The MHP Brokers Tips and Tricks Podcast Interview with MHP Broker Eric Wanck about his AL MHP Deal

• Estate Drive was a deal they had out to market twice, and when it came back a year and a half later, it sold for probably $300,000 higher. (Eric, 01:35)
• The buyer was someone Eric had never worked with before, but he came through, had financing in place, and closed. (Eric, 02:14)
• It was a clean, turnkey community with paved roads, direct-billed city water, electronic payments, and management already in place. (Eric, 01:54)
• The property traded at a sub-8.5 cap on lot rent in a tertiary Alabama market. (Eric, 03:07)
• Max and Eric emphasized that every deal is different, and value comes down to local conditions, setup, and underwriting. (Max & Eric, 04:04)

• “For the folks that missed the first time around, you’re probably kicking yourself because a year and a half later we went back out to market, probably $300,000 higher and we got it sold.” (Eric, 01:35)
• “The hardest part about this deal is just kind of coming to a number in terms, making sure that who was coming to the table was legitimate and had the means to close.” (Eric, 01:54)
• “Never worked with this gentleman before, but he came through and financing fell in place for him.” (Eric, 02:14)
• “DD was very smooth, we’re not talking about any re-trades.” (Eric, 02:14)
• “There’s no apples to apples in this business, even if the park is across town.” (Eric, 05:45)

00:00

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 is your host, Maxwell Baker.

00:22 Maxwell Baker

Hey y’all. Welcome to another beautiful episode, the Beautiful, the colossal MHP Brokers Tips and Tricks Podcast (aaaaahhhhhhhh) That’s a celebration we have every time we do a podcast here at the home office. So, as always, this episode is brought to you by the Community Price Maximizer. It is our proprietary system that will guarantee you, you, you, you, you, a higher price when you exclusively list with us (678) 932-0200 and again, we have; our top producer is blessing us with his presence on another beautiful closing, Estate Drive. Eric, welcome to the show once again, sir.

01:06 Eric Wanck

Thank you, Max. Thank you, thank you. Always a pleasure to come and talk about deals that have been closing here at the firm.

01:14 Maxwell Baker

Yeah, man. So, tell me about Estate Drive. I know this one was interesting. I actually like this deal personally. It was a little too rich for my blood personally, but that doesn’t mean it won’t sell. (laughs)

01:25 Eric Wanck

That’s right.

01:26 Maxwell Baker

And Eric made it happen with a California buyer, did it;

01:31 Eric Wanck

Yeah

01:32 Maxwell Baker

Made it happen, and Eric, give us some insight on this deal.

01:35 Eric Wanck

Yeah, this was a, ironically this was a deal that we had out to market twice. Had it out initially, and, you know, for the folks that missed the first time around, you’re probably kicking yourself because a year and a half later we went back out to market, probably $300,000 higher and we got it sold.

01:53 Maxwell Baker

I know I’m kicking myself right now.

01:54 Eric Wanck

(laughs) So, but a very, very clean deal. This is Rainsville, Alabama, paved roads that were just recently done, literally everything. I think there’s one parking home in there, but all TOH community direct bill city water, electronic payments, management already in place, very, very nice deal for somebody to come in. So, the hardest part about this deal is just kind of coming to a number in terms, making sure that who was coming to the table was legitimate and had the means to close, and as you said, Max, we, we ended up finding somebody out of California. Never have done business with the guy, so don’t think that just because you’ve never done business with the MHP Broker, that we have preferred folks that we only work with, that’s not the case. Never worked with this gentleman before, but he came through and financing fell in place for him. DD was very smooth, we’re not talking about any re-trades. Just, you know, a pleasure to work with the guy, so. You know, at the end of the day, it took some time, it did, but the end goal was we got it closed and we got a happy party on both sides.

03:03 Maxwell Baker

Yeah, I’m sure the seller was ecstatic. What kind of cap rate this thing sell out?

03:07 Eric Wanck

Yeah, this was in the 8s, you know, for, you know, Rainsville is still, I would consider a little more on the tertiary side, not your big MSA by any means. So, to get this sold, just off the top of my head, I think it was a sub 8.5 cap on lot rent

03:23 Maxwell Baker

Mh-hmm

03:24 Eric Wanck

You know, there’s, there’s a little bit of upside still there in the lot rents pushing.

03:27 Maxwell Baker

How many lots was it?

03:29 Eric Wanck

30 pads

03:30 Maxwell Baker

Yeah

03:30 Eric Wanck

That’s a pretty good cap rate for a tertiary market, but I mean it goes to show if you’ve got your numbers together, you’ve got the right culture in the community, you’ve got a good broker on your side, (clears throat) Eric Wanck, and you’ve also got some financing lined up for the buyer, then you’re gonna get a nice premium on your deal. Like Eric and I just, you know, talked about another deal that was that deal about the same size, give or take?

04:00 Eric Wanck

Yeah, maybe a little bit smaller, but, you know, probably within 1215 pads of this one.

04:04 Maxwell Baker

Yeah, so like, you know, that one was smaller and it traded north of 12 cap, but it was a rougher. Deal, rougher area, but this one, you know, turnkey, market’s a little better and north of an 8, you know, between 8 and 8.5. So like, every deal is different and I think it’s important for y’all, you know, just to reach out to us. Ask for Eric and he can kind of guide you through what the deal would trade at cause every deal is completely different. There’s a lot of variables. I get a lot of emails from amazing clients and I love hearing from y’all, but when you, when they ask, what are the cap rates trading for these days, I’m like, man, (laughs) It’s a loaded question because you gotta unpack all of the variables, you know, it’s kind of like going to Buford Highway and saying, which Mexican spot makes the best tacos? I’m like, depends on the day, like, it depends on how you feel about it. Some of them got better, you know, chilaquiles, some of them got better shrimp tacos. Depends on, depends on the area, depends on the mood. I digress.

05:11

That was a horrible analogy, but it got your attention to, it’s all local. Everything is local, based on what’s happening locally, based on what’s happening at the; with the bureaucracy in the area, all the politics, based on like the used home prices, based on what lot rents are going for, based on how management’s set up, you know, there’s just a lot of different things that go into this beautiful recipe of pricing your Mobile Home Park or RV park and Eric has got it down. So, Eric, you got any closing comments here before we wrap it up?

05:45 Eric Wanck

No, I mean, it’s, there’s a lot to unwind there when you talk about underwriting, but there’s a lot of truth to that. If you’re just curious what your community is worth, best thing to do is just reach out to the office, ask for me, cause there’s, there’s no apples to apples in this business, even if the park is across, you know, town. It can completely be a different setup than what your park is, and that could be a drastically different evaluation on what someone’s willing to pay too. So, I’m happy to talk to somebody about kind of the values and how the underwriting process works for us. Yeah, this one was, this one was a success all around.

06:23 Maxwell Baker

Hey y’all. Thanks for listening and as always, you can reach us 678-932-0200 again, that’s 678-932-0200. You can reach out to us, get a free analysis for your community; but like I said, happy to help you. Appreciate you listening, and let’s keep moving forward.

The MHP Broker

The MHP Broker specializes in evaluating, maximizing the value of, and selling manufactured home parks in secondary and tertiary markets. That’s been their line of business since 2009, and in that time, they've sold well over 700 parks. Whether you’re looking to sell your unique property or simply gain a better understanding of its market value, contact them today.