We have been looking for a park in Montana for 2 years straight with no luck finding the right deal. We have limited our search to the more populated cities and only parks on city water and sewer. Finally, it seemed that we found the perfect park…. 10 cap, city water and sewer, and best of all location is very lucrative. One Problem we need a 50/50 partner that has at least 450,000 cash (that would cover half of the down). Owner financing is not available. The idea of having a partner has made us very leery over the deal because of the problems that can arise. Could be dreamy or worst nightmare…. What do you think? Should we start searching for a partner/investor or start looking in other states?
@ngrov , as per your question:
“Should we start searching for a partner/investor or start looking in other states?”
My advice would be:
Start looking in other states.
Personally, I am not a fan of Partnerships.
I have seen the ill-effects of just jointly owning Timberland with multiple individuals.
Thus, actually having to ‘run’ a business with another individual is not something I personally would venture into.
Now I do understand that there are wonderful Partner relationships (such as Frank & Dave).
However, for me the negatives definitely outweigh the positives.
If you decided upon using a Partner/Investor, I would suggest starting with a much less expensive MHP and seeing how the Partnership actually works (or does not work).
We wish you the very best!
Thank you Kristin! Your advice is very insightful and appreciated!
My partner, Dave Reynolds, is my favorite person in the world, and I have had nothing but positive experiences with partnerships in the past. But before you even worry about that concept, why do you need $900,000 down on that deal? If that represents 20% down, you’re looking at a $4.5 million deal, and that’s pretty big for a first park. If you’ve got $450,000, then look for a first deal at $1 million and keep half of your cash in the bank until that first deal starts paying out a decent cash flow. I don’t think you need a partner at this point.
Yes it is 4.5 Million. Rare find for Montana, but I hear your point Frank. We are having a very hard time stepping across state lines, but it seems that the time has come to do that in order to keep moving forward.
Before you step across state lines and walk away from this thing, you still might be able to come out ahead depending on what the deal specifics look like. Maybe you can at least get an assignment if it checks out. Maybe its something that would fit Frank/Dave’s portfolio. If you want some direction on this park if you will pass on it, feel free to shoot me a message to see if there is a direction to go with this rather than a pass without anything. Thanks.
We’d be interested in exploring a partnership. Brad and I are partners, we own 8 parks so far, and are closing on two next week - both with partners in situations similar to yours.
I have a park in Montana and I’m going to start poking around for another. Nothing quite that large though. What have you done as far as searching? It’s a tight market up here indeed but a very solid one IMO. If you’ve passed on any deals for whatever I might be interested if there’s a willing buyer. I don’t mind picking up a park with a survivable black eye… a well, gravel roads etc. Parks with decent numbers are so hard to find these days and the market here is so favorable in most places that I think it’s quite doable.
I’d always prefer to go it alone but as long as a partnership is properly structured I think they’re very viable and can be mutually beneficial in many cases.
Partners can be great, but you want partners that are active and are willing to pitch in, and will provided capital. I’ve worked with partners for over 20 years and the benefits are greater than the risk. I have prior MHP ownership experience of turning around a park, sub metering, and turning a park to an all owner occupied MH’s.