Stumbled across 200 pad deal - too clean - is it a trap?

[Chris Reeves]

Hey guys,

So to the sleuths here - I smell a rat but I can't figure out where it is - 

I have "stumbled" across a 2-park package deal - a "pocket listing" e-mailed to me be a broker I have not done business with, but who lists (and claims to sell) a lot of parks in the mid-west.

Details: 200 pads total, paved roads, 95% occupied at both parks, city water/sewer, tenants pay all utilities including trash, and ZERO park owned homes in the two parks (no, not even any notes - so claims the broker anyway).

Rents are extremely low ($160 at the suburban park and $135 at the more rural one) and have been raised only once in the 10 years the seller has owned the parks (6 months ago).

Location: Park one has over 100 pads in a city of about 30,000 people 40 minutes from a metro of almost 1 million, unemployment rate very low, population growing, located directly next to many good businesses. Park two has under 100 pads but more than 50 - but is in a smaller town of under 10,000 people, 10 miles down the road from park 1. But according to city-data even this small town park is in a town that has grown 30% in the last 10 years and has an unemployment rate well under 5%.

Financing: Broker claims both parks will qualify for bank financing.

Seller will sell one or both parks: Broker claims seller will break the package apart but would prefer a buyer who will swallow up both at once.

Price: None given - seller wants to see what the market will bear and is asking for offers. Broker is telling me offers are coming in around 8-9 caps on actuals. Broker claims rents are under market an immediate $20 as-is and should be $50 higher within 36 months. If I can really immediately raise rents $20 then I should be at almost a 10 cap with two parks that are almost full with no POH's or private utilities to worry about. This seems too good to be true and sets of my "BS" meter.

Seller is located in a nearby state and is supposedly getting out of this state entirely - but owns almost 10 more parks in their home state (but will be selling them soon as well).

Fishy items: 1 - Why would you sell the "ideal" parks if you owned them? 2 - NO POH's? That seems odd - too good to be true. Broker has no explanation except "That's how this company runs their parks." 3 - NO PRICE, no financials available until it goes into diligence - they just want offers. Broker admits this is strange (none of his other listings are marketed this way), is apologetic for the opaqueness of the offer, but claims the seller is serious and just likes to market parks this way and see what the market will bear 4 - Broker also claims to not know why the seller is selling.

Yes I've been to boot camp and will follow to the letter Frank's 30 Day due diligence manual if we get this under contract.

Yes of course I can get it under contract and then see the financials - and I may do just that. But I'm still wondering if anybody has any thoughts on the BS factor of this deal going in. Just doesn't smell right to me.

Any feedback is appreciated!