Sep 9, 2023
In this episode of The MHP Broker’s Tips and Tricks Closing Cocktail podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed two top company brokers, Paul Schaaf and Ryan Ramseur, who worked together to close a 73-pad mobile home park in South Carolina.
This and every Tips and Tricks podcast episode is 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. Ask Max for details.
Here Are the Show Highlights:
- Max spoke with brokers Paul Schaaf and Ryan Ramseur on a large mobile home park in South Carolina, a community sale that the two teamed up on. (Max, 0:22)
- It’s a very desirable park, with a high occupancy rate. Mostly well-maintained park-owned homes with stable, long-term tenants at a good location right off of I-95 in SC. Rents were well under market rates, which would be very appealing to buyers. The low expense ratio of close to 30% was highly desirable, too. (Paul, 1:28)
- The ratio was so low because the tenants were responsible and took good care of the homes. And when irresponsible tenants left, the park owners were able to quickly replace them with more reliable tenants, keeping expenses low. (Paul, 2:32)
- One challenge to the sale was that the property was individually parceled out. This created headaches with obtaining titles and surveys, but no contract deadlines were missed. (Paul, 3:34)
- The issue of transfer taxes, how much they are and who pays them, can be a challenge in South Carolina. It reminded Max of a Florida transaction consisting of individually parceled homes in which they found during the close that $70,000 was owed in transfer taxes. (Max,4:02)
- The transfer taxes weren’t particularly high on this deal, so there were no unpleasant surprises. The cost was dealt with upfront and the buyer was okay with assuming the cost on account of the significant upside in the investment. (Paul, 4:30 and 4:48)
- The financing was hassle-free in that the buyer had already found a lender and acquired pre-approval, and Paul and Ryan were able to close the deal in 60 days. The biggest hurdle was in making sure they had titles to all property, and minor confusion on transfer taxes owed. (Paul, 6:34)
- Besides some minor challenges in getting all books and records together from the seller, the deal went pretty easy. It helped that there was a reliable buyer who’d already obtained financing, and they had a timely closing. (Ryan, 6:57)
Want to buy or sell your own RV park or mobile home community? Trust The Mobile Home Park Broker and its superhero brokers such as Paul Schaaf and Ryan Ramseur to get you the best outcome with the fewest hassles. Just drop Max Baker a line at info@themhpbroker.com or give him a call at (678) 932-0200.
Power Quotes in This Episode:
“Then the rents were significantly below market, so the buyer was really excited about all the meat on the bone.” (Paul, 1:28)
“We just had the right pieces to the puzzle to really understand the deal from the front end of it and there were no big surprises at the end of it.” (Paul, 4:30)
“So that's one thing that we've started doing here at our firm is negotiating the transfer taxes upfront when we're at the contract stage of the deal, because we almost lost that Florida deal because of the $70,000 transfer tax that we had to deal with. But now, in this stage in the game, we try to get that upfront, negotiated. Who's paying and how much? Because as we always say here, guys, surprises kill deals, problems don't. Right?” (Max, 5:19)
“With this particular owner, they had invested a lot of their time and money in the park. We understand that and we're just trying to make sure we can tell the best story about it and get a return on all that sweat equity. We're always trying to look out for all of that investment each owner has put into their park and that's what we're looking to do on future deals, to make sure every seller is taken care of. So that's really it.” (Paul, 7:28)