Just closed on my 8th Mobile Home Park Community, here is what I would do differently

[Logan M.]

Lessons I learned the hard way so you don't have to.

Leverage Seller Motivation for Better Financing Terms:

One of the crucial lessons I learned during this purchase was the importance of recognizing seller motivation and using it to my advantage. While the sellers were highly motivated to sell, I could have pushed harder on the overall seller financing terms. Sometimes, it's easy to get caught up in the negotiation process and not realize the potential for even more favorable financing terms. It's essential for new investors to remember that motivated sellers might be more flexible than you think. Don't hesitate to ask for better terms, as this can significantly impact the long-term profitability of your investment.

Optimize Seller Financing Notes for Your Benefit:

Creating a seller financing note is a complex process, and making the right choices can save you a considerable amount of money in the long run. In my case, I made a critical error when structuring the financing note. The seller needed a specific monthly payment, and while I attempted to be clever by splitting it into a flat principal and interest payment, I should have seen the better option.

Instead of a single flat payment, I should have separated it into two portions: one for the flat principal and the other for an amortized portion. This would have been in my favor, as it would have accelerated the reduction of the principal, saving me an estimated $30,000 over the life of the loan. This mistake taught me that the seemingly small details in financing terms can have a significant impact on your investment's profitability.

Negotiate for Necessary Property Improvements:

In hindsight, the third lesson I took away from my 8th mobile home park purchase was the importance of negotiating with the seller to make necessary property improvements. While the focus during the negotiation process often centers on price and financing terms, it's equally crucial to address the condition of the property. In my case, I missed the opportunity to request that the seller make certain improvements, such as having someone clean up the weeds throughout the park. These small but significant improvements can not only enhance the overall appeal of the property but also save you time and money in the long run. Don't be afraid to discuss such details during negotiations; they can greatly impact your property's value and profitability.

Secure Written Permission for Pre-Leasing Vacant Units:

The fourth lesson I learned from this purchase pertains to the importance of securing written permission for pre-leasing vacant units. Pre-leasing can be a valuable strategy to minimize downtime between tenants and maintain a steady income stream. 

Lessons learned so next time I won't have to.