Basically, we introduced ourselves to the park manager in the way you described. We would go into the office, sit down with them for a few minutes, let them know exactly what our investing strategy was, and then flat-out ask if they’d be okay with us buying and selling homes in their park. While it wasn’t necessary to get their approval, we’ve heard (and found) that trying to work in a park where you’re not wanted is very difficult and not worth the effort. We found that almost all the managers were happy to work with us, and some were even excited that there were investors who were going to help keep the park full.

A couple other things:

- First, make sure the manager knows that you’ll be selling the homes, and not renting them. Many parks don’t allow homes to be rented, but selling with owner financing is fine;

- Let the park manager know that if the buyer is ever late with their lot rent to call you directly and you’ll take care of it. Most managers are happy to do this (they just want their money), and this way you can find out if there is a problem with the buyer not paying as soon as possible;

- Many managers will help you find homes to buy (like you said, they know when the owners are past due on balances or are looking to sell) and can also help you find buyers for your homes.

My best advice is just to be completely honest with the park managers (even let them know you’re just starting out), but also let them know that you will help ensure that they get quality owners and that they get their payments on-time.

I stumbled onto your site when I was googling for information on investing in mobile homes. That was some great negotiation.
How did you communicate/introduce yourself to the park manager? Do you just call him or her and say ” i’m an investor and I buy MH and owner finance them to people who pay lot rent…do you have any MH that are past due in lot rents?” A majority of park managers in my area (SF Bay Area, CA) don’t allow for the MH to be rented out. Any advice for a beginner?

Yes, it was pretty clear that the seller was in a bad situation, but wasn’t aware of how bad his situation was. Often, people will “put blinders on” when things are getting bad, and just HOPE that everything gets better. While they’re doing this, they tend not to act rationally (in this case, he the rational thing to do would have been to take the original offer, which would have gotten him out of his situation and put money in his pocket).

While we were about 80% certain that we’d end up buying this MH, the seller just didn’t have the ability to think three steps ahead to realize that things were just going to get worse and worse for his situation, and that future offers would only go downhill. It was pretty obvious to us, but he couldn’t see it.

In the end, he avoided foreclosure/repossession and still walked away with $500 in his pocket; so as far as I’m concerned, it was a win/win.

Btw, this is a common trap for people/companies who tend to act emotionally instead of rationally. In fact, I’ve seen Fortune 100 companies that have lost hundreds of millions of dollars in very similar situations. They come close to the end of a negotiation, but the two parties are still a little bit apart on price/terms. Party 1 doesn’t realize that if the negotiations don’t concluded quickly, their situation will start to deteriorate. Party 2 does realize this, and instead of continuing to negotiate, they just “take a break” for a couple days/weeks/months and allows the other side’s position to deteriorate. By the time they come back to the table, generally Party 1 will realize what’s going on and quickly loosen up on their negotiations, though sometimes even big companies won’t see the writing on the wall for several rounds of discussions.

I have heard you mention that you have a knack for negotiating, but that was really impressive. I am assuming that you are able to do this since you don’t really need the property and had a good feel that he REALLY needed to sell?

We have absolutely no credit criteria for our buyers. As long as the mobile home park will allow them to move in, we’re happy to allow them to buy.

Our rationale is that, for the most part, the homes will be paid off within a few months, so even if they only pay the first few months, we’ll have recouped our investment. Plus, if they stop paying, we can resell it to another buyer and earn even more.

The only time this can hurt us is if the buyer does a lot of damage to the property while they are there. This is mitigated in a couple ways:

1. We do as little rehab on these homes as possible, so that we don’t lose money if they are destroyed;
2. We require our buyers to carry insurance, with us listed as the ones receiving the payment if there is a claim.

I’ll post some pictures in the next couple days…

Actually, our experience has been just the opposite. The park managers seem to be very interested in working with us, as it means they’ll keep their parks filled and those trailers on the lot (it’s expensive for them to lose trailers from the park). So, for the most part, the managers at the parks have been willing to work very closely with us if we agree to keep the trailers where they are and fill them.

Now, they don’t want us renting out the trailers…they only want us to sell them (even if it’s owner financing). The managers are very adamant about the parks only have owner-occupants and not renters.

Perhaps you should try a couple other parks…hopefully you’ll get a better reception from management. I wouldn’t want to own MH in parks where management didn’t want me…