The mobile home park industry is changing. The key word here is industry. For the first time since manufactured homes entered mainstream popularity many decades ago, it’s becoming a consolidated industry, with increasingly savvy groups of buyers and real estate investment trusts growing more interested in mobile home parks. In other words, there has never been a better time to sell your mobile home park. To make the most of this rapidly growing buyer pool, we have a 5 key tips for selling your mobile home park.
1. Outline Your Goals for Selling
As a mobile home park owner who is looking to sell, there is likely plenty on your mind — from the complexities of the sales process, to the long and winding search for a network of qualified buyers, and so on. But don’t get ahead of yourself. Before you jump into listing your property and dive into the process of selling your mobile home park, you should ask yourself a few key questions that will drive your selling strategy, improve your relationship with brokers and other parties, and ultimately secure you a better outcome from the sale.
Here are a few key questions to ask yourself:
- What do you want to accomplish by selling your park?
- Would selling your MHP provide you and your family the income and lifestyle you are trying to achieve?
- What are you planning to do with the cash after the sale? Taxes can be a killer, luckily there are options to defer most of it.
- Are you interested in receiving a lump sum of cash at closing, or a stream of monthly income?
- How much do you owe on the property?
2. Understand Where You Stand in the Mobile Home Park Market
There are many market factors that will determine where your park stands and how close to your selling goals you can get. As the seller, you must first understand the demands of the market, both in your local area and on a national scale. Who are the buyers? Who are the other sellers? You should also grasp the external conditions of the real estate market — economic, social, political, environmental — as these could factor into the price of your mobile home park.
Gaining a deep understanding of these factors can help you be more strategic and confident when vetting buyers and selling your park. However, it’s difficult to evaluate all this market research by yourself. This is where you should call on an expert who understands the mobile home park market and, therefore, can use intelligent data to shape your selling strategy.
3. Work with a Mobile Home Park Broker
Mobile home park brokers, especially ones who offers advisory services, can leverage actionable industry data to give you better perspective on the mobile home park market trends. That data greatly assists in making more informed decisions about increasing your park’s valuation and pricing later down the road. Some brokers offer additional strategic planning through competitive sets, SWOT analyses, upside plans, debt consulting, and rent comps — and paint a clearer picture of where you stand in the market.
Finally, get an evaluation of your property. Brokers can estimate your parks value through data-driven evaluations and underwriting, guiding you toward some of the steps you should take to improve your overall market valuation. Furthermore, Glenn Esterson will provide an initial complete evaluation for free.
4. Increase Your Market Valuation
So you’re clear on the state of the mobile home park industry, the demand for your type of property, and how your park stands up to it all. Now is the time to “get your house in order” and work towards increasing the valuation of your park.
This short list of impactful improvements can impact your park’s valuation:
- Submeter water, sewer, and trash.
- Proper books and records. The cleaner the financials, the better the price. Does your bank deposit statements match with your rent rolls? Do they match the P&L’s? Do they match the tax returns? If not, it’s time to start to mitigate this. Poor record keeping will have a major adverse effect on the pricing and salability of the deal, not to mention the ability to finance of the acquisition.
- Fill all vacant lots.
- Reduce ongoing expenses, but don’t cut corners. As an example, it is not sensible to cancel a landscaping contract that consistently and uniformly cuts the grass in hopes of saving a buck and making the tenants mow. Tenants never do a good job and they never do it uniformly with the neighbors. A new buyer will penalize you for that. It may be sensible to cancel an overpriced cable TV contract as a new buyer will likely not care and the reduced expense on this can have a dramatic positive effect on the pricing. Be smart about what you do, rely on your MHP advisor for specifics on how or what to do to increase the parks value.
- Raise curb appeal (such as improved signage, patch and seal roads, ensure tenant and park owned homes have clean roofs and skirts, remove or renovate damaged homes, remove dead trees, clean up the mail area — maybe install a gang-mailbox instead of using a row of weathered mailboxes, ensure all trash is in the tenants garbage cans or dumpsters not scattered around the park, etc.).
- Reassess rent based on the above factors.
5. Utilize Your Mobile Home Park Broker’s Network to List Your Park Effectively
By this point, your park should be in good order to negotiate the highest maximum price to buyers. But how do you connect with them? While multiple listing services are one way for interested buyers to find listings, there’s a much easier and more predictable way to affect a sale. Using a dedicated MHP broker like Glenn Esterson who has 8000+ buyers sitting in his contact list waiting for their next MHP deal.
A mobile home broker lists your park effectively by pulling from their extensive network of investors, granting you a pipeline of qualified buyers with whom you can secure a higher selling price. Brokers work with you to review this network of potential buyers against your selling criteria, ensuring the deal accomplishes your goals outlined from the beginning. A good MHP broker will always pay for them selves through higher pricing, buyer vetting and predictability of close. That’s important to you right?
Get Started With a Free MHP Evaluation From Glenn Esterson
There are numerous invisible factors that affect the sale of your mobile home park. Don’t go into it alone. Learn to use the market to your advantage and sell your property confidently.
If you’re interested in selling your mobile home park, Glenn Esterson provides the expert guidance and partnership you need to make these complex processes feel simple. Whether you are new to selling or a market expert, our advisory and brokerage services will help you secure the highest possible price.