How To Find Off-Market Deals
Let’s face it, the mobile home park industry is getting ridiculously competitive. No longer are mobile home parks an unknown investment, or an ignored asset class. More and more, investors are turning to these gems because of extremely high prices in the multi-family space which essentially wipes away all returns. No longer are shows like “Trailer Park Boys” or movies like “8 Mile” enough to keep these investments off the radar. Mobile home parks are a hot commodity. Because of this, you need to focus on ways to maximize your marketing efforts in order to find the best deals. If you don’t, you will either not buy a mobile home park, or you will overpay. It’s that simple.
It’s very hard to work with brokers when you’re just starting out as a mobile home park investor. Unless you are an experienced investor with established relationships by way of other investment vehicles, you’ll likely need to try to source deals directly. The reality is that brokers want to work with owners they’ve done deals with, know can close, or know they are going to get the property back to sell on the next go around. Brokers will rarely send first-time buyers or buyers they don’t know well the best deals. It’s because of this that I am a big fan of trying to source off-market deals. That means you need to go direct to the seller. Here are just a few ways you can increase your chances of finding your next mobile home park deal.
Laser Focused Target Market
Forget about trying to throw spaghetti on the wall, hoping some of it will stick. You can do that, sure. That’s how I started too. But it’s not sustainable. It’s also not a good way to scale your business. The best way is to pick a market or two and get hyper-focused on it. You’ll want to have it make sense. This does NOT have to be in your backyard. You can live in San Francisco and make your target market Minneapolis. But you’ll want to make sure it makes sense to you from a logistical stand point. I’ve travelled to parks that require a connecting flight across country and, to put it bluntly, it sucks. You won’t want to invest if it’s hard to travel there.
Define Your Ideal Park
Once you have your target market, define what your ideal park looks like. This is hard to do from a visual standpoint. Unfortunately, since we won’t have all the information about the specific parks before reaching out to the owners, you will likely have to market to parks you may not end up buying. For example, you may want to only invest in parks that have city utilities, however you will not be able to tell which parks are on city utilities in a given area. There are ways to increase your chances of eliminating parks without public utilities, but it’s not possible to cut it out entirely. That’s why you really need to define your park in terms of size (how many spaces), occupancy (how many current homes) and age of park (what ages are the homes). These are all things you can do by visually looking at a park on Google Maps. Once you can define those three things, you can start to build your target list within your market.
This part can be tedious, but if you want to find the best deals, you have to do it. Open an excel sheet and create columns for the park information. List every park in your market that you can find. First, go to MHVillage.com and look for mobile home parks in your area. They have a list of most of the parks. You can copy the info into your sheet. After you’re done with their list, open google maps and visually scan for any parks that you may have missed. Record all parks, regardless of size and condition.
Once you have a comprehensive list of every park in your market, let’s scrub it. Using your criteria, look at every park on google maps. If it doesn’t meet your occupancy based on the image, delete it. If the homes look old based on the roof, delete it. If it’s less than 20 spaces and you want everything above 20 spaces, delete it. You are trying to be very intentional about what you are going to prospect for.
(Tip: you can tell ages of the homes by whether they are flat or pitched. If they are pitched you can tell by a line running down the middle of the roof. Also, street view is helpful if you can see the park from the street angle.)
Write a letter
Create a letter that speaks to your owner. Writing a letter geared towards mom-and-pop works well. I include a picture of my family, which adds a personal touch. Craft the letter talking about how selling will benefit them. Put a call to action and make sure you put your phone number and email in multiple spots on the letter.
When you’re ready to send, use invitation style envelopes and hand write the address. This will improve your chances of the recipient opening the letter.
Cold calling is the best way to reach people, period. If you’re scared to cold call, find someone who isn’t. Why does cold calling work so well? Because it’s the quickest way to getting the decision maker and asking them if they would like to sell. Often times, it’s also a way to build rapport over time with an owner who isn’t ready to sell today, but will be in a year. If you can be top of mind for that person when they go to sell, they’ll call you. Use your list to look up owners numbers. A service like TLO or IDICore will provide phone numbers and other address information. These are skip tracing services and require a fairly extensive set up process. There are some requirements to qualify, but it’s pretty doable for most people.
Meeting Owners In Person
This one is so powerful, but a little harder to do, especially if your market is far away from home. On one of my recent trips to look at mobile home parks, I was able to secure four meetings last minute. While they initially might not be important, they could potentially lead to us purchasing a very nice mobile home park down the road. It was all accomplished by sending a letter prior to my visit stating I would be in the area and would like to meet with them to discuss the mobile home park market. You could also provide value in the form of a rent survey and most owners will take you up on a meeting. Meeting with someone face to face is incredibly powerful and will undoubtedly lead to deals.
If you can’t cold call, use SlyDial. This service lets you leave voice messages on people’s phones without having to talk to them. Still incredibly powerful as it’s a direct message with audio. However, the person still has to call you back. I compare this very closely to sending letters. However, I believe some people are audible learners and may respond better to this medium of marketing.
Finding good mobile home park deals takes work. It will not happen by hoping brokers call you. Sure, go ahead and bid on listed, on-market deals. But most listings are overpriced these days and good brokers will always get more than the property is worth. When starting out, it’s critical to source deals directly. It can be done. I’ve found multiple deals by going direct. Try out all of these tips, but ultimately the best prospecting will combine all of these. If you follow these steps, I have no doubt you will have a great mobile home park to purchase in no time.