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 broker Paul Schaaf about his experience selling Muldraugh, a mobile home park in Kentucky.
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:
When it comes time to sell your mobile home community in Kentucky or elsewhere, let The Mobile Home Park Broker go to work for you, with our innovative Community Price Maximizer platform to optimize your park value. Just drop Max Baker a line at firstname.lastname@example.org or give him a call at (678) 932-0200. Work for Max, or ask for Paul.
Power Quotes in This Episode:
“It was just a great relationship established between us and the owner, and they trusted us to get the job done and we were very successful. We actually rolled this out to the market and immediately had a few offers.” (Paul, 1:25)
“So, it was a big home value. But it helped having all the titles together, you know, (and) good pictures of each unit.” (Paul, 3:32)
“We’re here to make sure everyone is satisfied at the end of the day, and looking forward to more opportunities coming up here in the rest of the year.” (Paul, 5:48)
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.
0:22 Maxwell Baker
Hey y’all welcome to another beautiful episode of the mobile home park brokers Tips and Tricks podcast. Today’s episode as always, 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 today, we have a one of our rockstars on our team, Paul Schaaf. Welcome to the closing cocktail of the park of Muldraugh feel like I have to have a glass of wine when I say Muldraugh.
0:59 Paul Schaaf
That’s right, a nice Pinot Noir would be good or something.
1:03 Maxwell Baker
It would it would, crackers and grapes.
1:07 Paul Schaaf
A whole spread there for sure.
1:09 Maxwell Baker
For sure. So, tell us a little bit about this deal, how it came to fruition. And if you had any learning curves for any of the sellers out there that are interested in maybe learning about how we do deals and how we bring offers. Give us a little lowdown.
1:25 Paul Schaaf
Definitely. So, we worked with these owners who had had it in their name for close to 30 years or so, you know, had dedicated so much effort and money into the business and we’re looking to finally retire, they needed to really gain our insights on how to exit properly and we were very thorough, we took our time with it because they had to get all their books and records together. Also, improve operations from management transition, their leases, and also pad rent compared to home rent, and getting those up to what market was. So, the value was there for the next investor. So, it was definitely a lot of discussions on how to run it out to the market properly. It was just a great relationship established between us and the owner and they trusted us to get the job done and we were very successful, we actually rolled this out to the market and immediately had a few offers. The one that prevailed was a 30-day close and I think we hit it on day 28 Pretty much clean deal due to all of the diligence we did on the front half to close it quickly. So that’s it in a nutshell.
02:48 Maxwell Baker
02:49 Paul Schaaf
Whole deal. You know, as far as what we learned from it, you know, we did have to get into a little bit of a seller carry on it, just to help expedite things from a third-party perspective. But those were very good terms for both sides of the table. It was parked owned home predominantly, also with an eight Plex on there. So, we really just had to showcase. Hey, it was a great inventory, and it was well kept and the home rent supported the shell values of the homes. So that’s kind of it in a nutshell again.
03:25 Maxwell Baker
Yeah, appreciate that. How did y’all come to value? The park own home? And the wish there was an eight Plex?
03:32 Paul Schaaf
Yes. So, as far as the homes, we you know, diagnose each one individually, and really came up with, you know, exact values for each and estimates. So, we had about 37 of them. They are, you know, came in around 34k at home. So, it was a big home value. But it helped having all the titles together, you know, good pictures of each unit, and also what maintenance and supplies they had done on a regular basis and we also showcase the low turnover rate for each unit. Then when a unit did become unoccupied, the turnaround time to get it filled back in was less than a week or two so.
04:17 Maxwell Baker
04:18 Paul Schaaf
It was just a good market for POH’s is and then also the rents were still on the market, leaving plenty of you know opportunity for the next investor.
4:30 Maxwell Baker
Yeah and then that eight Plex how was that valued?
04:34 Paul Schaaf
We just underwrote it with all the rents and the expenses on it. And that’s how we came to our valuation on it
04:41 Maxwell Baker
Yeah, yeah and the buyer profile, remind me of what…?
04:47 Paul Schaaf
Yes, so this was a they had owned a few parks before, mainly in your blue and some purple states. And they made a good exit on those and we’re looking to 1030 won some money into more landlord friendly state. And they were looking for more developing areas. Another cool aspect about this area was all the investment going on with Ford in their battery plant, which is about close to, you know, billion-dollar investment there. And then also new core steel plate mill there. That was another $1.7 billion-dollar investment. So, economic development coming to the… …area, a lot of employees, a lot of contractors for the next five to 10 years. So long runway for affordable housing in the area.
05:42 Maxwell Baker
Nice. Well, any appreciate all the feedback there any closing comments here before we sign off?
05:48 Paul Schaaf
Not think that’s it, you know, we’re just here to make sure these owners are well represented, and also there for the buyers. So, they understand, hey, there’s still plenty of upside in the deal. And we’re here to make sure everyone is satisfied at the end of the day, and looking forward to more opportunities coming up here in the rest of the year.
06:11 Maxwell Baker
Nice, man. Well, congrats again. Well, cheers you some Pinot Noir? A little bit?
06:18 Paul Schaaf
Thank you, well, I guess I’ll probably we probably want to move on to the bourbon, you know, and the whiskey for this area, because we’re not too far from the horse tracks.
06:27 Maxwell Baker
That’s true man. We just, we just pass through the derby just went through last weekend, I think.
06:33 Paul Schaaf
That’s right, definitely. Horse country here. It’s a pretty neat area. So, Kentucky great market and looking forward to more deals in that area.
06:42 Maxwell Baker
Yeah, man, we’re grateful for you and all the work you did here. As always, y’all. This episode is brought to you by your Community Price Maximizer. As Paul has shown, we were able to get the seller, the highest price possible with a qualified and excited ready 1031 Exchange buyer. So, give us a call at (678) 932-0200 or shoot us an email at info@theMHP broker.com. Feel free to give us a call. Ask for Paul. He’s our rock star up in Kentucky. Really. He’s out of Charleston, so he works really all up and down the eastern seaboard. So, give us a call. We’d love to hear from you. And, as always, let’s keep moving forward.