In this episode of The MHP Broker’s Tips and Tricks podcast, Maxwell Baker, founder and CEO of The Mobile Home Park Broker, breaks down the most common seller missteps that can cost mobile home community owners thousands—or even torpedo a deal altogether. Drawing on years of experience and dozens of real-world transactions, Max outlines the pitfalls that park owners stumble into when they skip prep work, misunderstand expense ratios, or fail to keep their team aligned before going to market. These are the costly lessons he’s seen time and again—and the ones he’s here to help you avoid.
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
- Most sellers use the wrong expense ratio. Unless you’re triple-net with city utilities and dedicated roads, expect 30–40%, not 15–20%. (17:47)
- First impressions matter. Clean landscaping, clear signage, and basic repairs can mean tens of thousands more in the bank. (19:10)
- Don’t blindside your management team—buyers hate instability, and managers often hold the keys to smooth transitions. (22:16)
- Real story: Wall Street buyer with a 120-day due diligence scam tried to tie up a park. Max stepped in and closed the deal in 45 days with a real buyer. (25:29–29:31)
- Planning your exit matters. Max shares tax strategies like 1031 Exchanges and Deferred Sales Trusts to protect your upside. (30:27)
- Don’t skimp on insurance. Even debt-free parks need liability coverage to protect against lawsuits. (32:42)
Power Quotes in This Episode:
“You wouldn’t try to sell a muddy old car without cleaning it first. So why are you trying to sell your park without cutting the grass?” (19:10)
“Management is the engine that makes this investment vehicle propel forward.” (22:16)
“Wall Street guys love long due diligence and big ask lists. That’s how they tie up your park and flip the contract. Don’t fall for it.” (25:29)
“It’s not just about what you make—it’s about what you get to keep. Exit planning is what separates the pros from the price-cutters.” (30:27)
“Going uninsured is like walking a tightrope with no net. One wrong step and you’re done.” (32:42)
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 episode of the Mobile Home Park Brokers Tips and Tricks podcast. As always, this episode is brought to you by the, you guessed it, 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 (678) 932-0200 and we will go over all the details on how to get you the highest price when you exclusively list with us as your broker. Today we’re going to be talking about your seller’s guide. So, this book is what I wrote a little while ago, for all y’all sellers, all you sellers, depending on where you’re from, as I’m going to say it, all you guys and girls out there that are sellers of mobile home communities. Today, we’re going to be going over that book. So, I’m going to be doing a little bit of a summary, but also be reading directly from the book.
01:24
Next we’ve got Chapter Two — Are you making these common mistakes? Let’s dive in and see what mistakes you may be making. One of the biggest mistakes I’ve seen, the failure to use the correct expense ratio when you are evaluating your community. The only time I’ve seen anything close to 15% or 20% expense ratio has been for communities that are set up seamlessly and like that triple net example I gave you earlier, dedicated roads, i.e., public streets is what that means, dedicated city water and sewer, where the city bills the tenants directly, all lot rent and with great management in place. When I’m typically evaluating a mobile home park, the norm is to start at around 40% and I’ll typically reduce it down to 30%. Now, don’t get me wrong, there are communities out there that’ll go a little higher than 40%, but in general, that’s a good rule of thumb to where I start. There are a lot of factors out there that affect the expense ratio. Happy to walk you through that on your analysis with your community, if you want to give me a call again, (678) 932-0200 and I can walk you through all the different variables that affect your expense ratio.
02:51
So, moving on to number 2 mistake, the other mistake I’ve seen all the time is failing to prepare your park to be sold. Even when planning to sell a car, you shampoo your carpets in the car, you clean the wheels and put on a nice coat of wax before you show it to a potential buyer. It’s the same thing with your mobile home community or RV Park. You have to cut the grass, take care of the landscaping, fix the signage, make sure all the mobile homes have skirting. Make sure your accounting is in order, make sure your management is in order. You just got to make sure all that stuff is taken care of. You can’t just go into it half ass and thinking someone’s going to pay a premium. The only way I’ve seen that actually happen when they do pay a premium, and doesn’t matter is if you’re sitting right next to a McDonald’s and surrounded by retail, then all the operations goes out the window, because typically, the buyer on that community is going to be a developer, and he’s going to tear it down and put something that he seems is more better use of the real estate community sits on. Some of the other no nos I’ve seen for you know, the traditional communities that are going to be sold as a community, and not as a redevelopment, are potholes, debris in the road, rocks all over the place. You don’t want to be driving around the park with the investors or the bankers and feel like you’re going off roading. That is the worst thing you do, because the lenders are going to look at all the stuff face value, because they’re going to go look at it, and the buyers are also going to go look at it and first impressions are lasting. If you come in there and you’ve got it on a contract out of 7% CAP, 7.5 CAP on the low on our traditional Three Star mom and pop community, and you got a bunch of potholes and a bunch of crap everywhere. You better be ready to get re-traded. So, that’s why a broker is extremely important, because he’s going to come and look at it and determine, hey, this is what we need to do to make sure somebody doesn’t try to re-trade you, also, you’ve got to make sure the tenants don’t have a bunch of yard ornaments lying around. Nobody likes to see all that crap all over the yards. That just shows that you have zero pride in your community, and even if you don’t have the mobile homes enforce those rules and incentivize your tenants to have clean lots. I literally had to almost evict a tenant because of all the crap she had in her yard in the one of the communities that I own and she cleaned it up soon as I started sending her paperwork that had to be signed and notarized; All That Jazz like I, you know, you know you can’t, you can’t run a slumlord. You got to make it safe and clean for everybody else in the community. So, make sure that you clean your park before you put it on the market, which you know is going to in decrease the amount of variables that a buyer or seller, better yet, a buyer is going to see on your community, which ultimately means the fewer the variables you heard it before, the higher the price, the risk goes down, right? So, make sure you do that.
05:58
Mistake number 3, management is the engine that makes this investment vehicle propel forward. I’ll say it again. Management is your engine and makes this investment vehicle propel forward. These are the people that are first in line of defense when you’re talking to your tenants. So, it’s a mistake to avoid setting expectations with your management team when you take the first move towards selling your community, they know the heartbeat of your community, so you want them to be as stable as possible when you’re selling the park, if investors detect turmoil on your team, that’s likely to scare them away or be prepared for a re-trade, don’t just pop the news on them, because you might put the buyer in a bad situation. Once the title transfers, that manager might disappear. If the owner finds it to a buyer, what do you think will happen to the operations, got to make sure they’re on board. If the new buyer is in a bind and their income drops, what do you think is going to happen to the payments if you were getting if you were the one financing the mobile home park for them. So, having management is extremely important to have stability in your community, and also it makes it easier for you to buy from, the easier you are to buy from, the higher the price you’re going to get. You know, lower risk means more money in your pocket, right? Same, same, same thing I’ve been saying entire times, pretty, pretty predictable at this point.
07:28
So, mistake number 4, let me tell you a little story about a park owner out of Alabama who had seen one of my mailers and newsletters. I don’t know how he actually heard about me, but he had a nice sized community. It was about 75 pads. A buyer had approached them and made an offer, and they asked us to look at it, which obviously I’ll look at any offers that you guys get and poke all the holes. I mean, hopefully you’ll hire me in the future, or if you need to hire me, you know, we’ll work at a discounted rate if you’ve already got somebody here to be an advisor, but anyways, I was happy to lend some guidance to them. A lot of mom-and-pop owners do that, they’ll just call me, but you’ve got these, like, real savvy Wall Street, highly educated people out there that come in and just, they just don’t know the culture that you may have in your community or kind of the person you are. So, it’s going to be an uphill battle when you’re negotiating with somebody that has a completely different culture than you. You know the New York negotiator is different from a West Coast negotiator and is different from the south negotiator in the Midwest, every single part of the country has a different style of negotiation, and as your broker, that’s where we add the most value for you as a seller is I am the medium that lets you sit home and just wait for the offers, and let us negotiate for you with your best interest in mind, of course, and let us go to bat for you. It doesn’t matter what kind of style negotiator we’re dealing; we deal with all types. That’s why people hire us; is we make the whole selling process a lot easier.
09:11
So going back to the story, Wall Street guy came in there, put a crazy 120-day due diligence with an endless amount of due diligence materials they needed, and was real fast talker, Wheeler-Dealer type. What they do is, a lot of times, these buyers will come in, and their goal is to wholesale the mobile home park to another investor and wholesaling gets really popular when the market is flowing. Debt’s cheap. Things are going 100 miles an hour. A lot of deal flow happening, but wholesaling kind of dries up when the market tanks. Right now, in this day and age, interest rates are very high, and there’s not too many wholesalers out there. There still a few out there, but they’re struggling because as a broker, it’s very important to control the debt. That’s why we started a debt side of the business*, because it’s needed. These wholesalers don’t have the debt side. Their goal is to tie up your property, give you an unfathomable amount of request on due diligence and the due diligence does not start at 120 days. Does not start until you deliver all the materials to them. Sometimes it could take you up to 30 days to get all that. So, they literally just have your park under contract for another 150 days. Like that’s crazy y’all. You don’t need to do that. Call us. We’re here to help you. I’m here to help you. That’s what I do. I enjoy doing what I do, because I don’t like seeing Park Owners get taken advantage of, because these private-on-private sales, like, they’re great and all for some people, like, granted, you’re not gonna need a broker. I’ll be blunt and tell you you’re not gonna need a broker. If you’re mobile home park, sits right next to a McDonald’s. You get to dictate all that stuff to whatever you want. Short due diligence, all cash. Sit back. You made a great investment. You right next to retail. It’s going to be torn down and turned into something else. So, you don’t need a broker for that. If you do, I’m happy to do that for you, out of, you know, discounted fee, because it’s all about how much value we add. We add the most value when there’s a lot more variables, because we seen them all.
11:30
But going back to this story about Alabama. So, this buyer came in, he had a 25-page contract. I looked at it, and I was like, geez, 120-day due diligence. That is crazy! and then on top of that, the due diligence list was as big as the Bible and then once the due diligence was up, there was another 30 days to close. So, it was a total of 180 days. If it took you 30 days to get the due diligence for your buyer, that is crazy! They’re literally just trying to wholesale the contract to somebody else and make a buck. That’s what they’re doing. But the buyers were also offering very little to no value on the park, on homes, on that deal, or the park equipment. They were basically trying to get all of those items for free. This buyer was well dressed, talked fast, according to the community owner we were talking to the contract had a financing contingency as well so the investor could approve whether or not he liked the debt, and he had in there that the seller had to pay all the closing costs. Like, come on, it was crazy! Obviously they didn’t sign it, luckily. But, oh, I forgot also they had a contingency for an appraisal, and they were owner financing it. So, like, I don’t understand the financing appraisal contingency, like, what was that all about? You’re only putting down 10%, 30-year AMT, fully amortizing, albeit not knowable and at some really low interest rate and then I just said, guys, we need to really reconsider what we’re doing.
13:12
So, with us as your broker, obviously we negotiate all that crap out puts you in a very good spot, and we were able to produce a buyer for that same client I just mentioned the Alabama 30 day look, 15 day close. They put down, I think it was 30% yep, and we got some decent pricing on the park owned homes and all the equipment. They closed all in 45 days, versus the 120 up to 180 days the other guy was trying to get. So, I was able to deliver that after a few phone calls. It was an off market deal, and it could have been a horror story for them, but as a broker, there’s a lot of value that we bring to the table, and that’s why it’s very important for you to call me. I’m happy to help, even if I don’t get paid, I’m here to help you guys out.
14:08
Let’s move on to mistake number 5, failing to research a plan and exit strategy, can spoil your future or leave you vulnerable to excess taxation. So, all of this has to deal with how you sell your community. You got your 1031s, and the vehicle that is, is you get certain amount of time to go out and find a replacement property. You could go buy a McDonald’s ground lease and an Auto Zone. But one of the benefits is, working with me as your broker is we specialize in investment real estate, and I have a Rolodex. Can’t believe I’m using that word still, but all you old timers out there know what a Rolodex is, because it’s a, you know, old school thing of CRMs. But anyways, going back to the subject at hand here. The Rolodex I have a ton of people that sell retail, sell other investment vehicles. I’ve got a lot of people I can refer you to that can do the 1031 exchange and vendors and all that jazz. There’s another avenue that I’ve seen. I’ve never done it before, but it’s called a deferred sales trust. It’s a little bit more complicated than 1031 but I’d suggest you Google it or YouTube it. Search phrases of deferred sales trust. But essentially, you put the funds into a trust invest in other assets, like stocks, bonds and other real estate, but with no time on it, you just need an attorney you can actually trust and who is willing to hold a trust account for you. As I said, I’m no expert on that specific topic, but it is something that you should consider. Going back let me circle back. There is also a reverse 1031 that I recommend you look at as well. Essentially, it’s backwards 1031 where you identify the property you want to buy first, and then they give you about the same amount of time, I believe, to sell your property. Otherwise, it doesn’t work out. So again, we’ve got a vendor that can help you with that, but yeah, give us a call. (678) 932-0200 and I’m happy to walk you through that.
16:23
Mistake number 6. About 25% of the park owners who speak to me have zero debt on their community, which is great. I love that. I’m not a big debt guy, so love seeing that and I think they have no need for any kind of liability insurance on the property. You need insurance, y’all, I get that, but you’d be surprised. A lot of park owners out there don’t put any kind of insurance on there. You just self-insure, which is kind of like I said, mind boggling. Somebody wanders onto your land, falls or gets bitten by a dog, your toast. Mobile Home Insurance, on the other hand, is pretty worthless as well, like liability insurance, but also those mobile home insurance providers. I mean, it’s it’s kind of a crock. I want to be brutal out with y’all. They’ll sell you insurance, but when it goes to pay, it’s a whole other thing, like I mentioned before, mobile insurance, if you have your park full of old homes not worth more than, like, $5,000 each, the value of mobile homes and will depreciate continually. They sink lower and lower every passing year. But you can insure the park with just liability and maybe some natural disaster items. I work with a great guy that I use and recommend. I don’t say exclusively, because I was a broker, I got to give you three, but I’ve got this guy in here because he’s one of my favorite dudes. Kurt Kelly of Mobile Insurance, out of Texas, yee-haaw, great guy does a lot of deals. One of the juggernauts in the insurance business for our industry, takes care of most of my stuff. I’ve got several other people I can refer you to, but he can educate you a lot more on the insurance component than I can he may even give you a friendly discount if you mentioned that you heard me talk about him on the podcast, but at a minimum, I think you really need to have liability insurance and some type of insurance for your manager if they’re driving home doing around errands for you, just make sure you have some good coverage, because if They you know, God forbid, they crash or do something that happens to them, you don’t want to be on the hook personally, it’s important to add liability, even if basic insurance, when it comes to operating your community, no matter what, even if you have zero debt.
18:38
So, in a nutshell, let’s wrap this chapter up. I’d be happy to sit down with all of you over a cup of coffee or a virtual meeting, or go and go over all the mistakes that I’ve talked about during this chapter, and all the decade plus experience decade and a half, hopefully this will be multiple decades of selling communities as always, my goal is to be the best resource I can be for y’all. Man, I pride myself on having the most up to date data and techniques when it comes to selling a community and with my team, I should say, with your team by your side, I’d love to share all that experience with you at your convenience. So, give me a call. (678) 932-0200 or email me at info@themhpbroker.com. Like I said, we are here to help and love to hear from you.
*DISCLAIMER: We are not acting as a mortgage broker, lender, or loan originator. Our role is limited to introducing potential borrowers to trusted lending partners. All financing terms are negotiated directly between the borrower and the lender. This service is only offered in jurisdictions where such introductions are legally permitted. If you are located in a state where these services require licensure or are restricted, please disregard this message as it is not intended as a solicitation.
