The Great Recession involved a lot of bankruptcies and loan defaults that put many assets at risk, including intangible assets such as goodwill.
A Cascade Township property management firm that includes goodwill in its pledge to preserve all of a client’s assets, took on the challenge of maintaining the goodwill of scores of families left in limbo in a major bankruptcy of mobile home parks across the central U.S.
Amicus Management Inc., founded and owned by Daniel J. Yeomans, was appointed by an Ottawa County Circuit Court to be receiver of Country Estates, a Spring Lake mobile home community comprising 140 sites. It had been owned by Value Family Properties, a bankrupt Oklahoma company with mobile home parks in Michigan, Oklahoma, Texas, Georgia and Illinois.
Amicus successfully sold Country Estates with court approval in May, but is still managing two other former Value Family Properties; Forest Lake, with 93 mobile homes in Spring Lake; and Hilltop, with 92 mobile homes on Hilltop Avenue in Plainfield Township. Amicus was hired by Fifth Third Bank to manage Forest Lake and Hilltop until new buyers are found.
When sold, County Estates had come full circle, according to Yeomans, since the start of its original owners’ financial problems.
“We were able to effectively manage it to increase the value and to assist the residents that were there,” said Yeomans.
Yeomans said County Estates was acquired in May by MHC Inc. The purchase price, according to Ottawa County court records, was $1,675,000.
Yeomans said mobile home parks were hard hit in the recession, with “numerous” parks in Michigan in financial distress.
“The values on these parks in the last three years have substantially declined,” he said. A park now “could be worth 20 to 50 percent of what they were three years ago.”
Yeomans said that many of the mobile home parks that went into bankruptcy left the residents “kind of without management” during “all the chaos,” while foreclosure actions on the property was under way in court and the original investors were fighting among themselves for the remains.
“Country Estates was just in a state of chaos,” said Yeomans. “The big thing we were able to do was go in there and establish order, and put in a brand new management team. It really made a difference in the lives of the people living there.”
“At County Estates, we had to spend more than $50,000 on repairs and deferred maintenance,” he said. Property taxes were also past due, he noted.
Yeomans said bank financing for purchase of a mobile home in a mobile home park is extremely difficult to find these days, so the owners of the parks typically put up the money to finance the purchase of mobile homes, which they then rent to tenants. A mobile home park owner trying to grow the business faces a great deal of expense and “a long climb to increase occupancy,” he said.
In the absence of bank loans, individuals have been privately loaning the money and there is even a secondary market now in private buying and selling of the promissory notes, according to Yeomans.
The mobile home park bankruptcies added to the stress of those tenants who were buying their mobile homes because in some cases, they no longer knew “who was in charge and who owned the promissory note for their home.”
Country Estates reverted to Bank of America, and the other parks Yeomans is managing reverted to Fifth Third Bank, which hired him to manage them. He has high praise for both institutions.
“We hear about the ‘big, bad banks,’ and in this case — in a lot of these cases — the banks have been very willing to allow us to do what’s needed to protect the park, preserve the assets, instead of saying, ‘Mr. Manager, Mr. Receiver, give me all the money.’ The banks have been saying, ‘take care of the park,’” said Yeomans.
Yeomans said that since 1993, he has handled more than 500 receiverships. During the last two years, his company has handled up to 40 of them simultaneously.
Of those receiverships, he estimated that close to 200 of them happened in the last three years. About 80 percent of property management projects are court appointed.
Yeomans founded Amicus five years ago, to separate his work with insolvent properties from his Management Services Realty, a brokerage company he originally founded in 1993 and of which he is still the principal.
Amicus manages properties in eastern Michigan as well as Traverse City, northern Ohio and Indiana.
Handling of properties stemming from bankruptcy used to be called “bank workout” he said, but now the banks refer to it as “special assets” or the “SAG” — special assets group.
Yeomans does not deal with just insolvent mobile home parks. He said he has managed industrial properties —including a steel mill — about a dozen gas stations. When Cybernet failed yeomans was involved in the cleanup.
His receivership work is a form of emergency management, with the goal to “find the best possible solution” to maximizing the value and return on an insolvent property.
While the goal is to preserve the assets for a client, while maximizing the property value as much as possible, the economic collapse over the last three years has forced many sales as soon as possible, “because there is so much debt.”
“We have specialists for each type of asset category,” he said, and he has about 10 core employees, plus numerous individuals contracted in the field. His companies currently employ more than 125 individuals on their projects, with that number fluctuating over time from 80 to 300.
His main preoccupation is “mostly assets that need management. Multi-family is big right now.”
As for Bank of America and Fifth Third, “they’ve been flexible and they’ve really been trying to do the best they can for the (mobile home) communities” they were forced to foreclose on.
Last week Amicus announced the hiring of two new senior employees, a reflection of the company’s recent growth. David E. Veen is now director of client development, and James R. Laird will serve the company in his professional capacity as a CPA.
Veen was formerly president and CEO of Kent Commerce Bank in Grand Rapids, and has held various officer positions at First Financial Bank (formerly Irwin Union Bank), Citizens Bank, Huntington Bank and National City Bank. Laird previously operated his own business, Enterprize Management Inc., and has worked for Horizon Group Properties, Penske Logistics and several other local firms.