Interview with Tracy Renna of MH Title Brokers

SHOW NOTES

Welcome back to the Passive Mobile Home Park Investing Podcast, hosted by Andrew Keel. In this episode of the Passive Mobile Home Park Investing Podcast our host Andrew Keel interviews Tracy Renna, the Founder and CEO of MH Title Brokers.

One of the most frustrating things in the mobile home park investing realm is trying to get lost mobile home titles. Getting these mobile home titles fixed and in the correct name of the new owner is where Tracy Renna and MH Title brokers can assist.

Tracy Renna founded MH Title Brokers over 4 years ago to specialize in the organization and investigative work required to identify and retrieve mobile home titles. Tracy and her team engage with local DMV offices, legal institutions, and title companies, saving mobile home park owners and investors time and frustration.

In this episode, Andrew and Tracy dive into the topic of sourcing abandoned Mobile Home Titles, not the most glamorous topic, but one that can be an expensive one. They discuss Tracy’s journey and how she founded MH Title Brokers, what you need to know about sourcing abandoned mobile home titles, risks of owning a mobile home, what to do when you can’t find a title or the previous owner of a manufactured home, selling a mobile home without a title, and which states are the most difficult to deal with when it comes to issuing new Mobile Home Titles.

Join us as Tracy Renna shares her wisdom and experience on the in’s and out’s of sourcing abandoned Mobile Home titles in this episode.

***Andrew Keel and Keel Team Real Estate Investments (Keel Team, LLC) do not endorse any interviewee. This interview is for informational purposes only and should not be depended upon for investment purposes. ***

Andrew Keel is the owner of Keel Team, LLC, a Top 100 Owner of Manufactured Housing Communities with over 3,000 lots under management. His team currently manages over 40 manufactured housing communities across more than 10 states. His expertise is in turning around under-managed manufactured housing communities by utilizing proven systems to maximize the occupancy while reducing operating costs. He specializes in bringing in homes to fill vacant lots, implementing utility bill back programs, and improving overall management and operating efficiencies, all of which significantly boost the asset value and net operating income of the communities. Check out KeelTeam.com to learn more.

Andrew has been featured on some of the Top Podcasts in the manufactured housing space, click here to listen to his most recent interviews:  https://www.keelteam.com/podcast-links. In order to successfully implement his management strategy, Andrew’s team usually moves on location during the first several months of ownership. Find out more about Andrew’s story at AndrewKeel.com.

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Would you like to see value-add mobile home park projects in progress? If so, follow us on Instagram: @passivemhpinvesting for photos and awesome videos from our recent mobile home park acquisitions.

Talking Points:

01:50 – How Andrew Keel met Rod Renna (Tracy’s husband)

03:00 – The start of Tracy Renna’s journey to founding MH Title Brokers

06:40 – What you need to know about Mobile Home Titles to stay out of trouble

11:11 – The risks of owning a Mobile Home

13:30 – Selling a mobile home without the title

17:31 – Hold back between $3-5k when you can’t find a mobile home title or the previous owner

20:45 – Reaching out to Tracy Renna

21:30 – Ask about the POH titles- manufactured home title and bill of sale

22:11 – Top states to avoid because the mobile home titling process is so difficult

24:35 – Conclusion

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Links & Mentions from This Episode:

Email Tracy at info@mh.org

Call Tracy Renna on her direct number at 813-705-7044

Keel Team’s official website: https://www.keelteam.com/ 

Andrew Keel’s official website: https://www.andrewkeel.com/  

Andrew Keel LinkedIn: https://www.linkedin.com/in/andrewkeel 

Andrew Keel Facebook page: https://www.facebook.com/PassiveMHPinvestingPodcast

Andrew Keel Instagram page: https://www.instagram.com/passivemhpinvesting/

Twitter: @MHPinvestors

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TRANSCRIPT

Andrew:  Welcome to the Passive Mobile Home Park Investing Podcast. This is your host, Andrew Keel. Today we have a very special guest on the show, Ms. Tracy Renna, founder and CEO of MH Title Brokers.

Before we dive in, I want to ask you a real quick favor. I need more reviews on the show. Would you mind taking an extra 30 seconds to head to wherever you listen to your podcasts and leave this show a review? It helps us get more listeners, and it means the absolute world to me. Thank you so much for making my day with that review of the show. All right, let’s dive in.

One of the worst things in mobile home park management is dealing with old park owned homes and finding the titles to those homes. It is definitely a pain point. This is where Tracy and MH Title Brokers can assist.

Tracy Renna founded MH Title Brokers over four years ago to specialize in the organization and investigative work required to identify and retrieve mobile home titles. They engage with local DMV offices, legal institutions, and title companies, saving mobile home park owners a lot of time and frustration. Tracy, thank you so much for coming on the show.

Tracy: You’re welcome. Thanks so much for having me, Andrew.

Andrew: Yeah. I would love to start out by talking about our connection, Rod, and how in the world, things have come full circle. I want to say it was 2015-2016 when I met Rod for the first time. Maybe you could just start there and talk about how we came in contact.

Tracy: Sure. At the time, I believe we were managing a park. You had come and talked to Rod. I wasn’t there. I wasn’t present, but I know that you were looking for homes. Is that how it went?

Andrew: That’s right. Yeah, I was a Lonnie dealer, and your husband Rod and you were managing a park in Ocala. This was right when I got into manufactured housing. I was trying to find homes, and I came across you guys managing this park. We were trying to buy homes out of this park to do Lonnie deals on.

I actually found some homes from another park, came across Rod. Rod’s like, hey, I’ll buy them, where are we at? We ended up doing a deal on those two homes. It’s just funny, that was quite some time ago. We’re both still in the manufactured housing business. That’s super cool.

Tracy: Yeah, but you’re out of Lonnie deals.

Andrew: Thanks for looking up.

Tracy: Most definitely. Wonderful, look at you.

Andrew: Yeah, thank you. Would you mind telling us about your story and how in the world you got into the mobile home business to start with?

Tracy: Sure. You brought up Rod, and Rod is my husband. He is a licensed mobile home broker in the state of Florida, he has been for the last 10 years. I was not in manufactured housing and helping him a hundred percent. I actually was in the healthcare field for 15 years.

That was my side hustle. I would help him with title work from the transactions that he did. At night when I would get home, the last five years, we really had to make sure that the title to the home was the home he was purchasing. We were starting to see that more and more, where the manufactured data report wasn’t matching the title VIN number, wasn’t matching what was the HUD plate on the home.

That’s when I started really researching and making sure that whatever he was purchasing and then ultimately selling was going to be correct home and title. He doesn’t want to sell anything that is going to be half assed, and then the poor person on the other end doesn’t even have the right title to the home. That’s really how it started.

Covid hit and he had said, hey, listen, why don’t you help me full time, which I was not too keen on, but something happened with that. I started getting phone calls from park owners, and I started getting phone calls from transport companies and other brokers. They were like, hey, we’re really having difficulty either locating a title and all different scenarios. I said, well, let me see if I can help. I would research it. If I could find something, I say, I think that we can do this. For example, in Florida in 2021, they changed the laws on abandoned titles.

Ultimately, I refer a lot of those out to an attorney. We have a network of attorneys that we work with, and I will source that out to them so they can help them. I let the client know that, listen, we’re just lay people. We do the investigation. We stay in our lane, but anything that requires an attorney, we have some good attorneys that we work with.

Andrew: At a high level, Tracy, just so I can encompass this, what I hear you saying is that, hey, we buy a mobile home park, mom and pops were not the most organized. They’re not known for being the most organized and having titles, which is just like a title to your car. You have a title to every mobile home being that it’s personal property, and there are taxes that you pay to the DMV every year on these. Sometimes those didn’t get paid every time. Is that right?

There can be a track record here of a messy situation. Managing mobile home parks from experience is quite tough work. There’s a lot of stuff that goes into this. You can think of the obvious like collections. Yes. If you were thinking that collections would be tough and the affordable housing business of mobile home parks, you’re correct. It is a little tough.

You have that, that’s the obvious, but then there’s the subsidiary stuff like mobile home titles that you need to keep track of, and you need to understand the risks. Maybe could you talk about the risks? From an operator standpoint and from a passive investor standpoint, what do I need to know about mobile home titles so that I stay out of trouble?

Tracy: Sure. From a passive income point, if you’re going in to have passive income as a partnership in purchasing parks, one of the things that you really should understand is where the titles are. If the mom and pop are saying, hey, these are park owned, all right, that’s fantastic. Where are the titles to these park owned homes? Are they in your name? Are they in an owner’s name that passed away three years ago? They may say, oh, we have titles, but a lot of times they never put them in their name at all. That’s what I usually see.

Andrew: There’s a floating titles. What’s that’s called? That’s very common, where they don’t want to pay the personal property taxes. They’ll just have a tenant sign the back of the title and just give that to the owner of the trailer park. They’ll say, hey, you don’t have to pay me your back due rent, but just give me the title to your trailer, sign the back, and it’s an open title.

What he’ll do is someday he’ll find a buyer that wants that trailer. He’ll say here, give me the money, here’s the title. He’ll give it to them. He never signed it. He never put the title into his name. It’s been open the whole time, and then he’s just giving it to the next person, which runs a lot of risk because having an open title, they could go get a duplicate title and sell that trailer again, which I’ve seen happened before.

Tracy: So am I. I have seen it. There is a lot of risk. The other thing that I find is back taxes. For example, registration. In Florida, it’s called registration, which is a tax. You’re going to get a sticker like you put on your car.

What I’m finding is a lot of parks are starting to get on top of it, even if the homes are not in their name, if they are in the tenant’s name. The reason why is because it looks like a lot of these counties are staying on top of any of the registrations that have not been paid.

What happens is unbeknown to anyone, now the county has placed a lien on that home. What I find is I think it’s Wyoming. In Wyoming, they require anybody who owns a manufactured community, whether the homes are tenant-owned or they’re owned, is that they have to say what home is in there with a VIN number, and are the registrations up to date?

I thought that was beautiful because that could be helpful for any park owner. Even if it’s not required by the state, but you’re going to want to know that, because the states are really getting privy to the amount of money they can make with these parks on taxes.

Andrew: It’s not a ton. It’s typically not a ton. What’s the typical taxes on a home in Florida that’s a $25,000 metal-on-metal home from 1990?

Tracy: You figure, what is registration? Registrations based on the length of the home in Florida. Maybe between $84-$87 a year.

Andrew: It’s very cheap. This is another factor of why there are restrictions on zoning for mobile home parks. Think about it. That mobile home owner pays $87 a year, it’s a three-bedroom home, there’s three kids in there, there’s a husband and a wife, and those three kids go to public school, which costs around $12,000 a year for the County to put them through school.

You can see where it’s a loss leader for the local municipalities to be developing new manufactured housing communities, which constricts that supply, but that’s a whole another topic that I can talk for a couple hours on. What I wanted to talk about though is, who owns the homes? A lot of mobile home park owners will have the entity that owns the real estate, which would be Deer Run MHP LLC, and then we’ll have another entity that’s Deer Run Homes LLC that will be the owner of the homes.

The reason for this is that a lot of the big time lenders, the conduit lenders the agency lenders, Freddie and Fannie, they want those homes off, disconnected from the real estate, mostly I think from a liability standpoint, because they don’t want those homes associated with the real estate. The liability associated with owning those homes isn’t going to hinder the real estate somehow, which they would be the mortgage holder on. Why do you think that is? What do you think is the biggest risks or liability to owning these homes, Tracy?

Tracy: I don’t really know. I know that’s what they do, and I never really asked why they did it that way. I’m wondering if they’re financing it. There’s still finance though through the finance companies, a lot of them are.

Andrew: Most typically a different one. The real estate finance company isn’t the one that’s going to be financing the chattel loan, which is on the actual homes themselves. But I think it’s because if a tenant slips and falls in the home and sues someone because there was a soft spot in the floor, their foot went through it, and they got really injured, they would sue who owns that home, which would be Deer Run Homes, LLC instead of the real estate owning entity, which is Deer Run MHP LLC.

There would be a block there where you’re covered. They can’t get the real estate, which is I think the main reason there. I think that’s a clear distinction. I was just wondering, do you see that with other operators you’re working with, that they have the homes in a separate entity that’s on the titles?

Tracy: Yes, they do that. Actually, they will say it. They’ll say whatever, Fox Run Homes because they know those are the homes that are on that park. Fox Run mobile home park. I could understand that. It’s actually smart in a lot of ways because it will be completely separate. I think they probably sell off.

The other thing is you probably can sell off to two things if you really wanted to. You can sell all the homes as one package, maybe the land and another. I don’t know. I’m getting out of my life, but I never wanted to do that.

Andrew: The real estate lender doesn’t want the homes as part of their collateral, that’s why if it’s in a separate entity, you can sell the homes without needing a release of a lien release every time because they’re not holding those.

Tracy: That’s true too.

Andrew: Let me let me ask you this. Can you sell a manufactured home without a title? What does that look like?

Tracy: It depends on what state you’re in and how old the home is. In Alabama, yes. You can sell it with a bill of sale and as long as it’s 20 years old or more than 20 years old. So yes. Again, every state is different. In Florida, no, there’s no way you’re going to get away with it in Florida.

I highly recommend that in any state that you’re in, that you get title in hand when you’re purchasing it. I did mention Alabama because every state has different caveats to it, but the safest way would make sure that you had title in hand. The reason why is because you want to make sure that you are purchasing it from the purchaser.

Andrew: The right owner, yeah.

Tracy: Yeah. I’m not big into open titles, which we talked about just a few minutes ago. The reason being is what we said before, somebody can get a duplicate title. The title that you’re purchasing, you should always do a VIN check. A VIN check, some states will allow you to do this online. Other states they’ll make you pay, but you can check in to the VIN number and make sure that the home that you’re purchasing is correct. The issue date of the title is the one that the seller is giving you.

I always tell people, it’s great that you’re checking the VIN to see if there’s any liens. The other piece that’s so important is the issue date on that title. That what’s current in the state system. What I mean by that is again, we can talk about duplicate titles. Somebody may have a title that they think is actually what they purchased to the home. Again, this is if it’s not in their name and it’s an open title.

Sometimes it can be that way, but let’s just stick with that. A duplicate title, what I see is sometimes people forget. They don’t know where the title is, so then they go back down to the DMV, get the duplicate, then they’re selling the home, and they’re selling it with the first title, which they can’t do because they really have to sell it with the duplicate. So always look to see if you have the most current title.

Andrew: Yeah, such good information. This is why our due diligence checklist has grown from when I first started, which was 50 items to now being over 350 items long, is because little nuances like this that in the beginning, you didn’t really think. Hey, do I really need to check the VIN on all these park owned homes and match those up? But now it’s like, oh, wow, because we made a mistake.

We bought a park with several park-owned homes that didn’t have titles, and then we got the tax bills. We went down to the treasury’s office and saw the tax bills. In these homes, there were $7000-$8000 in back taxes on these things because there was fines accrued over the years and things like that. In order for us to get a title, we would have to pay to get that. paid off.

The tricky part was that these homes were trashed. There was no one living in them, they were old junkers. They weren’t worth $7000-$8000. What we had to do is we had to pay to get a demo certificate, demo privilege, or something like that to be able to demo these. We had to pay the back taxes off, and that’s where it can get expensive if you’re not careful and due diligence, because you could be paying $7000-$8000 in back taxes just to be able to demo an old mobile home that isn’t worth $7000-$8000.

Your performance can go downhill really fast if you didn’t raise money to pay the back taxes and the $3000 to actually demo the home and put it into a couple of dumpsters. I’m glad we went over this. This is a shot in the dark. But if you’re buying a mobile home park, it comes with park-owned homes, and the seller does not have titles to those, what’s a reasonable amount of money to hold back per each park owned home? What would you do in that scenario where he doesn’t have titles?

Tracy: I would hold back between $3000-$5000. The reason why is it depends on the state. If it’s in a state where you have a great attorney that can go to court and get you titles, that’s going to cost you about $3000 per home. Then if you want to turn around and demo it, because some states will say, you can show that, nobody owns it. You don’t have to go to court, and then you’re asking for a specific demo permit.

Andrew: A permit. That’s what it is, yeah.

Tracy: You can send off certified letters to prior owners. Again, every state is different. There are certain states where you can send off certified letters to prior owners. There’s maybe a list of criteria. Then you tell the state, listen, we did the best we could to find these past owners. We really don’t know who they are. We can’t find any events on the house. All we want to do is demo them.

Some states have the certain criteria and then you will demo it, because they know that’s what you want to do. Other states are like, we don’t really care. We need you to own it first before you can demo it, so now you have to pay. If it’s a state where you have to go to court, you’re looking to pay an attorney. You’re looking about $3000 to pay an attorney.

That’s court fees time. You’re looking at maybe four to six months before you can actually get a judgment that will allow you to go back to the state to get a title. From there, you’re proving ownership. Now you have to go and pay somebody to demo it, so I would say between $3000 and $5000.

Andrew: At least. Think about that. You brought up some really good points. In states like Illinois and Michigan, it may be longer. There’s more regulation there, it’s blue states, and it’s much harder to do this.

If you have a pro forma that says, hey, I’m going to bring in three homes, I’m going to fill these lots, I’m going to demo the homes that are there, I’m going to fill these three lots, and the first six months after I buy this property, this exact scenario that we just described could totally throw your proforma off track. So you got to understand mobile home titles. This is really, really valuable. Thank you so much, Tracy.

Tracy: You’re welcome. I’m going to add one more thing because this actually came up. I have a client who were looking in Oklahoma to help her. They have different criteria as well, but their problem is of why they’re in a panic is that they had abandoned titles when they purchased the park, but the insurance company is now saying if you don’t demo them, we’re going to drop your insurance. That is first for me. I’m just letting your listeners know that there are other factors really to keep in mind.

Andrew: Yeah, hazardous. Yeah, they don’t want those old homes with broken windows and stuff just sitting there. You can have some risk by leaving it there. Tracy, if any of our listeners would like to get ahold of you, what would be the best way for them to do that?

Tracy: Sure. You can reach me. The email address is info@mhtitlebrokers.com, or my direct number is 813-705-7044.

Andrew: Awesome. Tracy, knowing what you know about mobile home, investing mobile home park investing, your experience as a manager of a mobile home park, if you were going to invest passively as just as strictly as an investor into a mobile home park syndication, what is one thing that you would want to make sure of before doing that to make sure you’re successful?

Tracy: Sure. I would definitely ask about titles. I would really dig into them. I know that’s because that’s where my main focus is, but there’s so much that can stem from titles. Like you talked about, back taxes. We don’t even have the owner. What’s the state that we’re in? Do they require that we have to go to court to prove ownership before we can demo it? It’s not a glamorous topic, but it is very expensive.

Andrew: Let’s do this. I just had a great idea. What are the top states you would avoid because the titling process is so regulated and so over the top, it’s just not worth it? What are the states you don’t work in?

Tracy: There’s a couple we don’t work in because we haven’t been there yet, but I’ll be honest with you. Michigan’s a toughie. Michigan, it really is. It’s not a person friendly.

Andrew: Which other ones have you worked in that are tough like that?

Tracy: We’ve been able to really work out the kinks pretty much with any state. We never back down from a challenge.

Andrew: Have you done any in New York?

Tracy: You know what, I had one gentleman call me. I was like, you’re the only one that’s called me from up there, I said. I can’t tell you we have been in there, but I’ve heard horror stories.

Andrew: You got to stay away from New York, it’s worse than Michigan. Ask me how I know.

Tracy: How do you know?

Andrew: Bad experiences.

Tracy: Oh, my gosh.

Andrew: Yeah. They just over complicate things a little bit, and there’s just a tendency. There is a real reason why people say, hey, invest in red states, it’s a little bit easier to do business there. Yeah, I learned the hard way. Anyway, anything else you think we should touch on before we sign off today, Tracy?

Tracy: I don’t think so. No, I really don’t. I think people, to just have an understanding of how important it is to have titles, you could see the money attached to it whether going out or coming in. So it’s really important to have the correct title to the correct home.

Andrew: I think this goes back to a lot of just park owned homes. There’s additional risk, there’s additional management. There’s additional stuff that comes with park-owned homes that if you’re aware of and you have the resources, you can mostly hedge that risk if you’re on it. If you’re buying your first park, there’s 50 park-owned homes, and half of them don’t have titles, you need a team of people to help you with your title work. That’s what Tracy does over at MH Title Brokers.

Awesome. Great episode. Tracy, thank you so much for spending the time to do this recording with me.

Tracy: Thanks a lot. Thank you very much. It was wonderful.

Andrew: All right. That’s it for today, folks. Reminder, please leave us a review if you got value out of this show. Thank you all so much for tuning in. Have a good day.