All Forum Posts by: Carl E.

@Karla Yudy -- There is some good advice in here from @Richard Allen and @Paul Sofia

Don't worry about the private well, that's no big deal. You can do the testing yourself and spend around 2k/yr for lab work. Replacing the pump will probably only cost you 1k if it goes bad.

Private septic is no biggie either unless it's in bad shape. If that fails then you'll have to re-locate it somewhere new, so talk with a local septic installer and your health dept and determine what size system you'd need if doing new, then verify that you have the space to do so. This is what scares me about in-ground septics on MHPs: if that system fails and you don't have room for a new one you either have to 1) buy more land to put it on, 2) hook to city utilities if available (very costly!), or 3) build a wastewater treatment plant (so expensive that you will walk away from the park and say goodbye to your $250k, I can assure you of that)

As far as cap rates, I wouldn't pay any more than a 20 cap (and I'm not talking cash-on-cash) for such a small property, because 1) you will probably not get a traditional bank to finance this, meaning expensive private loans or all cash from you, and 2) you have no real market to sell such a small park.

In your shoes, I would go HARD for seller financing on this. Maybe a master lease/option, but then you risk giving the property back after you spend 2 years trying to get bank financing and your option expires.

Best of luck!

@Matt Boettinger - I don't dispute that the buyer added value to the property; my contention is that the broker, because of her position representing both sides of the transaction and by her failure to advise me properly, caused me monetary damages by her handling of the situation. But, as I am seeing here, this is simply a hard lesson learned.

It was a private well; between certified operator and testing/chemicals/electricity, total costs were around 10k/yr.

@Eddie Salisbury - No seller's remorse other than me kicking myself for having the wool pulled over my eyes :)

I should have known not to work with someone who was representing both sides of the transaction!

I did well on the deal (ended up putting ~325k into a 1031), but honestly I don't care about the money either way. The excitement that comes with successfully finding and making good deals are what inspire me; the money is just a cog in the wheel. What stings the most is knowing what the buying power an extra 100k would do to the trajectory of what I'm trying to do, especially this early in the game.

Live and learn!!

@Matt K. - Thanks for your input, it seems like my gut feeling was correct: hard (expensive!) lesson learned.

@Account Closed - Thank you for your input

I am a younger (30yo) real estate investor with relatively limited experience buying and selling commercial real estate. I purchased a small (~40 space) mobile home park several years ago (my first CRE purchase), and after a lot of work I determined in June of 2016 that I should explore the possibility of selling the property. I called a broker who had sold some property for my dad and she was quick to get me set up with a listing agreement, etc. At the time I had the nagging thought that I may be selling the property a little too soon, because I had 4 or 5 units that were *almost* ready to rent after putting tens of thousands of dollars into them (it's painfully obvious now, I know!). I had expressed this sentiment multiple times to the broker (all she does is mobile home parks), looking to her to give me some guidance or thoughts, which she avoided.

When I initially listed the property for 650k around June/July 2016, the agent was telling me it was too high. She did not send me any offers for a couple months, so I assumed she must be correct and it must be too high (this was my first CRE sale), leading me to call her and have her drop the price to 600k, which she gladly did without offering any input.

She soon after presented me with two offers: one for full or close to full price offer, but with me carrying the note (no way!). The second was for 545k, which I was forcefully and actively pressured to accept. She even had one of her employees call me to admonish me to "take the money and run" because there was "no way" the buyer would accept a counter offer. Lots of pressure on all sides. Anyway, despite my inexperience I felt that my asking price was reasonable, so I stuck to my guns and we settled for 590k.

Imagine my surprise when I found it relisted about two months later for 850k. I requested info on the listing and found that my buyer had 1) rented out the homes I fixed up, 2) raised the lot rent by $25, and 3) submetered the water. I later found out it had ultimately sold for "just over 700k" (according to the listing broker) some time in August 2017.

Sidenote: I paid her an 8% commission on the sale back in October, which she said was "a deal" because her "usual commission was 10%." I did not realize that normal was actually closer to 6% for this type of transaction.

So, in conclusion, I feel that:

1) she did not advise me properly as to the correct timing and best positioning of the property for sale

2) she attempted to pressure me into a sale that was clearly below market (the 545k offer)

3) she overcharged me on the commission

4) she did not market the property properly (she claimed to have sent it to "thousands" of people on her "buyers list," but I couldn't even find the park on loopnet for the first couple months)

My gut feeling says that this was just a very expensive way to learn "seller beware," because I know that commercial real estate doesn't have the same kind of seller protections as residential, but do I have any grounds for a valid claim?

@Eric Black @Mark Swim @Jefferson Lilly @Kevin Schulte

Keep an ear out for my upcoming interview on Kevin Bupp's podcast! :)

@Sheila F.

How much capital do you have to invest? Getting into a mobile home park can take quite a bit of money up front, and if the park is not verifiably cash flowing up front then you will most likely need a lot of capital to get it to where it needs to be.

@Account Closed

No problem! Kevin's show is fantastic. FYI, if you type the "@" symbol then begin typing the poster's name that you want to mention (@Joel Comino, for instance), Bigger pockets will pull up the person in the thread you want to reply to and you can click on their name so BP will notify them that you mentioned them. Just a tip :)

@Derek Williams

Yes, my park is in Northern Indiana. I'd be glad to help.

PM me if you want to talk.