A partner and I are about to commence diligence on our first park. So far we have only received a rent roll and basic information. There are 5 POH and associated mortgages. We noticed they are all very new, and have barely paid off any of the balance, so it seems like they all moved in the last month. My worry is that they were brought in to inflate the price of the park temporarily and may move out after a deal closes.
My instinct is to fund a portion (~20%) of the purchase price into escrow, to be released to the seller in 6 to 12 months as long as those tenants are still in good standing in the park. If they move out within that period, I’d get the money back.
Is this something anyone else has experience with or will that idea be a non starter? Thanks.