The MHP Brokers Tips and Tricks Closing Cocktail Podcast, Another Savvy Paul Schaaf Deal in Texas

In this episode of The MHP Broker’s Tips and Tricks Closing Cocktail podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed rockstar company broker Paul Schaaf, who discussed details of his recent sale of Sunrise Village, a mobile home park in Texas.

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 spoke with broker Paul Schaaf about his primary challenge and ultimate victory in selling this Texas mobile home park. (Max, 0:58)
• The park owners were, themselves, licensed real estate agents who nonetheless approached Paul about selling their park. (Paul, 1:21)
• They could have sold their property on their own, but they recognized that Paul and The MHP Broker had more specialized knowledge and experience in this niche of the industry and could get the job done quicker and easier and at a better financial return. They were right. After multiple offers, Paul found a prospective buyer after having the park on the market for just a week or so. From there, they closed in around 45 days, with a buyer who had financing. (Paul, 1:43)
• Paul credited having a great buyer who knew the industry and was highly motivated to get the job done. But even at that, there was one potentially high-risk hitch during due diligence. (Paul, 2:29)
• There was a phase one environmental discovery that the property had long ago been used as a service station or tire shop and that at that time it had held a long-gone gas tank. The prospective buyer wanted assurance that there would be no costly need for soil remediation once they became the owner, (Paul, 2:57)
• It cost a little money upfront, but the soil was tested and quickly found to be clean and problem-free. (Paul, 3:28)
• The buyer obviously felt it was worth proceeding with the transaction. The park’s in a prime location, adjacent to a Walmart Supercenter and a hotel, and with good road frontage in a growing area. The park was becoming hybrid, with some RVs moving into unoccupied lots. The occupancy was just around 75 percent, giving the buyer plenty of opportunity to increase revenue by infilling. The utilities were provided by the city, with direct billing to residents–making this part of ownership turnkey. The park also had an onsite manager who was willing to stay on. And the seller was motivated to close and to move on with other investments that interested them more. So everyone was happy and highly motivated to close. (Paul, 4:28)
• As far as the financing went, the buyer brought significant cash and they were able to get approval in a week or so from a lender they’d worked with on previous commercial deals. The only thing that slowed the sale at all was that phase one discovery, which proved to be just a minor hitch. (Paul, 5:37)
• The lesson, from Paul’s perspective, is that sellers must be as organized as possible, and then find well-qualified and motivated buyers. That involves having a broker who knows the business and can help get them over whatever unexpected “speed bumps” might be found along the way. (Paul, 6:16)

Want to buy or sell your own mobile home park or RV community? Trust The Mobile Home Park Broker and its superhero brokers to get you the best outcome with the fewest hassles. Just drop Max Baker a line at info@themhpbroker.com or give him a call at (678) 932-0200.

Power Quotes in This Episode:

(On the client trusting Paul and The MHP Broker to represent him rather than handling the sale himself despite being a licensed real estate agent) “…It saved him stress. And we also got him more money than he probably could have done on his own.” (Paul, 1:43)

(On the soil testing) “…Everything checked out, it was quick, the dirt was solid.” (Paul, 3:28)

(Such hitches are) “…not common, but they do happen from time to time and as a brokerage firm we’ve been through enough that we know how to navigate them…successfully…” (Max, 3:42)

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 another amazing, beautiful, colossal all those adjectives you can even think of episode of the mobile home park brokers tips and tricks, podcast. As always, this episode is brought to you by the Community Price Maximizer. You might have gotten a postcard from us if you’re a park owner. But like I said in that postcard, it is our proprietary and guaranteed way to get you the highest price when you exclusively list with us. And in this example, Paul had, oh Is this an exclusive listing?

00:56 Paul Schaaf

Sure was Max.

00:58 Maxwell Baker

So, I should introduce our rockstar here, Paul Schaaf. He had just closed a mobile home community, we’re going to be going a little bit about it. And talking about some of the highlights that we learned as a firm, kind of some of the things you should watch out for when buying deals and just kind of just some tips and tricks. Like I said, the name of this podcast. So, Paul, welcome to the show.

01:21 Paul Schaaf

Thanks, Max. It was definitely a good deal. And as part of the exclusive process, the owner was actually had experience in real estate, but he knew we could deliver better service and get the job done quicker, which helps save him time and money so.

01:39 Maxwell Baker

Yeah, so he was a licensed agent.

01:40 Paul Schaaf

That’s right, yeah.

01:41 Maxwell Baker          

Okay, nice.

01:43 Paul Schaaf

Well versed in investment assets. And he could have sold it on his own for sure. However, he didn’t want to take the risk. And he knew we had the right platform to succeed. And he was willing to pay for it. Because again, it saved him stress. And we also got him more money than he probably could have done on his own. So, we ended up earning our cape and finding the right buyer, actually think we had this under contract in less than a week of releasing it to the market. And then we had multiple offers as well. So and then we also closed it in less than I want to say 45 days with financing so.

0:24 Maxwell Baker

Wow, we’re looking to close in 45 days!

02:27 Paul Schaaf

Yeah.

02:28 Maxwell baker

So, that’s pretty quick.

02:29 Paul Schaaf

That’s right. I mean, we did have a great buyer who knew the space and was very proactive to get the job done as well. You know, it’s just a good working relationship with all sides of the table. A few surprises in regards to phase one. But thankfully, we were able to be proactive and expedite ordering that, especially on you know, the buyer was all committed to get that done quickly.

02:54 Maxwell Baker

Can you unpack, what the Phase One drama is?

02:57 Paul Schaaf

Yes, so the property back in the day had a gas or a tyre shop. And there was one point a tank that was removed, but the documents weren’t present, the owner didn’t have them. So, you know, after searching through databases, nothing really came up. So just to be safe, the buyer wanted to protect their investment to ensure that the soil was clean. And there wasn’t any remediation that was going to bite him in the you know what…

03:28 Paul Schaaf

…when they took over the property, so they for everything checked out, it was quick, dirt was solid. And, you know, it was some money upfront, but it’s something the buyer had to do to protect their investment.

03:42 Maxwell Baker

Yeah, I’ve dealt with that, too. With a deal down and making I had some drama with some barrels. And Sue McCart. If you’re listening, that deal taught me a lot. So thank you for having that park. But at the time you lose a little hair going through these phase one issues, which are I mean, they’re not common but they do happen from time to time and as a brokerage firm we’ve been through enough that we know how to navigate them and we typically are able to successfully navigate so that way all the risks are explained the Phase One environmentalists is done their work and you get to decide whether or not you want to move forward. But this deal was also how was the park set up it wasn’t continuous Park was it?

04:28 Paul Schaaf

It was actually location was prime adjacent to a Walmart Supercentre, which was pretty neat, also a hotel adjacent to it and then just good road frontage in a growing area. And then as far as the setup there was predominantly tenant owned homes and then there was a mixture of RVs moving into some of their unoccupied spaces. So they were bringing in a hybrid approach and an occupancy was, say around 75%. So there was still some opportunity for the new investor to to infill and also increase rents because those were below market. And the utilities were public Direct Bill, which was a good way to run your park and operations remotely. Also, there was a manager that was willing to transition. So we helped out the investor quite a bit. And then the seller was happy to be able to exit to move on to some other investments they had had more interest in.

05:32 Maxwell Baker

How was the debt set up on the deal?

05:37 Paul Schaaf

So, they were able to pull together significant amount of cash. And then they had a lender that they worked with on a couple other commercial deals. That was also involved. I don’t know too much about it, but they were able to approve them pretty much in a week or two. And everything else was good to go. We’re just waiting on the phase one.

05:56 Maxwell Baker

Yeah, that was the biggest, probably the biggest thing that we all had to go through around the speed bumps.

06:02 Paul Schaaf

Yeah, that was the variable. And it was so long ago. That’s why it was no one really caught it, you know, Owner, previous paperwork. But thankfully, everything checked out.

06:13 Maxwell Baker

Nice. Any closing statements before we wrap it up?

06:16 Paul Schaaf

You know, on this deal, it’s just so important to you know, make sure you test the waters and you can leverage us to ensure you’re getting a qualified buyer who can perform. And also you know, just making sure you get most of your ducks in a row. And then if a fire does come up, then we’re there to exhaust it and you know, get back on track to get to the closing day. So, what we do on a day in and day out basis,

06:44 Maxwell Baker

Yep, that’s what we do here is we help people buy and sell communities. So give us a call (678) 932-0200 or email us at info@themhpbroker.com. Ask for Paul. He lives in Charleston does a lot of deals in South Carolina, and is now expanding. We’ve got something in Arkansas here closing and pretty soon cross our fingers. It’s one of those zombie deals that die and come back alive and die. We all love those deals. So, we’ll do a podcast episode on that one eventually when we get it done. But thanks for listening, y’all. As always, this episode is brought to you by the Community Price Maximizer. And you guessed it, it is here to guarantee you a higher price when you exclusively list your park with us and as Paul has explained, even other agents approached us to list their parks. So, give us a call (678) 932-0200 and as always, let’s keep moving forward. Be well and thanks for listening!