Working directly with sellers


#1

I scoured the market for about one year or more trying to work with every broker under the sun. I eventually developed a decent deal flow. This includes on and off market deals and pocket listings. Many many deals and several contracts later, I still hadn’t successfully purchased anything. I finally enacted the direct to seller approach and have spent the last six months trying to find deals working directly with sellers.

I’m starting to create a small deal flow and have several park deals in which the numbers work well. One in particular, has me very excited. It doesn’t hurt that I’ve also hit it off with the seller and we’ve basically agreed he’s going to sell me the park for a very attractive price.

Now here comes the weird stuff. He still hasn’t countered my original offer which is close to his asking price. He hasn’t asked for a contract although I’ve asked. After a month or so of kicking it back and forth since my offer, he asked for some time to prep the park and get it ready for sale. He wants about 2-3 months to get things ready.

None of this seems unreasonable at all, but what the heck I do now? Do I just keep in touch with the guy and try to be involved with his prepping the park? Should I push harder to get it under contract? Don’t want to lose this deal. He seems like an awesome and honest person. The best type of person you’d want to buy something from. I might not have to do anything except be patient.

In the meantime, I have other deals I could pursue. I should obviously keep looking. However, If this one is going through, my personal $$$ will be almost tapped. What do you guys think?


#2

I would get a contract to him that closes on the timeline he is saying he needs. If he won’t sign it within a couple weeks then you know he is not telling you something, or otherwise not ready to sell.


#3

Solid advice brother. Thank you for replying. Sometimes, you are just too close to the deal to see what’s staring you in the face


#4

Im gonna ask the legit question. What is it he’s fixing and why wouldn’t he negotiate that into the deal or share it? I would seriously suspect he’s got another buyer on the hook. If you are serious, send him a letter of intent spelling out your down payment, mortgage etc. Mtg commitment etc.

Beware stretching yourself thin. We did that, had a $5000 dollar water leak… that was the water cost only.


#5

Include a deadline for s response.


#6

This situation is all too common on dealing direct to owner. A lot of time these guys are thinking about selling, might be talking to others, maybe only you.

I have had this same situation turn into years…

You wont be able to bully him into signing off and if you try to , he wont talk to you.

Keep things amicable, follow up without being a pest , i think thats going to give you your best odds.


#7

I like @Marvel_Equity 's advise. Giving people an ultimatum - won’t work. They will just not want to work with you. Chances are that you might not even be the first one they reached out to and they are using you as a backup. I am currently talking to a few owners like that. Best i can do is follow up.
If you have some numbers, and are in a position to send them an offer - just do that. It does not hurt and makes the owner realize that you are very serious.


#8

Brakes - To answer your question, he’s working on one of the septic leach fields. He’s got too much water running through his system (letting tenants take advantage) and one of his fields gets marshy in the spring. They run the water all winter. At least that’s what I think is happening. He thinks he has a potential water leak. That plus the ground water from thawing equals a marshy field. When he first bought it, he admitted all the fields were like that. The previous owner didn’t take care of the septic system. Over time, he’s been able to get all except for that last one operating close to 100%. He’s in construction and can do all of this type of work himself. He’d rather it be 100% before he sells it so we don’t have any issues. Thanks for responding!


#9

Thank you Jack! You raise a good point. This was my plan. I get the general vibe that he does what he says he will and if I push him it will turn him off. He wasn’t thinking about selling until I happened to drop by his park a couple months ago. He said he figured he’d be ready in a few years but he’d be willing to sell now if he got his price since he’s so busy.


#10

getting tenants to fix their leaks is nearly impossible IF the water is included in the rent. Metering each space is the best line of defense. We offer to replace faucet seals, toilet flappers etc… for free, it costs little and is much better than a flooded leach field. I finally put in 2 leach fields and only run 1 at a time to let the other dry out some. Educating you tenants to pour cooking grease into the garbage rather than down the drain is also VERY important. Grease and oil will clog up a leach field and make it darn near impossible to fix.


#11

That’s a great point Bob. I am planning on sub metering to monitor the water usage if for nothing else. If I allocate each tenant a certain gallon limit per day and charge for anything above, maybe I can keep the usage down. It’s private wells, so I’m not sure I can charge for all water use. It has public water available, so the end game is to tap into that down the line.

How do you only run one leach field at a time? Do you have shut offs to both fields?

How do you educate your tenants on the grease and oil? Do you send out flyers, etc?

Thanks again! - Kyle


#12

es, ball valves on each.
What State are you in? In Ca. to operate a well with over 3 spaces, you have to have a distribution license.
You are a community water system.
Water must be tested monthly for bacteria, then there are quarterly, annual and tri annual tests required.
Monthly testing runs around $30, some of the larger tests can run $500.
The D1 test they give once or twice a year and is put on by the State. It is VERY strong on math, they allow up to 3 or 4 hours to take it and give all the other tests at the same time. Since I was a firefighter, my hydraulics classes made it a breeze for me, I was out in 20 minutes, but on average 60% fail the first attempt.
My larger leach field contains 1000 feet of leach pipe and was badly clogged with cooking grease. I put in some leach pits and let it dry out for 4 years, until the leach pits also clogged up. I had no more room to expand my system. In disperation I put a submersible pump into the clean side of the 15,000 gallon septic tank and hooked it to both systems with valves. I pressurized the large system that was plugged, it was all the pump could do to blast out the clog and I feared the connections were going to come apart before it finally worked.
I also added an air defuser to the clean side of the tank which puts in fine bubbles of air to promote bacteria growth and I discovered a home made concoction that creates and feeds the bacteria in the tank (equal parts of baking soda, brown sugar and Yeast). I was down to having to have the tank pumped every 6 months, I am now @ every 2 years and it is not really bad @ 2 years.
With a well, you can never have too many pressure tanks, the fewer time the pump turns on and off the longer it will last.
I was forced onto City water 2 years ago, and I bought a trencher and ran ALL the outside watering to my outside wells and the City water only goes inside the trailers. I have 40 spaces, 32 occupied, Last months water bill was $832.
I was using over 20,000 a day when on my well, by separating the systems I am using around 5,000 gallons of City water a day. I tried putting in some meters but they froze and broke in the winter, so It is cheaper for me to just repair the tenants leaks as they occur and my manager does that and I have a large storage of spare parts.


#13

Hey Bob,
This park is in PA. Thank you for all the detail. What do you mean by separating your water systems without meters? I’m trying to follow you but I got confused when you mentioned that part and that city water only goes inside the trailers. Thanks!


#14

I ran our wells to all outside faucets. The City water ONLY goes to the trailer connections. By doing this as opposed to running City water to the entire park, I am saving well over $2,000 a month in the outside watering months.
1 thing you NEED to be aware of, IF you have high Nitrates, which can create “Blue baby syndrome” high arsenic, or any chemicals that contribute to cancer in your water, it can destroy your life. There are always attorney’s who will sue you for everything you have. IF you have $1,000 worth of tests that prove your water is safe, it can save you $1mil in future problems!


#15

Now I understand! Thank you for explaining that Bob. I had no idea what you meant by outside lines. You’re paying for the city water as well, so I can see how that would save you some $$$ by having your wells supply the outside water lines. I’m sure it also eliminates some liability because people shouldn’t be drinking from your outside lines.

As for the other note, thank you for the tip! You’re a wealth of info at this point I’m sure. I may take you up on some more of that knowledge at some point if you don’t mind. I’m seriously considering two parks right now. Each have wells and one has septics. Only one has city water / sewer available. The other has a sewer packaging plant :laughing: