In this episode of The MHP Broker’s Tips and Tricks podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed top broker Eric Wanck about his success with three recent transactions, including a five-park Tennessee deal.
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:
Looking to buy or sell an RV park or mobile home community? Max’s team can help you through the process. Just drop Max Baker a line at email@example.com or give him a call at (678) 932-0200. Or email Eric at firstname.lastname@example.org.
Power Quotes in This Episode:
(Regarding the five-park TN deal.) “We were one week away from closing. And the buyer called me, saying, ‘Look, the bank’s changed their finance terms. It’s completely thrown off our numbers, and we can’t close.’” (Eric, 2:16)
“…we’ve had it happen where banks are changing terms midstream, and it’s very frustrating. But to be so close to the finish line, and then almost have a little bait and switch, you know, had us kind of going back to the drawing board.” (Eric, 2:48)
“One thing we’ve been able to source here is debt through credit unions.” (Max, 4:05)
(Regarding the Byron deal) “…at the end of the day, it’s about getting it done, and everybody’s happy, and we put money in their pocket.” (Eric, 5:18)
(Regarding the Fitzgerald deal) “I love deals that come around to me multiple times…it’s about building relationships.” (Eric, 6:05)
“Demand for affordable housing continues to increase.” (Max, 7:21)
“I would encourage (investors) not to try to price in a price hike on your rate in your offers. You know, because I’ve seen some buyers doing this whether adding a buffer so, hey, if it goes up 50 bps on me, I still have room.” (Eric, 8:18)
“If financing ends up being a snag, then we can always revisit that and I can have a conversation with the seller. But I see a lot of deals not getting done because buyers are being so cautious with their financing and their underwriting.” (Eric, 9:06)
“(Interest) rates are the highest they’ve ever been. So, like I said, give us a call.” (Max, 9:48)
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 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. It is our proprietary system that will guarantee you a higher price. When you exclusively list with us four Step Program, give us a call guaranteed highest price 678-932-0200 and today I have the honor to welcome back our All Star World Series Champion. All of the above all the adjectives I can think of that two years running top broker at our firm Eric Wanck, welcome to the show again.
01:07 Eric Wanck
Thank you, thank you love all the adjectives. And it’s always good to be back on the podcast talking about closing deals that we’ve got done. So thank you. Thank you.
01:16 Maxwell Baker
Yeah, man. And today we’re gonna go over three different ones. One’s the Tennessee five Park portfolio, we’ve got another one called the Byron mobile home park deal. And then we also got another one and Fitzgerald that you closed recently. So let’s start off with the Tennessee five Park. Give us a little details. And we’ll take it from there.
01:40 Eric Wanck
Yeah, all one owner here on this one and owned it for many years looking to get into retirement part of life and happy to work with this gentleman and get these products sold. On the buy side, we had some buyers that have actually worked with before, but they’ve never put anything under contract not to their demise or anything. It’s just that we never was able to get terms and get a deal done. But this time, they came forward and expressed interest and are able to get this one under contract, 88 pads in total good size deal. Mostly Park owned homes, which did present some challenges.
02:16 Eric Wanck
For those out there, you probably know that park owned homes are unique in the fact that we all need titles and trying to get them financed. And this was an interesting deal because knock on wood, it hasn’t happened too often to me. But we were one week away from closing. And the buyer called me saying, look, the bank’s changed their finance terms. It’s completely thrown off our numbers, and we can’t close.
02:45 Maxwell Baker
And that’s happening a lot lately, too, isn’t it?
02:48 Eric Wanck
Yeah, like I said, it’s, that was the only deal that I’ve had that close to closing. Now, I’ve heard of banks, and we’ve I’ve had it happen where banks are changing terms midstream, and it’s very frustrating. But to be so close to the finish line, and then almost have a little bait and switch, you know, had us kind of going back to the drawing board. So, you know, what do we do? You know, do we do we offer seller financing to kind of bridge that gap to seller still gets his number? Or are we just kind of negotiate out a price and get it done. And in this case, we actually renegotiated our price just a little bit. And it took two three weeks. But hey, we still got her done. At the end of the day the lender was happy the numbers all work for the buyer. seller was still considered as a major win on his end, and he could go about his retirement, Enjoy life so.
03:37 Maxwell Baker
03:39 Eric Wanck
Yeah, all around. Good deal, though.
03:41 Maxwell Baker
Yeah, it was, I know it was a little stressful there at the very end with the bank loan. And we’re starting to see that a lot, y’all where a lot of these lenders are retreating. Really, it’s just about the interest rate. I mean, it’s been a moving target. Unless you’ve been living under a rock, the last 12 months, the Fed has been, you know, playing what it feels like dice on what they’re going to be raising.
04:05 Maxwell Baker
Next. But you know, one thing that we have been able to source here is debt through credit unions. So if y’all have a deal or interested in buying one of our deals, and you’re curious on how you’re gonna get funding, give me a call max here. We’ll talk about the terms that we can offer you.
04:21 Maxwell Baker
But moving on to the next deal. This is the Byron deal, which took us two times put it on the market due to some expectations that weren’t realistic, I guess we could say. And yeah, so give us a little bit of details on this Byron deal. And take it from there.
04:40 Eric Wanck
Yeah, I mean, as you said, this was the second time around for us first time out. The park was I would say 60 65% occupied and it just needed more value added before we could get really the number that the seller is looking for. So they to the to the seller’s credit, took it off the market for about a year, year and a half Half, and he did a good job of bringing it up to about 85% occupancy, I believe it was good condition all around to present this to the market. And, you know, through relationships, this was a little bit odd as well, we typically don’t work through a seller for source and buyers.
05:18 Eric Wanck
But you know, we have a relationship with the seller on this one. And they were able to find a buyer that came direct to them. And hey, at the end of the day, it’s about getting it done, and everybody’s happy, and we put money in their pocket. So this is a relatively smooth deal. It wasn’t on private utilities, but at the end of the day, it was a good size Park, more than 70 pads. So that definitely helps bring a few more buyers to the table, so to speak. That the only way I think we got a real strong number on this one.
05:46 Maxwell Baker
Yeah, I think so too. It was, surprisingly, how well of the price that we were able to get with the seller on this deal with the buyer. So congrats to everybody on that one. Moving on to the Fitzgerald deal, which you have sold twice now, I believe.
06:05 Eric Wanck
Yeah, that’s right. I was gonna say that. I love deals that come around to me multiple times. And we’re not talking about it on this podcast. But I actually just closed another deal here last week, which was another second time around for me. So you know, hey, it’s about building relationships. And we love working with buyers that buy through us that they know that, hey, we’re gonna give you product, or we’re going to do a professional job for you. And hey, once the turnarounds done, you’ve added value to the park, you give me a call and say or would you do ended up selling the park for us. And that’s the relationship that we want. Those are the folks that we really enjoy doing business with.
06:47 Eric Wanck
In this one Fitzgerald fit that bill. He added about two, three years and turned around pretty nice stabilized park down there. Good books and records. Pretty good price for it, just where it was located. South Georgia still has some pretty unbelievable, low lot rents. And yeah, I feel like there’s definitely value add there for folks that don’t mind holding more longer term. 5-10 years, I think you’re just gonna see natural appreciation on those rents. Because really, anything under two, five super cheap,
07:21 Maxwell Baker
Yeah, we’re starting to see even in these tertiary markets, some of the areas are hidden $300 lot rents, which was unheard of five years ago, I think one of our clients told me recently Nadal actually mentioned that he was getting close to $300. On his parks down in Americus. And it’s just, it’s interesting, like it’s just inflation A is Well part of it. But also, demand for affordable housing continues to increase.
07:52 Maxwell Baker
So I’m with you, Eric, like, I still think that you’re going to start seeing in the smaller tertiary markets rents getting into the mid two hundreds even hitting a three hundreds, which is it’s not bad. I mean, it’s not bad revenue come out of these deals. So and these are a lot rents Y’all not park on home rents. So but yeah, man. So any other closing statements you want to say about these three deals or any other insights for our audience
08:18 Eric Wanck
I go back to I will touch on the financing real quick, because I think it’s it’s very relative to where we are in the market right now, with rates just continuing to jack up over the last 12 months, and how many different rate increases we’ve seen. Hopefully, it starts to level out, but nobody has a crystal ball. But I will say you know, if you’re out there looking for parks, and you’re putting in offers on par if you’re doing your underwriting, I would encourage you not to try to price in a price hike on your rate in your offers. You know, because I’ve seen some buyers doing this whether adding a buffer so hey, if it goes up 50 pips on me, I still have room. And one, it seems good because you have confidence you can close even if rates go up.
09:06 Eric Wanck
But I discourage you to do that just because the markets usually pretty competitive when you have multiple offers on parks. And I think at the end of the day, come with your best foot forward putting in an offer. That makes sense. Now, if financing ends up being a snag, then we can always revisit that and I can have a conversation with the seller. But I see a lot of deals not getting done because buyers are being so cautious with their financing and their underwriting. I don’t think the delta in the gap is that big right now. You know, so pay a price that that’s fair. And if we need to work on financing while under contract, we can cross that bridge.
09:48 Maxwell Baker
Yeah, cause we’re starting to see quotes from our credit union partners in the high fives y’all so I think the last quote I got was 5.89 and it is April eleventh right now. So rates are the highest they’ve ever been. So, like I said, give us a call. If you’ve got any questions about debt. We are out there hustling to find it on all of our listings. And obviously, we don’t want you to fall out of contract for stuff like that. We’ve been dealing with that a little bit. But for the most part, we’re still able to get that done. And it’s been working. So, Eric, anything else?
10:26 Eric Wanck
Thats it, I do appreciate your time.
10:28 Maxwell Baker
Yeah, y’all. So give us a call. Like I said, 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, call Eric (678) 932-0200 or shoot us an email at email@example.com and let us know that you heard this episode and we’ll shoot you over to Eric and he will be able to help you. So thanks for listening, y’all. Let’s keep moving forward.