When an institutional investor is interested in your MHP
I recently met with a MHP owner at a conference who, during a break, chatted me up for some quick opinion on a "big company from up north" who called and asked if he wanted to sell his park. They made a cash offer for the park with some pressure to make a quick decision was unsure what do as he was not considering selling this particular MHP prior to this phone call. His concern is that If he sells the park he will have to pay taxes on it and he would also not be generating income anymore, but on the flip side he would secure a sizable lump sum which could be reinvested. He exclaimed to me that "if this company wants it then my property may be more valuable than I thought!"
I’ve seen many occasions where offers will seem to come out of the blue from large companies and institutional investors. As REITS gobble up the choicest MHP's across the nation a major shift is taking place from mom-and-pop to big time Wall Street asset. The offer may sound great but these kinds of offers are typically made very quickly, and you are asked to make a decision quite quickly as well, enticed by an all-cash offer. Unfortunately, such large company investors often know more about your property’s value than you do, so unless you’ve had a professional valuation done very recently you don’t know if the offer is a good one or not, or where you stand in a negotiation. Also, if you find you do want to get out of your property but without the taxes and with continued generation of income, there are other ways, such as a Tax Deferred 1031 Exchange. In any case, the best thing to do is have a professional third-party analysis done on your park to determine what is on the market now, what has sold recently, and what the average price per pad is for the geographic area. With this information in hand you’ve got a launching pad from which to enter into negotiations or to say “no, thank you!” Cash may be King, but knowledge is power. Give us, The McAnuff Group of Marcus & Millichap, a call today for a complimentary (free!) comprehensive analysis on your park. It will give you the insight you need to make the best decision for your and your park’s financial future.