Navigating the world of mobile home parks can be a bit tumultuous. It’s a grand opportunity to create substantial income, albeit with the right plan and patience. Today, I’ll be discussing some surefire ways to determine whether or not an MHP Listing is legitimate.
First things first: if it’s a listing, it should be legit. That’s because, to be a listing inherently means that it’s exclusive. There’s a tangible document signed by seller and agent, giving the agent rights to sell the property at a predetermined rate. If it’s an off market listing, however, then it’s not an actual listing. Sometimes called a pocket listing, it’s difficult to know if its legit. You’re essentially at the whims of the person that’s introducing you to the deal.
The Value Of A Broker
A lot of times, sellers don’t want to deal with a broker. But, as a buyer, know that without a broker, there’s no promise the seller is going to sell. If you want to up the probability of a successful purchase, you’ll want to look into brokers with exclusive listings. Or, you can go to a listing board, like The MHP Store, or Crexi, and see what’s on there. They usually differentiate between exclusive and non-exclusive listings on the site.
The best way is to point blank ask an agent if they have an exclusive listing, and if it’s actually deliverable. If you can get books and records, i.e., PNL, rent rolls, etc., chances are it’s on the legitimate side.
Spotting Scams In The MHP Industry
Sometimes, it’s good to raise your eyebrows a little bit. That’s because, like all industries, there are some shady folks in the business. For example, there are wholesalers who will bring a buyer to a friend’s park who wants to sell. They’ll give the new owner financing, and then offer to retain the management duties.
It sounds like a good deal at the onset. The buyer gets a financed park without having to take on management duties. But actually what ends up happening is they gradually squeeze the life out of the buyer. From costly renovations, to false promises of revenue increases, and more. Before long, they’re pushed into default. The previous owner then reacquires the park, reaping the benefits of the buyers’ efforts.
The MHP Expert
That’s it for part one of our take on legitimacy in the mobile home park industry. Have more questions for us? Check out our services page to see what all The MHP Expert offers. Contact me to learn more!