The MHP Brokers Tips and Tricks Closing Cocktails Interview with Broker Paul Schaaf Regarding His Sale of a Challenging Mobile Home Park in West Virginia

In this episode of The MHP Broker’s  Tips and Tricks Closing Cocktails podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed The MHP Broker’s Paul Schaaf regarding his recent sale of a storage facility, mobile home park and RV community in Parkersburg, West Virginia.

As with every Tips and Tricks podcast episode, this one is brought to you by The MHP Broker’s proprietary Community Price Maximizer. Use this four-step system to get the highest price possible for your mobile home park or RV community when you sell it through The MHP Broker. Guaranteed. Call Max for details.

Here Are the Show Highlights:

• Max introduced broker Paul Schaaf to discuss his sale of Gihon Self Storage Facility and RV Park in Parkersburg, West Virginia. (00:22)
• The owner had acquired the park as part of a bankruptcy settlement, so his heart wasn’t really in it. He was running it from out of state. It had three verticals: a mobile home park, RV community and self-storage facility. He had a good on-site manager taking care of the day-to-daay, but contacted Paul because he was getting unsolicited offers. The self-storage vertical was running pretty well, with 150 units and about 75 percent occupancy. The mobile home vertical was a mess, though. A lot of houses in poor shape that had to be taken out.  The offers were generally just for the self-storage business, but the owner wanted to sell everything as a single unit. They put together a nice marketing package and had multiple offers. The seller had a nice financing program, which helped attract qualified buyers. (Paul, 1:12)
• The owners offered self financing on a portion of the loan at about five percent with a three-year balloon payment. (Paul, 3:15)
• The deal went well, even though the buyer was taking on the mobile home vertical that needed a lot of work. The deal closed in about 45 days. (Paul, 3:49)
• The buyer was someone Paul had worked with in the past. They had money from family and friends, and had invested in commercial properties before. They were just getting into buying mobile home parks, and had a few properties. Having worked with him before, Paul trusted that they could close without major issues, and that’s what happened. (Paul, 4:05)
• Paul’s takeaway was that sellers must be patient, especially if they have properties that are challenging to sell. This one, for instance, had problem houses that had to be removed and replaced. But when you have good buyers and sellers, as he did here, the deal can go quickly and smoothly and be a pleasure to work. (Paul, 4:49)

Bring us your most challenging deals. At The Mobile Home Broker, we have years of experience selling mobile home parks, RV communities and all of the other verticals that might be part of the transaction. Call Paul Schaaf or Max Baker at The MHP Broker, (678) 932-0200. Op drop ‘em a line at info@themhpbroker.com.

Power Quotes in This Episode:

“We are good at those deals in the secondary, tertiary markets. Don’t get me wrong. We do big deals. I mean, we just closed a nice $9 million deal recently, and have done upwards toward the multi-million dollar deals as well, up in the 30s. So, we do a lot of deals. We do all types.” (Max, 5:23)

00:00

Hello and welcome to the mobile home park broker’s tips and tricks. This is the podcast where we talk about mobile home park investing, because that’s what we’ve been involved in for the last decade. Let’s dive into today’s episode. Here is your host, Maxwell Baker,

00:22 Maxwell Baker

Hey, y’all, welcome to another epic episode of the Mobile Home Park Brokers Tips and Tricks podcast. As always, this episode is brought to you by the Community Price Maximizer. It is our proprietary system that will guarantee you a higher price when you exclusively list with us. Give us a call. Paul Schaaf will actually walk you through how we can get you a premium on your park and he is here for another closing cocktail. Paul, welcome to the show, and congrats on closing another deal man!

00:52 Paul Schaaf

Yeah, happy to be here Max and thanks for having me on!

00:56 Maxwell Baker

Yeah man, so tell us a little bit about Gihon that was up in West Virginia, wasn’t it?

01:01 Paul Schaaf

That’s right, near Parkersburg, West Virginia.

01:04 Maxwell Baker

So, tell us a little bit about the deal and how it was done, and how many offers we got, and kind of just like the whole deal story behind it.

01:12 Paul Schaaf

Yeah, it’s an interesting deal, as they all are. This owner got this parked through a bankruptcy, and this was an asset that was collateralized and ended up in their hands as part of the bankruptcy, so not really a venture that they had planned on, however, learned the ins and outs and did a good job of turning the park around, but they were out of state and had other things going on their lives that were far more important. So, you know, that’s kind of the backstory on it. It was a more of a value-add deal. There was two components, self-storage and MH, and actually some RV, but a heavy lift on the MH, whereas the self-storage was running about 75% occupancy, 150 units. So, some decent cash flow on that part of the business, which helps support removing homes that were just old and had some issues with asbestos and whatnot. And then he did a good job of finding a manager to run it while he was out of state. So overall, they came to us because they were getting fly by overnight offers unsolicited. Really, these guys were just trying to buy the Self-Storage and their goal was to sell them together because they didn’t want to be left with the park that was their goal, and we focused on it and put together a nice marketing package that displayed both opportunities and the upside on both. We were able to garner multiple offers and get into some good negotiations and vet who would be the right fit, and ended up, you know, getting within pretty close to ask a nice seller financing program that helped out the buyer, and you just walked into.

03:11 Maxwell Baker

My next question was, how it got financed?

03:15 Paul Schaaf

Yeah, so it needed a lot of capital injection into MH side, and the owners already had it. Owned it outright. They just needed to be compensated for all their time and effort and resources into cleaning it out and getting it, you know, somewhat marketable, so they understood the buyer’s situation, and we were able to get a nice structure of, believe it’s about 7030 and it was a three year balloon interest rate, you know, probably around 5% or so.

03:46 Maxwell Baker

That’s pretty competitive!

03:49 Paul Schaaf

Yeah, you know, the negotiation was to make sure that it was going to close in a timely manner and that’s what happened. We closed it, I believe, in 45 days.

04:02 Maxwell Baker

Yeah, what was the buyer profile like?

04:05 Paul Schaaf

Buyer profile, you know, someone who has investment experience in other commercial um, however, wanted to get into more MH and self-storage, and was able to raise funds through their family and friends and did well on a couple other parks, and they were looking to acquire more, actually, a previous client of ours, so we were familiar with them and trusted their process and ability to close and they ultimately, you know, got the deal due to their history and ability to perform.

04:40  Maxwell Baker

Nice! Okay, well, Paul, do you have any closing comments on here, or any top things that you learned from this deal that kind of stand out from other deals?

04:49 Paul Schaaf

You know, it’s just sellers, they got to be patient, and we’ll do everything we can to achieve their goals and find the right buyer but cases where there is a lot of hair on it, we’ve got to be able to get creative and remember to trust us, because we’re in this day in and day out and I have to tip my hat to the owners. They were they were very trustworthy and great to work with and then the buyer really appreciated the process as well. So, that was the main takeaway on the deal, Max.

05:23 Maxwell Baker

Oh cool, man. Well, I appreciate it. Y’all heard it here first about this guy on mobile home, RV and self-storage deal. It was quite the different type of deal with all the verticals of income that it came out of it. But like I said, we are able to do those deals. We are good at those deals in the secondary, tertiary markets. Don’t get me wrong. We do do big deals. I mean, we just closed a nice $9 million deal recently, and have done up upwards towards in the multi-million dollar deals as well, up in the 30s. So, we do a lot of deals. We do them all types. But like I said, this one was very unique, simply because it just had the three different verticals, and we had a great man for the job here, Paul Schaaf, and I made it happen and everybody likes working with Paul, so give him a call. Real easy to work with both. Friendly. Guy is obsessed with golf. He’s a hell of a golfer, so I’m sure he’ll talk your ear off about that. We always have a great time talking about it. So, give him a call, (678) 932-0200, and he can walk you through what we can do for you and your community and get it prepped for sale. So, like I said, give us a call and thanks for listening. Let’s keep moving forward!