How to convince elderly mom/pop to share verifiable income/expens

Question

I’m working with a broker to acquire a mom/pop owned Mobile Home Park (36 pad), sellers are an elderly couple. Had the property under contract for several weeks and one excuse after another (waiting on CPA to get past tax season, had to go into the hospital, I just don’t want to share my financials) the sellers have not and seem to refuse to provide verifiable income and expenses.

What are your ideas to warm the owner’s up to sharing veritable financial info?

Chris Mason · Answer

Make up some lowball assumptions for rent and expenses, use that to justify a lower offer, and let them know that based on the information at hand this is the most the mobile home park is worth. They might just go "oh, that's not right! this, that, and the other are wrong!" -- and you go "oh, great. If that's all true, I'm totally comfy with my initial offer. Can you show me those numbers so I can run it past my spouse/lender/broker/whatever who was making me run numbers the other way that you say is wrong?"

People don't always like to hand out info willy nilly, but they generally like to prove someone else wrong when you say something less than nice about something of theirs.

Account Closed · Answer

@Jay Helms  From experience, i used to think this was shady, and pressed on for info.  After doing this for a while, this is such a super common thing.....  I get it, they are skeptical, they have lied to underreport to IRS , whatever, don't care. I would not drop a deal due to weak info.  If i could model off the little I could get, verify all what I could on my own, not overpaying .

How long have they owned it for? In this situation you are describing  i really want to see longer term ownership (i.e. 20 plus years) .

Will also be relevant if they are doing seller carry or you are trying to get a loan on the place.

Remember too, if they are really going to sell, if someone else cant figure out how to solve the riddle they will still be holding the park .  See if you can figure out a way to overcome the objections and just because you didn't get the deal today, doesnt mean you might not get it tomorrow.

Reid Hanley · Answer

Some people are just lazy, unorganized or even embarrassed about how they have run a business so showing that is not something they like to do.  Just have a WTF conversation with them one final time.  if they give you what you need then great.  If not the deal will have to stand on the merits of your best guesses.   Since you have it under contract already hopefully your out clauses give you the ability to adjust the offer price if something looks off.

I'm assuming there are some potentially significant park provided expenses (water, sewer...etc) you want answers to.  If so, maybe they would allow you to get this information directly from the utility providers?  I would think you could estimate all the unknowns with some area market research and a few thorough inspections of the property infrastructure and MH's.

Ryan Groene · Answer

If you have had it under contract and you have a due diligence clause(hopefully you do) and it is apart of your diligence list items that you have financials, then they are legally obligated to give it to you otherwise theoretically your contract should have never started therefore you have until forever until it begins. Of course this is if your contact reads that way.

Another way to convince them is that if you have it under contract you need that to close the property and therefore they can sell it. There probably getting a little sellers remorse and thinking they could get more than what you have tied it up for. Not sure though.

Also you could just have an open conversation with them and be like what is the deal...if you have it under contract your not going to blow up the deal because it’s your right to purchase it. Just be very open you want to close and be like cut the bullshit. What’s the deal. Maybe phrase it in a nicer way but this happen more than you would think.

And if all else fails...play hardball and tell them you’ll tie up forever and they’ll never  be able to sell it because you’ll just sue, blah blah blah....etc

This is all assuming you have it under contract

Jay Helms · Answer

The sellers weren't willing to pony up the verifiable income statements. I backed out of the deal. No tickee, no laundry!

How to convince elderly mom/pop to share verifiable income/expens

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