On this episode of The Mobile Home Park Lawyer, Ferd talks to us about how to infill your park in a detailed step-by-step guide. Ferd discusses exactly what he does from the very start in becoming a mobile home retailer to handing over the keys to the new homeowner.
0:00 – Introduction to infill of mobile home parks
1:27 – First up in the process is to become a mobile home retailer or dealer, but not every state has the same rules
3:06 – Ferd learns a process fully before teaching it to his team
3:53 – Identify the home desired order
4:11 – Identify which lot is desired for the new home and verify lot dimensions
4:59 – Get some quotes from manufacturers, then select some colors and features
5:45 – You have to arrange for the money to purchase the home
5:57 – Order the home
6:48 – Sometimes you have to pay in advance or pay a deposit
7:12 – It takes a day to build a house but there’s a 6-month wait to get a home right now
7:46 – Schedule the build and schedule the location and make sure everything is facing the right way
10:51 – When you receive the home, you move everything out of the way and inspect the home
12:11 – Make sure you get the keys and the certificate of origin
12:47 – You need to arrange a final time with the home setter
14:08 – Sometimes there is additional grating work or drainage work
14:32 – Next phase is to call the city inspector
15:21 – When you get the green light, you can call the gas and electricity provider and the HVAC company
16:40 – Then you start setting up the home for sale
17:46 – Next you have to track the sale
19:02 – Let the managers have all the miss documents they need
Welcome back mobile home park nation. Ferd Niemann here again with another episode today. Today, I’m going to talk about the infill of mobile home lots and more specifically really just the process for bringing in mobile homes. Everybody knows that a there’s a number of strategies to maximize the value of a mobile home park. And one of the most effective, though one of the more difficult is the infill of mobile homes. I’m going to go step-by-step through what that process looks like, especially with the bent towards bringing in new homes, because that’s likely going to trigger more of your federal HUD code, regulations or your state inspections, potentially new upgrades, or new service from an electrical standpoint or from some other government or quasi-government utility standpoint. So without further ado, I’m going to get into a relatively complex process, but once you get it down, it’s really just rinse and repeat.
Okay first up in this process, I’m going to just briefly mention becoming a mobile home retailer or dealer. This is often necessary, especially if you’re going to sell new homes because you’re supposed to collect sales tax and not every state has a sales tax. Not every state has the same regulations, obviously for among other things needing to become a retailer or dealer. I’ve got an entire prior episode on that. So I’m not going to dive into being a retailer, but it’s often a prerequisite if you’re buying new homes because the manufacturer is going to want you to do it and be approved. That way manufacturers, they could sell to you and they can give you title to the home. And the first time you get a title, it’s not actually called the title. It’s called a MCO or CO manufacturer certificate origin.
It looks similar to a title, it is generally a slightly different color. And a lot of times it won’t have a back or won’t have much on it in the back. Like a regular title has a front and a back, but a couple different brands do it a little different, but for the most part, and I’ve bought from, I don’t know, six or seven different manufacturers. I kind of buy low to medium end. I bought one or two from higher-end manufacturers. But in the Midwest where I’m in about five states of parks in the Midwest and the $60,000, $70,000 single wide just doesn’t work that well for me. So I’m trying to get to the single wides into thirties and forties and the doubles and the thirties, forties, and fifties, sometimes the sixties. But really, I need the retailer license to order direct from the manufacturer in the states that I’m in.
So I’m going to go over to this process. And again, the process can be different a little bit for each day, but this is pretty much the way it works. Anytime I do something new, I want to learn the process myself before I teach it to my team. So I just learn the process. I make a checklist. I go down in order and order new home. I’ve got a column. This is unit number one, unit number two, unit number three, and just go down every checklist. And obviously, as you’ll hear through this list, you can’t do everything at once practically. But you need to monitor it, monitor on a regular basis. So my managers do this checklist, or if I’m on-site, I’ll pull out the checklist and say, look, here’s where I’m at. What do we got? And then go through them. Because I’m not watching day-to-day on everything, you know, especially some of the minutia of where are we at in this level of permit? Where are we at on, is the skirting done on this home and the smoke detectors in this home. So, anyway, this is in order, a lot of things are not in order. This is the order that I do it in. First, identify the home desired order. Next, I want to, you know, 16×76, true victory plus single wide. This is the price point of this park. That’s why I want that home. And this lot will generally fit it.
So then the next step is like, I got to identify which lot is desired for this new home. And then I need to verify the lot dimensions and I need to learn how to measure these properly. And if the lot size is tight, I need to call utility locates before I confirm it. So I can identify how much of the lot is exactly usable. Cause sometimes there’s an underground gas line that’s in the way. You can generally move gas lines, if you’re getting all new home, it’s all electric. It’s not that expensive. In fact, the gas company will often do it for free. You’re going to need electric for every home. So we’ve got to look where the electric pedestals are, look where the lines are.
Now, if you’ve got a survey, especially a table a survey then you might already have this in general, but still, you know, sometimes you got to measure the lots. Also, you got to worry about internal and external setbacks. You’ve got to make sure you’re at least 10 or 15 feet depend on what your fire code is away from all adjacent homes, etc.
Next step, get some quotes from manufacturers. Now, as I record this here in June of 2021, it’s a nightmare right now getting home from manufacturers, there’s a massive backlog, COVID pricing and materials and shortages here and there. And then lots of the homes. I mean, some manufacturers won’t even give me a return call, just like, Hey, the next thousand homes are going to the true retail outlets, the guys on highway 24 that have been there for 50 years, not you community owners. So that’s been a challenge of late, but I got to get quotes. And then I got to select my colors, my features, you know, I got to get the floor layout, which is good for marketing. And then I got into pier diagram, cause I’m going to need to know where I’m going to put the concrete piers where I’m going to give it to the concrete and the install guy.
At some point here along the process, let me be done this in advance, but for this particular home, you know, you at least got a arrange for money to purchase the home. Do you have cash? Do you have line of credit at the local bank, are you using, you know, 21st mortgage or some other financier to acquire the home. Then you got to order the home. And sometimes if you’re going to order a home with a certain Meg, you can figure out are door piers necessary or not necessary. And then you make notation for the concrete guy. So some brands you can get reinforced door piers, and then you don’t need to put new concrete piers underneath that location in the home.
Generally, you know, single-wide, about 90-inch centers, 90-inch eye beam separation. And you put, you know, HUD code, the depth is going to depend on where you’re at in the earth, as far as Frostline. But typically HUD code concrete is two feet wide by two feet wide by at least 36 inches deep and eight feet apart. So you’ll have about 20 concrete piers on a 16 by 76 mobile home. And then there’ll be about nine inches apart with, and then if you’d probably got to put two different side piers the width of the door, for the door underneath the door structure.
The next thing you got to do, if you order the home, some manufacturers make you pay for the home in advance. Some once they kind of trust you, they just wait until it’s ready to roll off the line. But sometimes you’ve got to pay in advance or pay some deposit. I know when I first bought my home, first one from adventure, they’re like, we need 25% down before we, you know, put it in production. So, okay, well then eventually the home is placed in line and constructed. This takes, you know, little as one day to build the house, but practically there’s a queue. Right now there’s a queue of at least six months most manufacturers. But you know, back when I started doing this few years back, it was, you know, it might be 10 days. It might be 60 days and it’s going to depend on the plant. Some plants have obviously a bigger capacity than others.
Next step, you know, the home is being built or it’s in the queue to be built. So now I’m getting the rest of my site ready. I’ll give the pier diagram. And desired lot location to the concrete guy and I’ll schedule him. And I’m going to tell him which direction the home is going to go. I had that mistake one time where it was obvious to me that the side with the beautiful shutters was going to face the community in the backside, but no shutters was going to face the back tree line. Well, this guy liked it the other way around. So he put it in place, and I had to get him turning around again and he was not happy. And then if the pier diagram and the door piers are off, then you got add more concrete because there’s not concrete in the right spot on the sides. On the center, it really makes no difference typically.
So I want to confirm who’s calling the locates. Typically I’ve already called him and he’s going to call him, because he’s the guy drilling under the earth and it’s his lawsuit if he hits a wire so he’s going to do it anyway. And I see him and check off where they are and make sure when they’re successfully marked, cause he does want to show up and they’ve done, you know, water and power, but they haven’t done gas and he gets out and he’s like, great. And generally, if they do that, you can call locates guys back. And they got like a two-hour emergency call to show up. And you can start digging, but sometimes they don’t show up.
So then you got to either delay or you got to hand dig, which really gets everybody grumpy because you know, if you got a loader, an auger with a bid on it, that’s going to be a lot faster than a shovel. So that’s what concrete guys, pet peeve tell you that. You also give your peer diagram to the home setter and you get on his schedule. Depending on the city, you fill out a mobile home permit application. And my manager. I’ll say here, look, here’s the attached sample permit. Here’s the attached site map. You can draw a picture, here’s number nine, circle number nine and put it on the permit. I’m going to place insurance on the home with trip coverage for a date that is before the home is shipped. I insured the home for at least a price to be paid to the manufacturer.
Then I can go pick up the permit in city hall or pay them and send them cheque they’ll mail me a permit or email me a permit. And I tell my manager, here’s the email and here’s the pricing and here’s a copy of the permit application. And then I put that permit on the storm door facing out in case the inspector comes by and the home is half done, half installed. You can see that it’s under construction. It’s not in disarray.
Next the home is shipped. Typically it arrives one to two days later, depending on, I mean, I’ve got parks in the Midwest, so I’m only buying stuff, I’m kind of in the middle, right? So some places like if I buy it from adventure up in Indiana, two days, if I buy it from Waco, Texas, it’s Clayton plant down there two days. There’s a Hackleburg plant. There’s Lynn, Alabama plant for True, one day sometimes on the singles, typically two days on the doubles. Cause the doubles aren’t as structurally sound because of the internal walls, not connected or sort of structurally built during transport. So they drive slower and they’re lighter.
Some of the champion Clayton plants in Kansas, Indiana, Kentucky I’ve ordered from those guys can be one day typically, depends when they leave. They have certain restrictions, especially on like Fridays and weekends where they’re not allowed to drive. So, and then Kansas City, if I got property homecoming here, Kansas City has additional restrictions. So you just got to know your mark a little bit. And you’ll figure that out. And then when it arrived, depending on the state, you know, they have some sort of property locator for me to turn in. And this is basically the government’s way of tracking where homes are. Then I received the home. When I receive the home, it’s a big to-do. I got to get cars out of the way on the street and all that kind of stuff. Put cones in front of the lot where it’s going. And typically the transport guy just drops it near the lot. It does not put on a lot.
When I get the home, I jump inside, I inspect inside and out, look underneath, see if there’s any tears in the underbelly. If the tired blew through, I’ve had tires blow through the underbelly, which is the tarp, and insulation through the plywood floorboard through the carpet and have tire in the middle of the master bedroom and manufacture will replace that and pay you for it. But then sometimes they can’t ship the parts, it’s too expensive or too far away, unless you’ve got another homecoming a few days later. And they’ll just tell you to have your local guy fix it. And then you just send them a bill, send them pictures and stuff like that.
And then we just order it. Sometimes there’s parts, there’s repair. Sometimes the walls pop off, especially the cheaper brands. The walls will pop off or the strips I’m talking batting boards on the name. The battens will pop off between the sheets of VOG Landover, gypsum board. If you get sheetrock homes, they are typically going to be better-constructed, more expensive. Cause if you don’t want sheetrock cracking in the transport, it’s a huge pain.
You want to make sure you get the keys to the home and you need to make sure you get that certificate of origin or at least make sure it was mailed to your lender. Sometimes if I got a line of credit, the local bank, sometimes the bank will just be like, just give us the title later man. But sometimes the bank will be like, no, no the titles coming to us in order for us to wire the money to the manufacturer. So you just want to get a copy of it. Typically you’ll get a warranty packet, and it will also include the final invoice which is important for like when you go through 21st mortgage, you are going to need a copy of that before you can get paid off.
Okay, next up you, hopefully you’ve already done this, but you know, at least you got the home setter on like ready, but you need to arrange a final time. Okay, the home actually arrived. Cause sometimes they get delayed. Sometimes there’s weather. I’ve had Homes take like six days to arrive because of rain and wind and they get locked down or they blow out like 19 tires. You see these guys on their toter trucks, they got a ton of tires in the back of it.
They generally put cheap tires on these because sometimes they’re used in which that’s another thing you can sell your tires and axles after the home arrives, I’ve done that and made north of 10 grand last year on tires and axels giving them back to the guys. So that’s kind of fun. Like found money. I don’t have any firm at least not in that kind of bulk.
With the home setter, depending on the setter and the location, you can do this, your own labor in house, or you got to get a pro. So some cities you have to have a licensed plumber, licensed electrician, licensed general contractor to be involved. Other cities, they just want a licensed installer, blessing it. And then you can have your own guys do the electrical work and just make sure which is going to be generally cheaper and make sure that it’s good enough for the electric company and the city inspector and the home setter to all sign off on it. And you confirm who’s doing what, and you may have to call locates again, depending on if stuff’s still visible or valid, like the paint on the grass, or if there’s slags, because sometimes the flags get pulled away or your mowing guy just takes them out and then put them back. And it was like, okay, where was that gas line?
Sometimes you’ll have additional grading work or drainage work. Typically the concrete guys kind of figured this out and he does a little, it’s called a crown. He’ll put down some form of gravel and it’s really, a lot of them use like AB3. It’s like a concrete, gravel mix different than like your big white rock gravel you see in, you know, rural parking lots or rural streets. It just gets kind of messy if it gets wet. So talk to the concrete guy, talk to the install guy.
Next step, once it’s being installed, generally this next phase is call city inspector. Some cities have two inspections. City here near me, the first inspection you have to have the home blocked, tied down, anchored in. You hook up the water, including the shutoff valve and the water meter, sewer, gas, and electric. You place numbers on the home. You play steps by both doors. I typically put steps by both doors instead of the deck, because then the deck can be out of the inspection process, which some cities require you to get a separate deck permit. But if you put a deck in, the city is going to, they have something else to pick at. Oh great, Now there’s a deck. Let’s see if this thing is perfectly level and it’s got four inch spaces between the rungs and all this sort of crap.
So I’ll just buy steps from rural supply for 225 bucks and put them together and put it in front of both doors. And then if you get that inspection passed, the city gives you the green light and the city will call, or you have permission to call the electric provider and the gas provider. And keep you mind the electric and gas were hooked up during the first inspection, but they weren’t really live. There was no juice coming to the lines, but they just looked like they were hooked up and maybe three wire, four wire connection, there may be one ground rod or two ground rods, or you may have to upgrade the pedestal to 200 amp. You have to have separate pedestals just depends on the city, right?
So then I start to arrange for rural supply or your vendor to hook up your HVAC system, your air conditioner. And then the utility company comes out at some point and they basically bless the utility hookup, and they turn on the juice. And now the city wants to come back out and go inside the home to look at GFCIs, which frankly, on all the new homes is not an issue they’re in there. They want to look at the smoke alarms, carbon monoxide detectors, and they just verify electricity is hooked up properly. Skirting us beyond the home at this point, it’s the first time they looked under the home. They don’t want the skirting on, because it’s harder to look under and see if the anchors are done right. Some states require an cross system. Double-Wide have an even slightly different system of the under installation, but you get all that ready for phase two inspection. Boom! You pass. Now, you’re like getting ready to rock.
Now we finished the home set up for sale. Construction of deck, construction of sidewalk, gravel or concrete, you put in light bulbs and blinds. Some of the cheaper ones don’t come with blinds, put in floormates 21st mortgages give you floor mats for free. I’ll put shoe booties in the front door. So we’ve got, if it’s muddy, the sales manager cannot get his feet muddy and not track mud through the house. Put a lockbox on the home, do a light cleaning and just come to like a final punch list of what needs to be done. And then we go to sell the home, right? Photos for ads. You get tenants applications in there, 21st mortgage apps or pep apps, your business cards, whoever’s the contact, online application instructions, a sign in the yard, you know, and then we start with get applications, leases, contracts, assignment appropriate, we get pet insurance. And then we eventually would transfer title as part of the sale of the home. We, you know, sales tax be owed by the buyer. So we calculate it, add into the purchase price and then either we or the lender or the seller will have to pay the department of revenue typically through the titling process of department motor vehicles.
Next you got to track the sale, you’re going to do for your own accounting. For your own balance sheet, but you also got do it for some states as a dealer, it’s like, there’s a monthly sales report in Missouri for example. And then you just monitor when the resident occupies the home, you want to confirm all documents are necessary, that are necessary in your possession.
We typically give the new residents a goodie bag, you know, with day one stuff like heaters, you know, toilet paper, napkins, bag of popcorn, you know, can of soda, water, a couple candy bars you know, toothpaste, hand sanitizer or trash bag, roll paper towels, basically and a laundry basket, by the way. Basically a little goodie bag of stuff like, you know, I might need this in my first day in a new house and I forgot to pack it or it’s still coming from the moving truck tomorrow, people really appreciate that. It’s also a good time to slip in a little referral sheet in there or Hey, go here to give me a five-star review on Google or my podcast. I actually honestly never asked them. They don’t know I have a podcast, but you know I have a podcast because you’re listening and if you’re still listening, has everybody watched that John Boyd guy on Facebook, who does the baseball videos. That’s what I feel like right now. He’s just rambling saying filling time basically.
Anyway, it’s my show. I can do what I want, but back to my regularly scheduled programming the next step which is, I’ll let the managers have all the miscellaneous documents they need. Typically you’ll have a dealer license you may need at some point in the process, a city business license, you may need to have your certificate organization for your LLC or your property management company, but that’s really the process for ordering new homes from soup to nuts, get the retailer license to report the sales afterwards. And there’s a whole bunch of other strategies, leasing and selling and advertising that I might cover on another episode. We’ll see if I get to it. Or if I decide to share my special sauce, page, or manager as well, there’s a special sauce and pay by commission and give them trucks. I think I’ve bought six F150. No five F150 and one Chevy Silverado in the last year. You know, for me, one was for me. I’ll be honest. And then for other employees, my company, as a form of bonuses and compensation, and it’s kind of cool. I like having trucks and people like having a chip on their shoulder. Like, Hey, I can tell my girlfriend, like I got this truck today because I kicked butt at work.
And that’s really motivating for people. And if you can get your salespeople motivated, they’re going to want to understand the installation and infill process because all these steps I just rattled on about for 20 minutes, they’re a necessary evil for the sales guy and say, Hey, you don’t get your commission until the electricity is on.
You don’t get your commission until the concrete set, until the smoke detectors in, until the tenant has paperwork. Until everything on this list is done, including also, which I forgot to mention the tenant having utilities in their name, because I’ve had that happen where we forget that. And all of a sudden, I get an electric bill for $300 and I’m like, that’s not possible. There’s no, the furnace isn’t on. Oh, it is. And somebody’s living there. And now we got to chase them down for utility money. And sometimes they don’t have the ability to get it in their name because they have bad credit or something orutility company. They pass 21st mortgage muster, but not the utility company.
So there’s been some pain points on that in the past. So anyway, all of these steps are necessary for your sales guy to get a commission because all those steps are necessary components of ordering new mobile homes to infill a park. And there’s nothing cooler than updating your site map once a month. And seeing all the little vacant white spaces disappear into colored spaces for either tenant-owned homes or park-owned homes. And it’s really cool adding new families to the community, and just seeing the vibrancy that, that creates, desolate green space and gray space or brown space becoming littered with bright new homes. And then, you know, of course you can then afford to put in a dog park and a playground and paved the streets and rose bushes and, you know, have a company and a community picnic and all that kind of stuff. So, all part of the process that is a pretty much soup to nuts on how infill your mobile home park. Thanks and God bless.