In this episode of The MHP Broker’s Tips and Tricks Closing Cocktail podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed The MHP Broker Eric Wanck about his Bailey Acres Mobile Home Park transaction near Chattanooga.
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 wanted to discuss Eric’s Bailey Acres deal because there were some challenges. It was a development project with a lot of infilling required, and there was a bit of drama as a result of the park’s interaction with the local bureaucracy. (Max, 1:19)
- Eric loved the deal because, in the first place, it was a prime location, just south of Chattanooga, a thriving metro. The park was just 20 minutes from downtown Chattanooga. And while a lot of infilling was needed, the infrastructure was in place. It had city water and a 1:1 septic system. It was also getting $400 a lot, a good rate. The park had been neglected for a few years, so it did need some major sprucing up by the new ownership. (Eric, 1:31)
- As far as the city was concerned, the park had too many pads for its size, and some would have to come out. Eric and the eller went back and forth on that for a while. In the end, they had to lose about four pads. But they found an experienced park owner/buyer from Georgia who knew what he was doing. The seller was very happy with the sale price, which went for about $20,000 a pad, a very good deal for a park in such need of infilling. (Eric, 2:31)
- Part of the buyer’s financing came from 1031 exchange. That’s funding generated by the sale of a similar project. If spent on a like project within a limited time, there’s less capital gains taxation on the previous sale. (Eric, 4:06)
- The buyer was able to get additional financing through a pre-existing relationship with a local bank, so he came to the table fully funded. This was important because the seller didn’t want to hold a note, so it worked out to everyone’s advantage. (Eric, 4:08)
- Max reminds sellers that there are a lot of 1031 exchange users out there, and they’re all motivated to find a seller and a quick deal–and they’ve got money! We’ll help you find them. (Max, 4:44)
While Max can’t guarantee a sale price of $20,000 per vacant pad on EVERY sale, he can assure you of getting the best price possible on every deal, thanks to he efforts of savvy veteran brokers like Eric. Call Eric Wanck or Max Baker at The MHP Broker, (678) 932-0200 or drop us a line at info@themhpbroker.com.
Power Quotes in This Episode:
“I felt that the location was strong enough that eventually we would find a buyer, and lo and behold, we did just that.” (Eric, 1:31)
“Seller’s happy at the end of the day, I believe, because we stuck firm to what he wanted and we got nearly, I think about $20,000 a pad.” (Eric, 2:31)
“You know, the higher the lot rent, the more money you’re gonna get, obviously, because there’s more demand.” (Max, 5:04)
“Really happy to be involved on this one, and look forward to more deals where we can infill. I think there’s going to be more that hit the market, and this is going to be opportunities for some investors out there. Doesn’t have to be the 100-plus pads that the institutions are chasing. You know, this one’s sold high fives (CAP rate). We can get them done.” (Eric, 5:25)
“I mean, it was unreal the response we got. Received multiple offers and then went to work with competing offers and got it sold actually over ask price. The seller was very happy with that.” (Jeff, 4:09)
“It was a couple hundred grand over ask price with multiple offers that were competing.” (Jeff, 4:26)
The worst thing you can do is have a (investment) fund just sitting there. (Explaining why an investor might overpay on a good deal vs. doing nothing with their money.)” (Max, 5:24)
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 beautiful episode of the Mobile Home Park Brokers Tips and Tricks podcast. As always, this episode is brought to you by the, you guessed it, 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. Today, we have a beautiful closing cocktail, back to back deals here. Eric Wanck, welcome to the podcast again brother, and congrats on getting some deals. Election year was a little tough for us all, except for you, Eric, because you’re just a rock star and you know how to close deals, right?
01:05 Eric Wanck
I try, I try. Yeah, it’s right though election year was a little bit tricky, I think across the board for everybody, but we still had a lot of closings and 2025 is staying busy.
01:19 Maxwell Baker
Yeah, man. So tell us a little bit about Bailey’s. This is actually a pretty interesting deal story because it’s a development deal from the ground up and there was a lot of drama with the city and love to hear you unpack all of that.
01:31 Eric Wanck
I actually love this deal for multiple reasons, but I really like the location set just south of Chattanooga, and as you mentioned, it was an infill project. Not completely ground up. The infrastructure was there, city water, 1 to 1 septics, all the roads in, and it was an existing mobile home park back in the day that unfortunately just kind of got left. That owner had to come in, clean everything up, spruce it up a little bit and that’s kind of where we took over as far as trying to find a buyer but I’ve been to this park multiple times. I liked the Chattanooga MSA for its growth and this thing’s only 20 minutes to downtown. So, even though it was a tough sell in the sense that we, we don’t market a lot of these infill projects, I felt that the location was strong enough that eventually we would find a buyer, and lo and behold, we did just that.
02:30 Maxwell Baker
Yeah
02:31 Eric Wanck
Yeah, good little deal as far as, you know, kind of the interesting things about this deal is, you know, there was, there was actually more pads out there than what we could market it for, and that all came down to just what we could get in writing from the county. I think at one point a verbal was given and unfortunately, we all know that verbals don’t really go anywhere, I guess when it comes to what can we really put on the ground out here. So we ended up losing, I think, around 4 lots. When it got down to putting that in writing, but hey, it was just perfect for our buyer. He was out of Georgia. A fellow park owner already, and I have no doubt he’s gonna do really well with this. We got, we got a good price for this. Seller’s happy at the end of the day, I believe, because we, we stuck firm to what he wanted and we got nearly, I think about $20,000 a pad on this max, which is for an infill deal…
03:31 Maxwell Baker
That’s pretty damn good, man!
03:33 Eric Wanck
Pretty strong, and we’ve sold a few of these, and this was the highest price per pad that we’ve been able to sell. MSA helps a little bit, you know, roughly $400 lot rents up there in that area. That helps, of course, infrastructure in the ground as well. So, overall though, very happy with it, took a little bit of time to sell and navigating the nuances there with the county, but happy parties on both sides, and I’m glad to be a part of it.
04:03 Maxwell Baker
How was it financed? or was it all cash?
04:06 Eric Wanck
The guy did have some 1031 money.
04:08 Maxwell Baker
Nice!
04:08 Eric Wanck
He had a little bit of cash himself and lo and behold, we used all sorts of money on this one, and they actually had a really good connection with local banks done business with and, you know, it was an easy loan for them because they didn’t have to, they didn’t have to bring much to it. So, but that was, yeah, I mean, I’m glad you brought that up because these smaller dev deals, it’s the financing. How do you get it done? The seller didn’t want to hold a note, just didn’t really make a lot of sense for him. So, you know, find the buyer that had that kind of financial stack ready to go, was key to getting it closed.
04:44 Maxwell Baker
Yeah, and we had a quite a few; there’s still a lot of 1031 buyers out there, y’all. So, if you’ve got a deal that’s vacant and looking for a buyer. Obviously we can’t guarantee $20,000 a vacant pad, but at all is a big variable of what local lot rents are going for. So, what were the lot rents in the market over there?
05:02 Eric Wanck
Yeah, they were about $400.
05:04 Maxwell Baker
Yeah, so $400 rents. Can’t promise you 20 grand a pad, but, you know, the higher the lot rent, the more money you’re gonna get, obviously, because there’s more demand and. If he ever wants an Eric; I was gonna say if he ever wants to make an offer on the park next door, let me know.
05:20 Eric Wanck
(laughs) the personal plug.
05:22 Maxwell Baker
But anyways, congrats on this. Any closing comments?
05:25 Eric Wanck
No, that’s it. Really happy to be involved on this one and, and look forward to more deals where we can infill. I think there’s going to be more that hit the market, and this is going to be opportunities for some investors out there. Doesn’t have to be the 100+ pads that the institutions are chasing. You know, this one’s sold high fives. We can get them done.
05:44 Maxwell Baker
Yeah, you can. You’ve done it multiple times, E. So I think the last one you did was that Florida deal.
05:50 Eric Wanck
Yeah, that’s right.
05:52 Maxwell Baker
Yeah, I’m pretty good, and I think the seller has been working on that one hard too. So yeah, give us a call y’all. Reach out to Eric. He does know what he’s doing when it comes to these infill projects. Happy to talk to you as well here, so give us a call (678) 932-0200 or email us at info@theMHProker.com and as always, this episode is brought to you by, you guessed it, your Community Price Maximizer. It is here to guarantee you the highest price when you exclusively list with us, just like Eric did on this deal, AKA Bailey’s Mobile Home Park in beautiful Chattanooga. So, like I said, call us, happy to help and let’s keep moving forward!
