The first time I wrote about Arch Stanton, I looked up the movie The Good, The Bad and the Ugly on Netflix and watched it. I do not recommend doing so. It is not a good film. It is not even the kind of shitty film that is fun to watch. Maybe we just have higher standards, now that we are in the golden age of video. The scenes of Spain in American Southwestern drag are physically compelling. Clint Eastwood looks good in a poncho and a cheroot, and everyone remembers the music. But plot, character building, dialog, interiority and suspense are, well, crap. If you are going to stream videos, I recommend Reservation Dogs, Slow Horses, A Spy Among Friends, Happy Valley, The Bear, Defending the Guilty, This Is Going to Hurt, The Morning Show, or For All Mankind. You can watch the shows that started it all – The Sopranos and The Wire -on Amazon for free now. There is plenty of good content available and life is short. Don’t spend your allotted time watching crap.
The Good, the Bad and the Ugly is about a bunch of guys fighting over some gold buried in a grave next to a grave where a guy named Arch Stanton is buried – or, at least, that is what the marker says. People get double crossed, some Mexican-looking guys work Clint Eastwood over, and Clint Eastwood shoots away the noose that suspends the Ugly guy before he can hang. Clint Eastwood rides away with the money, but since he has no name, no family, no friends, no sex drive and no history, God only knows how he will enjoy it.
When I advertised a home for sale in my park in spring 2022, a guy who used the handle Arch Stanton replied to the ad. Here’s what he said about the requirement, stated in the ad, that applicants submit proof of vaccination:
FUCK YOU AND YOUR FUCKIN VACINATED YOU STUPID TWISTED BRAINWASHED HUMAN!!!!!!!!!!!!!!!!!!!!!!WOW!!!!!!!!!!!!!!!!
I wrote a blog post about him and forgot about him. Then, on Christmas afternoon 2023, my phone farted a message written either by the same guy or by another guy who also uses the handle Arch Stanton, who watches real estate ads in the same Craigslist market as the first Arch Stanton, who makes logical leaps similar to those made by the first Arch Stanton and who punctuates like him. This Arch Stanton asked,
is the home on a slab?,, and what is the total current lot rent
The home I was advertising is not new. It had been owned by an old lady who died recently, from whose family I bought it. I have not been under the home, but the old lady’s tenure pre-dated current building code requirements, so I think that the home does not sit on a slab. At any rate, the question of whether the home sat on a slab it seemed strange, because the home, not the pad, is for sale, gravel pads are just as good as slab pads and you only notice the difference between the two types of pads if you crawl under the home. They feel the same from inside the home, which is where most occupants of a home spend most of their time.
I wrote back, Not on a slab. $500 plus water, if you pay on or before the 5th. Please call the park manager, Dee Dee Wells, if you would like to see it. Her number is (XXX) XXX-XXXX. Thanks.
Arch Stanton replied, lol.lol..lol…500 ,lololololol,,,,,,GREED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
To which I replied-
Well, you are Arch Stanton. You lie next to the buried gold. You can afford it.
Thank you for your interest. You can apply for residence in the park at xxxxx.twa.rentmanager.com/applications. You will need to provide three recommendations from people who are not related to you (teachers, coaches, clergy, employers or landlords), proof of income and proof of COVID vaccination within the last three months. Thanks in advance.
I have not received a reply to my response yet. If I do, it will be entertaining and I will post it.
Valuing a mobile home lot is like valuing a futures contract or an option contract. I have disquissed about option pricing here previously. To value an option, you plug a bunch of inputs into your pricing formula. The formula rumbles and belches and spits out a bunch of outputs, one of which is theoretical price. The process is both an art and a science, but the only element that requires artistry is predicting future volatility.
Valuing a futures contract on a physical commodity is even more straightforward. The futures price is spot + cost of carry. Cost of carry is the cost of storing, financing, transporting and insuring the underlying, less any benefits that ownership of the underlying might grant, such as dividends, in the case of a share of stock. You don’t need a crystal ball to value a futures contract in corn. No art is involved. You just need to know the spot price and the cost of carry.
That’s why futures and options are called derivatives. They derive their value from the value of their underliers.
A mobile home lot is also a derivative. It derives its value from the value of apartment rents.
A lessor of a stick-built rental unit provides her customers with use of two items, i.e. a structure and the land on which a structure sits. By contrast, a mobile home park owner provides only the land on which the structure, which is owned by the resident, sits. That means that a mobile home lot should be rented for an amount equal to half the price of an equivalent two-bedroom apartment in the same market.
Q: Why not say that an apartment should rent for twice what a mobile home lot rents for? Why use one and not the other as a benchmark?
A: Who are you?
Q: I am your daimon, O Socrates.
A: Ye gombeen.
Q: Continue.
A: The market for apartments is deeper and more liquid than the market for home lots. Because of that, it is a better benchmark.
Q: Why use two-bedroom apartments as the benchmark? Why not three-bedroom apartments? Most new manufactured homes have three bedrooms.
A: Remember that we are not comparing structures, because the lessee of a home lot provides her own structure. My gut tells me that a family of four that decides to live in an apartment rather than a mobile home in a park would be more likely to choose a two BR apt instead of a three BR. Since I have no data to back that up, I use the more conservative measure, i.e. two BR apts, as comps, instead of three BRs. Use of 3 BRs rather than 2 BRs as comps would boost the theoretical lot rent price.
Q: Do lot rents have first-, second- or third-order Greeks? What is lot-rent vomma?
A: Don’t be a gobshite.
Q: Are apartments similar enough to mobile home lots for us to use one as comps for the other?
A: You do the best you can. Use comps from the same town and the same neighborhood, if possible. If you have, say, a two-star park, use two-star-type apartments as comps. If you have a lifestyle park, use high-end apartments as comps.
Q: Why half?
A: HCR has advocated for a formula that caps allowable lot rent at forty percent of comparable apartment rent. That said, HCR has a political agenda and is run by people who are not qualified to make this judgment because they have never managed either mobile home parks or apartments. Since a park owner provides half the package that an apartment over provides, a park owner should receive half the compensation that an apartment owner receives.
In order to determine whether a $500 lot rent is a fair price, I did some empirical research. Bestplaces.net says that the median monthly rent for a two-bedroom apartment in the applicable market is $1,690. That number might be a bit inflated because many of the listings in that market are clustered in a nearby college town where housing is in short supply and customers tend to be wealthy. Further googling indicated that, if you factor out apartments in the college town, two-bedrooms fall into a range with a low end around $925 and the high end around $1,500, with most listings clustered around $1,150 and $1,200.
So – $500 is a fair value for lot rent in that market. If anything, it is kind of low. It might even fit within HCR’s parameters. Whether or not asking a fair price for a useful item reflects greed, I leave to readers.[1]
In one of the sequels to The Good, the Bad and the Ugly, a boy on the street asks the Eastwood character, ‘What did you say your name was?’
Eastwood spits a small piece of tobacco stuck to the tip of his tongue and says, ‘I didn’t’.
Public discourse has taken a nose dive since social media. It is easy to be rude and in-your-face when you are hidden behind the anonymity of an encrypted identity and an online handle. I do not think that I will ever meet Arch Stanton in real life. Were I to speak with him, I would explain that the amount that I charge for lot rent in that park is reasonable because it is less than half what a resident would pay were they to move into a comparable apartment. In fact – I would continue – if he knows anyplace cheaper to live, I would like for him to tell me where it is because I would like to move there myself. I do not think that I could convince him, because he does not seem to be the type who is swayed by facts and data. But if we were nose-to-nose, he would at least remember some of the manners his mother taught him before she damaged his head in the washing machine.
[1] That statement is not snark. Private business is run by self-interest. A private market with adequate regulatory guard-rails is the least-bad method we have found yet for allocating social resources. Greed is rancid self-interest. One’s tolerance for rancidity is subjective. What to Arch Stanton is greed might be healthy self-interest to me.