MHP Brokers Tips and Tricks Closing Cocktail Podcast, Paul Schaaf and his Darlington 2-Park Portfolio Interview

In this episode of The MHP Broker’s Tips and Tricks Closing Cocktail podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed rising star broker Paul Schaaf about his challenges and ultimate triumph in brokering the Darlington SC 2-park mobile home park portfolio.

This and every Tips and Tricks podcast episode 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. Ask Max for details.

Here Are the Show Highlights:

• Max interviewed The MHP Broker’s Paul Schaaf regarding what he went through in successfully selling a two-park portfolio in Darlington, SC. (Max, 1:13)
• This was a mom and pop operation with a lot of park-owned homes. This would be an advantage for a buyer in that rents in that booming market could go for nearly $1,000 a month after some remodeling work. (Paul, 1:25)
• But the parks got a short appraisal. That was unexpected to Paul since lot rents were at about $100 under market. He tried contesting the appraisal, but that failed. So he got buyer and seller together and found that they both still wanted to complete the transaction. They were all on the same team, so Paul was able to get the seller to agree to a carry back financing program to self-finance the deal. (Paul, 2:11)
• This deal was like many from The MHP Broker, in that the sale went through to the first prospective buyer. Max credits that to the careful front-end due diligence the company always performs in order to put the right buyer in front of the seller. (Max, 3:17)
• One reason Paul believed in the sale price, and tried to stay as close to it as possible, was the presence of a storage unit that sat empty and wasn’t currently bringing in any income, but he felt it had nice potential for a buyer. (Paul, 4:37)
• The deal came about from a referral. This emphasizes the impact of doing great work for clients so they refer your company to friends and associates, and it further demonstrates the power and influence of the The MHP Broker brand in satisfying clients. (Paul, 5:14)

Want to learn more about how The Mobile Home Park Broker team can save even the most challenging transaction and close your deal? Drop Max Baker a line at info@themhpbroker.com or give him a call at 678-932-0200.

Power Quotes in This Episode:

“There’s always a little bit of drama, but we’re able to get through it and close the deal at the end of the day.” (Paul, 4:37)

“Our brand is so strong that we can continue to fill the pipeline with listings and make sure we’re doing a good job. So, referrals would be the key takeaway I’m thinking of right now.” (Paul, 5:14)

“Problems don’t kill deals, surprises do. And Paul is one of the biggest researchers on our team to make sure that your contract and close ratio is as close to 100% as possible.” (Max, 5:47)

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’s your host, Maxwell Baker.

00:22 Maxwell Baker

Hey y’all welcome to a another a beautiful episode of the mobile home park brokers, tips and tricks, podcast. As always, this episode is brought to you by the Community Price Maximizer is our proprietary system that will guarantee you a higher price. When you exclusively list your community with us, four step process. Today, we are having a another beautiful, radical, righteous any adjective you want to throw out at Closing Cocktail with one of our up and coming, brokers he’s been with us two years, almost two years, I think a little over two years now and is nipping one of our other top brokers heels as becoming the top broker, Paul Schaff. Welcome to the podcast, man.

01:11 Paul Schaaf

Hey, Max. How you doing, man?

01:13 Maxwell Baker

Good, man. So let’s start off with just background on the Darlington deal. You know how we met the seller and how the TOC track was and then we can kind of dive into some of the highlights.

01:25 Paul Schaaf

Yeah, so Darlington was a mom and pop operation. They’ve had it, you know, bought it from a relationship. They were doing decent with it, but had some other things going on with some other businesses. And were ready to part ways and it was kind of a value-add deal. Definitely had some hair on it. But plenty of upside due to that market increasing. Also, there was a large inventory of park owned homes. And as we know, those are tough to get a hold of in today’s market and especially in the beginning of the year. So that was the plus for the buyer, being able to remodel these homes and rent them out for pretty good rents, I would imagine close to $1,000 for home rents.

02:10 Maxwell Baker

Wow!

02:11 Paul Schaaf

So, well no, it was it was definitely that was the perk of it. And then, you know, there were some drawbacks to the deal. We had a short appraisal that we didn’t see coming, mainly because, you know, the lot rents were about $100 below market. And the inventory of homes, I think though they didn’t put the right value on them. But it was just a bad appraisal. And we tried to contest it. And lo and behold, they just didn’t move the buyers, trusted lenders.  So, we had to get creative on the deal. And you know, figure out a seller carry back program that worked for the owners, and also the numbers worked for the buyer. So that’s definitely a hurdle. But we’re able to get through it by making sure we add a solid relationship, a trustworthy relationship between all the parties, and figured out how to get the deal done. So that was really kind of the highlights on this deal.

03:07 Maxwell Baker

Yeah, man. So how many buyers would we have to go through to find the right one here to actually close on it?

03:13 Paul Schaaf

Yeah, this is the first buyer we put out.

03:17 Maxwell Baker

Oh, oh ohhh! another miraculous, excellent contract to close ratio. As you’re thinking about selling your mobile home community, one of the first questions I would ask as a broker, if I were selling a deal, is, how many times do you have to put my park under contract to actually, close on it, and here at The MHP Broker as Paul, and these two deals the very first buyer, and I will say that 99% of our deals are set up this way, because we do excellent front end due diligence on the deal. Also do excellent front end due diligence on the buyer. And we like to know what’s happening with the debt as much as we can. So that way we can navigate it to success in this situation. And what’s happening more and more now that I’m seeing and Paul can jump in here is that a lot of these lenders are telling the appraisers to be conservative, and your appraisals are coming in a little lower than normal. But Paul, what kind of conversation did you have with the seller to help us get across the finish line with this appraisal issue?

04:22 Paul Schaaf

You know, I think from the beginning, I just set expectations, like the values of the homes, you know, there’s got to be some fluctuations, because it was such a large number of homes that there could be a volume discount on them. So, we needed to be prepared for it.

04:36 Maxwell Baker

Yeah.

04:37 Paul Schaaf

There was also a storage unit that wasn’t bringing in any income, but it was a nice building, and we weren’t just gonna give it away. So, I think we just, you know, had those proper expectations in the beginning. And we were able to, you know, hit those curveballs out of the park when they came to us. So that was really it, setting proper expectations. Making sure we’re all-seeing eye to eye, there’s always a little bit of drama, but we’re able to get through it and close the deal at the end of the day.

05:08 Maxwell Baker

Nice. Any closing statements that you would like to tell me and the sellers out there that are thinking about listing with us.

05:14 Paul Schaaf

I would say, one of these deals was a referral. So, we are always trying to do business with people we like doing business with, you know, it’s always good to have that connection, where we want to do business with them, because we trust the previous transaction. That’s what I like to work off is referrals, word of mouth, our brand is so strong that we can continue to fill the pipeline with listings and make sure we’re doing a good job. So, referrals that would be the key takeaway on that I’m thinking of right now.

05:47 Maxwell Baker

Yeah, so you know, you know you’re doing a good job if people are doing a deal with you and then sending you another deal their buddy or fellow professional that they know in the area, or outside the area that own a community. You know, it’s like MHP broker Paul Schaff and, and the rest of our team will take care of you. So, give us a call (678) 932-0200 or shoot us an email at info@themhpbroker.com and 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 upfront due diligence on your deal. Problems don’t kill deals, surprises do and Paul is one of the biggest researchers on our team to make sure that your contract and close ratio is as close to 100% as possible. Thanks for listening, y’all and let’s keep moving forward