When is the best time to look at the inside of tenant occupied homes? The concern is we don’t want to make anybody nervous about the park being sold. This is a concern for both the seller and us. So do we need to do this after a purchase agreement is reached or before? If waiting till we have a purchase agreement and we do it during due diligence should it be done early in the process or later? We don’t believe that the condition will affect our decision to buy however it may affect the price we are will to pay for the park. FYI there are 5 POH that are currently rented Thanks
You should be doing your inspections after you are under contract. That is the natural order of things and it keeps both of you from wasting each other’s time. If the condition is going to affect the price, have the seller tell you what the exact condition is with a realistic price assigned to each home. Then, during diligence, do your walk through with the seller. If the home is not in that condition, then you have him there to point it out. At the end of the walk through, you can talk about a price concession face to face if it is warranted.
If you are trying to remain secret about it through the inspections (most tenants are smart enough to know what’s happening) then you can pose as a maintenance man, appraiser, banker, insurance rep, etc.
Once the property is under contract there is no longer any reason to keep the sale secret. During due diligence you should be talking with as many residents as you can to get their perspective on any issues the community may have and which, if any residents, you may have to consider getting rid of.
Greg you bring up an area that we have never choose to go since IF the deal did not work there can more problems for the seller but I have really never felt comfortable doing what you suggested but I see you have made a very important point. What do other sellers or buyers of park thing about what Greg has said… Again Greg very good information!!! We have bought and sold over a dozen parks and to my knowledge buyer or seller have never talked extensively to tenants.
Keep in mind I am of the opinion that residents know a lot more than owners think. Additionally although I respect a sellers desire to not broad cast the impending sale this is primarily only necessary up to the point of a accepted conditional offer. Once that point is reached all cards are off the table. Personally I would never finalise a sale with out all possible info and what tenants can provide is essential in my opinion. By that point in the sale I will inform the seller I will be contacting the residents and I could care less what he thinks. If he threatens to kill the deal I know he is hiding something.
This applies to buying rental properties of any type. I talk to the tenants because they know the hidden secrets of every property.
I haven’t personally done what Greg suggests, but I might add it in on the diligence. The last park we bought, the seller insisted we did our walk throughs of the POHs under the guise of being his insurance agent. It was pretty obvious the tenants didn’t buy it.