In this episode of The MHP Broker’s Tips and Tricks Closing Cocktail podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed two top company brokers, Paul Schaaf and Ryan Ramseur, who worked together to close a 73-pad mobile home park in South Carolina.
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:
Want to buy or sell your own RV park or mobile home community? Trust The Mobile Home Park Broker and its superhero brokers such as Paul Schaaf and Ryan Ramseur to get you the best outcome with the fewest hassles. Just drop Max Baker a line at firstname.lastname@example.org or give him a call at (678) 932-0200.
Power Quotes in This Episode:
“Then the rents were significantly below market, so the buyer was really excited about all the meat on the bone.” (Paul, 1:28)
“We just had the right pieces to the puzzle to really understand the deal from the front end of it and there were no big surprises at the end of it.” (Paul, 4:30)
“So that’s one thing that we’ve started doing here at our firm is negotiating the transfer taxes upfront when we’re at the contract stage of the deal, because we almost lost that Florida deal because of the $70,000 transfer tax that we had to deal with. But now, in this stage in the game, we try to get that upfront, negotiated. Who’s paying and how much? Because as we always say here, guys, surprises kill deals, problems don’t. Right?” (Max, 5:19)
“With this particular owner, they had invested a lot of their time and money in the park. We understand that and we’re just trying to make sure we can tell the best story about it and get a return on all that sweat equity. We’re always trying to look out for all of that investment each owner has put into their park and that’s what we’re looking to do on future deals, to make sure every seller is taken care of. So that’s really it.” (Paul, 7:28)
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.
00:19 Maxwell Baker
Hey y’all welcome to another beautiful, colossal spectacular 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, and Paul and Ryan teamed up on this deal. Paul Schaaf, who we just actually did an episode, we actually pumped these episodes out one after another, if you believe it or not, and then we’ve got Ryan Ramseur, who was also a part of the deal, guys, welcome to the show.
01:02 Paul Schaaf
01:03 Ryan Ramseur
Thanks, Max. Happy to be here.
01:05 Maxwell Baker
Tell us a little bit about this park in South Carolina. Love to understand, like the buyer profile, how the seller was and also what kind of debt that they sourced or if it was Owner Finance, any issues with due diligence, we try to unpack all the juicy drama, if any, in this deal.
01:26 Paul Schaaf
Yeah, I’ll kick it off Max. This was a predominantly Park owned home park. However, occupancy was really high. previous owner had it for about a decade, done a good job of keeping it clean and good tenant base in their location right off 95. So you know, had a lot of nice attributes to it. And then the rents were significantly below market. So the buyer was really excited about all the meat on the bone. And they were able to get dead on this deal. Even in today’s market with the higher interest rates number still pencilled well, and there was still some, you know, opportunity to bring in some homes, again, raise rents, and the overhead was was pretty low on this as an expense ratio. I think they were closer to 30% for Park owned homes, which is good to see.
02:27 Maxwell Baker
Yeah, that’s crazy low. How’s that even possible?
02:31 Paul Schaaf
You know, the tenants that were in there had been there for a long time. They knew the rules and regulations. And the manager had just done a really good job of making sure hey, these people weren’t destroying the homes. And if they were causing issues, then they were able to fill the home back up pretty quickly with someone who was more reliable. So that was really, you know, what they did day in and day out to make sure hey, the park was clean and safe for everyone there.
03:01 Maxwell Baker
So a lot of how to do with management structure. I mean, were they doing like check ins and doing walkthroughs? Like once a month? Or did you get any of that info?
03:10 Paul Schaaf
Yeah, definitely. They were there. And always picking up the phone and treating their tenants right? To make sure they were taking care of. So in return, they were taking care of the properties as well. So nice, good relationship between, you know, the landlord and the tenants.
03:28 Maxwell Baker
and this was a continuous park, or did it have like Atlanta home packages or all parcelled out?
03:34 Paul Schaaf
Yeah, there was definitely some, quite a few different parcels involved with it. That was one of the headaches with title and surveys and making sure everything was all the i’s were dotted and T’s were cross, I’d say that’s where we we lost a little bit of sleep. But thankfully, you know, we ended up you know, staying within contract timelines, no extensions, and everyone was very happy at the end of the day.
04:03 Maxwell Baker
and what was the, you know? South Carolina, y’all, there’s always a big variable of taxes going up. And the transfer taxes. I know, we did a deal in Florida recently, I think it was last year. And they had like, I don’t know how many parcels it was, but a lot and the transfer taxes were $70,000 through some crazy, because they were all individually parcelled, similar to this. So can you explain to the listeners how that kind of worked out?
04:31 Paul Schaaf
Yeah, so thankfully, in this area, the taxes weren’t as steep as some other deals we’ve seen. And just the way it would the deal was structured, more value on the homes. We just had the right pieces to the puzzle, to really understand the deal from the front end of it. And there were no big surprises at the end of it. And that’s that’s really how I have on it, Max. I mean, yeah, there were some bumps in taxes but they weren’t like mind blowing, and transfer taxes, we were able to negotiate in favour of the owner, buyer was okay with paying those because the condition of the park and you know, the future of the investment look sound, so they were willing to invest more in it right away.
05:19 Maxwell Baker
Yeah. So that’s one thing that we’ve started doing here at our firm is negotiating the transfer taxes up front when we’re at the contract stage of the deal, because we almost lost that Florida deal because of the $70,000 transfer tax that we had to deal with. But now in this stage in the game, we try to get that upfront, negotiated. Who’s paying and how much is paying? Because as we always say, here, guys, surprises kill deals, problems…
05:49 Paul Schaaf
…don’t right. That’s right. Yeah.
05:51 Maxwell Baker
So how was the financing setup?
05:53 Paul Schaaf
So the buyer had previous relationships, they own multiple parks, and they had already gotten their pre approval right away. I mean, they had all their ducks in a row. Again, I think we had this closed within 60 days. So just a proven track record on their lender, and the relationship was already there. So it was just a smooth process, even with, you know, the conditions of the market right now. We really had no issues, though, I think the biggest hurdles we had overcome was making sure all these titles were correct.
06:32 Paul Schaaf
On Park owned homes
06:33 Paul Schaaf
On the park owned homes. Right. Yeah. And then on the parcels, a little bit of confusion on the taxes. But we all, you know, hopped on a conference call and figured it all out. And that was the end of it. So but nothing, nothing crazy.
06:51 Maxwell Baker
Cool. Ryan, you got in the inside on the other stuff. And kind of the man of mystery here.
06:55 Ryan Ramseur
I think Paul’s covered all the bases here on this. I mean, you know, buyer had had all their ducks in a row. It was, you know, a little difficult wrangling some of those books and records from the seller. But, you know, we were able to mitigate that. And as Paul alluded to, you know, a timely closing with a reliable buyer, and get this thing done within 60 days.
07:23 Maxwell Baker
Nice, man. You guys have any closing thoughts here before we wrap it up?
07:28 Paul Schaaf
No, I think we’ve touched on pretty much everything. You know, with this particular owner, they had invested a lot in the of their time and money in the park. And we understand that and we’re just trying to make sure hey, we can tell the best story about it and get you you know, return on all that sweat equity. We’re always trying to look out for all of that investment each owner is put into their park. And that’s what we’re looking for, to do on future deals to make sure every seller is taken care of. So that’s really it.
08:01 Maxwell Baker
Nice. Cool guys will appreciate y’all joining. As always, this episode is brought to you by the Community Price Maximizer. Y’all have probably received our wonderful postcards in the mail if you’re a park owner and the 30 states that we do business in, so give us a call. We’d love to show you how we can maximise guarantee you the highest price when you exclusively list with us in this four step programme. Paul and Ryan are very well versed in it, have done it successfully multiple times. So, give us a call (678) 932-0200 or email us at email@example.com love to hear from you. And as always, let’s keep moving forward and thanks for listening!