All Forum Posts by: Kyle G.

I'd make a final offer and let them decide every single time.

Regarding Option A, I'm not comfortable with massively overpaying up front with the sole intention of hammering them in post-DD negotiations. I know it happens in both real estate and non-real estate transactions but it's just not for me. The only exception would be if the number is VERY VERY close to my desired price and I could present legitimate, concrete reasons for concessions after due diligence. Even then, worst case scenario I'd probably still be willing to pay the initially agreed upon price. 

But with the numbers you're talking about? No way. I'm not comfortable ethically and it's hard to imagine the  seller going for it in the end either. Which brings me to Option B....

After the bidding war, the seller should know you're a serious buyer. Everyone has a final price and you hit yours; no harm done in  walking away. If the buyer believes that's the true  value let them overpay. If they try to get all sorts of significant concessions you've left the door open for the seller to come back to you at the price you actually want. 

Just make sure to end things cordially with the seller if your final offer is raised by the other party. Let them know you can't afford to pay more than $X, thank them for their time, and ask them to keep in touch if the property goes back on the market. Maybe they call in a few weeks, maybe in a few months, maybe not at all. Some may disagree, but that's how I'd handle it. 

Yes, it's the newest F&D fund. Don't know any investors and haven't personally invested, but I've interacted with Frank a few times, attended their bootcamp, and have followed both the MHU and fund stuff for a couple years. They are as good as it gets in the MHP business.

Obviously make sure you thoroughly understand *every* aspect of the fund offering. FWIW, I wouldn't hesitate to invest if I were looking for hands-off MHP investments. 

Learning and saving is an option. Alternatively, seek out a partner for this specific deal (assuming you can negotiate a good price, it passes DD, etc). They may be either on the operational side (read: experienced in MHPs), the financial side, or both. Do be aware that you will be giving up the majority of the monthly profit and future appreciation by going this route, as that partner would need sufficient incentive to get involved in the first place. However, it helps you get your foot in the door now while gaining experience and pocketing a little bit of money. Then in a year maybe you do it again, or in 2 years you do it but with entirely your own money, or something else. 

what is the metro population for these parks (and how far apart are the 3?)? 

utility systems for each?

occupancy for each? 

all of those will have a large impact on the offer price.

You're underestimating expenses; the NOI would be ~$100k less (or in that ballpark) and that is also assuming 100% occupancy (not likely).

And yes, as others stated it's priced similarly to other "commercial" property. A lot-rent only park would be priced in the same manner as an apartment building (ie: noi/cap rate).

Jim,

Fantastic response!

You said well priced smaller parks go under contract in hours. Are these the ones listed on MHPS/loopnet, or even the pocket listings too? I've read elsewhere that the bigger parks (100+ lots) are the ones with the toughest competition, and smaller parks are easier to buy due to a smaller pool of buyers that doesn't contain many professional investors. Not true? 

Also, regarding pocket listings could you clarify how the broker/buyer relationship actually works? Like does the broker have a list of "verified" buyers that he then emails any new pocket-listed deals to, with the first response getting the deal? From what I've read of Frank and Dave's material, they tend to suggest constantly calling brokers for new deals instead of new deals automatically getting sent to them because they're on the list.

Thanks for your help.