Locating Off-Market Mobile Home Parks With Motivated Sellers
Specialist · Portland, OR · Member since 2015 · 1k+ posts · 231 votes
Locating Off-Market Mobile Home Parks With Motivated Sellers
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Commercial Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 59 votes
10yIt seems to me that there are different meanings to the phrase "motivated seller and you need to define what you are looking for. Sellers can be motivated to sell for various reasons including, health, retirement, financial or estate planning, distressed property situation and many other reasons. I suspect what most people mean by motivated seller is will the seller sell at a big enough discount to perceived value to interest the buyer. Of course there is also another way to motivate a seller and that is to offer full value for the property. The only way to "turn" an owner into a seller of any kind is to talk to them to discover what the motivations might be.
Good hunting.
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- Commercial Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 59 votes10y
It seems to me that there are different meanings to the phrase "motivated seller and you need to define what you are looking for. Sellers can be motivated to sell for various reasons including, health, retirement, financial or estate planning, distressed property situation and many other reasons. I suspect what most people mean by motivated seller is will the seller sell at a big enough discount to perceived value to interest the buyer. Of course there is also another way to motivate a seller and that is to offer full value for the property. The only way to "turn" an owner into a seller of any kind is to talk to them to discover what the motivations might be.
Good hunting.
- Homeowner · VISTA, CA · Member since 2015 · 727 posts · 340 votes10y
Ha! A motivated seller will sell if a particular need arises that may motivate them as @Howard Abell has so aptly stated. Or if their MHP is in a blighted, neglected or abused condition or area. If they're distressed it's probably for a good reason; location,demographics & socio/economics.
If the park is in a geographically desirable area that's in the path of progress don't hold your breath waiting for a good deal to come your way. Bottom line? If you can buy it cheap............that's not necessarily a good sign.
What you really need to do is a lot of due diligence. Buying something on the cheap does not always yield the greatest results. If your capital restricted find some partners if you stumble onto a good deal that's above your price point.
It's not always about what fits your buying criteria in this biz. It's more about how the price fits the criteria of the buyer/s.
- Specialist · Springfield, IL · Member since 2011 · 700 posts · 479 votes10y
Two things:
- Actual owners are not always easily located and identified. Often, for a variety of reasons, they don't want to be identified and they shield their ownership behind Delaware or Nevada corporations or complex arrangements where other people show up as owners when, in fact, they are not. Our firm has at least 50 clients that include both Hollywood and Nashville celebrities whose own spouses and children do not know they own land lease communities who are actively shielding their ownership.
- There is no one prevailing reason why community owners sell. In some cases it might be age or health. In other cases it might be because relationships between the principals change. It can also be because of mismanagement or a change of direction.
I would not take too much for granted about why people sell, nor would I take for granted that a person that has gone to a great deal of effort to shield their identities are going to be happy when you call and announce that your detective work has led you to them.
- Specialist · Portland, OR · Member since 2015 · 1k+ posts · 231 votes10y
Thanks John and Howard for your input. I am still going through the learning process when it comes to MHP strategies. And I do agree a good amount of due diligence will be required.
Originally posted by @Jerry Holt:
> I am interested on learning more on mobile home park deals but I’m not interested in listed properties that the various websites provide.
Only properties that won't sell are listed on Loopnet in most cases. There are, occasionally, listings from residential or other non-MHP agents, or owners, that get mis-priced. Or they put so little info up, and no photos, that no one calls them but me. So you have to have your searches set up to email you weekly of every MHP deal that comes up in your target markets...just in case.
> So, now that I have the owner contact information what’s next?
Getting accurate lists is a drag. How did you get yours? We do a lot to come up with lists...starting with Google Earth to identify parks with at least 30 spaces. Then we look up the ownership in the state property tax records. Then we mail them.
We recently mailed every MHP owner in the state with a park 30 units or over. If all we had was an LLC name, we mailed to the registered agent and the mailing address for the company. In my state, there isn't any way to do better than that with LLC's. One thing we always do is check the addresses of the LLC's to see if either is by chance a residence. Then we can reverse directory them to see who lives there.
We did get some responses. One was an older couple retiring, the other didn't really want to sell the park I wanted but wanted me to buy 50 MH lots he had for sale out in the sticks. After looking at the lots, I decided I didn't want them even if he sold me the other park with it. The older couple simply wanted too much for their park: $38,000/unit, which is what I am buying an apartment building for here in the same town. Oh, and they HAD to carry a note, but wanted 6.5% interest and 20% down for min. of 10 years. And they would only sell to another Mom and Pop...I would had to prove I have the 20% of the $3M asking price in personal funds before they would even tell me how many park-owned homes they had. WACKY. Needless to say, we parted company and we sent him a thank you card explaining that we were just too far apart on price. We will stay in touch.
Everyone got a business card magnet with the letter which listed a few bullet points about what we do. Everyone gets mailed again in 90 days. This time, with a different type of mailing...perhaps a personal letter instead of the more corporate letter we sent out this time. 90 days later, they'll get another mailing...maybe a newsletter about the MH market. At some point, we have to work on getting phone numbers and start regular calls to the owners: One must build a years-long relationship over the phone (and by personalized mail) in order to be the one they call when they are finally ready to sell. It is a very long, time-consuming process that 90% of investors give up on after a couple mailings.
>What circumstances would make the owner a potentially motivated seller?
Sick of it all, retirement, illness, bankruptcy, foreclosure, death of spouse who did all the work, death of sole owner and the descendants want to sell fast, tax foreclosure, out-of-state ownership, property manager who is stealing, property manager who just quit, notice of major repairs required...the list goes on and on.
>My first thoughts were to do title searches on the MHP owners to determine if there are any encumbrances, such as liens, easements, judgments, taxes or any other issues.
Why bother? There aren't that many parks. Mail every park that's within a 2-hr. nonstop flight from your nearest airport, or a 4-hr. drive, which is located in a city of 30,000 or more. There are other criteria: Listen to these MHP podcasts to get the full picture on criteria that work for them: "Mobile Home park Investors with Jefferson Lilly & Brad Johnson" and "The Mobile Home Park Investing Podcast - The #1 Real Estate Investing Podcast that will Show You How To Create Massive Cashflow by Investing in Mobile Home Parks"
>If the dollar amount of the encumbrance is not too high, but it remains unpaid, it would make me wonder why. Is the owner in a financial situation?
You're thinking too much. This is just a marketing business. Stop thinking and start doing. :)
Good luck to you! Let us know how it goes.
Marc C.
- Specialist · Portland, OR · Member since 2015 · 1k+ posts · 231 votes10y
@Marc C. and @Ken Rishel thanks to both of you for your input. What you are both saying makes sense. I like your approach Marc and repeat mailings like you are doing would be essential. You both have gave me a lot to consider and I will be re-thinking my approach with the MHP owners before I dive into it.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
I don't have a lot of experience at this however I did put 4 MHP's into contract the last 10 or so years and closed on 3.
1. was elderly lady totally upside down park was a mess but any park in Oregon has value.
2. this one was Vancouver WA.. very tidy 45 space park.. same owners started it .. they needed quick sale because they needed capital for manufacturing business they owned and were expanding. it was off market but through realtors.. I paid market for the current rents which were 250 a space.. ( however did believe that the space rent was low)... and we paid cash and closed in 30 days. and could Proof the cash with our offer... MHP buyers buy and large the bigger players are very well cashed up.. and if they are sellers they are not going to fall for the smoke and mirror type sales tactics you either have the dough or you don't is their mind set... this one I raised rents to just under 495 a space and sold it to a big owner out of San Fran who also paid me cash..
3. bought one that had recreational value but water and private seweage was a mess and I will never EVER buy a park that is not on public sewer and water again.. huge hassle.. lost money on that one.
4. another one in contract on the east coast I wanted to scrap the MHs and build a housing sub.. did not pencil. it was listed by realtor.
Gives you an idea that they come from all sorts of different sources.. I don't really actively look but when one falls in my lap and its a deal I buy it in 30 days for cash.. before they sell it to someone else.
You should also find MHP brokers. They may advertise on their sites, but not on loopnet and mobilehomeparkstore.com
Here are a few I have found
http://www.emcatlanta.com/mhpfs
http://joannemstevens.com/index.php
http://www.marcusmillichap.com/properties/search?t...
http://www.mobilehomeparksforsale.biz/Home_Page.ht...
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Bryan H. we have a very good one in Oregon and she sold my Vancouver park and got me top dollar...
Oh, also wanted to say, while loopnet and mobilehomeparkstore.com is mostly over priced, garbage. There are deals to be had there.
I'm under contract now, found mine on loopnet. I found a motivated seller. Looking at some nice returns for a turnkey park.
- Homeowner · VISTA, CA · Member since 2015 · 727 posts · 340 votes10y
Feel free to reach out anytime @Jerry Holt. That's what this forum is all about. There's so much happening in the MH Industry nowadays and so many new and better products available that will genuinely help gentrify the thousands of MHP's throughout the USA.
But that stated, there's also so many old, worn out and run down MHC's no longer in the path of progress that frankly, IMO, should be closed and rezoned for higher and better use. But no matter what stay tuned to the many threads on BP on this subject if you're really interested in investing in it.
There's a lot of very valuable information and knowledge you can get and it's absolutely free for the most part. There's many free podcasts and webinars that are very credible and factual that you can learn a lot from as well. There's also a few pay to play webinars and podcasts that although expensive are very informative.
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