The MHP Brokers Tips and Tricks Podcast Interview with MHP Broker Eric Wanck Regarding His 5-Park North Carolina Portfolio Closing

In this episode of The MHP Broker’s  Tips and Tricks podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed The MHP Broker Eric Wanck regarding his very challenging closing of a portfolio of five mobile home parks in North Carolina.

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 Eric Wanck and explained how Eric and his business partner had recently closed on a five-park portfolio in the Tar Heel State that came with plenty of challenges. That included a buyer who initially fell out of contract but then came back months later for round two. (Max, 00:22)
• The prospective buyer initially came to the deal with a funding package he was trying to put together from among several investors. As what tends to happen when you have too many moving parts in a deal, the whole thing fell apart. The buyer’s due diligence was also challenging, since there were something like 123 park-owned homes to look at, spread on some 172 pds scattered over five parks. (Eric, 1:58)
• The prospective buyer failed to get financing, killing the deal the first time around. The deal looked deader’n a doornail.  (Eric, 2:40)
• The park went off the market for three or four months. But then the original prospective buyer came back with another deal. One advantage of doing business with those folks again was that they had already inspected he parks and had completed the bulk of their due diligence. However, Eric was naturally skeptical–and cautious–since that group had already brought them a soured deal. (Eric, 3:07)
• Eric and the sellers proceeded cautiously, shortening timelines for due diligence and inspections since a lot of that work had already been done the first time around. It was still a slow grind, taking about 90 days to close, even with the buyers presenting an all–cash deal. (Eric, 3:47)
• The availability of all of the park-owned homes also complicated the deal. They were hard to price. Twenty-eight of them were nearly new, having been bought new and installed in 2020. The final tally was that the homes sold to the park buyer at an average cost of about $22,000 each…a good price for the buyers. (Eric, 5:06)
• With lots renting at close to $1,000 a month, the buyer was going to generate impressive cash flow and get back the purchase price in good time. The sellers had made over a million dollars in capital improvements to the homes, increasing the value of the entire portfolio. (Max, 6:06)
• That included new HVAC units throughout the park, greatly increasing the portfolio worth. (Eric, 6:27)
• The sellers’ well-organized and complete books and records also helped make the deal possible. The seller also had the benefit of being able to get the best purchase price based on competitive rates and other pertinent data collected and provided by Max and his team. (Max, 7:00)
• The bottom line is that, the more comprehensive the due diligence and financial information, the more the seller can get in the sale. Make the process easier for all parties, and you’ll end up with more at closing. (Eric, 7:40)

The Mobile Home Park Broker has tons of experience putting seller-friendly deals together–and saving deals when they fall through or feel at risk. If you’re thinking of putting your park on the market, call Eric Wanck or Max Baker at The MHP Broker, (678) 932-0200 and we’ll help you find a qualified buyer and an optimal sale price.You can also drop us a line at info@themhpbroker.com.

Power Quotes in This Episode:

• “Whenever you get more people involved (in a deal), you typically might run into more issues. (Eric, 1:58)
• (On a first deal falling through.) “Hey, just because you don’t make it go once doesn’t mean you can’t try to do it again.” (Eric, 2:40)
• (After the first deal failed and the parks went off the market for an extended time) “We just kept a good relationship with the owner.” (Eric, 3:07)
• “When you drive around a mobile home park and you see a bunch of brand-new Trane HVAC units, literally on every single home, you’re dealing with ownership that takes pride and wants to have a nice home for tenants.” (Eric, 6:27)
• “So it’s very important to organize your books and records, because whenever we go to sell your community…it only adds more zeros to the bottom line. You know, simply because you’re eliminating risk, and the less risky your asset is to an incoming operator, the higher the price naturally is what’s going to happen.” (Max, 7:00)
• “The more comprehensive your due diligence and financial information is, the more money we can get for you. …It makes the process so much easier, both on your side and the buy side and getting to the closing table.” (Eric 7:40)

00:02 

Hello and welcome to the Mobile Home Park Brokers 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 beautiful episode of the mobile home park brokers Tips and Tricks podcast. As always, this episode and every episode, is brought to you by the Community Price Maximizer. It is our proprietary system that will guarantee you your highest price when you exclusively list with us. Call us, email us, send us a smoke signal. We got you. Get you to the highest price today. We’re gonna pivot from that and talk about this deal that we closed at the end of 2024 Eric and his partner Paul, were the brokers on this deal, and this deal was pretty difficult. Needless to say, there’s a lot of moving parts. The buyer fell out of contract, came back a few months later, put it back in contract. Eric was really good at making sure that the earnest money was a ticking time bomb, and they put hard money up on day one, on the second round but this five-part portfolio, Eric, congrats on closing it. I’m kind of stealing your thunder. I wanted to talk about it with you, but congrats on getting it done and dude, like, yeah, it took a minute. He probably gained a few gray hairs from it, but you did a hell of a job and congrats, buddy.

01:41 Eric Wanck

Yeah, thank you. Thank you. Yeah, you hit some highlights there on how unusual this particular portfolio was to finally get across the finish line. It was no small feat by any means.

01:54 Maxwell Baker

Yeah, tell us about some of the hardest things that you had to navigate on this deal.

01:58 Eric Wanck

Yeah, as you mentioned, we did have this under contract. Initially off market, the buyer was utilizing multiple private money partners and you know, whenever you got more people involved, you typically might run into more issues. DD is pretty comprehensive, as you can imagine, over five parks. I think there was over 100 and I can get the exact number, but we had a pretty good amount of Park Owned Homes here in this portfolio that made it challenging. Out of 172 pads, there was 123 I think, Park on Homes. So, as you know, trying to finance, trying to do due diligence on that many homes is…

02:39 Maxwell Baker

Tough!

02:40 Eric Wanck

…an undertaking, for sure. So, I think that was probably one of the bigger challenges, was not only navigating the Park Owned Homes, how to get them financed. You know, unfortunately, we came up a little short, not on our end, but the buyer just trying to get the money around on the first time around here but, hey, just because you don’t make it go once doesn’t mean we can’t try to do it again.

03:05 Maxwell Baker

It’s definitely one of those classic zombie deals.

03:07 Eric Wanck

Yeah, yeah, as you, as you mentioned, I think it went off the market three four months. We just kept a good relationship alive with the owners. They still had an interest in selling, so we did take it to market exclusively, and probably within 60 days, this group came back to us with a good offer and we kind of wanted to learn from the first time around, they had a bulk of the due diligence already in hand. They knew the parks very well. So, for us to make our client feel good about going under contract. We demanded money. Going hard day one.

03:45 Maxwell Baker

Yeah, that was clutch.

03:47 Eric Wanck

Not many folks would be able to do that but again, it was a unique situation and we were able to get that. We’re able to shorten up some timelines, as far as the DD and inspection, because a lot of that was done. So, we tried to run a hard bargain, but the buyers knew at the end of the day, these are good assets. They make good money. There’s upside on the table and it was still a grind. I think it took almost 90 days even on the second time around, and they closed in cash. But there was some extensions for small, little items, as it always does. It seems like with these deals, there’s something that comes up last second that we were trying to clear off title, and they ended up closing with cash, trying to get rid of some other property, and just moving that money through a 1031 so boy, awfully, awfully glad to have it close, though.

04:39 Maxwell Baker

Yeah, man, I could tell it was a difficult deal. All the communities I’m just reading, some of the highlights were on public water. 28 brand new homes were installed since 2020. What kind of pricing were those homes getting at? Like, it’s kind of a crap shoot as you know what, where to price brand new homes and used homes like, do you remember how many or what the price range were on those brand-new homes that were included?

05:06 Eric Wanck

Yeah, the seller’s cost basis was boy off top of my head, probably running 50 grand on these homes. Now, they had been installed, you know, a few years, but they took a pretty good discount as far as how we price them, what this what the buyer actually bought all 123 homes in a package for, I think, just roughly, the buyer probably got into them for about $22,000 a home, yeah, which is not unheard of. You know, you’re, making money. You know, tax wise, cash flow wise, as the owner has those homes, your basis is

05:42 Maxwell Baker

shrinking consistently over time with the payments, the rents you’re collecting. So, I mean, it’s not really a loss. Let’s be real about it. I mean, if you’re collecting, you know, what were the rents at over there? Were they over $1,000?

05:58 Eric Wanck

They were close. Yeah, I think we’re pushing $900 on a lot of these lots, but $1000, I think there was a few that touched into $1000.

06:06 Maxwell Baker

Yeah. So, I mean, you were able to get your money back pretty quickly on that investment. So, they also did some renovations and H back upgrades. Totaling, I’m just reading the notes here, more than 1,000,005 in the park on home capex. So, they were definitely upgrading all the units. So, what it sounds like, right?

06:27 Eric Wanck

Yeah. I mean, sometimes you see these folks shy away from putting money back into the park on homes, but this was the exact opposite case. They had a good relationship. They were able to get, essentially at cost, HVAC units and install them. Yeah, when you drive around a mobile home park and you see a bunch of brand-new train HVAC units, literally on every single home, I gotcha, you’re dealing with ownership that takes pride and wants to have a nice home for tenants.

07:00 Maxwell Baker

Okay, but we had all the numbers. I mean, it seems like this last little piece here, all the due diligence was there. So, you know, lo and behold, whenever you have a lot of data, you’re able to get a lot of cash, a lot of prices and a lot of value. So, it’s very important to organize your books and records, because whenever we go to sell your community for you, it only adds more zeros to the bottom line. You know, simply because you’re eliminating risk, and the less risky your asset is to an incoming operator, the higher the price naturally is what’s going to happen. So, Eric, you got any closing comments here before we wrap this up?

07:40 Eric Wanck

100% couldn’t agree with more with that. The more comprehensive your due diligence and financial information is, the more money we can get for you. Yeah, it’s just; it makes the process so much easier, both on your side and the buy side and getting to the closing table.

07:55 Maxwell Baker 

Definitely! Well, congrats buddy. Again, I’m looking forward to 2025. Eric’s pipeline y’all is the biggest he’s ever seen since working here at The MHP Broker. So, give him a call if you’re looking to buy deals, or if y’all are looking to evaluate deals, give him a shout. He has got a great team around him. Like I said, we are here to add as much value as we can to you, whether it’s debt, selling, buying, research, consultation services, give us a call. Appreciate y’all listening. (678) 932-0200, or email at info@themhpbroker.com and as always, let’s keep moving forward!