Selling a mobile home park comes with its own set of cautions you’ll want to heed. Today we’ll share a few mistakes you’ll want to avoid in the process of getting the place sold.
Seasons come and go, and there’s always a change somewhere around the corner. You invested in a mobile home park and for reasons of your own, you’re looking to pack up and move on.
That’s fine. We’ll help you along and hopefully, the road ahead will be smoother for it.
3 mistakes to avoid when selling a mobile home park
So let’s look at these three mistakes you should be able to avoid when it comes down to selling a mobile home park.
#1 Avoid writing a vague listing
If you’re serious about selling a mobile home park, the last thing you want to do is post a listing that won’t get much attention. While it’s your listing, so you can list as much or as little information as you wish, we do think some details are a must.
Importantly we suggest a description of the park detailing the total number of lots and how many are in use at this moment. Include the monthly rents, the amount of acreage, and the size of these rental lots. Make mention of the types of road (whether paved or gravel), the utilities available, and what the lease agreements look like. What are the responsibilities of the landlord and what are the responsibilities of the tenants?
Within your listing, we suggest a brief overview of the locale. (Sites like City-Date.com can help you with this.) Take a moment to give information about the population. List the location’s biggest employers, points of interest, and whatever else may be of importance to future management.
Helpful tips to keep in mind
Another helpful selling point is giving potential buyers an idea of their projected income. This can be calculated with the current occupancy and concrete expenses from last year’s operation. Remember, it’s a ballpark estimate. You may need to adjust to compensate for any changes in your business plan this year.
Maybe the numbers don’t look appealing. What you don’t want to do is make numbers up to ensure a sale. This will ruin your credibility and it isn’t ethical at all.
So you are left with two options. You can either leave the projected income out or include it with an analysis of what wrong that year. And list how you think the right person could make things better.
If you’re worried about sending your tenants and employees into a frenzy about a possible mobile home park sale, you can be vague in giving out your mobile home park’s location. The park name and address need not be included, but at least include the state you’re located in.
You’ll also do well to describe any mobile homes owned by your park.
#2 Avoid going into a deal blindly: know if you want to deal with a bank vs cash
Next mistake you want to avoid is not knowing how you want to make the sale. When selling a mobile home park, it’s important to know beforehand if you want to deal with cash or if you can owner finance.
If you choose cash only, keep in mind this can only be done if the bank and appraiser gives a thumbs up on your selling price.
As far as making the sale happen with a loan and terms, call up some finance companies. See what that would look like for a potential buyer who qualifies for such an arrangement.
Get acquainted with what you want now before you get a buyer. This will make understanding the process easier for you.
#3 Avoid breaking the law, communicate with your park residents
Every state is different. Check with your state law – many states have laws in place to protect residents from uncommunicative mobile home park owners. Plus, it’s just polite to notify your tenants. This isn’t just a business, your dealing with people’s homes too.
You may need to and should let your tenants know of the new management entering their lives and how that affects them.
If you’re going to up and sell the land to someone who wishes to develop it for other means, then a timely notification will be in order. People will need time to hunt for their next place of residence.
Bonus: Avoid selling because of a poor business plan
Selling a mobile home park due to a poor business plan is a tragedy in itself. Instead of rushing to put the old place on the market, why not re-evaluate your strategy? There is a lot of potential in mobile home park investing. It’s a pity to miss out when all you may need is a little tweaking here and there!
Look at it as something new instead
In closing, selling a mobile home park is the end of a chapter in your life. But it’s also the start of something new. We wish you the best in your new venture.
If you’re trying to clean up the place for sale, why not consider disposing of the unliveable mobile homes?