5 Things You Can Do to Prepare Your Mobile Home Park for Sale
Every day now it seems Mobile Home Park (MHP) owners are getting offers to buy their parks. And why wouldn’t they? Owning a mobile home park has a lot of perks. These include higher-than-average returns than other real estate investments, uncapitalized income streams, and the fact that MHPs are nearly recession-proof and many are turnkey with low operating expenses. Mobile homes house about 22 million people with around 7-8 million living in a mobile home park giving these residents an affordable place they can call home.
If you’re a MHP owner and feel underwhelmed by the offers you’re receiving, or if you’re having trouble receiving credible above market offers, don’t worry. You came to the right place.
I can help increase the value of your mobile home park by an estimated 8-13% on average, and in some cases by more than 20%!
Sell Your Mobile Home Park
Here’s the truth: The best time to contact a broker is six months to a year before you want to sell. It takes time and effort to sell a mobile home park. And you want to make sure you don’t cut corners or leave out any of the buyers who would pay a higher price and provide a higher probability of close.
When buyers go to examine the nitty-gritty of your mobile home park, they need to be certain that their investment will be a wise, headache-free opportunity. An experienced broker is a great way to ensure buyer and seller satisfaction and will likely result in a smoother transaction that puts more money in the seller’s pocket even after paying a commission.
Why Glenn Esterson?
As a broker, I’ve been working for more than 18 years across the nation. My work has taken me to mobile home parks in Southeast, Northeast, Midwest, and Southwest, and a whole bunch of states in between.
My team and I will create all the marketing materials. We will generate more exposure to larger groups of hard to reach out-of-state 1031 buyers more so than any other brokers. Once we have locked-in on a few potential purchasers, we will properly vet those buyers and potential offers, saving you from headaches.
After all there are only two reasons your park won’t sell: price or exposure. With my team you will never worry about exposure. And if you let us price the park, you will also get better offers that will actually close at the contract price.
What Should You Prepare Before Contacting A Broker?
When someone’s buying a mobile home park, they want to make sure it has a tenant base that is plentiful and content. Happy tenants mean less time a buyer will need to spend on the headaches of screening and leasing to new applicants.
While there is nothing inherently wrong with raising rents to improve your cash flow and Net Operating Income (NOI) for a sale, you may find that you have offended your tenant base and it may be hard to keep those tenants content through the transition.
They may become unhappy and it may show through. Plus that rent increase may not have been necessary to achieve the pricing you want and may actually limit the buyer base because of taking additional profit off of the future performance for the would be investor.
So How Do You Make It “Worth It” For Tenants and Potential Buyers?
Before contacting a broker, do yourself a favor and follow these simple steps for some easy ways to increase your property’s valuation and your profit margin.
It’s a little bit of money now to make a whole lot more later. And if you do it right, chances are you’ll make back what you spent — and then some — during the sale of your mobile home park!
1. Paint The Roofs
Invest in your local business community and hire some professionals to paint the roofs, even if they are tenant owned. Mobile home roofs can seriously date the appearance of your mobile home parks. No one wants to pay a premium for something is rusty and corroded. A quick coat of roofing paint will reflect the time and energy you’ve put in to your mobile home parks.
2. Install New Skirts
A mobile home without proper skirting is not appealing to buyers, especially if the undercarriage is rusty, or in poor condition. Buy and install new skirts for all of the homes — you can even tell your tenants it’s an early Christmas present!
Some people think you should charge the tenants for new skirts. In my experience this is a good way to make your tenants feel unhappy. Unhappy tenants equals more headaches for you, so I advise against that kind of practice. Instead you should foot the bill, after all you will get the tax write off and the higher net sale proceeds to justify the improvements.
3. Paving Roads
If your mobile home parks has gravel driveways and roads, you know it has its advantages. It’s a cheap way to create a driving surface, and it works in a variety of environments.
But gravel also has a lot of drawbacks. For one, gravel can become an unsightly solution. It kicks up messy dust and is hard on vehicles. Paving your driveways can cut down on maintenance, create instant curb appeal for your units, and increase your resale value.
If your MHP already features paved roads, great! If they’re chewed up or worse for the wear, give them some much needed TLC and have them repaired.
Ugly lawns are always a red flag for buyers. Maybe the lawns are overgrown and not uniform, maybe there’s leaves in the yard, or the lawn is dead and your units are sitting on bald patches of dirt. Maybe the tenant is keeping unsightly items in the yard or the neighboring tenant is spilling on to a vacant lot. If the lawns are unkempt, what other hidden surprises might be waiting for would be buyers? Poorly maintained landscaping is another one of those things that screams “neglect”.
Avoid this pitfall by hiring some local professionals to freshen up your facilities. Have them throw down new sod, spread out some mulch, and even plant some local low maintenance bushes and flowers.
Go a little further than that. Add an entrance sign, put up a flagpole, build some flower beds in open spaces like center islands.
5. Fixing Mailboxes
Mailboxes are outside all of the time and experience the brunt of the elements. That means they’re more likely to be damaged, bent, or otherwise affected by wind, rain, and overuse.
To help ensure a better return on your investment, fix or replace your broken mailboxes. Using a cluster mailbox is a great cost-saving alternative to having rows of old fashioned boxes. A mailbox touch-up will be the cherry on top of all the work you’ve done restoring your MHP.
You’ll have happier tenants, more potential buyers, and a better bottom line.
Investment is Time, Money, and Sweat Equity
Contact me and start with an initial evaluation to get a clear understanding of where you are right now and what the improvements would be worth.
Let me say again: You are going to need to invest some money in your MHP. You got to spend money to make money, after all. Don’t cut corners but be as efficient as possible when spending on these improvements. If you are using third-parties be sure to hire licensed and bonded professionals.
Take some time, get your ducks in a row, and you’ll be surprised at how much you benefit.
In the end, these simple fixes can mean the difference between a low offer and an above market price offer.
Contact Glenn for a Free Evaluation
I’ve been selling apartments & mobile home parks across the USA for over 18 years. I now exclusively focus on parks. I have the experience and knowledge necessary to guide you through the sale process.
Whether you’re looking to evaluate, sell, or buy a mobile home park, I’m ready to help you with expert advisory and brokerage services. Reach out today and I’ll get you started with a free evaluation.
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