When you sell your mobile home park yourself, you don’t have to pay a commission—but you are going to have to work for it. Selling a park as an owner isn’t as simple as taking out an ad in the paper, or putting a sign at the entrance. And before you even get started, you need to prep your park to increase its value so it’s ready to be listed.
Now’s the time to take care of those deferred maintenance issues you’ve been avoiding. And, you need to get your tenants on board by fixing up their own spaces. Just like you’d pick up your house if you had a potential buyer coming to look at it, you need to clean up your park. Don’t put the cart before the horse. Your park should be prepped before you put it up for sale.
When a realtor sells a house, they do something called ‘staging.’ Essentially, they try to appeal to people on an emotional level. That’s why they use the old tricks of baking cookies or playing music. They want people to see the home in use, so they can see themselves living in it.
You need to do the same thing with your park, but you need to appeal to mobile home park buyers in a different way. Almost all investors in the mobile home parks business are buying to operate, rather than redevelop. They’re going to look for indicators that the park will pay off for them. A savvy seller will stage their park to show its potential as a revenue generating investment. Here are a few things to consider:
You need to look at your park objectively to see what areas could be spruced up. I’m a big proponent of providing tenants with the tools they need to fix up their own properties. Buy paint in bulk, then offer it to your residents so they can repaint their homes. I’ve found that if you provide it, people will use it. The same goes for bringing in dumpsters for a community spring cleaning. Getting your community on board with the clean up is the fastest way to boost your park’s curb appeal.
This is something a lot of mobile home park owners overlook. Generally, the park’s reputation goes right along with its appearance. Google your park to see if there are any online reputation issues. If you find your park has a lot of bad reviews on Google, Yelp, or any other social media channels, you need to do some damage control before listing it for sale. This is another situation where your tenants may be willing to help by leaving reviews for your park that show it in a positive light.
This is a big one, as most buyers don’t want to buy parks they’re going to have to fill up themselves. When I see a park with a low occupancy rate, I ask myself, “If they can’t fill it, how will I?” That’s especially true in Washington where low-cost housing is in high demand. You shouldn’t charge Seattle prices in Spokane. Price point is a major consideration where mobile home park renters are concerned. Most parks I see with a lot of empty spaces are having problems because they’re pricing themselves out of their own local market or they are being ignored.
Washington is a high demand state for low-cost housing in general, but demand is especially intense around metro areas. Seattle, as an example, is in the midst of a housing shortage, so a park being sold in that area is going to go fast—and for a higher price. On the other hand, rural areas like eastern WA tend to have less demand. Keep in mind that 60% of Washington’s residents live in the Seattle region, so this is the hottest spot for selling any type of housing.
No one wants to take over a park that needs to have its entire septic system overhauled or the streets redone. If you’re trying to sell a park with maintenance issues, then you need to repair what you can before you list it. If you can’t afford to repair the issues, at least get an estimate to show potential buyers. Some investors may be willing to work with you by offsetting the expected repair costs from their offer.
You might have noticed a lot of these suggestions are low cost, easy fixes. Really, prepping your mobile home park for sale is just a matter of rolling up your sleeves and using a little elbow grease to get your park looking its best. Once its picture ready, your park can be listed online.
If a realtor was selling your park, they’d list it on as many sites as possible to maximize potential offers. If you’re offering your park up as a For Sale by Owner (FSBO), that’s a task you should put on your own to-do list. Some websites require you to be a real estate agent or broker in order to put up a listing, but there are dozens open to anyone, including:
Going to Craigslist is a bit like going to a junkyard. While most of the stuff isn’t very useful, with perseverance you can find the occasional gem. You can list property for sale for free and target it specifically to your closest Washington metro region. And it offers email relay, so you won’t have to worry about scammers and spammers getting your email. You’ll probably get more emails from brokers than actual buyers, but you’ll still get your park out there. In Washington, there are 11 metro regions to pick from. Just choose the one closest to you.
The internet’s biggest commercial property site, LoopNet lets you post a listing using both free and paid options. This is a site that a lot of buyers and brokers go to first when looking for property, so you’ll want yours to be here as well. At the Washington specific section of LoopNet, you can also get valuable insights for setting up your ad, like which communities in the state are popular and the most commonly used search terms for looking for property in the state.
CIMLS is a site focused on commercial property, though it’s a bit smaller than LoopNet. But, commercial property listings are free, so it doesn’t hurt to use it. It also has valuable information specific to Washington state, to include census and population density data that can show you current demand in an area and give you a better idea of price. A quick view of the site currently shows multiple listings for the Vancouver area, but almost none for Seattle, which should tell you it’s probably easier to sell in Seattle than Vancouver.
If your community has a regional newspaper or magazine, you may consider taking out an ad in it as well. While I can’t speak to the effectiveness of it, it will help you reach an audience who prefers to do their property searching offline. I consider this on par with putting a for sale sign at the front of your property. While it’s probably not going to be the way you find the buyer, it still gives you a chance.
If it’s free to do it, just do it. More exposure means a higher chance of a good offer. Of course, the offer is only good if you profit from it. That’s why your listing price is going to be the most important decision you make when selling your mobile home park.
First off, you need to know your park doesn’t just have one value, it has three: the listing price, the price it’s appraised at, and your break-even price. The list price is the price you quote in advertisements. Breakeven is the bare minimum you can afford to take. And you get a general idea of your property’s appraised value when you pay your property taxes—but that doesn’t mean that should be your asking price. You need to look at other factors, including:
While you shouldn’t blindly follow the market rate for comparable properties, this will give you a reasonably good idea of what parks like yours are going for. This can be a bit tricky when selling a mobile home park, though, as these don’t sell as rapidly as office spaces or single family homes.
This follows that age-old dictum of supply and demand. If you have a mobile home park across the street from you that’s also for sale, you’re going to have problems because there’s an excess of supply. In some cases, you may need to take your property off the market if there are too many available commercial properties in your local area. Your only other option would be to significantly reduce your asking price.
You should adjust your list price if your property has maintenance issues, a low occupancy rate, or other problems that are going to make it difficult to profit from your investment. Some park buyers won’t even consider a spot with problems, while others will be willing to work with you, but only if you work with them on price.
If you must sell your park right away, you’re going to have less leverage in the market because you can’t afford to walk away from offers. You should never sell a park because you have to; you should sell it because you want to. The longer your timetable, the longer you can hold out for the best offer. If you’re in a hurry to sell, you’re best off contacting a direct buyer as the negotiation process will be much shorter.
One big problem that park owners have when selling is that they’re entering the market at a disadvantage. They usually don’t have a lot of experience in the commercial real estate sector, and there are some individuals who may try to take advantage of that fact. If you think you’ve gotten a low-ball offer, you should get an outside second opinion.
One way to get an appraisal quote is to contact a direct buyer, like me. When you deal with a direct buyer, you’re dealing with an individual who’s buying your park to run it, not flip it. That’s why dealing with me is a bit more straightforward.
When you contact me for a quote on your park, I give you a fair offer based on what I think it’s worth. I’ve been buying and valuing parks for 25 years, and I’ve found that it doesn’t take me long to assess the potential of a place I’m considering. Even if you decide not to go with me, you’ll still have a solid valuation for your park that you can bring to the table when negotiating with another buyer.
Getting the best offer is all in the preparation. Shoot me an email or give me a call if you’d like to get a quote on your park as part of your preparation for a successful sale.