Dec 15, 2021
In this episode, we explain a deal that had its challenges from the first. It shows the value-add from getting the involvement of experienced brokers who’ve “seen it all” and can save even the most run-away deal.
As always, this episode, hosted by Maxwell Baker and featuring MHP Broker’s Eric Wanck, was brought to you by our proprietary Community Price Maximizer. With our system and our very experienced brokers like Eric, we’ll guarantee you a higher price when you later sell your mobile home or RV community.
Here Are The Show Highlights:
- Eric Wanck was recognized and congratulated for successfully selling three parks over the last 30 days. (Max, 0:22)
- One of those parks was a 90-pad mobile home park , a two-park side-by-side portfolio in Pennsylvania with a combined 104 pads. It was a deal that came with a “bit of hiccups,” according to Max. (0:22)
- Both parks were on city utilities and water/sewer and sub-metered so tenants were responsible for payments, not the owner. And the homes were 90 percent tenant-owned homes (TOH), according to Eric. All of that was good news for a potential buyer, but the park was in decline, with old homes and management that had fallen behind in upkeep. That made the sale more challenging. Nonetheless, the location, the fact it included so many TOHs and other factors made it desirable for the right investor. (2:02)
- Eric had a couple different buyers on the deal, but one fell through during due diligence proceedings. This emphasized, for Eric, the reality that sometimes a park is on the market for awhile, but it doesn’t mean the deal is troubled or the park can’t be sold. He’s gotten great response after a new marketing push for parks that have sat idle on the market for 90 days or longer. Sometimes “the time is right,” and not before. (3:10)
- The seller brought a couple more homes into the community, sold one and kept the other as a rental during due diligence. That muddied the transaction terms mid-deal, but Eric got it sorted out. (5:33)
- Prospective buyers might spend a lot of money on various inspections and think they’re stuck financially if they back out of the sale. But Max pointed out that his team can sometimes get that money back, so be sure to ask for their help. (6:43)
- Eric advised making sure both selling partners are on board during negotiations. He had a husband-wife team in one sale that seemed to be at odds and not communicating with one another. This could lead to “spinning your wheels” in trying to seal the deal. (7:57)
Want to know more about The MHP Broker approach to buying and selling RV and mobile home park communities? Even the most challenging deals can lead to success for both parties. Just drop me a line at info@themhpbroker.com or give me a call at 678-932-0200.
Power Quotes From Max and Eric on Episode 10:
- “Our job is to prevent the deal from blowing up and there's always plenty of opportunities in all of these deals for it to blow up.”(Max, 0:22)
- “There's a whole myriad of things that can go into what risk profile a buyer may have. We got a very good cap rate on this deal, a selling cap rate, low eights and that's good…considering the fact that these two parkswere distressed.” (Eric, 2:02)
- “I tell sellers this all the time: sometimes that right buyer does not come through in the first 30 days. It may not be 60 days.” (Eric, 3:10)
- “Having somebody ride shotgun on your journeywhen it comes to selling a community. (having a broker) that's sold well over 250 communities is going to make your life easier, the transition easier and ultimately get you more money in your pocket bookwhen you sell your mobile home community or RV community.” (Max, 4:25)
- “If you're a buyer, and you are under contract, and you've got money spent on a survey and appraisal, a phase one, septic inspection, all these inspection reports that come out when you are buying a community and you blow out of it for who knows what reason, give us a call. We'll probably be able to place it and get you your money back on all of those third-party costs.”(Max, 6:43)