenant owned homes. I think just about most people are on the same page that they would prefer a tenant owned home. The retailers love tenant owned homes because that’s their direct client. Park owners love tenant owned homes because they know there are much stickier tenants. However, there’s plenty of deals that have plenty of park owned homes and you have to wonder about that. You should always try and transition these park owned homes. There are exceptions to the rule. But again, we’re deferring back to an earlier statement. We’re talking about your average C class park with slightly used homes and things like that. Those kinds of homes, in my opinion, should always be transitioned as quick as you can because the cost of upkeep on this park owned homes just going to be too expensive.
Glenn Esterson: You’re going to constantly think yourself, “Oh hey, I’m getting $700 rent on this. Why would I want him to have just a $300 rent?” When you balance that to $400 difference, yeah, that sounds great. But, that’s $5,000 of profit that you think you have. That maintenance on there in an average turnover, which is we call it 18 to 30 months is the average tenant in these used park owned homes. That average turnover is going to cost you something like $5,000 unless you’re doing all the work yourself.
Jason Sirotin: People don’t think about their time enough, right? The calls. Even if you have a property manager. Oh, this big thing happened. You’re going to be hearing about all of these things. It’s going to add stress and it’s going to make you less good at all the other things that you’re doing. It’s a distraction.
Glenn Esterson: Yes.
Jason Sirotin: That’s how I keep thinking about it. The more I think about it, park owned homes seem like a distraction unless some of the ones that you’ve showed me before that are new in like the house, the homes are really nice, I think that’s different.
Glenn Esterson: Of course, there’s exception always. Every rule out there that I know of. Right? There’s this slight middle ground there. I mentioned it earlier with this CASH program and other similar programs like CASH, where the retailer gets the home over to you, the manufacturer gets the home over to you, you pay the set up and then the tenant goes and gets on the hook for the mortgage for the home. You’re in a second place hook on there most of the time. If the tenant defaults, you get a home back and you’re responsible now for it to get it resold. But, that’s a slightly different option I think-
Jason Sirotin: Wait, that’s how it works? I want to make sure I understand that. You’re saying if somebody forecloses, the park owner gets it?
Glenn Esterson: In the cash program because there wouldn’t be a foreclosure, the tenant would default. And then, the manufacturer already has you as the person who’s responsible for this thing until that tenant has paid off their balance that they’ve approved that-
Jason Sirotin: So, you’re the lienholder?
Glenn Esterson: You’re kind of, I guess, second place lienholder.
Jason Sirotin: Okay, got you.
Glenn Esterson: If they default and they have a very successful low default rates on these programs from what a lot of park owners are telling me. It’s a lower output of cash for a newer home and a tenant who owns the home, but you have some security in there knowing that it would get pulled off of your lot necessarily if that tenant defaults through this program because you would still be there to be able to get it resold. That’s a neat distinction to have. But, it is just a true lot renter who owns their own home and they’re in there, they have a mortgage on there and then they default on that mortgage in that home. You might lose that home off out of your park. You want to be aware of the issues that your tenants might be facing about their financial situations because it could have a further impact on your park if the banks try and pull out those homes from there. Usually, they’ll work with the park owners.
Jason Sirotin: Right. That’s a lot of work on them. Nobody wants that.
Glenn Esterson: [inaudible 00:25:34] amounts of money.
Jason Sirotin: Right. Nobody wants that.
Glenn Esterson: You also want to make sure that the tenant doesn’t sell the home to another person who doesn’t live in the park for $10,000 to pay off whatever mortgage was left. Now, that home is getting pulled out of your park by some other person for some other location because now you’ve got to go through that whole process again.
Jason Sirotin: Wow. That’s something really important to look out for. Is there any covenants that you can have in place that doesn’t allow people to do that?
Glenn Esterson: See, I can’t answer that for every single state in this [inaudible 00:26:15]. What I can say is there’s a lot of owners out there that right through a lot lease to have that the home cannot be moved for X amount of years. It gives some consideration for that particular paragraph under leases. I don’t know if it holds up in court. Sometimes, I guess it does. Sometimes, maybe it doesn’t. But, that’s the hard part about this homes is not letting home leave your thing. What a lot of owners also do is put a first rate of refusal in all those homes so the tenants would sell it to them first and foremost. Some owners say, “Hey, this guy wants $25,000 for their junky little home.” They’ll never be able to sell it that way. I’ll let them just abandon the home and then I’ll go and file for abandoned title and go through that whole phase because maybe the home is only worth eight grand or something.
Jason Sirotin: Right.
Glenn Esterson: There’s a lot of caveats in there and a lot of different strategies that get deployed. But from my perspective, whatever you can do to protect that home for leaving your park that’s legally allowed, I would go ahead and try to figure that out upfront with your municipality, with your attorney. When you take over, have new leases issued so that way these things don’t become a challenge a couple of years down the road when there’s a situation in that person’s life that requires them to consider moving. That’s what I would say upfront. Again, it always goes to this a lot of upfront work.
Jason Sirotin: Of course, yeah. It goes back to due diligence. The last thing that the panel is talking about will be growing good service set up and subcontractors, which I’ve worked with my share of bad vendors and one bad vendor can make your life a living hell.
Glenn Esterson: It’s so miserable. I have a feeling this particular subject is more geared towards the manufacturers and the retailers on here about growing good service. But if you’re a park owner, you better have some good service in your park for your tenants. It doesn’t not apply to you because they’re not necessarily focusing on the park owner with this question. But, your deal with your tenants is that you’re providing them safe, affordable, clean housing. You should take that seriously. In my mind of growing good service, it’s okay. People aren’t happy with you, but at least you’re keeping your word on what you said you would do to live up to your end of the obligations in the contract that you have with your tenants.
Glenn Esterson: Now, some of that is going to come down to your vendors. If you’re saying, “Hey, if this is a park owned homes, if something breaks, I’ll send my guy over and fix it.” Well, you need a vendor to go over there and fix it. If you’re from out of state and you didn’t have all of your vendors lined up before you close, or at least right in the early part of the closing, you’re going to, again, find yourself in a position like, “Shoot, what do I do? Now, I’m going to have to go pay Roto-Rooter $400 to go clog, unclog a sink.” You know?
Jason Sirotin: Yeah.
Glenn Esterson: If you didn’t have your plumber fenders worked out upfront, who would do it for a $40 check you’d visit or something? It’s critical that when you’re going through your due diligence with the seller, “Hey, can you provide me your list of vendors? Provide me your list of subcontract so I can call them and interview them and ask them questions about the maintenance that they’d been doing and work out my contracts with them and see if they’re actually people that I want working at my park.” You want to get them out just the same as you would a tenant. Differently than you would a tenant but the same constant you don’t want to bring in some criminal or you’re letting into people’s apartments and you’re not there overseeing standing over the shoulder to make sure that something terrible doesn’t happen.
Glenn Esterson: See, you want to be able to go through to get these vendors lined up. If you’re in a value add park where you’re bringing homes in, you’re going to want to find a cheaper way to do all your setups, your delivery’s set up. I would really look into that if part of your performance stilling lots during your due diligence process. What that set up is going to cost if you do it full retail value versus setting up your own little maybe even company and buying a moving truck if you have a lot of homes to bring because that might really bring down your cost.
Glenn Esterson: You have to look a little bit wider on some of these subjects and see it more comprehensively when you’re looking at these deals. Again, especially during the due diligence. But if you waited too long and now you own it, you might’ve paid too much for your acquisition. You might not have your vendors lined up. You might have a bunch of fuzzy municipal people and tenants that are planning to blowout because the previous owner really offended them. Get a due diligence done upfront so you don’t find yourself looking at these questions as something as an afterthought and now you’re scrambling to work it out because that’s how the slippery slope start. That’s how these war stories that I have come to petition and you don’t want to find yourself in that position.
Jason Sirotin: Your next book should be called Due Diligence. And that’s it.
Glenn Esterson: Right.
Jason Sirotin: Speaking of your book, Glenn, it is now available-
Glenn Esterson: It is.
Jason Sirotin: … on Kindle and in its paperback. I got mine and it looks gorgeous and the content is so good. Can you tell people how they can get the book?
Glenn Esterson: Sure. I have both copies. Both kinds are on Amazon. All you got to do is go to Amazon and type in The Mobile Home Park Manifesto and you’ll get a Kindle version or a paperback version. Kindle version’s less than five bucks and the paperback’s just about 20 bucks or so. We’ve had a lot of success. I can’t believe it, man. I just looked at it yesterday, there was 21 books shipped yesterday alone.
Jason Sirotin: Wow.
Glenn Esterson: That’s fricking impressive to me. I doubt I’ll ever make my money back on this book but I’ve sold a few hundred books now. I’m pretty impressed with that.
Jason Sirotin: Congratulations. That’s amazing. I want to tell people out there, the reviews are so important to us on Amazon. If you could go and leave a good review if you love the book or you thought it was helpful, an honest review would be really, really helpful to help spread the word.
Glenn Esterson: It really would. That’s the thing that’s lacking on the Amazon stuff. We have I think maybe eight reviews on the paperback and three on the Kindle. I appreciate the heck out of the ones that have ever reviewed it and everyone who hasn’t reviewed who has bought the book, I appreciate it. But man, would it really be cool and helped me out if you guys could leave a sentence or two about the book and leave it with a five star review. There was a brief moment there a couple weeks ago, I was best seller on Amazon, number 15 in the investment books. That was pretty exciting about that.
Jason Sirotin: Whoa, that’s awesome.
Glenn Esterson: I think the reviews had something to do with that. It’s no longer at that category, but I’m still happy with how things are going there. But, more reviews with boost that further because the sales are great. We’re selling almost 20 books a day or something like that. Probably a hundred books a week, give or take. That’s pretty cool. I like it.
Jason Sirotin: Hey, we got people reading it and we’re talking about it here. People can go see you live and in person at the 2020 Louisville Manufactured Housing Convention at the Kentucky Exhibition Center, January 15th through 17th. Again, Glenn will be speaking the morning of the 16th at 8:00 AM on a panel called Issues Eating Companies Alive.
Glenn Esterson: We have a booth set up at this place. You can come over and meet me and most of my team, not my whole team, but a lot of my team will be there. We have a booth set up right next to Rent Manager. We’ll be there with all our deals and full of books and things like that. If you bought a book and you’re there, I’d be happy to sign it for you, to talk to you. I don’t know what you know what you want me to do, but I’m happy to spend some time with you and discuss the industry. It should be an exciting time for everybody.
Jason Sirotin: Yeah. If you are listening to this podcast after the event, you can always reach Glenn at themhpexpert.com and you can call him directly. He got a really cool, easy to remember vanity number. It’s (720)MHP-4YOU. That number for people like me who remember numbers better, it’s (720)647-4968. Glenn, thank you so much for your time and sharing all this wealth of information. For Glenn Esterson, I’m Jason Sirotin. This is The Mobile Home Park Expert podcast and we’ll see you next time.