Worst case scenario? - Blind offer

We are purchasing a park with an outright blind offer. The sellers said they don’t care about selling (Which I believe is true as we contacted them) but would sell if they got a cash offer with no due-diligence or seller deliveries). They did say they can guarantee only a clear title. This is obviously extremely risky but the park is full, almost all tenant owned, free & clear with all city utilities (so no worry about failing septic tanks). We know the rent, the park is a high end park (4 or 5 star). Since there is a lot of cash involved without any financials or rent rolls I have been trying to imagine all of the worst case scenarios that could occur if we purchased the park. Besides it being a toxic waste Superfund site I haven’t been able to imagine anything and appreciate any suggestions/fears anyone here would have if they were faced with a similar scenario.

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The one thing that almost caught me with a functioning park was the zoning (the title search should find any outstanding fines). Even though everything I looked at said mobile home park, it was actually still zoned Agricultural. If it wasn’t for the fact the building department had approved plans for the park, I could have been in real trouble. I would check with the County/City that it is fully approved with replacement of homes and no outstanding issues.

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Agree with the zoning, but hopefully there is also a survey included along with clear title. I’d hate to buy something without a survey to find out I really own half the property.

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Good luck! Fact is, you can check almost 90% of DD without seller interaction because of open records requests. There can be multiple layers for zoning, which could include a PUD, HOA, and other governing docs. The key questions involve revisions to zoning, flood map, etc. Crime records can be requested from the Police. Onsite driving and walking provides all the clues for number of occupied paying homes - looking at the utilities, trash, and mailboxes correctly will answer all occupancy questions. We have done DD on many deals that just had changes approved by City Council or the owner knew of some negative changes coming. Setbacks, encroachments and boundary issues are other items that can be completely looked at by reading the code. We have looked at several properties in the past year that had replacement restrictions by the city of lot square footage, set backs, etc that required loosing a certain number of homes to comply. Some of those deals were dropped and one in particular was purchased at half price to accommodate future lot decrease. If all cash is being collected with discounts then the market comps better be 90%+ occupied. ~ DueDiligencePartners.com

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If this is your first park–WALK. If you have experience keep digging until you are content with the information and make a deal. We have bought parks with out any information from sellers BUT we had a park next door and we knew the area and possible problems.

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I would have no fears what so ever with this situation since I would do as carl suggests but likely not for the same reasons. Walk away, you are wasting your time trying to bribe someone into selling that has no interest and no desire to work with you. All you are doing by making a offer is stroking his ego or insulting him. Either way there is likely nothing in this for you except risk and rejection.

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If the park is not for sale and the seller has indicated no interest in selling, then you have time on your side. Take your time, do the due diligence regarding zoning, environmental, market research, etc. You will not get documents from the owner, but you can estimate expenses and rent roll based on if you see physical evidence of an occupant or not. I would make clear title a condition of the sale.

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