I have a park that I’m selling (my first park sale) and the brokers aren’t really moving at the speed I would like. Since this is my first sale, I don’t really know what to expect. But in about two months, there have only been a couple of offers and this is a turnkey property with 100% TOH and 100% occupied, about 20-40 below market rents, public water/septic, etc. It’s in a decent enough market (population 100k+, avg home price is 100k+ and 3BR apartment rent is 1k+) and I honestly expected to get more traction.
My question is twofold: 1) Should I expect to have more offers after two months?
How ironclad are these exclusive listing agreements? I mean if I’m not getting the results that I expected, I would really like to go with someone else.
P.S. I would prefer not to give more details about the park at this time so please respect that.
I’m a broker specializing in MHPs. The first thing you should ask yourself is, are the agents you gave the listing to specialized in this property type? If they are, & are already active in that market they should know all the best buyers & would know who is in a 1031 exchange (The most motivated) in that market. Even if they aren’t specialized they should at least have the knowledge of & access to Costar. With Costar you can look up all the buyers in the market who recently bought mobile home parks along with their contact info. They are usually looking to buy more. If the first thing they did with your property is put it on Loopnet without going through the top buyers and showing it to them off-market I don’t think they are doing their job right. Once something is on Loopnet it loses some of its allure. Especially if people feel like its been shopped. Still it could be other factors, I don’t have enough info to know. It could simply be priced too high. It could also be well + Septic which many try to avoid. If the homes are older & it’s a 2 star park with small spaces that is also less attractive. Some parks with smaller spaces cannot replace old homes with newer because of new space req./regulations (depending on the area).
They do not specialize in this property type. Also, they do not have the price listed on any of the sites it’s on. And it isn’t listed on LoopNet at all, which I thought was weird. It could be that since they don’t specialize in this asset class they don’t have the contacts to market effectively.
If they have access to Costar they should look at recent sales of mobile home parks in the area and call all of the active buyers. The worst is selling to a first time buyer since they will be the most likely to back out. If you find or know any other MHP investors in your area they would be the best prospects. Also are they showing the right information in their packages? They should have enough information in the right order for someone to make a buying decision.
@DaveM, what’s the size of the park? I’ve experienced high interest but less actual offers for <50 unit parks. Is the listing posted on mobilehomeparkstore.com? That’s a cheap way to reach your targeted audience.
Dave, we have personally sold our parks ourselves successfully–we know our product and the areas pros and cons–one park the buyer paid our asking price and within 1 hour of meeting had a signed contract. I would be glad to help you in drawing real buyers and finalizing a contract so there is a win-win situation. We are in a definite seller’s market to the degree some sales are less than a 6 cap and have personally stopped doing much buying unless we see a solid +8 cap.
OH MY…it fits the criteria that Frank talks about perfectly. people are over paying for parks with easy money. somehow you cant sell your amazing park. what should you do? should you pay to advertise on mobile home park store or loopnet or should you just put something on the free forum…but i do respect the fact that you say you cant disclose any additional info as clearly you are man of principle. maybe you should honor your agreement and next time before you sign a document you should do your DD. Dave after you sell it I have a sweet deal for a 1031 exchange, its a win-win. pm me and i will send you the info on my beautiful property. as a man of principle myself believe me when i say this will be the deal of a lifetime. believe me
I want to first state that I don’t really try and do sales with people on this forum. Mainly because we’re playing in the same space. I’m not going to sell for a 10 cap. I’m fine with a win-win deal, but I think a lot of people on here want their win to be bigger than my win and that’s not really something I’m interested in doing. I will PM the link to the listing, but just keep in mind that this won’t be an amazing deal (can be good, but not a home run from an investor’s perspective) for the buyer so if that’s what you want, I’d keep looking.
“I want to first state that I don’t really try and do sales with people on this forum.”
"Mainly because we’re playing in the same space. "
“I’m not going to sell for a 10 cap.”
“I’m fine with a win-win deal, but I think a lot of people on here want their win to be bigger than my win and that’s not really something I’m interested in doing.”
“P.S. I’m not going to do a 1031”
My Husband and I own 2 Mobile Home Parks.
I am also a Licensed South Carolina Real Estate Broker-In-Charge.
@DaveM , I commend you on knowing what you will and will not agree to as a Seller.
It is great that you are specific, so that the potential Buyers understand what will and will not be accepted…it saves time for everyone involved.
BOTH Sellers and Buyers should know what they will and will not agree to.
For Example: There are some Buyers that write multiple offers on multiple properties at the same time knowing beforehand that they financially only have the ability to close on one property. This is not correct.
Writing an offer means that you have:
Desire To Go Forward
Financial Ability To Purchase
Ability To “Pull The Trigger” To Actually Purchase - (Go Through With Closing)
IF a Buyer writes multiple offers (knowing that they can only financially afford one), the Buyer is stagnating all of these properties because other Buyers will NOT want to place an offer on a property with a “Ratified Contract” (unless it is a screaming deal).
Also, a Buyer with a “1031 Exchange” brings in a little more complications to the Sale as opposed to a Cash Buyer.
Having a Seller state that they do not desire to participate in a “1031 Exchange” is a good thing. It saves everyone’s time.
@Kristin thank you for the kind words. Going to make some changes to how we are marketing this thing and I will post back on here later down the road with an update.