Help Dealing with stubborn broker

Hello Everyone,

I am brand new to this and have been following the forum for a few weeks as well as doing my own research.

I recently put in an offer on a park for a master/triple net lease with option to purchase. I think a few people have looked into this park already from this site and nothing has come to pass.

Short version, park has 22 spaces @ avg 325 rent, two POH all 22 spaces are occupied. They are on well/septic (yes, not the best I know). So if my math is correct, 2232512*.5*9.2=394,680. I offered 395K.

Broker just came back to me trying to sell the property at the listed price or “something with a 6 in front” based on the potential of the property. He also gave me a new cap rate of 7.58% which would bring the value down to 308,000.

I am assuming the broker just wants a pay day. He says that the seller is the one who wants 699K

My question would be what kind of information do I need to present to the broker in order to show that my analysis of the park is in fact true market value?

Thank you all in advance

PS I do plan on getting all of the study information and attending a bootcamp as soon as possible, but I didn’t want to let a possibly great deal pass me by.

This does not sound like a great deal. I like your math and pricing a lot more than the seller’s. Show them your calculation of cap rate, and that a 12% cap is more reasonable for a property like this.

Do not be afraid to walk away. Leave on good terms with them, but don’t do a deal at a price that takes advantage of you. There are other better deals out there. You might just send the broker some comps off and/or showing what other asking prices are. Of course, the deals are getting done at prices lower than that. Do a bit more research and find out what actual prices have been on parks in the area. Be sure to adjust for size; larger parks trade at lower cap rates, smaller parks like this trade at higher cap rates.

If you can’t come to a reasonable valuation (something with a ‘3’ at the front), then politely decline the deal and let them know you’d be interested in hearing from them after they shop the deal some more and if it is still unsold.

To your continued success,


Thank you so much for the reply.

My thinking was the same. If they cannot come down to a realistic price with comps and other information, I will have to walk away but on good terms.

This was a great deal to get my feet wet even if it didn’t result in my favor.

Can you explain the math? 22 Lots x 325 Lot Rent x 12 months x .5 for expenses ? x 9.2 Cap Rate?

dmaxwell wrote:

“My thinking was the same. If they cannot come down to a realistic price with comps and other information, I will have to walk away but on good terms.”

My Husband and I own a Mobile Home Park in South Carolina. I am also a Realtor and Broker-In-Charge.

I completely agree with you that ‘if they cannot come down to a realistic price with comps and other information, that you should walk away on good terms’.

I have had several deals where the initial negotiation has not resulted in a sale. However, several months and/or years later the same players were able to agree to sales terms and complete the transaction.

Frank and Dave have created great formulas to value Mobile Home Parks. The valuation is pure numbers and should be based on current performance NOT future potential of the property (as you as the Buyer will be the one doing the blood, sweat and tears to make the ‘future potential’ come to fruition).

Previously, we had a Mobile Home Park under Contract that was listed with a 78% occupancy rate. However, after we did some research it was discovered that there was only a 39% occupancy rate. As a result of this information we signed a Release of the Contract. When the Seller’s Real Estate Agent tried to explain the discrepancy in the occupancy rate, she said that all we needed to do is rent the unoccupied mobile homes. If this was such an ‘easy task’, we contend that the current Sellers should have done this.

Stick to your numbers and your valuation. There will be a Mobile Home Park out there that you can buy based on your valuation.

We wish you the very best!

I enjoy negotiating and love difficult brokers, I find formulas useful as far as searching for a deal, but brokers don’t care or respond to formulas since not all parks are the same. I buy the same way I sell the only difference for me are the margins (not saying this is the best way, just best for me) I don’t pad the numbers and never use proforma, I add capital expenditures, and vacancy and many times management (I find that missing on many mom and pop sales). Usually once I include that a 10 cap drops to a 7.

Most brokers will understand this, also when it comes to old “refurbished” POH’S at best they are on a contract which means its temporary income, at worst they are straight rentals.

If 10 POH homes are bringing in $400 ea. and 10 are on $250 lot rent most brokers see $6,500 as the monthly income and refuse to look deeper. Now lets say $62,400 NOI on their numbers, I add real world expenses and get $50,700 NOI at a 10 cap we are $117k apart already and includes the temporary income from rentals/contracts.

If there are POH’s I usually tell the broker I would rather buy the park on a separate contract than the POH, and I find little resistance I usually say its a better corporate vail, taxes etc.

If I separate the 2 offers and get him below $327,000 for the park, my numbers will show a fair value (if they are using 10 cap) of the park separate from the contract value of the POH, at this point we get into the value of the POH and my argument on rentals are repair cost, on contract sales my point is this income is temporary and their numbers count that income in perpetuity. Assume a brought in home that is worth /. Bought for $5k will sell under contract for $9k because of set up delivery costs, clean up, stairs etc. and the full value of the note will be around 12k, so I offer the value ($5k or whatever they paid for the home itself) and am happy to pay, but I will also explain the wonders of the sellers keeping their beautiful homes and get that care free mail box money.

As far as negotiations and convincing brokers, practice and get comfortable and be confidant, know why your offer is what it is not just the numbers, take nothing personal, if your offer angers them, then you are in the ball park.


Your last line definitely rings true. I was 100% confident and gave my farewell basically after every correspondence and yet kept receiving emails. I stood my ground and must have insulted him as he has “been doing this for 30 years and is very experienced”.

This park will still be on the market a year from now. The broker told me had several other offers incredibly higher than mine yet still chose to engage in arguing value. That tells me he has no other offers and was hoping I would bring my numbers up.

I am content in waiting it out and maybe in a few months realization will set in and I can follow up and possibly have a better outcome.

The amount you offered was fair (although I would not personally touch that deal since it has well/septic). If the broker needs something with a “6” in front of it, I suggest you offer him $66,666, because that’s as much as it’s probably worth.

Brokers (and salespeople of all types) try to bully you into making mistakes, as they see everything as a transaction and have no compensation or care for what happens after the sale. Their input on value is meaningless. Ignore them completely. It’s kind of like the customers on the show Pawn Stars that tell the owners that the Mickey Mantle autographed baseball is worth $5,000, when they already have 10 on the shelf for $50 that are sitting unsold. A broker is not an appraiser. Don’t confuse their expertise.

You cannot intelligently explain the true value to the broker. What talks is money. If he has no other offers higher, and needs to make his mortgage payment, he’ll hardball the seller to take your offer. If he think that there’s a sucker out there that will be $700K, and his mortgage is not due for another two weeks, then he’ll hold out.

I can promise you that if you pay a penny over what you’ve proposed, you’ve overpaid. And, again, I think you’ve already offered too much, as the well/septic on a tiny park is a deal killer in 99% of cases (unless the location and numbers are unbelievably strong).


I couldn’t have phrased it any better.

I’m glad he rejected the offer because I definitely agree with you that the septic/well system is probably more than I want to handle on a first park purchase if not a turn off all together.