The industry holds two major events each year: Las Vegas and Chicago. Both cost a lot of money to attend, in both travel costs and a roughly $500 admission ticket. So if you didn’t devote the time or money to attend this year, here’s a full rundown of what you missed.
Comments from the Federal Reserve
Charles Evans, President of the Federal Reserve Bank of Chicago, gave a speech on the future of interest rates, a topic which is of great interest to any owner of income properties. The plan, according to Evans, mirrors that which we have been saying for two years now. They are going to try to get interest rates up around 2 points. They envision basically a 1 point increase in 2016 and another 1 point increase in 2017. The Federal Funds rate has been at 0% since 2008, and their goal is to be at 2% by 2018. I would add that, historically, this would make the decade of 2008 to 2018 the lowest interest rate period in American history. The Federal Reserve is also targeting an inflation rate of 2% annually. However, as has been proved repeatedly in recent years, nobody has any actual idea of what’s going to happen except that the economy is going to continue to go down the drain. In the Q&A period, Evans talked about minimum wage, and said that “there’s a good bit of uncertainty that if you mandate higher costs, businesses may elect to reduce their staff.” That’s an understatement. At a $15 minimum wage, how many of those high schoolers hanging around the McDonald’s kitchen will suddenly evaporate? On the question of “how can you raise interest rates when the economy is pathetically weak?”, Evans responded that “we are trying to recalibrate our systems for the demand of a new economy” which means “I have absolutely no idea how it can possibly work but I’m buying time until I can retire and shut my cell phone off.”
HomeFirst presentation on marketing
The speakers were two individuals who handle the marketing for a chain of eight mobile home parks. They tracked the results of their advertising in 2015, and here were the traffic stats they claimed for each marketing push:
Signage: 1,638 leads
MH Village: 395
Craigslist: 1,258
Rent.com: 1,400
Referrals from existing tenants: 688
Their own website: 46,312
Other ideas they proposed included: 1) setting up furnished model homes to demonstrate how nice things can look, as opposed to just bare rooms 2) having the manager give a tour of the entire property, and not just the home for sale, to sell the customer on the overall “community” and 3) have great looking and consistent marketing that is compelling. These are all concepts that we have fully embraced for two decades, and fully support.
Millennial Marketing
There are the boomers (1943-1960), the Gen X (1961-1981) and then the Millennials (1982 – 2004). The Millennials have their own characteristics, such as preferring happiness to money and security to excitement. They are the largest living generation with 80 million members. The speaker gave a great and thorough presentation, and I now am aware that 24 years olds are the largest single age category in the U.S. But I was stumped on how this actually related to the mobile home park business. I don’t know about you, but my millennial customers are typically plumber’s helpers and not software designers.
Dr. Charles Becker from Duke University
This was, by far, the most important speech of the event. Here is the power-point to the speech. The points are pretty self-explanatory
Click Here To View The Slides
As I’ve been writing about for a while now, the industry should aspire to be as strong as the apartment industry. To do so, we have to provide empirical data and not just myths and legends. To have an esteemed University such as Duke focusing on mobile home parks is indeed a coup.
Dinner at the Mid America Club, 80th Floor of Aon Centers”
One of the highlights of the Chicago event is always the dinner. Not because you learn a lot. But because it’s exciting to see what they’ve planned. Two years ago, it was on a chartered boat. Last year, the top of the John Hancock building. This year it was even higher – the top of the Aon Center. The food was fantastic, as you would expect, and the conversation was always interesting, a mixture of new headlines and insider gossip. You also run into all those people you talk to throughout the year but only see in Chicago or Vegas.
Using Growth Capital to Expand Your Portfolio by Bennett Kim
I had never heard of Bennett Kim or Carefree Communities, but they were apparently part of a billion dollar acquisition by a private equity group recently. They follow the same basic business model as ELS, namely expensive communities and RV parks. But the presentation was a unique topic that I had not seen before at an event, namely the statistical data on private equity group investment in the industry, as well as other sources.
Click Here To View The Speech PowerPoint. Pretty interesting stuff in my opinion.
Transforming Ten Techniques from Apartments to Communities
This speech I liked a lot. I am a huge believer that mobile home parks and apartments have a ton in common, and rather than re-invent the wheel, we should steal all of their best ideas and use it against them. This speech outlined what some of those top ideas are that we should all steal. The speaker was from ApartmentEXperts.com, and really knew her stuff. Here are the important points:
- 48% of all leads receive no response. The only solution is endless mystery shopping. Most every manager does a terrible job of taking and returning calls. Don’t let them do that to you.
- Always ask for the appointment. One of the great failings of most managers is that they don’t understand that the successful phone call ends with an appointment to show the unit. We’ve been saying for a while that our metrics are three calls = one showing and three showings = one sale. You can’t translate a call into a sale. It’s all about appointments. Only 42% of park managers ask for an appointment – and that’s pathetic.
- Stay open later than your competitors. You can do this by being open on weekends and at nights – the times in which most customers are not at work. The 9 to 5 concept does not work well when showing homes.
- Emails are most effective between 3 pm and 5 pm. That’s when most customers are in the funky part of their day where they’ve lost interest in their job and are surfing the web, waiting it out until they can go home. That’s when you want to do your email blasting.
- Show the customer what they want to see, using modern technology. Check this out. Here are the before and after photos of a bedroom and living room using a company that photoshops furniture into it. These are not “real” after photos, but merely photo shopped. Look at the quality here. The price is affordable. Apartments have been doing this for a while now, but I’ve never seen a park owner do it.
- Start marketing the park, too. Show the entry and amenities (if any) as well as the photos of the home in your advertisements. Apartments have been doing this for decades. Very few park owners do.
- Offer specials, even if they are nearly meaningless. Apartments do this all the time. Have a “rent today and receive a can of tuna” promotion and people still feel special.
- You only have seven seconds to create a good first impression. Make sure your manager answers the phone professionally and knows their stuff. Make sure that the park entry is attractive and the park common areas are clean well presented.
- Ask for the sale. Again, a failing of most managers. They are just too shy to ask for the sale. So you need to give them sales training as well as “how to manage a park” training.
Conclusion
My hat is off to Jenny Hodge and the folks at MHI for putting together a roster of good speakers and interesting topics. As always, it’s hard to imagine how to outdo their dinner venue next year. Will I be back next year? Of course. If nothing else, the contacts you can make at this events are sometimes priceless.
