Mobile Home Park Offer Sheet

[Justin Denham]

Hey all,

We are looking to make our first offer on a mobile home park. I would like to present the terms in a simple format prior to presenting any type of contract. Also, since we are offering a decent amount less than the asking price ($600K offer / $900K asking). We based our offer on our realistic (IMO)valuation based on a lot of the advice we have read here and other MHP investing books. We separated out the NOI for the lots and added back the wholesale value of the park owned mobile homes. I was also thinking about providing an explanation on how we determined the offer price. Does anybody have any suggestions or templates for an offer format? Also, any thoughts on whether I should share the formula I used to determine the value?

Best Wishes,

Justin Denham

[Curt Smith]

An LOI letter of intent may not be a complete waste of time but the main problem any offer has with the seller, even a full price offer is credibility. Will you include your proof of funds for the earnest money ($20k to $50k), a bank's pre-approval to lend you the purchase money?

The next issue a buyer has to deal with is how to structure due diligence, when earnest can be gotten back, time frame and what issues (earnest going hard).

This where partnering with an experienced park owner becomes essential. And / or go to the Frank and Daves boot camp which includes a purchase contract, around 40 pages. See mobilehomeuniversity.com. Under products our team all purchased the due diligence manual AND when to boot camp. We ended up offering on Frank's P&S contract.

You are on the right foot re how you calced the offer price!  Just write that up in a cover letter.  

A point in making an offer is to get "yes" from the seller, right? There's an advantage of forgetting the LOI approach and writing up the purchase contract, in either case you have to send credible proof of funds for the earnest, at least $20k and given your offer is low, offer MORE earnest money like $50k.