All Forum Posts by: William Noel

Hi Jean-Marie, 

Here are a few posts about valuing real estate and negotiation. Best of luck! Will

I know a lot of people get nervous about negotiating. Back when I was a cold caller sometimes I wouldn't even want to pick up the phone. I find now that having a few phrases picked out ahead of time helps me when it comes time to negotiate. I know what I'm going to say ahead of time, so it's less intimidating when that time comes.

There are powerful negotiation levers you can pull in your life. I pull them all the time in our business and I also pull them when I’m buying something off craigslist, ebay, or in a market / store where negotiation feels appropriate.

Lever One. Your wife / husband (imaginary or real). I discovered this lever right after I got married, buying a Toyota Prius off of Craigslist. The price on the ad seemed high (prices always seem high to me) and I said to the seller “I really want this car, but my wife will kill me if I pay $12,000 for it. Would you take $8,500?”

This phrase is a diamond hiding in plain sight. Right away the seller and I go from being on opposite teams to being on the same team. The team we are both on is called, “try to make this sale without making both of our wives (or husbands) angry that we bought (or sold) for too much (or too little).” Everyone who has been in a long term relationship can relate to this.

Lever Two. K.I.S.S. Bad negotiating will pit the buyer and the seller against each other. I don’t like that feeling. A phrase I use all the time is so straightforward and honest that the seller will never feel like you’re trying to pull the wool over their eyes. Just say, “What’s the lowest price you’ll accept and still be happy with the sale?” This is my “go to” line for smaller purchases. I thought it might translate well to real estate negotiations, but it doesn’t. When negotiating on a very large purchase, you need to be artful. This phrase is not artful, it’s just simple and useful.

Lever Three. Nothing. The last lever is one that everyone knows but most people don’t use. I don’t know why they don’t use it! It’s the most fun and the most easy, because you don’t say anything… … … … Try this when a seller says a price that you think is too high. Don’t respond AT ALL. Most likely they know it’s too high also and will negotiate themselves down without you saying a single word. The great thing about this is that you don’t seem like a squeaky wheel and you get to save your squeaky negotiation tactic to use AFTER they negotiate themselves down to normal price. CAPICHE?

Mastering the purchase is one of the three pillars of successful real estate investing. The other two pillars are access to capital and property management.

I'm not the best real estate investor in the world, in my city of San Francisco, or probably in my neighborhood! There is one thing that I do very well and do it every time, and that is make a great purchase. These are some of the techniques I use to make great purchases. 

Hope some of this was helpful for you. All my best.

William Hayes Noel

@Rick Chatwin Thanks. It's not quite the dream of margaritas on sunny beaches but it does feel good. It's mostly sitting in front of a computer, which is too bad. I'd like to get out into the construction sites more often like the good ole days. 

1. Yes. Look for parks for sale on MobileHomeParkStore. Call the owners. They will have horror stories you can learn from.

2. Both. Cash for little parks and leverage for larger parks. Actually, that's not true, we leveraged a small park this year. Use the bank if you can and you don't mind signing a personal guarantee. Most people starting out will sign guarantees, most seasoned vets do not because they have seen recessions and have a lot to lose. 

3. Frank is the best and there is no way to cover everything in three days. You have to learn from the forums, mentors, and experience. Or join a team!

4. Yes, we do it all from a San Francisco living room. It's difficult and is a full time job. There are things that make it easier being far away. A) Have a great manager and maintenance person that you have built rapport with. B) Don't have the manager handle money. Residents pay directly to bank or online. C) Video drive through the park every now and again with the manager on FaceTime or whatever video chat you use. D) Get your feet under you and then grow quickly. Scaling the business allows you to hire help.

Best of luck Rick! 

@Joshua Diaz There are a number of ways to fill lots. We're learning about more people who are willing to help finance homes and take over rehabs everyday. 

The old fashioned way that we do it, we're buying homes for ~$2k, moving for $2k, putting $7k into them, and selling then for $300 a month over lot rent on a 5 year contract. We get our money back eventually and fill another lot in the park. This way of filling parks is slow but steady. 

It seems like a few Clayton dealerships will help fill parks as well if you give them a kick back for referring people to you. There are lots of changes going on now, reverting back to the old days when homes were financeable and lonnie dealers more prevalent. We will have to see how that progresses but for now, if you have the capital and a trusty handyman and demand in your park, buy a few cheap homes and renovate them. Will

My wife and I own and operate mobile home parks. We have two large parks under contract. One that we currently manage is up for sale. I thought I'd share a story of the park that we have up for sale in Dayton, Ohio.

The park manager is Barb. Her grandmother was the first manager when the park was built in the 60s. We took over a few years ago, the park was in receivership (post foreclosure), and was a mess. It looked like nothing nice had been done for the park since Barb's grandmother stopped working there.

We rehabbed 12 vacant homes. Paved the potholes. Replaced all the electrical lines, poles, and boxes (we own the electrical system in the park). We removed about half of the residents because of drugs and rule violations. We've gone through probably 50 different families to arrive at what is now an 80% occupied quiet clean park.

We bought this park for $299k. We spent $150k rehabbing. The park has 55 spaces. We'll sell it for just over $1M.

This is one way to make money in the park business. Buy a park that is under 75 lots and make sure you buy it at a LOW price. Attend a Frank Rolfe seminar. Use Appfolio property management software. Find a park mentor and follow their advice. Hire a great manager that also knows how to fix things or has a relative that does. Bring in cheap used homes, fix them up, and sell them on a rent credit contract. Hire somebody on Upwork to help you 5 hours per week with the small stuff. Don't have the park manager handle bill collections, instead setup the residents to pay online or directly at the bank.

It's a lot of work, but you can make good money this way and start to develop a track record. We've done it five times now and will buy 4 more parks next year. This is a good business, but it's not for the faint of heart. Your residents will be very poor and your heart strings will be pulled. Know when to be tough and when to be compassionate. Some people deserve a second chance and some will waste your time and leave you out to dry.

Go out and buy a small park. 

William Hayes Noel

Hi Ram, 

You can usually get away with having a few RVs parked in MH lots. We do it from time to time. It depends on whether you like to ask for permission or forgiveness. For us, it often depends on our relationship with the city and whether or not we think they are looking out for RVs in mobile home parks (usually they are not!). Best of luck. Will

Hi all, 

We use a piece of Apple software called Filemaker which is basically an enhanced excel spreadsheet. I'd be happy to share our system with anyone interested. Will

Hi @Roland Brown,

MHPs are a real bear to manage, especially if you are buying fixer-uppers. The market for them is very hot now as well, which is driving cap rates down. Most people talk about parks as a unicorn investment but it's not entirely true, they are much more work than the SFRs that we have.

If you are going to purchase a MHP I would offer two pieces of advice:

1. Shoot for the moon right off the bat and try to get a park that has at least 60 spaces if not more. They are much easier to finance if you have to do conventional financing and you are more likely to find a great manager in a park with at least 50-60 spaces

2. Find a great deal so that you can partner with a seasoned MHP investor. If you don't want to give up any equity, find somebody who will consult you through the first 9 months. There are a few mistakes you can make that will cost you the investment and a seasoned investor should be able to help you steer clear of these. 

Best of luck. If you decide to go the SFR route, check out John Schaub's book "building wealth one house at a time". It's an older book but still a classic great read. Will

Hi @Charles Roby,

I think you're on the right track. There is great potential in Lonnie Dealers but very few people are doing it well these days. Most people are talking about 21st Mortgage.

I'd be interested to hear what you find out. I've been putting my own money into filling lots and making an 8-12% return on the rent credit payments. Eventually I will run out of capital. You can sell the agreements at par value to outside financiers like PEP (Performance Equity Partners) but I would rather find a debt investor who is interested in a stable personally guaranteed 8% return. 

Please keep in touch. All my best. Will

Hi @Jennifer Taft,

I didn't initially have too much luck with realtors either. We're on our fourth park now and we're starting to get some traction with a number of great realtors around the country. It's taken about two years. 

You didn't ask for any advice, but looking back this is what I would have advised myself: Become very useful in one area and offer that service to other experienced park investors. Something that would be very useful, for example, would be a deep rolodex of debt investors who are looking to park money in safe 8% yield investments. Mobile home parks require a lot of time. You have to find parks, raise money, structure the deal, and then manage all of the assets. Most people can't do all of these things well right off the bat.

If you can become an expert in one helpful area and then partner with an existing operator you will benefit twice - once from your deep knowledge of a certain aspect of the business, and again from working with an operator who as already made the rookie mistakes.  

Best of luck. Stick with it. Reach out anytime. Will