The MHP Brokers Tips and Tricks Closing Cocktails Interview with Broker Jeff Dodge Regarding His Sale of an Appealing Two-Park Portfolio

In this episode of The MHP Broker’s  Tips and Tricks Closing Cocktails podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed The MHP Broker Jeff Dodge regarding his recent sale of a beautiful two-park portfolio.

As with every Tips and Tricks podcast episode, this one 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. Call Max for details.

Here Are the Show Highlights:

• Max explained how he and broker Jeff Dodge worked together on the sale of a two-park portfolio, with Jeff doing the majority of the work. (Max, 00:22)
• The park seller had been in the business for a long time, having bought and sold many parks. These two parks were big and beautiful. Together, Eagle Trace and Edgewood consisted of 116 park-owned homes, 11 tenant-owned homes and nine vacant lots. The parks were very well maintained and the homes were new or impressively renovated. Everything was direct billed, making it more of a turnkey operation for the buyer. There was also an opportunity for value-add rent increases. (Jeff, 1:23)
• There were also park-dedicated roads throughout both properties. And the parks carried an asking price of a CAP rate that was above 6. (Max, 2:31)
• Rents averaged at about $100 under market value, a major selling point for fairly immediate increased revenue generation. (Jeff, 3:39)
• One major challenge Jeff foresaw was the presence of all of the park-owned homes–116 of them in total. This can sometimes be a sale obstacle if prospective owners don’t want the cost and responsibility of having to maintain homes they own. Despite all the park-owned homes, the portfolio received multiple offers. (Jeff, 3:58)
• They ended up in negotiations with three serious buyers. (Jeff, 4:24)
• The park owner also had an office building that he wasn’t going to include in the deal. Max convinced him to keep that in his pocket as a possible bargaining chip. Sure enough, they were able to add the building to the deal and pull down an additional quarter-million dollars. This was a tactic Max had learned in the process of selling some 500 mobile home parks over time. (Max, 4:30)
• The story has a happy ending. Buyer and seller were both happy with the transaction. (Jeff, 5:53)

The Mobile Home Broker has years of experience selling mobile home parks, and the brokers know tricks of the trade that can help you get maximum price on your park. Call Jeff Dodge or Max Baker at The MHP Broker, (678) 932-0200. Op drop ‘em a line at info@themhpbroker.com.

Power Quotes in This Episode:

“So, you know, you’re worried about the financing aspect and finding that right buyer that’s willing to take on 116 park-owned homes. But, you know, ultimately, we received multiple offers.” (Jeff, 3:58)

“I want to say I’ve probably sold well over 500 mobile home parks in my career.” (Max, 4:30)

“…issues can come up at any time up until closing, but it seems like we always find a good resolution. Yeah, we got it to the finish line. Both parties were happy with the outcome.” (Jeff, 5:53)

“I’ve moved the ugliest thing on the street to the most beautiful park, like this one. We do all sorts of stuff.” (Max, 6:14)

00:00

Hello and welcome to the mobile home park broker’s 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 is your host, Maxwell Baker,

00:22 Maxwell Baker

Hey, y’all, welcome to another epic 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’ve heard it. I’m gonna preach it every time it is our proprietary system that will guarantee you a higher price when you exclusively list with us, give us a call, (678) 932-0200, or you can email us at info@themhpbroker.com and today, let’s get into this closing cocktail. Jeff dodge, welcome to the show. Congrats on getting this deal closed. We worked on this deal together, but Jeff did the majority of the work running down there a couple times, meeting with clients. So, dude, Congrats on getting this closed.

01:11 Jeff Dodge

Thanks. Max. Appreciate that, It’s great to be here with you!

01:13 Maxwell Baker

Yeah, man. So, tell us about this deal, the buyer profile, and then I’ll, interject with some comments that I’ve that we both uncovered.

01:23 Jeff Dodge

Sure, yes, as you know, the seller been in this business for a long time, bought and sold many parts over the years, but came to us, you know, to represent him in the sale of this portfolio, which is really nice to see the expertise to you know, come to us with trusting us to do something of this nature. Little background on the parks real quickly. Eagle trace was 107 lots, 98 Park owned homes, 810, and own one vacant lot. So, uh, low vacancy in that one Edgewood, 29 lots, 18 Park owned homes, 310, and own homes, eight vacant lots. That one presented a little bit more of a value-add opportunity, but overall, gave us 136 lots, 116 Park owned homes, 11 tenant owned and nine vacant lots. The city-maintained utilities and roads, which is great, Direct Bill everything, which is great for everybody, new and very impressively renovated homes. They spent a lot of time and capital renovating these homes, and they were very impressive to see, parks very well maintained. Took a lot of pride in these parks, obviously, and there was still some room to increase the rents on them.

02:31 Maxwell Baker

I really like this deal, simply because the numbers on it were pretty strong. Like you mentioned, direct billed everything, dedicated roads. What’s not to like, and we still got a cap rate with the six in front of it y’all, which is unheard of in this market, but here at The MHP Broker, we just make shit happen and Jeff is really good at helping us through the due diligence. He was able to negotiate with the buyer and get over some hurdles that we had. We had some closing attorney hurdles that came out of left field. You can call me and I’ll discuss that with you. I’m not going to talk about it on this podcast? But yeah, so it was definitely a deal to remember, and we were able to get a six cap with some change behind, sixth thing, it was like six and a quarter, six and a half what was that, was that on lot rent?

03:24 Jeff Dodge

Right around that range, that’s right.

03:25 Maxwell Baker

Yeah. So, like, we got a pretty damn good price on it and simply the other variable is, another reason why we got it that way is because the lot rent was about 100 well, how much money was it below market?

03:39 Jeff Dodge

The bigger Park was about $100 more than low the smaller park, but yeah, somewhere in that $100 under market, I would say.

03:47 Maxwell Baker

Yeah. So, they had some upside. So, that obviously gets to help us with the cap rates. When there’s some upside on lot rent and then the Park Owned Home. There was a bunch of them, I mean, close to 100 right, Jeff?

03:58 Jeff Dodge

That’s what was I was gonna say, the biggest challenge, I felt like going into it was this just a large number of Park Owned Homes, 116 out of 136 lots. So, you know, you’re worried about the financing aspect and finding that right buyer that’s willing to take on 116 Park Owned Homes. But, you know, ultimately, we received multiple offers.

04:16 Maxwell Baker

We did, yeah, it was like within the first two, three weeks, right? I think we got three. How many offers did we get?

04:24 Jeff Dodge

Yeah, there were, there were several. It came down to three buyers that we were really, really seriously negotiating back and forth with.

04:30 Maxwell Baker

Yeah. So, it ended up working out. We picked the best buyer and, you know, there was a warehouse involved, or not a warehouse, but an office involved, and it was not going to be included the deal, but we kept it in our pocket, and we strategized with the seller, saying, look, let’s just keep this in our pocket in case we need to juice the price downstream or negotiate for something later. And it ended up working out, because that little office, we were able to get the buyer up another quarter million dollars. By saving some stuff in our tool belt for stuff downstream. So, there’s a lot of tactics as a broker. I mean, this is what we do, y’all, if y’all have some communities out there that you want to sell. I mean, we’ve been through hundreds of transactions since we’ve started. I mean, I want to say I’ve probably sold well over 500 mobile home parks in my career. That’s crazy to say out loud, y’all, but we have done it, and we’ve seen a lot of drama. We kind of know not, kind of we do know when there’s smoke, there’s probably a fire, and we’re pretty quick at putting those out. When Jeff is really good as well, he helped us through the entire process like he was definitely a star agent on this deal, meeting the clients, doing the underwriting, like Jeff. Jeff made it happen like he did a great job. So, Jeff, good on you brother. Any closing comments you want to say about this too before we wrap it up?

05:53 Jeff Dodge

Yeah, I appreciate those remarks, by the way. One thing I’ll just say that I feel like we learned kind of what you were alluding to, is that, you know, issues can come up at any time up until closing, but seems like we always find a good resolution. Yeah, we got it to the finish line. Both parties were happy with the outcome. And I would just close with you know that we can always find the right buyer for you. So just give us the opportunity to list your property.

06:14 Maxwell Baker

Yeah, we move stuff. I mean, we’ve, I’ve moved the ugliest thing on the street to the most beautiful park, like this one. We do all sorts of stuff. And you know, I will say that the more beautiful your park is, the easier it is to trade, simply because there’s a lot of buyers out there looking for turnkey stuff. But you know, you can go with a white glove broker. Some of our competitors out there only work on white glove stuff. But when it comes down to, like, deal negotiation, being tactful, like they just sitting there kind of twiddling their thumbs. I mean, we have a lot of experience with dealing with all that monkey business, because we’ve done some of the 12345, Star types of communities, and, you know, the smaller ones that have a lot of hair on it always, always have more craziness that come with them, with no books and records or citations with the county, or any kind of weird encroachments, like from mobile homes encroaching on the parcel next door. Or, you know, there’s a laundry list of things, and we just know how to navigate that. So., I digress. Give us a call. We would love to represent you. (678) 932-0200, seis, siete, ocho, nueve, tres, dos, cero, dos, cero, cero or email us at info@themhpbroker.com and as always, this episode is brought to you by you got it the Community Price Maximizer, our proprietary system guarantees you a higher price. But anyways, you’ve heard it. Give us a call and let’s keep moving forward!