What are some of the better way’s too include partners in MHP deals?
Are you trying to include them as active workers or passive investors?
There are many ways to have partners. Could you clarify what you want from your partners.
Rick Ewens
For me, partnerships tend to have a purpose. So in a deal, everyone comes to the table with something. In my partnerships, I tend to come to the deal with the due diligence, contract knowledge and then through my operations company- the day to day operations of the MHP. So most of my partners are equity partners. Now if I had a park that was outside of my operational skill sets, or in a place I would rather not travel too, I would pick up a partner to fill those needs. I tend to look for the park first, then the partners seem to just appear. Sometimes people try to partner first, and unless it is just a equity partner, you really do not know what you need until you have a property and understand the operations of that specific property. You will know the right partners because they will either see value in the skill they bring to the table, or they will be excited after they see the return for the equity stake.
In operations, one should note these do not operate exactly like a stick built rental. The operations person must understand the infrastructural parts of the MHP. Though, the management duties could be split, or you could bring in an outside consultant or ‘person in the know’ if the wheels ever came off. I have found it is very hard to teach someone operations that are way out of their skill set. So the more complex the MHP, the more skill sets you need in that person that is dealing day to day with any issues that might arise…
Remember unless you have a modified partner agreement, if there is a large capital expense all the partners contribute per their % of ownership. This can be modified with the partnership agreement, as can disbursements with ‘preferred’ returns. Just know if your the one with deep pockets, if the park has a issue you might be the one putting in the cash regardless of what the agreement says. So be ready for that if/when it occurs.
There is another part of partners, concerning being on the same moral and values page that might be more important than any other factor. Partnerships tend to be designed to have a life span, but sometimes ‘life’ happens and they do not dissolve. So be ready for the unseen- divorce, death, illness, tax liens, bankruptcy, heirs, tornadoes, hurricanes etc…
I’m sorry should have been a little clearer. I have the opportunity with friends and family to seek either passive or active. I tend to cringe at the thought of active as I was locked into a nightmare of a restaurant once with a family member. “Never Again” was my motto after that. Since then I’ve mellowed out a little and I would not turn my nose up too and active partner but I only know one person at the moment that has the required resources and that I trust on that level.
Works well for me to be the operations partner, and the other partners to be equity partners or investors only. Most of the equity partnes don’t seem to care much about the details of the MHP business, they just want someone they can trust with their money and get a good return.
Bret
Anyone seeking investors
Hi Dean,
Yes I’m seeking Investors to fund MHP’s. Would like to partner with some Investor’s familiar with MHP’s , as this would be a great initial park acquisition experience to have knowledgeable partners, rather than have to educate / convince new Investors.
Dean,
Yes I am seeking investors. I have a deal I’m looking at in Florida.
Call or email me with the criteria.
Thanks, Terry
904 829 1410
When I am seeking a partner- I tend to present the property, not the concept. In the presentation, the concepts will be addressed. I also spell out where I 'sit’and ‘stand’ in my business dealings. Great properties find their own partners, and then it is just a matter of figuring out who are great partner fits…