1. The magazine
for and about
Mobile Home
Park Investing!
In this power packed issue, the Marcus & Millichap team tell-all about:
 The septic issues that are lurking silently beneath the surface
 Doing the math for the time value of money
 How to determine the best from others before you even hire them
 How a balanced approach led an MHP investor to success
 What’s hot in mobile home park ownership TODAY! AND MORE...
Vol. 2, No. 3 (Summer 2015)
THE MOBILE HOME PARK OWNERS & INVESTORS MAGAZINE
MQ SPECIAL REPORT: LCSS, CLASS V WELLS, AND ADVICE FROM THE MHP SEPTIC EXPERTS!
Getting The Best Part II
Septic Failure Red Flags
The Cash-On-Cash Return
Five Crucial Insurance Facts
The EPA Facts for MHP Septic
Q&A: An MHP Mortgage Broker
MQ INVESTOR PROFILE:
Rick Melero of HIS Capital Group
Reveals His 40-40-20 Strategy
Courtesy of Team Mobile
525 North Tryon Street
Suite 1600
Charlotte, NC 28202

2. You may have noticed a few changes with
MQ...you spoke and we listened! Great suggestions,
readers! We also appreciate all the 1-year anniver-
sary kudos we received and are glad to hear the con-
tent has been exactly what we aimed for: timely,
educational, entertaining, and visually stimulating in
one package. Our first year we did a year-long spe-
cial report on the 1031 Exchange and in this, our
second year, we have decided to bring you four spe-
cial reports on topics a majority of owners/investors
are asking about. In our summer issue we are focus-
ing on MHP septic since no one wants a septic prob-
lem in the heat of summer! We’ve consulted with
multiple experts in MHP septic to bring you the best
and most current information as a springboard to
your own due diligence. Next issue we will focus on
sub-metering and getting those expenses down even
further!
For the first time in MQ history a reader
has shared an actual authentic document with us and
gave us permission to discuss it for the benefit and
education of all readers. Be sure to check out Curt’s
“Ask Curt” column and the snapshot on page 5 to
get the scoop! Our guest investor for the investor
profile has fantastic advice and real life proof of
how reevaluating portfolio strategy can not only
create financial freedom but a financial fortress. We
will also delve into part II of getting the best from
others as a primer of more yet to come!
Team Mobile thanks you for being our
readers! We can’t wait to bring you bigger and bet-
ter and more dynamic content with every single is-
sue we produce!
- Blythe H. Chambers, M.S.
Editor, Mobile Quarterly.
The Marcus & Millichap Team:
Curt Baker
A pioneer during the nationwide eco-
nomic and real estate crash of 2008 at a time
when lenders were unprepared to handle rec-
ord-setting numbers of “short-sales”, Stephanie
McAnuff made a name for herself in the area of
residential distressed debt workouts and nego-
tiation as a Certified Short Sale Specialist. Her
unique experience and expertise led her to be-
coming an Associate with Marcus & Millichap
and partnering with Curt Baker to form Team
Mobile with an emphasis on mobile and
manufactured housing communities.
A New York native with Carolina roots,
Stephanie relocated to North Carolina in 2000.
While Stephanie’s primary focus is the South-
east, her territory spans nationwide, and her ex-
pertise is understanding the unique requirements of the sale and marketing of
manufactured home communities. With her alignment with many professionals
in the industry she is considered a “one-stop shop” when it comes to selecting
contractors, used mobile homes, movers, and park management. She is a
member of Toastmasters International, The North Carolina Manufactured
Housing Association, and the North Carolina Board of Realtors.
In her free time, Stephanie enjoys athletics, cooking and reading, but
her heart is committed to giving back to the community and volunteering.
Stephanie McAnuff can be reached at :
Stephanie.McAnuff@marcusmillichap.com
(704) 831-4600 ext. 4628
With over 30 years of sales experience,
including 9 years as a mobile home park broker
and investor, Curt’s extensive knowledge and
expertise is at the helm of Team Mobile for Mar-
cus & Millichap’s North Carolina office. Curt
also owns a portfolio of mobile home rentals in
South Carolina and, therefore, understands first-
hand how parks operate, best practices on man-
agement, and how to successfully work with
park residents. As an industry veteran, Curt also
enjoys many longstanding relationships with
lenders in the southern region.
Curt is originally from Albuquerque, New
Mexico but is a graduate of Georgia State Uni-
versity with a B.A. in Business and a minor in
Language with fluency in Spanish. After graduat-
ing he lived and worked in Mexico as an international sales consultant. Curt is
also a member of Toastmasters International, The North Carolina Manufac-
tured Housing Association, and The North Carolina Board of Realtors.
In his free time, Curt is also an entrepreneur who owns a local surf-
shop and catching some waves at the beach is where you can find him when
he’s not making mobile home park deals for Marcus & Millichap clients.
Curt Baker can be reached at:
Curtis.Baker@marcusmillichap.com
(704) 831-4600 ext. 4631
Stephanie McAnuff
Editor’s Desk

3. Marcus & Millichap presents our listings for...
In This Issue:
Interested in making your property one of MQ’s Featured Properties? Call Curt or Stephanie for more information!
Dear Stephanie...……………………………...
Taming The Septic Monster…...............
EPA Septic Fact Sheet...........................
Septic & Insurance .....…………………....
Ask Curt………………………………...……...
Doing the Math: IRR……………………….
MQ Investor Profile………………………….
Psychology: Getting The Best II……….
Representation: Mortgage Broker…….
OUR COVER PHOTO
“Wouldn’t It Be Nice?” Our Editor’s own artistic and
graphic rendering of a photo of a vintage Airstream fea-
tured at www.getcampie.com.
Dear Stephanie,
I read a few mobile home park investing and education forums regularly to stay
connected with other investors and talk-shop. I have noticed there seems to be this
almost black-and-white divide on which is the better route: parks with park-owned
homes or parks that are purely land-lease. I have both kinds of parks and all are
profitable but certainly come with their different issues, the biggest one for me
being operating cost. Is there a rule of thumb on operating costs for a park with
park owned homes vs a lot rental only park?
` - Walking The Line in Walla Walla
Dear Walking The Line,
As MHP brokers, generally we see that expenses can vary considerably depending on
how the park is managed and run and the amenities offered to the residents. Expense
ratios for parks with park-owned homes range from 40-50% of effective gross reve-
nue to 60% of effective gross revenue. Parks that are 100% lot-rental, called land-
lease properties, are more along the lines of 30-35% of effective gross revenue. Per-
centages that are much higher than this tend to attract closer scrutiny by investors and
lenders. This can cause longer sales cycles and, sometimes, pressure on owners to
reduce the sale price when the park is on the open market. The bottom line is that
having a thorough, professional analysis done on your park is one of the smartest
things you can do to know where you stand, how your property fares next to the com-
petition, and areas where the option of maximizing profitability is available.
Send your questions for Stephanie to:
Stephanie.McAnuff@marcusmillichap.com
Dear Stephanie...….p. 2
….p. 3
….p. 4
….p. 4
….p. 5
….p. 5
….p. 6
….p. 6
….p. 7
Located in Knoxville, Tennessee, West Knox Mobile Home Park, built in
1972, is a clean 59 space community nestled among mature trees in the
foothills of the Great Smoky Mountains and comprised of all land-lease
sites with 21 of the homes owned by a single third party and leased to
tenants. Residents enjoy sub-metered city water/sewer, on-site man-
agement, and new signage. There are three vacant park-owned mobile
homes recently turned back over to ownership which are now for sale.
The current NOI $82,547 with a gross potential rent of $148,680. Cur-
rent cap rate is 10.01%.
Knoxville, Tennessee was the first capital of Tennessee and is seat
of Knox County. It is one of the largest cities in the Appalachian region
and is home to the headquarters of the Tennessee Valley Authority and
corporate headquarters of several national and regional companies.
Current total ROI is 19.5%. The property is being offered for $825,000.
Please contact STEPHANIE MCANUFF (NC Lic. 270402; GA Lic. 358467)
Stephanie.McAnuff@marcusmillichap.com or (704) 831-4600 ext. 4628
The North Georgia R.V. Park, built in 1971 nestled among 21.83 acres of
majestic Georgia pines in Commerce, is a popular and reputable R.V. and
camping park and the only in Georgia with a salt water swimming pool. The
61 R.V. spaces can be rented daily, weekly or monthly, and the park also has
one log cabin and 5 tent sites for rent comprising a scheduled monthly income
of $17,008. An additional 14 acres of beautiful raw land must be sold with the
park for $125,000. The park’s office/recreation building is pictured above.
The current owner has also recently increased marketing efforts with the de-
velopment of a new website located at www.georgiarvpark.com. The current
NOI is $68,498 with a current gross potential rent of $204,096.
Commerce, Georgia, Jackson County, is an outdoor recreation destina-
tion city located 90 miles northeast of Atlanta, and home of the highly popular
brand-name outlet shopping mall, Tanger Outlets.
Current total ROI is 9.59%. The property is being offered for $1,100,000.
Please contact CURT BAKER (NC Lic. No. 275726)
Curtis.Baker@marcusmillichap.com or (704) 831-4600 ext. 4631
West Knox Mobile Home Park North Georgia R.V. Park

4. hen it comes to water and sewer there are two kinds of mobile home parks: those on city water and city
sewer and those with LCSS or Class V Wells, as defined by the Environmental Protection Agency (EPA). If yours is
the latter your septic, if not well maintained and monitored, can create a monster of epic proportions that can drain
your income and even kill your investment plus result in criminal charges and fines at the extreme. Septic systems
are designed to transport all of your wastewater from the mobile homes on your property into a tank that pumps the
liquid out the other end into a drainfield after going through a filtration process. Let’s review this process and what
happens with the process fails:
The solids will fall to the bottom of the tank and, under the right conditions, will break down into a sludge and
eventually become the consistency of water and flow out into the drain field. However, the fats, oil and grease your
residents feed the septic monster, not to mention cigarette butts and other frequently-flushed septic killers, will float
at the top causing clogging and preventing proper function of the system. These components do not break down at
all or at best, very slowly; therefore, it is critical that you have your tank pumped on a regular schedule, and enforce
policies with residents about what can and can not be flushed or poured. The gray-water in between the grease and
other gunk at the top and the waste solids at the bottom flows out into the septic drainfield, but the longer the sys-
tem goes without being pumped the narrower the gap for the water and the closer the grease and waste solids get
to each other, thus spawning the birth of the septic monster which will grow silently beneath the surface and eventu-
ally start to migrate into the septic drainfield, drain lines will become clogged, and the system starts to fail. At the
point of failure, the “septage” overflows in the tank, causing the pump to seize. When this happens toxic wastewater
backs up and needs a place to go, but the only way out now is back into the home from whence it came.
When your septic system fails, the damage can be absolutely devastating. Unfortunately, once you begin to
see the signs of a failing septic system it is already dangerously close to complete failure and swift action to fix the
problem is critical. Not only is it costly to replace an LCSS septic system that has been damaged from owner ne-
glect, tenant abuse, and over-use, but it can also cause extensive damage to the mobile homes you or your resi-
dents own and much worse: if a septic system overflows, the septage that backs up into the mobile homes could be
considered a health risk by the Environmental Protection Agency, which has recently tightened regulations of LCSS
and Class V Wells, and you, as ownership, are opening yourself up to public safety violations and lawsuits from the
city, county, state Attorney General’s office, EPA, and/or tenants. If your septic troubles result in a state health code
violation then total condemnation of your park, if not addressed promptly, is a hard reality and once a violation no-
tice has been received you are given very little time to act! Ignoring the realities of the septic monster and not pump-
ing your septic on or ahead of schedule to save a few dollars now is literally flushing your profits down the drain.
Let’s say you haven’t pumped in a while or aren’t sure when the prior owner last pumped; what should you be
on the lookout for? Listed below are the most common red-flags. Remember, some are noticeable, some hidden
beneath the surface, and some you won’t know about unless a resident complains or you inspect inside homes:
 Toilets will start to make gurgling noises when you flush
 Sinks, showers and bathtubs will drain slowly
 You may smell a sewer odor in or around drains
Continued on Page 7...
MQ’s pulp rendering of a still frame from the movie “Septic Man.”
By: Betty Houston of
Lentz Septic Tank Service

5. An MQ reader’s question
inspired this quarter’s
special report when they
shared this real violation
notice with Curt. See our
Ask Curt column for
more information!
FIVE SEPTIC FACTS
ABOUT RISK AND INSURANCE
YOU AREN’T THINKING ABOUT...YET
By: Kurt Kelly, JD
President of Mobile Insurance
kurt@mobileagency.com
When contemplating the purchase of a mobile home park that has a septic
system(s), it’s vitally important to understand how septic systems affect
your insurance premiums and liability, as well as the probability of having
to replace the system. Here are five key, read critical, things you should
know while you are evaluating and doing your due diligence on a park with
septic systems:
1) Your park insurance usually does not cover septic system damage /
problems. As septic systems are almost completely underground,
they aren’t susceptible to perils covered by most property insurance
policies such as wind, hail, and fire. Flooding can damage septic
systems but you generally can’t purchase flood coverage on a septic
system;
2) Simple septic system failure is NOT covered by insurance;
3) Pollution-caused losses aren’t covered by General Liability insurance
policies. Most states legally define sewage as “pollution” and thus
contamination claims aren’t covered. However, water/sewage back
up damage may be covered (ex. Sewage backs up into 30 tenant
owned homes resulting in 30 floors having to be replaced at $7,000
each);
4) You can usually purchase “Pollution Insurance”, but it’s generally so
expensive ($5,000 to $10,000 minimum per year) that it’s not a feasi-
ble option for a park owner. Uninsured pollution losses aren’t un-
heard of, but they are rare; and
5) Park specialty insurance companies that give you the best insurance
value usually charge a little more for a park with a septic system vs
one without one.
History suggests that the biggest risk of owning a park with septic systems
is the failure of the systems themselves. That potential problem is both
expensive and largely uninsurable. Therefore, careful inspection of the
system plus sales price considerations prior to purchase and a reserve of
capital for potential future problems after the acquisition are the best
methods of managing this risk. Go forth with knowledge...invest wisely
and prosper!
The Environmental Protection Agency has cracked down with tighter
regulations on MHP septic systems, particularly LCSS and Class V
Wells. EPA is regulated by the Safe Drinking Water Act (SDWA) to establish
minimum federal requirements for Underground Injection Control (UIC) Pro-
grams to protect underground sources of drinking water from contamination
caused by underground injection. Protection includes the oversight of construc-
tion, operation, and closure of injection wells. This EPA fact sheet is a quick
intro to keeping in the clear!
WHEN IS A SEPTIC SYSTEM REGULATED
AS A CLASS V WELL?
A septic system is required to meet UIC Program requirements and is consid-
ered a Class V Well if either of the following are met:
 The septic system, regardless of size, receives any amount of industrial or
commercial wastewater; or
 The septic system receives solely sanitary waste from multiple family resi-
dences or a non-residential establishment and has the capacity to serve
20 or more persons per day (known as large-capacity septic systems—
LCSS)
WHAT ARE THE MINIMUM FEDERAL REQUIREMENTS
FOR CLASS V WELLS?
Owners or operators of LCSS must meet both state and federal requirements.
The minimum federal requirements for Class V Wells are:
1. Obey the non-endangerment performance standard prohibiting injection
that allows the movement of fluids containing any contaminant into under-
ground sources of drinking water, if the presence of that contaminant may
cause a violation of any primary drinking water regulation or adversely
affect public health; and
2. Provide inventory information (facility name and location, legal contact
name and address, ownership info, nature and type of injection wells, op-
erating status) to the state or regional EPA UIC Program.
Stay in the know! Go to www.epa.gov for more information

6. Follow along each quarter as we take you step by step
through the 101’s of a critical math equation in your
property financial analysis….
nternal Rate of Return (IRR) is the flip-side of
Net Present Value (NPV), our equation last issue,
and uses the same math. With IRR your objective is to
figure out what interest rate attached to your invested
capital over time (a dollar yesterday is worth more than
a dollar today because of an interest rate) will bring the
NPV to zero. When an investor says “This park could
earn 12.4%!” they are referring to IRR. Both NPV
and IRR are used to analyze the potential of an invest-
ment, and surveys have shown that despite a strong
academic preference for NPV, investment executives
prefer IRR over NPV and find it intuitively more appeal-
ing to evaluate investments in terms of percentage
rates of return than dollars of NPV. However, you will
need the NPV to figure out the IRR. Generally speak-
ing, the higher a project’s IRR (the higher the interest
rate on invested capital to get NPV to zero), the more
desirable it is to undertake. While it is a viable way to
analyze potential it is important to note that IRR is a
true indication of a project’s annual return of invest-
ment only when the project generates no interim cash
flows - or when those interim investments can be in-
vested at the actual IRR. In short, IRR is the “cash on
cash” return, or the yield of the investment and is
essentially compound interest in reverse, AKA dis-
counting. IRR will also be higher for investments that
are partially financed with debt. Let’s break it down...
Hi Curt,
I have an on-site manager at one of my
MHPs where there have been a lot of necessary
repairs. When I acquired the park I knew it needed
work and the improvements have been very good
for both the residents and for the profits. Then in
May my manager received a surprise fax that the
septic system is in violation of EPA regulations
and there is sewage on the ground, but he not only
did not tell me about the septic issue but failed to
tell me about the violation notice. I’m facing hav-
ing my permit pulled if I don’t get it repaired within
a tight timeframe. The residents are up in arms
and bypassing the manager to call me directly. I
was about to list the property but no one wants to
acquire a park with bad septic! What do you make
of this and how can I get it in listing shape fast?
- It Hit The Fan in N.C.
Hi It Hit The Fan,
This is a serious issue with multiple moving parts that
must be addressed immediately, with the most serious
being a public safety violation which typically receive
the most severe penalties in a court of law particularly
if negligence is determined as the cause. The first
thing you should do, besides call your attorney, is
contact the individual agent who wrote up the violation
to demonstrate that you are more than willing to get
this remedied immediately, especially since you did
not get the notice as soon as it came in. The second
thing you should do is call a septic expert and have
them come out to the property immediately and meet
them there instead of relying on the manager any
further for such a serious matter. As for your man-
ager’s negligence, be sure to follow along with
Blythe’s investing psychology series about “Getting
The Best” which will go into hiring next quarter. While
the septic expert is on the way, assure your residents
that the situation is being fixed as quickly as humanly
possible, and live up to that promise. At this point you
will be “putting out fires” so to speak, and then fixing
the damage. Unfortunately, as Kurt Kelly points out in
his insurance article, septic pollution is not covered by
insurance so this is going to be expensive depending
on the extent of the damage and where on the spec-
trum between pumping the tanks and replacing the
entire system the issue falls. But, refusal to comply
with what is mandated by your local agency and the
court could result in what recently happened to a Mas-
sachusetts MHP owner who was fined a civil penalty
of $250,000 and forced to fund nearly $3M for the cost
of a new LCSS. Considering a majority of MHP’s are
listed between $900K and $2.5M not addressing this
issue now could cost you more than your park is
worth! The fastest way to get it into listing shape is
simply not delaying and doing whatever is necessary
to remedy the problem before the court gets involved.
Then, ensure your next manager has the septic sys-
tem on regularly scheduled pumping/maintenance and
I suggest visiting the property more often. Things go
better when the boss is in town.
Get the difference for yourself!
Call or e-mail Curt today at:
(704) 831-4600 x4631
Curt.Baker@marcusmillichap.com
Ask Curt...
The Quoted Corner:
“You can’t climb
the ladder of success with
Your hands in your pockets.”
- Arnold Schwarzenegger
Defined: Internal Rate of Return is the return rate that can
be earned on the invested capital. Ask: what interest rate on
my invested capital will bring the NPV (the time value of my
money) exactly to zero? That percentage is the IRR.
Key 1: When you think IRR, think judging an investment’s
potential ROI when:
 Analyzing one property to see if it potentially meets your
pre-determined return threshold/goal
 Analyzing multiple potential acquisitions to see which has
the highest IRR and, theoretically, the best bet
Key 2: When calculating IRR, first you need the following
basic ingredients:
 First, the NPV must be calculated or known
 Second, determine both your money out (investment) and
the money in (return) over the identified period of time
you wish to analyze
 Third, “guess & check” which interest rate will calculate
the NPV to zero and plug in one by one til you get it
Key 3: The IRR should be higher than the cost of funds.
Ex: if it costs you 8% to borrow the funds, then:
 IRR < cost: Not profitable (not wealth building)
 IRR = cost: Breaking even (why invest?)
 IRR > cost: Greater potential ROI (wealth building)
Example: You’ve located
two MHPs that are true hum
dinger mom & pop appreci-
ating assets. There is a $50K
difference between the two.
Your required return after
considering the cost of funds
is 12.4%. Based on the IRR
analysis done in your
spreadsheet to the right,
which is the better invest-
ment: the MHP bringing up
to $90K cash-in year 1 or
the MHP bringing up to
$70K cash-in year 1?

7. MQ Investor Profiles: Rick Melero
Principal of HIS Capital Group, LLC
MQ: You studied theology in college then got into residential investing, but a
serendipitous meeting with a successful commercial investor at exactly he right
time turned out to be a game changer for your career. Tell me about that turning
point and your first MHP investment.
RM: Yes, the timing couldn't have been better when I met a very affluent inves-
tor. At that time I’d been in the residential space about 10 years. This investor
inspired me to diversify my capital and efforts into income producing commercial
real estate. I followed his advice and one of my first commercial ventures was a
passive investment in a Mobile Home Park. I am very thankful that I made that
prudent decision because about 18 months after owning some
commercial assets, the market collapsed and my residential busi-
ness diminished in a matter of months. Had I not been diversified,
I would have lost everything. That experience has formed the
basis for committing to a balanced approach to investing which I
call my 40-40-20 Plan.
MQ: What is the 40-40-20 Plan and where is your portfolio right
now within this approach?
RM: Today I look at every investment opportunity as a chance to
add to my portfolio, but first it must fit my balanced approach,
which is the 40-40-20 Plan. This means 40% of our investing
capital is dedicated to appreciating assets, which are assets that
we purchase distressed and at good discounted price. The other
40% of our capital is focused on income producing assets, such
as mobile home parks and or other cash flow projects. Lastly, we look for higher
risk/ higher reward opportunities that should never exceed 20% of our holdings.
So the needs of our portfolio will determine the level of interest I have at the
time. Based on balancing our current portfolio, we are actively seeking to add
approximately 20-40 single family rental properties and one or two more com-
mercial income producing assets. Since we are currently launching one of our
luxury developments, we want to strengthen our rental portfolio with assets that
can quickly be sold off and liquidated, if need be. The plan helps me to never
become emotional about a project and never purchase an asset in a rush. Now, I
do believe in fundamentals so when I evaluate an income producing asset it
must produce a minimum of $1.50 of income to $1 in expense. Also, if the asset
has already been fully stabilized, I am not interested.
MQ: To achieve this highly disciplined approach I imagine your portfolio is quite
diverse. What percentage of the portfolio is comprised of mobile home parks?
RM: We are very diverse. I think the most unique asset that we currently have in
our portfolio is a historic castle in Ireland. As for the percentage of mobile home
parks, I’d say we are close to 20% of the total holdings.
MQ: Clearly you have a keen eye for future trends to be able to accommodate
fluctuations in the market and choose the right assets to offset
others. What do you see in the future for MHP investing in gen-
eral? Trends?
RM: Learning from my previous mistakes as an active investor, I
vowed that I would find a way to avoid getting caught by a market
shift as I did back in 2008. So I did a lot of research and met an
economist who predicted the economic depression we experi-
enced two years prior to the collapse. He now generates an eco-
nomic report for us. Based on the most recent report, our econo-
my is just barely starting to recover and we have a few years to
begin the growth stage. I feel that mobile home parks will be a
strong investment for any investor looking to diversify over the
next 5 years. As for MHP trends, the first I see is more aggressive
funding offerings because of how well this asset class performed
during a depressed market. The second trend I see is more luxuri-
ous mobile home parks with better amenities and stylish looks.
The only way this trend will pick up however is if the price points remain afforda-
ble and offer the middle class more space for the price they would pay. The third
trend, which took me by surprise, is the Millennial generation’s interest efficient,
modern, and affordable “tiny-house” living ranging from 150 sqft to 700 sqft. For
a copy of our economic report please email roi@hiscapitalgroup.com.
MQ: We have found that the most successful people read books and take to
heart words of wisdom passed down from those before them. What about you?
RM: Yes, I’m currently reading “The Book on Leadership” by John McArthur and
my grandmother said it best: “Tell me who you spend your time with and I will tell
you who you become.”
hen Rick Melero was just a young boy in Puerto Rico he was asked what he wants to be when he grows up. “ To be like my grandfather ,”
he said, “retired!” In 1991 Rick moved to Florida and began pursuing his retirement dream and sought out an industry that would allow him to become finan-
cially free. But, when the market crashed in 2008 and his residential home investing business diminished in mere months a fated encounter combined with
his positive attitude and tremendous faith turned obstacles into stepping stones and he drove HIS Captial Group into the future with a highly strategic and
strictly adhered balanced approach they call their 40-40-20 Plan. Rick has aligned and surrounded himself with experts who challenge him and HIS Capital
Group to new heights, and today his portfolio is stronger and more diversified than ever. With Rick Melero you can always be certain that he walks the talk!
y this time in your life it is likely no mystery that your beliefs are at
the core of everything. If you’ve made it into the investors circle your beliefs
got you here. Your beliefs were the fuel that drove you to the starting line.
We’ve already been pumped-up about beliefs, motivated about our beliefs,
and been inspired to change our beliefs so this column will put a different
angle on things. We all know it’s not that simple to change our beliefs;
they’ve been with us since we first began to conceptualize ourselves in
the world, and while we may feel reprogrammed for a brief moment they
creep back in when we are tired or weak or triggered. This will be our
critical focal point, particularly when it comes to others who you rely on
day to day in your business: beliefs will determine actions when faced
with the unexpected, and life is full of the unexpected. You can
manage the expected and write a clear operating handbook with
policies and procedures, but your property manager will be faced
with the unexpected all the time and how will their core beliefs
enable them to handle the situation? You must know this. Will
they quit? Will they handle it like a boss? Will they fly off the
handle and cause more problems? Or, will they master their
emotions and solve problems with confidence? Will your
manager’s beliefs position them as being respected by your
residents or being seen as someone who is a push over?
In some instances you can train someone out of old, limit-
ing beliefs, such as training a person of small stature in
the art of Wing Tsun Kung Fu. But what about beliefs
you can’t train out? Well, you will need to eliminate
candidates who reveal detrimental belief systems
during the interview process, which is a highly over-
looked aspect of recruiting, especially if you go
through an agency that’s working for their percent.
The main reason this is overlooked is because the person doing the hiring
simply has not been trained in how to do it, including professional recruiters
who are actually in sales (they earn a commission) not in organizational de-
velopment. If you want to get the best from others who work for you, not
only do you have to be the leader people want to follow (your beliefs) but
you have to hire people with core belief systems that are complimentary to
your core business objectives, the current status of your mobile home
park today, and where you want your mobile home park to be in the
future. Don’t hire someone who believes passive-aggressive behavior
solves problems best when you need to do a lot of collections. Don’t
hire someone who believes impersonal is best if your population is
elderly. Don’t hire someone who believes their life is a series of
unfortunate events when you need to improve the property. Don’t
hire someone who believes the rich steal from the poor when you
plan on doing long overdue rent increases. Think about what you
need to do with your park and hire based upon the kind of be-
liefs that will propel the actions that need to be handled opti-
mally, and this is going to take some time and thought and
perhaps an examination of your own beliefs. The way some-
one speaks will reveal their beliefs, so when you are hiring
someone to manage your mobile home parks pay close
attention to the answers they give to behaviorally-based
interview questions which you should carefully craft
within the confines of what is relevant to the job. When
you are on a treadmill do you feel like you are on a
hamster wheel or do you feel you are on a stage
showcasing your athletic prowess? The belief
will determine the result. I will delve into crafting
these questions in the next issue. ■ DIG DEEP ■
By: Blythe Chambers, M.S. Applied I/O Psychology
MQ Investing Psychology: Getting The Best From Yourself & Others II

8. Senior Broker,
Marcus & Millichap
Tampa, Florida
Look for our Fall 2015 issue & MQ special report on
SUB-METERING FOR PROFITS!
Thank you to our sponsors!
If you would like to advertise with us, please call Curt Baker at
(704) 831-4600 ext. 4631 or
Curtis.Baker@marcusmillichap.com
The Power of Representation...
Presents a special two-part Q&A with a
Pierce Redmond
Security Mortgage Group LLC
Based in Rochester, NY
Servicing the U.S.
www.securitymortgagegroup.net
Pierce Redmond has been in the MHP mortgage brokering business
for over 10 years. In this Part I Q&A we get to know Pierce better,
earn more about lender desires, and criteria for MHP’s.
MQ: Pierce, you graduated with an MBA from the Rochester Institute of
Technology and have been working at Security Mortgage Group since as a mort-
gage broker with a focus on MHP’s. Why did you get into the MHP mortgage
broker biz?
PR: I was fortunate to work with two businessmen, the founders of Security
Mortgage Group, who I look to as mentors and the rest is history!
MQ: So, you’ve seen MHP mortgage brokering through huge fluctuations in
the economy during those years.
PR: Yes, when the market tanked lenders were very conservative, but as
things improve they are becoming more aggressive. I would say “safe but ag-
gressive.” For instance, what we are seeing now is max LTV is at 75% and lend-
ers know a lot of people were dinged credit wise and are recovering, so mini-
mum credit score most lenders look for is 680 but they tend to want net worth to
be at least equal to the loan amount.
MQ: Are the lenders you work with open to new investors then?
PR: Yes, of course experienced investors with a track record make for an
easier deal but as long as the criteria have been there we have brokered quite a
few first MHP investments.
MQ: Let’s talk more about criteria. Can you give me a starting point?
PR: First, the minimum loan we broker is $500K. Lenders now tend to
consider these as “non-flexible’s”: paved roads, occupancy, utilities, park-owned
homes, and location. Aside from paved roads, which is either yes or no because
that is a “quality-issue” with lenders, and desiring less than 20% park-owned
homes, there are no hard-and-fast rules but rather lenders look at the combination
of these factors.
MQ: W hy is having over 20% park-owned homes undesirable and why do
lenders not count these towards total income of the park?
PR: It comes down to “is this a reliable income for the park?” In other
words, homes can be easily moved or converted to tenant-owned, so park-owned
home income is considered to be unreliable.
MQ: W hat are you seeing as today’s typical loan terms on an MHP loan?
PR: For loans above $1,500,000 we can typically do a 10 year term, 75%
LTV, 30 year amortization, non-recourse. For deals under $1,500,000 we can
usually do a 5-7 year deal, 25 year amortization, 70% LTV, and recourse.
Look in our Fall 2015 issue for a continuation of this Q&A including
trends and what Pierce wants you to know for your next deal!
...IT’S ALIVE! continued from page 4
 There could be a wet area around your septic drainfield, usually the area will
stink and often it will have a black mud in or around it. That black mud is proba-
bly not oil, black gold, Texas tea…it is waste from an overflowing septic tank, or
clogged septic lines
But, it doesn’t have to start with red flags. Prevention should be a regular part of your
routine for all your mobile home parks to tame that monster before it grows into a
beast. Proactive prevention includes setting community rules and regulations with
fines at your community, in addition to these pro tips:
 Have your tank pumped every 2-3 years, and if your population is generally
elderly be aware that certain medications create a chemical reaction in tanks
that delay or stop the breaking down process
 Institute park rules or institute a septic fee for each resident to pay for the dam-
age caused by flushing plastics, baby wipes and “flushable wipes”, paper tow-
els, condoms or tampons
 Get creative & offer incentives/rebates for residents to purchase and use one-
ply “safe for septic” toilet paper from you or at the management office
 Ban residents from pouring grease down drains
 Inspect mobile home interior drains for sinks, toilets, and tubs twice yearly
 Educate and incentivize residents for saving food scraps in compost cans, in-
stead of using garbage disposals, for a community compost that can be eventu-
ally used as rich potting soil by residents or the community which will in turn
beautify landscaping
Your very best scenario is to use as many of these prevention tips as possible in
conjunction with never skipping recommended pumping to keep your septic system
operating efficiently for many years! As the saying goes, “An ounce of prevention is
worth a pound of septage.”
To contact Lentz Septic Tank Service please call (704) 876-1834