What if I told you there was a simple way to save thousands of dollars in the New Year – and it’s 100% free and has no downside? In this Mobile Home Park Mastery podcast we’re going to review the lost art of negotiating and renegotiating vendors.
Episode 327: Easy Money Transcript
Back in the 1990s, I changed the org chart and I hired my first employee to serve the purpose as being the intermediary between myself and the park managers. And in so doing, I learned something very, very valuable, a very important way to save money. And saving money is making money. This is Frank Rolfe, the Mobile Home Park Mastery podcast. We're gonna talk all about vendors and negotiating and renegotiating vendors. And what happened was when I got that first employee other than an onsite manager named Dee, Dee was bored because there wasn't a whole lot to do. Her job was to basically answer the phone and to call and check with managers. So instead of the managers calling me and disturbing my workflow, which back then was trying to find parks and finance parks, instead they would call Dee. And part of Dee's job was such items as fixing things that broke in the parks, water leak, sewage stop, and then additionally home needed to be remodeled, well, Dee would be in charge of that. Trying to get a contract for the mowing for a mobile home park, Dee was in charge of that.
And Dee was a retired apartment manager, so she was used to lots of activity going on and we weren't supplying it. There just wasn't enough going on in the mobile home parks every day, which was good. We didn't want a whole lot going on. But she was bored, and so she started to really, really work with this kind of fiery passion, negotiating and renegotiating vendors. And as time went on, I realized that Dee was in fact not costing me money, Dee was making me money. I was paying Dee about two grand a month, Dee was probably shaving $3,000 a month off the various vendors and their bills. And I think a lot of us lose sight of the simple fact that in our everyday life, all the time, we can shave a little money off here, add a little money off there, and it adds up to quite a bit.
So how do you get in the habit then of negotiating and renegotiating with your vendors? Well, the first thing, of course, is you need to get several bids. So if you've gotta go in and make sure the water and the sewer connections are working on a vacant lot you're bringing a home in on, or that you have to pour a concrete slab 'cause you're in a HUD state, rule number one would be, let's get multiple bids. Because if I get multiple bids, more than likely, I will be able to psychologically maneuver the vendor, whoever I choose, to come in lower than they would've in the absence of bids. And ever since COVID where a lot of people left the concept of work, they just kinda gave up. Not sure where they all are today, living with their grandparents, I guess, it's harder to get multiple bids. But you still need to try.
Don't let the manager tell you, don't let any employee tell you, "Oh no, I can't find more than just one electrician." No, that's not true. You can find more than one electrician. You're lazy and you're spoiled and you don't want to do that. But getting that second electrician might be the key to saving you hundreds if not $1,000 or more on whatever electrical work you're looking at doing. So you've got to get multiple bids. And once you have multiple bids, feel free to play the vendors off against each other. There's certainly nothing wrong with going to the person who was the high bid and say, "I've got somebody who undercut you, but I really like you and would like to use you. Is there any way you could come in under them?" And then of course, repeat that process back with the other vendor to see if you can really get the price down substantially.
So bidding between vendors to get jobs has always been a key way to keep cost down. That's why all city governments are required to get multiple bids. It just doesn't make any sense if you're trying to save money, which you certainly should be, to avoid that very simple practice of having multiple people give you their best shot, their offer, and then ask them to go back and sharpen their pencil some more. Also, when they're done with the project, it doesn't mean you can't still shave a little off, because most everybody, when they get done with whatever they're doing, didn't do it just right. You ever notice that you hire the paver to come in and maybe put a skim coat of asphalt on your street, and at the very, very end when you look at the project, it's just not perfect? Maybe passable might be okay, but yet the asphalt isn't exactly even where the two stretches meet.
Or the person who does the striping, they screwed up and the striping isn't exactly right. Feel free in those instances to say, "Hey, this is a little off. Can I get some kind of discount for that?" Many of these vendors, they already impute into their number, some degree of reduction for something that they're gonna do that isn't exactly right. So it will be very easy in many cases for them to say, "You know what? Yeah, I hear where you're coming from. I'll go ahead and take off 50 bucks." Now you might say, "Well, gosh, 50 bucks. Was that worth the effort?" Sure, it was. Compute how much that is. You got $50 off and what? 30 seconds? Something like that? That's definitely worth your time to do.
Also, there are always little amounts on big projects you can get cut off even when the job has started, simply by saying, "Look, I've really been running the numbers. This is still really way above my budget. Is there any way you can give me a little extra relief?" Or say, "You know what? I got a proposal for you. If I go ahead and do this with you, maybe we could do a bundle deal. And if I do this project with you, on the next one, could you take an extra $500 off, or $200 off?" So get creative with people, just even once they've established a price and you have a contract. It doesn't mean you still can't try and come up with different ways to get the price down, even if you're getting that price down on a future project that hasn't quite happened yet.
And it's always important, even when the project is done and even when you're coming to the point of paying them, just to say, "You know what? We really, really love working with you, but times are really tough right now. Our collections are down, we're not hitting our numbers. Could you do me a break? Could you just give me just a little extra off?" $20, $50, just to see what happens. And if you go ahead and reassure them when you start off with, "We really like your work and we really like working with you," so they know that it's not gonna be an issue where you're gonna have any kind of dispute, but you just could naturedly say, "Man, times are bad, could you give me any extra break?" Once again, you'll be shocked that people will typically, just to keep you in their good graces, just to ingratiate themselves for further work, say, "Yeah, okay, sure. Take an extra $25 off."
Now if you do all these different items, what does it all mean? Well, here's the deal. You can try and negotiate and renegotiate with vendors as much as you want, but what you must never do is lose their ability to work with you. Then, you have completely failed. So if you've got a Roto-Rooter and you're trying to get the Roto-Rooter to do his roto-rootering in your mobile home park at the lowest possible price, then you get a bid from a couple Roto-Rooters, and you work with the guy and get the price down, and then he goes out to do the Roto-Rooter, and you complain that, "Man, we're way over budget on repair and maintenance right now. Can you take a little bit more off?"
Or say, "Hey, if I call you out again, could you maybe, on the next one, take an extra $50 off?" That's all fine and good. That's making money, that's putting money in your pocket. But you cannot push it to the extreme where you lose the vendor. If the vendor says, "You know what? You're too big a pain in the rear," or, "I don't wanna work with you anymore," now you've created a horrible strategic dilemma, because now you've lost a vendor and that means you can't get multiple bidding, because if there were two vendors you could reach before, now there's only one. And even worse, vendors do to some degree talk amongst each other, and you don't wanna be labeled as the person that no one wants to work for. So don't take what I'm saying too seriously. Don't go out there and push people so hard that they fight back and say, "Now I don't wanna work with you anymore. You're just too big a pain." Then you've blown it.
So while it's okay to get some money off a project, 'cause every dollar you save goes straight into your pocket, it does not mean that you at any time should push vendors so hard to be a turnoff. You need that relationship. Have you ever noticed sometimes you buy a mobile home park and you call up different people to come out and work on it, maybe you call the Roto-Rooter and they say, "I don't work at that mobile home park." "Nah, I don't want that work. I'm not coming out there." That's a disaster. That means that mom and pop basically took things to such an extreme, they were so hard to work with, or so slow in pain that they've blown that relationship. The key is to try and get some money off, to get things for as low as you humanly can, but don't push it to such a level that you lose that vendor going forward. This is Frank Rolfe, the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.