Sep 6, 2024
In this episode of The MHP Broker’s Tips and Tricks podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed The MHP Broker Eric Wanck regarding his sale of Five Points Mobile Home Park, and the challenges that wereinvolved.
As with every Tips and Tricks podcast episode, this one 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. Call Max for details.
Here Are the Show Highlights:
- Super broker Eric Wanck recently sold Five Points Mobile Home Park, though not without a little drama. (Max, 0:22)
- From the outside looking in, it was a great park. Five Points is in a favorable metro, it has a good, solid resident base, all tenant-owned homes, with direct-billed city water and sewer. Everything investors are looking for. (Eric, 1:28)
- On top of all other buyer advantages, the park was priced at an almost 11% CAP. (Eric, 1:56)
- The reason for the high CAP is that the tenant-owned homes were all pretty old and run down, from the late 1970s and early 80s. (Eric, 2:10)
- Max remembers being highly unimpressed with the homes as he rode through the park, inspecting it and taking pictures. He knew then it would be a hard sale. (Max, 2:28)
- The seller had approached Eric probably about a year before the sale, and asked him to evaluate the property. Eric appraised it and recommended that the owner spend a little money on improvements. The seller did so, and Eric was ultimately able to get about $800,000 more for the property than he had originally thought it would sell for. (Eric, 2:44)
- They got a lot of interest in the park, and the high bidder was a man who owned real estate, but had never owned a mobile home park. He already had a lender in place, but the lender got nervous. It made so many unrealistic demands that it looked like they didn’t really want to fund the deal. (Eric, 5:36)
- One and a half weeks before the proposed close date, the lender pulled out of the deal. Fortunately, the buyer was already in backup communication with another lender who came into the deal. They were able to complete the sale in 30 days with the new lender, and that included a new appraisal. (Eric, 6:36)
- The prospective buyer was a little gun shy with the appraisal, based on what he’d already been through with a lender, and the general aesthetics of the park with the old homes, so he did something Eric had never seen before. Even though he wasn’t the owner yet, he paid about $10,000 out of his own pocket to improve the look of the park. The strategy worked. The appraisal went through without a hitch, and the park was sold. Proof that even a drama-filled transaction can be successfully overcome with experienced mobile home park brokers. (Eric, 7:33)
We can’t guarantee a total lack of drama, but we do guarantee a park sale at the highest possible price. That’s the bottom line. Call Eric Wanck or Max Baker at The Mobile Home Park Broker, (678) 932-0200. You can also drop us a line at info@themhpbroker.com.
Power Quotes in This Episode:
“It’s not a deal without drama, bro.” (Max, 3:38)
“Every Tuesday, we talk about all the deals that we're working on. We talk about all the drama that everybody's coming across. We are a giant think tank for you, the seller and the buyer. So that's why you pay us.” (Max, 4:21)
“It just goes to show that you always run into something with these transactions…great cash flowing park definitely had its rough edges, but I think at the end of the day he's going to be very happy here, in the long run, with the asset that he purchased.” (Eric, 7:33)