The MHP Brokers Tips and Tricks Closing Cocktails Podcast Interview with Eric Wanck of The Mobile Home Park Broker

May 31, 2024 by Maxwell Baker

In this episode of The MHP Broker’s Tips and Tricks Closing Cocktails podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed broker superstar Eric Wanck regarding a couple of his recent and very successful deals.

Here Are the Show Highlights

  • Eric recently closed on Cozy Homes Mobile Home Park and Dogwood Estates MHP. (Max, 0:22)
  • Cozy Homes was an off-market deal on a park that Eric sold to the current sellers in 2020. They reached out to him again this year when they wished to sell. (Eric, 1:11)
  • It was a nice park, with 75 pads, city water and sewer, and paved roads. It easily met appraisal and sold in about 90 days, from initial contact to the sale date. However, the owners had managed the park from afar, installing local day-to-day management. This proved to be problematic. (Eric, 1:53)
  • The local manager did a poor job of maintaining the park, some residents left, the park lost value, and the owner had to refinance, with a balloon payment due in twelve months. That’s why they decided to sell. The lesson is that passive owners still have to check in regularly and know what’s going on with their property before it loses value. (Eric, 2:35)
  • As a result of the local management’s shortcomings, monthly park revenue had dropped from about $23,000 when Eric first sold it three years ago, to about $14,000 or $15,000 by the time it sold again. (Eric, 3:45)
  • The sellers had bought the park three years ago for $2.2 million and had to sell it for a lot less than that due to its deteriorating condition. (Eric, 4:06)
  • Despite the drop in value of the park, Eric did an excellent job on the sale and the sellers still got a premium price. (Max, 4:23)
  • Eric’s second recent success was with Dogwood Estates near Martinsville, Virginia. It was a smaller park than Cozy Homes, and also had city water and sewer, and paved roads. But its location wasn’t ideal…right next to a McDonald’s restaurant. (Eric, 6:24)
  • The lesson to be learned here is that sellers sometimes need to practice patience if the property has some challenges. It might take time, but there’s a buyer for every deal. This park had good books and records, and it easily passed the buyer’s due diligence. (Eric, 7:09)
  • The new owners ended up with a park with a ten-CAP on day one, and lots that were under market rate by about $50. Infilling opportunities also existed. (Eric, 8:01)
  • There’s a lot of opportunity out there, a big market for mobile home parks even with the high interest rates. So stay patient if you’re a seller, and The MHP Broker can help you find a buyer regardless of what challenges or obstacles your park might face. So caall us. (Eric, 9:58)
  • Some of the large banks and other lenders aren’t even interested in deals under $2.5 million or even $5 million. That’s why Max’s company has established connections with credit unions that are enthusiastic about lending for smaller deals and at more favorable interest rates than the major lenders are willing to give–if they’ll accept a deal at all. (Max, 11:07)

Regardless of the challenges and obstacles your park might face, we believe there’s a buyer for every park. Just contact Max Baker or Eric Wanck at The Mobile Home Park Broker, (678) 932-0200.

Power Quotes in This Episode:

“Don’t ever think that parks are a hands-off, passive business, because they’re not.” (Eric, 2:35)

(The closing price) wasn’t close to where we sold it in the beginning. Butwe still got a pretty solid price for this deal.” (Eric, 4:23)

“So if y’all have some parks out there that are mismanaged, give us a call.” (Max, 5:33)

That’s (678) 932-0200 or email us at Ask for Eric if you’re going to call. He is the man with the plan and his pipeline is massive, still. So you guys give him a call and let’s keep moving forward!” (Max, 12:45)

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 programme, give us a call 678-932-0200 and you can ask for Eric, because Eric Wanck is actually on our podcast today because he just closed two new deals and as exciting as that is one of them was actually pretty interesting. So Eric, welcome to the show. Tell us a little bit about the two deals you just closed. One was the Cosy Homes and the other one was Dogwood Estates, Love to hear about them and let us know what you got what you learned.

01:11 Eric Wanck

Yeah, thanks, Max, always good to be on the podcast talking about closing deals. And as you mentioned, one of these deals is very interesting, always love seeing business, come back around to us and this was a park that I sold in 2020, I believe it was the seller reached out to me here again and he said, Look, what’s it worth kind of in a situation where I might be looking to sell. So hey, the conversation started there, this was one that we did off market, just being familiar with one the park and to the players in the area, and who has some holdings in this in this vicinity.

01:53 Eric Wanck

So we’re able to put it together in a relatively quick manner. I mean, I think from the time that the seller called me to finally close was probably about 90 days, we did get a bank on this. Everything was smoothly the appraisal and everything else. But hey, it was it was a nice sized Park 75 pads, city water and sewer, paved roads. Maybe the lesson on this one though, I preface this with the fact that certainly not going to disclose who the seller was. Great guy, a working professional, but manage the park from afar and those that are looking to get in the business and they want to get into the park business for maybe the passive income. It’s not all passive.

02:32 Maxwell Baker

No, it’s not.

02:35 Eric Wanck

Don’t ever trust the fact that just because there’s in place management, that manager is going to just continue to do a stellar job for you just like they did the last owner. So there’s a lot of checks and balances here that were not met and unfortunately, management took advantage of this particular gentleman to the detriment of the park, and they’re hurt some of the occupancy, hurt the numbers and when you get less income and then you have a bank saying, hey, we’re going to refi and you need you got a balloon coming due in 12 months or less, it causes some anxiety that especially when rates have gone up the way they have in the last, you know, 18 months. So he found himself in a situation where he needed to sell, be quite honest with you, or else he was going to have to come to the table with some cash to refi out this loan. But yeah, just kind of a note there that you got to be on top of your manager and don’t ever think that parks are a hands off passive business because they’re not.

03:36 Maxwell Baker

Yeah, that was one thing I mentioned about this deal that it was grossing, when he bought it, like in the low 20s, wasn’t it?

03:45 Eric Wanck

Yeah, about 23,000 a month and then when we sold it, we’re probably looking at about 14,000 – 15,000 a month.

03:54 Maxwell Baker

So over $7,000 drop in revenue and we sold it back then for what was the price when he bought it?

04:01 Eric Wanck

2.2 million

04:02 Maxwell Baker

And what it was the price when we sold it?

04:06 Eric Wanck

Well, I will say the the buyer strategically had an exit on this. I don’t know if we want to disclose the the exit price or the purchase price. But they paid actually a premium for this if you just do a traditional underwriting. But yes, it was much less than 2.2 million.

 04:23 Maxwell Baker

So the reason I normally I don’t really disclose the pricing for obvious reasons, that gives us our strategic advantage as a broker. So you guys call us and we can evaluate your park. But Eric killed this deal so well that it did take a little bit of a haircut on the price but not as much as you would anticipate like, that’s what I was very impressed about is like, we still got a premium for this deal. All be it. It wasn’t close to where we sold it to in the beginning. But for what it’s worth. I mean we still got a pretty Solid price for this deal and it’s really all depends on exit strategy like, you know, this buyer that we’re working with, we’ve done several deals with Eric’s done a great job with him, he’ll pay a premium if he’s got an exit strategy and he comes in, fixes the homes, puts them on lease options sometimes, I don’t know what’s all the strategy that he puts together, but he’s got a way to come in and fix the issues and then sell it to a more passive owner that’s looking to buy something that doesn’t need as much management.

05:33 Maxwell Baker

So if you all have some parks out there, that are mismanaged, give us a call, you’d be surprised what all we can do for you. Because like I said, there are a lot of buyers out there that look at the problem children, mobile home communities and RV communities. And that’s what we specialise in, we do really well, as a company, especially Eric, been here since the beginning  OG broker and he’s seen a lot, so yeah man, congrats on that it was a really interesting deal just to hit off market and this guy that was selling it, I mean, we’ve, well, I don’t want to get into the details. But there were a lot more issues other than management that were that were going down and we were able to save him from having even to get to that point. So But anyways, moving on to Dogwood estates. Eric, tell us a little bit about this deal, kind of what you learned and the details on it.

06:24 Eric Wanck

Yeah, no, this was a smaller Park around the Martinsville, Virginia area, a little more tertiary. But hey, this is kind of bread and butter of what we do, love tertiary parks out there and truthfully, that’s where the bulk of the market is. So this was a city water, sewer and trash, paved roads. Great kind of check the box off, you know, for a lot of buyers, mostly tenant owned homes. The downside was it was tertiary and it was kind of, you know, in town sitting back off the road, but in town, not necessarily a bad thing. It literally backed up to a McDonald’s like these 10

07:02 Maxwell Baker


07:03 Eric Wanck

10 Walkrate to the McDonald’s drive tennis

07:05 Maxwell Baker

It sat on the market for a little while, even with a Walkscore being crazy than that.

07:09 Eric Wanck

Yeah, yeah, this was one that we talked about where we were kind of shocked that somebody has not put it under contract yet. But you know, it’s just one of those things that right buyer right time and that’s why we kind of stress that sometimes it does take six months, maybe even a little bit longer. But you know, we have a pretty good track record of getting things under contract and sold within the six months and this was probably around that four month mark, where we got a cash buyer out of the Virginia area and truthfully, we didn’t take a haircut, you think cash like you just took a low price on it. But that’s not the case. Here, We struck a good deal that worked for both sides. You know, management was already in place clean DD, books and records were good. This deal, believe it or not sold for just north of a 10 Cap.

07:58 Maxwell Baker

Wow. All lot rent next to a McDonald’s.

08:01 Eric Wanck

Yeah, so you guys are out there. If you’re thinking if you’re looking at parks, and maybe that stigma exists that, hey, if it’s listed, it’s no good, because everybody’s seen it already. It’s not the truth, sometimes you just need to dig into these deals and the gentleman that bought it, you know, that’s, that’s 10 cap day one and he hasn’t even raised the rents which they were under market by at least 50 bucks.

08:22 Maxwell Baker

So he’s gonna make a nice little lick on that deal.

08:26 Eric Wanck

Yeah, yeah. I mean, it was stabilised, there wasn’t really any upside and fill in vacancies. But just easy upside and fill in rents are raising rents. I mean, and he’s gonna make his value back for sure.

08:38 Maxwell Baker

Yeah, that’s nice, man. That’s great. But anyway, the closing comments here on what you’re seeing on the debt side, or what you’re seeing as far as buyers now that we’re basically in a different world these days, with what we’re seeing with deals. Just wanted to get your thoughts on what you think were you seeing the market right now?

08:56 Eric Wanck

Yeah, that pendulum on the interest rates is always a little bit of a chasing target for us because when we put these parks out on the market, I mean, we could honestly have a, an interest rate jump from the time that we first started talking with a seller sign a listing, get the marketing all done, put it on the market, you know, our cap rate and our pricing could adjust slightly. So we’re we’re always kind of having an eye on what’s happening in the banking world and adjusting appropriately. But yeah, the the year of 2020 and 2021 and trying to sell a lot of these parks, even the tertiary parks, that were 25-50 pads of the you know, solid Park on city utilities was was being priced in the 8 cap range, and they were selling quite frequently for us. I think that same park today is about 100 basis points higher, if not a little bit more, just depending on the situation, but I think the sellers are out there, folks are looking to maybe maybe free up some capital and pull out equity maybe reinvest in some of the He’s opportunities that do exist.

09:58 Eric Wanck

So I think that, as far as opportunities, if you’re listening to your buyer, they are out there, not everything is super overpriced, and we’re happy to just kind of work through what we have as listings as a company and on the buy side, there’s definitely a plethora to look at. And, you know, Max, we we kind of have a debt side now to the company, that’s hands off to myself, but, you know, if you need help with the financing, we try to make sure that we get you into that deal, a debt coverage ratio, you know, the cash flow is there to where all the numbers make sense and, you know, at the end of the day, that’s the great thing about commercial real estate is, you know, we know how to strike that deal with our client, to where, hey, maybe we can’t get this sold at X amount, because of where the interest rates are, maybe you have to hold a note for a lesser interest rate to get your price, So we’re always trying to work the deal no matter how just to get it done. I mean, that’s what we’re here for. and we’re here to serve, not only the seller, but you know, the buyer trying to get it through into the closing line.

11:07 Maxwell Baker

Yeah, you know, as, as we’ve kind of evolved as a company and, Eric, appreciate you talking about the debt side, I’m actually leading the debt side and have been working on building that infrastructure for the team here and it’s simply because you know, a lot of institutional lenders out there the Fannie and, and Freddie and, you know, insurance companies and CMBS, and all that stuff out there, like the minimum loan amount for those people’s like 2.5 million, 2 million, sometimes even 5 million on some of these other ones. I know CBRE even has a lending platform to lend but their minimum loan amount is like 5 million and then they’re semi competitive. So we’ve actually been approaching the credit unions, because if you guys have relationships with credit unions, get out there and see if they’ll lend on parks because banks and all these for profit companies, they can’t compete with a credit unions because it’s nonprofit, obviously. So we just closed the deal. It was 6.02%, or 6.05%, when we closed it last week. Now they’re quoting obviously, it’s moved since then, but they’re in the 6.7% – 6.9% range. So they’re not even touching 7% yet. Whereas these you know, community banks are in the 8%, high 7%’s and even CMBS is in the mid 7%. So give us a call like it we’ve had to create this debt side because it’s just we can’t get deals done unless we get them funded. So that’s the reason why we started drumming up lenders and and banks and banks and lenders should say and credit unions to get this done.

12:45 Maxwell Baker

As always, we appreciate your business and wouldn’t be finishing this podcast without saying that 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 (678) 932-0200 or email us at Ask for Eric if you’re going to call he is the man with the plan and his pipeline is massive still so you guys give him a call and let’s keep moving forward!, appreciate y’all listening. Have a good weekend and day or whatever day it is you’re listening to, see you later.

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Maxwell Baker

Maxwell R. Baker founded The MHP Broker in 2009 as a commercial real estate broker specializing in helping Investors buy and sell mobile home communities throughout the Southeast. His family got started with mobile home parks in 2000 where Max gained experience in management, rehabilitation, and selling mobile home parks. Today, The MHP Broker has grown to a team of several agents with expanded services focused on owner and investor brokerage services, mobile home park audits, and in-depth market research, resulting in the sale of over $500 million worth of mobile home communities.