The MHP Brokers Tips and Tricks Podcast Interview with Ferd Niemann

The Mobile Home Park Broker's Tips & Tricks To Investing

In this episode of The MHP Broker’s Tips and Tricks podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed lawyer Fern Niemann about his legal focus on representing mobile home park owners.

Just like with every Tips and Tricks Closing Cocktails podcast episode, this one’s brought to you by The MHP Broker’s’ proprietary Community Price Maximizer. Use this four-step system to get the highest price possible for your mobile home park or RV community when you sell it through The MHP Broker. Guaranteed. Call up Max for details.

Here Are the Show Highlights:

- Lawyer Ferd Niemann runs the website TheMHPLawyer.com, and specializes in representing the legal interests of mobile home park community owners across the country. Up to about 80 percent of the firm’s business is within this industry. (Max, 0:22)

- Ferd began his professional career as a commercial real estate tax analyst for Jackson County in Kansas. He flipped and bought and kept homes for rental on the side. He couldn’t scale up quickly, so decided to get into apartment investing, but found it to be a competitive market out of his financial range. Instead, he started buying and selling mobile homes, which were much less expensive. He did this while attending law school at the University of Kansas. His intention was to get into tax law and real estate investment law. (Ferd, 2:07)

- Around 2018, Ferd got out of law practice and focused exclusively on building his mobile home business. He’s bought and sold parks, and currently owns 19 communities, mostly in the Midwest. Ferd has also gotten back into his law practice, with a mobile home specialty, and hosts a podcast covering the topic. (Ferd, 3:51)

- Ferd’s firm does a lot of business fighting zoning laws established by localities that seek to shut down mobile home parks with home age restrictions, park size restrictions, infill timelines, utility restrictions and other penalties. The majority of his clients have parks that are “legally non-conforming.” That means that they were legal when established, and they’ve been grandfathered in to protect against current regulations, but might fall short of current legal requirements when they change hands. Many cities use the zoning charge of abandonment to shut down mobile home park activity. The idea is that if a lot sits empty for a designated period of time, which might be as little as a month or two, it’s considered abandoned, and the park owners loses the right to rent it. (Ferd, 6:09)

- Age restrictions seem especially illogical to Ferd. He’s got a 2022 mobile home that’s falling apart and a classic 1957 model that’s in beautiful condition. The point is, a home’s age isn’t necessarily a valid indicator of the condition it’s in, and age restrictions are arbitrary and unfair. (Ferd, 7:52)

- There are several violations that can get a mobile home park shut down, including fire code violations, public health safety, welfare, and morals. But abandonment provisions are the most commonly enforced by hostile cities. (Ferd, 8:38)

- Ferd’s firm uses zoning letters to nail down what the park can and can’t do in a locale. He attempts to get the cities to sign off on the zoning letter to protect the client in future zoning battles. The city will sign off on the letter maybe 25 or 30 percent of the time. (Ferd, 10:37)

- About a third of the time, the city will agree to sign the zoning letter once revisions are added and changes made. Ferd’s firm haggles for the best case possible with revisions. (Ferd, 11:10)

- This works more effectively in smaller cities. The bigger cities have much larger law departments and are less likely to simply sign off on a zoning letter. (Ferd, 11:38)

- The challenges vary by state and region, too. As examples, Tennessee and Iowa are cooperative with zoning letters, while North Carolina tends not to be. (Ferd, 12:22)

- Ferd rarely sees “carve outs,” in which the regulations are changed for one park, but he can sometimes get communities to change the zoning code altogether. In other cases, he’s gotten communities to grant grandfather rights for parks that were in existence before the zoning code was updated. (Ferd, 14:29)

- Sometimes cities that can’t get parks shut down because the park was in existence before zoning codes were put in place will instead try to shut down individual lots that haven’t been infilled within a designated time.

Ferd compares that kind of vacancy with a motel with a room that hasn’t been rented for some time. That doesn’t mean the entire motel or that room was abandoned. (Ferd, 17:27)

Zoning issues related to floodplains, fire code violation, egress and ingress are also tough to fight. (Ferd, 17:27)

While zoning issues constitute about half of Ferd’s law firm’s work load, with an average of about five to 10 cases in front of them at any one time, it’s not all they do related to the mobile home park industry. They also handle contracts, leases, closings, syndication issues and others. When it comes to floodplains, cities might tell a park owner that 30 or their 100 lots are in a floodplain and that while those 30 lots are grandfathered into current law, they can’t be replaced in that location if they’re even burned out, flooded or otherwise lost. That’s a tough ruling to fight. (Ferd, 21:05)

It’s hard to move a flood map. Sometimes Ferd can get variances on a 100-year floodplain, and occasionally even a 100-year map, but FEMA and the Army Corps of Engineers tend to push back hard. (Ferd, 22:27)

It’s hard to get floodplains changed because no one wants to take the chance of changing the map and then people drown in a major flood. (Ferd, 23:03)

Right of first refusal provisions can be additional challenges to park owners looking to sell. In states that have such provisions, the park’s current residents can get together and try to match the sale price to take ownership. Realistically, they’re unlikely to be able to come up with the sale price, but it can slow a sale and create additional stumbling blocks. For one thing, tenants who know that a sale is proceeding might stop paying rent, knowing that the sellers won’t evict them and therefore lower the occupancy level during negotiations. Ferd is handling such a case in Colorado now. (Ferd, 25:17)

Those who wish to contact Ferd for legal advice can drop him an email at [e-mail]. (Ferd, 36;18)

Do you have legal issues related to the sale or purchase of a mobile home park? Reach out to Ferd Niemann at TheMHPLawyer.com. Or call up Max at [phone]. You can also drop him a line at [e-mail].

Power Quotes in This Episode:

“I can work on zoning every week, but it’s not every day.” (Ferd, 18:21)

“...nobody wants to be the person that raises their right hand and in front of the federal government says, ‘I think that this area that someone else said was not safe for habitation is now safe enough that I'm gonna modify the (flood) map’ and put people for the rest of time at risk of drowning to death when I put my career on the line for that move and so it's really hard to get a map changed.” (Ferd, 23:03)