Episode 25: Four Leaf Properties – Inside The Modern Mobile Home Park
Episode 25: Four Leaf Properties – Inside The Modern Mobile Home Park
Mike: Hi. This is Mike Callaghan from Four Leaf Properties. We’re a manufactured housing, owner, and operator. We own about 8,000 spaces across the US, mainly in four states, Illinois, Indiana, Michigan and Texas.
Mousetrap: Today we travel to Chicago, Illinois to talk with Mike Callaghan and see how his company Four Leaf Properties is working to change the perceptiononmobile home parks.
Intro: Hey, look! It’s the Doublewide Dudes.
Mousetrap: Alright, alright. Welcome back to another episode of the Doublewide Dudes. It is December4th, episode #25 with Christmas right around the corner AP, just passing Thanksgiving.
AP: Yeah, yeah. We had a nice little break there, took about four days off as a team. We all got to spend time with our families, cooking, and I got to be a dad for four days in a row which was super cool.
Mousetrap: Yeah.
AP: How was your Thanksgiving, man?
Mousetrap: It was good. I went down toMcAllen. I’m going to say for the first 56 hours that I got home I didn’t leave my house once. Just chilling with the family, my mom’s cooking; my brother and his wife and two kids were in town as well. So it was fun, spending time with the family not doing anything; just sitting around having a good time.
AP: Yeah, especially after we’ve been really putting in some hours lately. We’ve got the new lot getting ready to open the beginning of January. All these families down by the coast like the Smiths, and the Fuentes family, trying to help rebuild after Harvey and it’s crazy to think that the year’s almost over.
Mousetrap: Yeah. It is crazy. I was talking to you today, mentioning back in February when we first started this, just how fast things came along and we’re finally here the end of the year.
AP: Yeah. 25 solid episodes and we’re over 2100 downloads and listeners which is, I have to be honest, way more than I ever thought we were ever going to have Mousetrap. So, big, big thank you to all the listeners out there and our supporters that have gone on this journey with us over this year.
Mousetrap: Yeah. I’m definitely excited about that; a lot more than I expected.
AP: Yeah and we’ve got a good one today, Lisa Lane. She’s the VP of Marketing over at Four Leaf Properties. She reached out to us because she’d actually heard one of our podcasts and saw one our videos – our blogs and whatnot – and we just got to talking about marketing, youknow that’s my passion, that’s what she does for Four Leaf, and somehow we got on the idea of talking to Mike, the owner of Four Leaf Properties about what they do. And, I think you’ll hear in this interview Mousetrap, there are a lot of similarities between Mike’s vision for Four Leaf and kind of changing the perception around mobile home parks and what we’ve been able to do here at Braustin Homes in introducing transparency to the mobile home buying process.
Mousetrap: Yeah. It just goes to show that transparency and honesty really plays a big part. I mean, with him doing his thing with Four Leaf on owning what the industry used to be and…really just in business or in life it just comes down to doing what you say you’re going to do.
AP: Exactly.
Mousetrap: So just applying that to any business is really going to resonate with the customers or potential people that are going to be interested in your product and it’s good to see that he’s doing that for the mobile home parks. Well, let’s jump into the episode. That way you guys can listen in on Mike’s firsthand experience on his business, Four Leaf Properties. Enjoy.
AP: When I first talked to Ms. Lane, Lisa Lane, we talked about maybe doing this podcast and we really like to tackle stereotypes and myths that our industry has, and a trailer park is definitely one of those. But we wanted to make sure we did the right podcast interview to tackle that myth because there are some rundown parks out there that probably shouldn’t be on the forefront of tackling the myth of trailer trash and trailer parks, you know.
Mike: You know that as well as I do and that’s the tough part. I think I’ve been in this for a dozen years. I would say for the last 15 years the industry has been massively changing, both in terms of the quality of the product as well the type of people who are coming in to operate the communities. There area lot of very sophisticated people who come from other sectors of the world who are stepping in here now and are really materially changing things but it’s one park at a time.
AP: Right.
Mike: And in the meantime, we’ve got 60 years of history that unfortunately was well earned. Running a lot of bad communities and probably preying on a lot of people who didn’t know any better and so we’ve got to turn that whole ship around. So, it’s taking some time but I’m pretty confident that you’ll see a very different manufactured housing community market ten years from now; very different ten years from now than we see today. And probably when it’s five years we’ll finally start to see the perception really altered because we’re getting bigger and bigger. We’re taking a bigger chunk of the pie every day.
AP: Right.
Mike: And the people who are there are really happy.
AP: As affordable housing becomes more and more scarce, just the plain need for this type of housing is going to be there and once people are exposed to it…Lisa and I were talking about how both of us were very hesitant to get into this industry, not because of what it is but what we thought it was.
Mike: By the way, I’m in the same boat. I still consider myself an outsider. I was in consulting before this. So this is about as far from the world I grew up in and that I knew and what I knew of it was probably similar to what you knew of it.
AP: Right.
Mike: So, I mean, look, I grew up in the Midwest. I probably drove past five or six trailer parks on my way up to the lake every summer, and they looked like trailer parks and they were called trailer parks. But what I think changed somewhere and I think it happened probably in the mid 2000’s really. 2005, 2006 was when the financing marketbottomed out and then the recession really started in manufactured housing before the big recession happened. It was already happening inMHbut the financing market dropped out and all of a sudden everybody’s losing occupancy and I think the manufacturers just looked at themselves in the mirror and said, “You know, we need to stop putting together these homes with bare wire and tape. We need to stop taking RV parts, sticking them in a house and claiming that they’re better quality.”
AP: Right.
Mike: And it started there, and those guys really got their act together around that time. All of them started reinvesting in the factories again. They all got rid of all the old RV stuff, let’s go out and source new product. Let’s source the best materials we possibly can and I think the quality ofhomeis kind of out in front of the market and then eventually we came through the recession, financing markets got better. The properties started to get back ontrackand the banks got healthy. People were able to get liquidity and so now here we are. Finally, all the pieces are together and as a by-product of that, I think we’re probably seeing the best years in manufactured housing in 30 or 40 years.
AP: Yeah. Like you said, the parks definitely earned their reputation back in the day, but the product too. Changing the name from mobile home to manufacture wasn’t going to fix the issues we had in our industry. It had to start with ourfactoriescarried over to our retailers and carried over to our Park Managers and definitely seeing things a lot different than they were when we started eight years ago. But you’ve been doing this for, you said 12 years now?
Mike: We got into it in about 2007. So, real quickly, the history was…again I sold the consulting company to a public company but then with my partner who I’d been in business with for many, many, years. Left the public company, said what are we going to do next and kind of laid out some criteria and started looking around. We were probably listing around for the better portion of a year before we met a gentleman from Indianapolis who owned some communities and it was the first time I’dever been exposed at all to the industry. I knew nothing about it and I thought listening to this guy who has been in it for 20 years, that’s fascinating. I was likeitskind of a real estate play; it’s kind of a financingplay. You have these houses, you sell them, you rent them, lease to own…
AP: Right.
Mike: I just thought it was awesome. So I would say, yeah, about 2006/7 is when we got a little involved and then we ended up spending about a year with that guy. We asked him if we could basically spend a year in his business, just running around, learning the business. The expectation was that we were going to buy his business, buy his properties. It turned out we got to the end of the year, we ended up not liking his properties but we really liked the core operating company and it took us about another a year and a half to finally buy him out, but in 2010 we formally bought him out and formed Four Leaf Properties and that was really the beginning. But the reality was we were in it a couple years before we even acquired a couple of properties. So you said you’ve been in it for eight years?
AP: Yes sir.
Mike: So tell me how you entered into this thing.
AP: Well I was 23 and really just needed a job. So, I was looking around. A buddy of mine who we had sold cell phones together in the mall a few years back had gotten hired on with Palm Harbor and told me he was liking it. I almost didn’t show up to the interview because I wasn’t sure I wanted to sell mobile homes. I knew nothing about it other than what Hollywood had shown us on TV and that’s not the most flattering part of what we do. But you get in, you walk through the modern product, it’s pretty cool. But what really solidified it for me to make this a career was the lives we get to impact. Not everybody can afford a $500,000 house. I think the average home in San Antonio is about $300,000 and teachers, firefighters, hard-working folks, just can’t afford that nowadays and it’s only getting worse.
Mike: Right.
AP: So that’s what sealed the deal for us. I’m sure you all see it in your line of work too when you’ve got a family that comes up hugging you because a year ago you let them celebrate Christmas in their own home. There’s just nothing better than that.
Mike: I agree. I think that the toughest part for all of us is the education piece. You hit the nail right on the head. The idea that we know we have a better product, we know it’s more economical, we know it’s safer, we know it’s higher quality than any other alternative on the street and yet convincing the world that it’s better, more economical, safer is the tough part. It is so intuitively obvious to all of us. But I get it when you’ve got stereotype in your head, you’ve got history in one way shape or form, sort of form your impression, it’s really hard to change that impression. You’ve not only got to convince somebody remotely, i.e., on the internet, digitally, which means that you need to be able togoout and you need to be able to reach out and touch you in a number of different ways; on the internet, get comfortable that you are really who youare and checkyour reviews out and everything else. Now you have to get them on site. Now you have to get them in the house. Now you have to get through the financing processes and convince them that you can get approved. This is going to be a great financial option for you and then you have to close them.
AP: Right.
Mike: So I find the same thing though, we take them through that process that and the e-mails that I get from people over and over again like, “Thank you so much. Everything you saidwasgoing to happen actually happened and we’re so delighted. We’re telling everybody about this.” And I’m like, “Do me a favor. Tell everybody to tell everybody.”
AP: Haha I like that.
Mike: Becausewe need you to go two or three deep.
AP: Right.Well, when we started Braustin Homes, we’ll be a year in January, we purposely chose to keepmobilehome in there, and we’ve gottena lot of flack from folks in the industry, but when people are looking for our product they call it a mobile home.
Mike: So true.
AP: We didn’t think we were going to help change the perception by trying to hide behind a name change so we figured we’d own it. Own the mistakes of the past but then flood the the Internet with content – podcasts, blogs, videos – on what the modern product is and just admit 20, 30 years ago, our industry did a horrible job. But just like cell phones aren’t the size of backpacks. These homes have gotten a lot better with technology too.
Mike: Right.
AP: And, I think when you educate folks like you were saying, this becomes a no-brainer.
Mike: I agree with you. And it’s funny that you do own the mobile home and I think it’s awesome by the way. And by the way, when I’m talking to people generically outside the industry, I use the term trailer parks all the time. Every once in a while somebody will be with who’s an industry guy and be like, “Hey!” I’m like, “Hey nothing.” If I tell them I’m in the manufactured housing business they think I’m in the manufacturing business.
AP: Right.
Mike: As soon as I say trailer park it’s like, “Oh yeah.” and now I can tell them about my story and our version of that and what we do and everybody’s like, “Wow. That’s awesome.” And then I’ve got friends who I’vetaken to my communities who have been through the homes. And they’re like, “Mike, you have to be kidding me. How much is this?”I’m like, “It’s 800 bucks” ‘Plus the lot?” “No. That includes the lot.” “Wait a minute. Hold on a second.” So, again, I think you’re right. I think you’re doing the right thing. It’s like own it. It is what it is. If that’s the vernacular that the average common person knows and understands, well then shame on us. The words are the words. We’re not going to be able to change the words and changing the words isn’t going to change the impression. Go change the impression and make the words match.
AP: Exactly. So, other than owning trailer park, what else is Four Leaf Properties doing to tackle the stereotype on your side of the industry?
Mike: Well, I sing this tune, and I hope we’re living it because obviously, the number one thing is actually doing what you say you’re going to do, but I tell everybody that we’re not in the housing business, we’re in the services business.
AP: Right.
Mike: I say that when people join us right from the front. Honestly, it’s not a housing business at all. The housing process is terrific, it’s great. But the reality is it’s all the other thing we do, it’s the events that happen in the community, from the holiday events from Bingo andwater aerobics and the amenities and the playground and the dog parks and you maintaining those things and the services from your homechecks that happen to onsite maintenanceteamsandbussing services and all those things. That’s why people are drawn ultimately, I think, to our type of living. Yes. The house will sell a lot but if somebody’s not comfortable that this is going to be way better than living in an apartment on all these other levels, I think you get that stereotype still playsinAlberto and you’re still fighting the old way.
AP: Right.
Mike: So, you have to turn that whole concept on its head. Yeah, I can tell you the house is better and the economics are better. But look at what the quality of living is like. So for us, that’s what we’re out beating the drum on all the time now. It’s a servicesbusiness.Mr. Customer when you come to us you’re going to get way more than just a product. Yeah, we kind of have to lead with the product because that’s what people are initially searching for. But I think what closes them is getting on site, looking at the community, seeing theamenities, seeing all those other things.
AP: Right. I can tell you on our end, thehouse and the pictures do sell themselves, but the very next question is “Where am I going to put it?”
Mike: Right.
AP: We may bring up a park to a local resident in San Antonio and it’s hard no right out the gate, but then you take them into a community where there’s the pool, nice roads, nice landscaping, it’s the complete opposite of what they had painted in the picture in their minds. So I think that goes a long way. It is a service business because there are a lot of people that do what y’all do, just like there are a lot of people that sell the homes we sell. There’s nothing special about the home. You can buy it from 30 other people up the road. It’s how the process is and the care andattention to detail. And you hit the nail on the head, doing what you said you were going to do. That is so rare in our industry and business in general and it really shouldn’t be. It’s what we teach our kids.
Mike: Yeah. That’s right. And I think particularly in a market like this where you know you’ve got…a market thatmay not be as well educated, and I think there’s a tendency to say well because they don’t know any better, I could pull one over on them. But let’s be honest,that’s what the industry didforever.
AP: Right.
Mike: So when I talked earlier about having a well-earned reputation, this industry earned its reputation for running roughshot over people who didn’t know any better. Whether that was because it was a bait and switch or they were selling them a substandard product or whatever the case may be. So yeah, I think the industry as a whole, even that simple thing of we’re going to change from a mobile home to a manufactured home. Okay, fine. You just changed the words and maybe you changed the product sometoo, but if you want to make it really go away, that whole story, the whole thing where it goes and all the things you’re talking about, the amenities and the infrastructure, it all has to bethere. You have to deliver it. And you have to deliver ituniversally.
AP: Right. So how do y’all go about delivering that Mike? When y’all purchaseacommunity like say in Wilmer, in talking to Lisa it sounds like y’all put a lot of investment into making sure that’s what you envision for a community. What’s the process and what can customers expect when they’re looking at a Four Leaf Property as a potential home site?
Mike: Great question. I think first is when you go into underwriting acommunity; we’re not a transactional buyer. We’re buying for the long haul. We own 24 communities; we haven’t sold one yet. So my view is always five, ten, 15 years out, which if you think about it that way, you think about the infrastructure, you think about the amenities in that context. If I’ve got something that looks like it’s only going to last for two more years then I need to fix it and I might as well fix it now.
AP: Right.
Mike: If there’s anamenity in the community, a playground…I’m looking around and I can see kids running all over the place, there’s nowhere for them to go, I’m going to have a tough time telling the story about lifestyle unless I have a place for the kids to go. I better get the playground going. I can drive around the community and see ten dogs and say, “Where are they all going?” When I saygoingI mean “going”.
AP: Right, right.
Mike: You need a dog park for that, right. So that they can go do their business and kind of isolate that. So those are the things that we do universally everywhere. We invest a lot of money upfront and one of the advantages we have is we’re a private company so I don’t have to honor the wishes or the intentions of an investor group or some large conglomerate. I’m not a public company. So we go in with the expectation that whatever it’s going to take to invest we’re going to invest; we’re going to invest it early. And we’d much rather do it that way because the old sort of build it and they will come does apply if you’ve done your homework.
AP: Right.
Mike: So find a decent market, go in, invest the money, make the community significantly better than what it was, people will recognize it and then your sales process kind of takes care of itself.
Mousetrap: You know, listening to him talk about what he does over at Four Leaf Properties, there are a lot of similarities between them and what we do over atBraustinMobile Homes.
AP: Yeah. A lot of, like you said, just doing what you say you’re going to do and leading with transparency, calling it what it is, a mobile home, a trailer park and not trying to hide behind the word, but really change the perception behind what other people may think it is.
Mousetrap: And, just from previous episodes and what we’ve come across on what cities think about mobile home parks,I can imagine there’s been a lot of backlash for him.
AP: Yeah, definitely something they encountered in the beginning. But as you’ll hear him talk about here in a minute, once they were done, they changed the perception of the cities themselves.
Mike: What’s interesting to me is in the locations where we have basically developed almost from scratch. Like we’ll find a community that’s really rundown and it’s reallyunderutilized andunder occupiedand we go in and we replace all the infrastructure, all the roads and we put in a newoffice. We bring in all the amenities and all the landscaping and everything and then all these new homes come in. We have at least half a dozen municipalities that after we’d done that, we had a conversation with them and they’re asking us if there’s any other vacant land anywhere in the municipality we might like to take a look at to build another community out. So you go from the view of, “Well, we know what you guys bought before.” and of course when you come in and you buy thatthenthey look at you with a stern eye and we start talking about all these plans, very grandiose plans, and they’re like, “Yeah, yeah, yeah. We’ve heard this for forever and oh, by the way, you’re just another trailer park owner” Three years later, “Is there another piece of land we can help you guys acquire where you can do this again?” So I think the answer is where we’ve gone in, we are successful doing what we do. We absolutely can change the impression but I would be lying to you if I walked in the door and said, “Oh every time we show up they’re delighted to see that another trailer park has exchanged hands and here comes anothertrailer park.”
AP: Well that’s awesome. It sounds like yourreputation for doing what you said you were going to do have really paid off the last few years for you. It’s not just consumers that need to know we’re serious about making this industry better; it’s also the local municipalities because they saw the last 20 years too and I can’t blame them for not wanting a rundown trailer park in their city.
Mike: I can’t either. I mean if all it was, was one big long telephone call to my fire and policemen constantly pulling the attention on my municipal services I would feel exactly the same way. But it starts with some of the basic things like doing a background check on every single resident in your community. We do a background check on every single one. We check every quarter to make sure that those are all still in place. I think that’s probably a safer environment than the one that I’m in and I’m in the Western suburbs of Chicago. I think you have to start with some of that basic stuff like that and then as you sort of build up, now you start to create a culture within the community where people feel safe, they start to feelvestednow they want to take part in more activities. Now they’re watching over their shoulders, you get the community watch programs together. You can follow a very definitive plan. One that’s been very successful universally but you have to do those things and you have to do them right from the beginning because if you start cutting corners, very quickly these things can also slide back to where they were before.
AP: Right.
Mike: So we feel pretty strongly about being methodical in that approach.
AP: Where do you see Four Leaf Properties in the short and long term, what are your goals for the company?
Mike: Well, not to be too lofty, but I’ve said this before, I really think we can change the business. And I know we’re a relatively small company,maybe, in the whole scheme of things right now but we’re not necessarily a small company in the manufactured housing world. We’re in the top 25 and I think if we can get into that top 15, which that’s a three-year plan for us, all the things that you and I have talked about in terms of changing minds, changing hearts, doing the right thingtoright reasons, we can alter the industry in a relatively short period of time because I think the product is so good. There is such a need and we’re growing at such an advanced rate and we’re sort of grabbing market share, if you will, every day. So where do I see us? I hopefully see us as a really good company, a really sizable player in the industry that is known for and seen as one of the true thought leaders and beyond that I know that if you do all those things well and you’re known that way and your residents see you that way, then the financial stuff all takes care of itself.
AP: Absolutely. And I have seen the pictures online to vouch for our audience that y’all really do a good job with these communities that you purchase and renovate. If some of our listeners are wanting to learn more about your company and possible communities in their area, how can they find out about you guys Mike?
Mike: Sure. The best way to find out about us is to go online to our website http://fourleafprop.com/ On our website, you can look at all of our communities. You can actually peruse all the homes that we have available. We’rerealtransparent on the Internet. You can actually see the pricing for those homes. We actually have a finance company that we work with as well; you can do an application online. You can almost walk through our entire process, and get to the point of being approved for a home, know what that home is before you walk on site to view it. But as we’ve been talking about, I think the most important part of the process at the end of the day is getting on site of that community and meeting those managers and the folks who you are going to interact with every day and become your new neighbors.
AP: Well, in talking with Lisa for the 20 minutes or so, you could just tell even though she’s been doing it for a decade at the same location, you can hear in her voice that she really likes what she does.
Mike: I believe that is true. She’s awesome at what she does, by the way. And she took that community from 20 or 30% occupancy up to where it is today. So she has literally sold a home to probably 85 or 95% of the people in that community at this point.
AP: Right.
Mike: And now, of course, she’s adding another 150 additional spaces in that community soit’s a huge success story for us. But she’s a huge advocate, I agree. And it’s somebody who I think if I walked in the door and was sort of uncertain of myself, I’m pretty doggone sure I’m walking out by the end of the day signing on to thatdotted line.
AP: Yes sir. Well, we definitely appreciate your time and for y’all shedding some light on a part of this industry that most folks just don’t know as well asmaybe they should.
Mike: Thanks, Alberto. I really appreciate the time. I appreciate you guys doing everything that you’re doing on behalf of the industry as well and best of luck to you as well.
AP: Thanks, Mike.
Mousetrap: All right. Well, there you have it. That was Mike Callaghan over at Four Leaf Properties. I really think he’s doing some good things for the mobile home industry and for the community parks that are popping up all over the US. Hopefully, we can see one here soon in San Antonio.
AP: Yeah. They got a good thing going there and really putting in the time, the effort and the care that we should when we’re talking about people’s housing. Big thanks to Mike Callaghan for taking his time to visit with me. Big thanks to Lisa Lane for putting this all together and thank you to Lisa Augusta. We didn’t get to hear her on this interview but I got to visit with her for about 20 minutes and it really helped to give me some insight into what it means to run a Four Leaf Property community.
Mousetrap: All right. Well, that does it for this episode guys. Thanks for tuning in and as always we’ll talk to you guys in the next one.