Due Diligence Hacks for Mobile Home Investors
How can mobile home park investors conduct efficient due diligence on more opportunities anywhere in the country?
In the past real estate investors have frequently made a killing on buying out of area property, sight unseen. Many have also bankrupted themselves by ignoring the most basic due diligence. Between the internet and local professionals it is easier than ever to get a real handle on a product without being there. Still, there is no true substitute for putting boots on the ground.
Of course flying or driving the nation to hunt down and evaluate every mobile home park out there just isn’t efficient, practical, or profitable.
Change the game and achieve superior due diligence, efficiency, and returns using ‘strategic flights’.
What is a Strategic Flight? This is a term used for when you want to do due diligence on a market that you don’t live close to. Instead of doing due diligence on just one park, you conduct research on several parks at the same time; thus strategically choosing a flight that has you flying to a place once; and then working in that market for a few days.
Here’s how to maximize this strategy…
Choose Your Destination
Find a destination with multiple parks clustered together in the same area. This will ensure you maximize your time in the air and on the ground. It also clearly helps if at least one or two parks in the area are entertaining offers or will consider selling. How large of an area you are willing to tackle in a single trip is really up to you. Just don’t overdo it, and burn yourself out. It is possible to visit as many as 20 parks in 3 days if you are strategic about it, and plan your time well, in advance. This may also somewhat depend on the area. For example you may be able to go to semi-rural Georgia and fund many mobile home parks within 30 to 60 minutes of each other. Of you could fly in to Orlando, Florida and technically take day trips to all four corners of the state and check out dozens and dozens of markets in distinct submarkets, all in one trip.
Some additional factors which may impact the choice of initial destinations may include:
- Flight deals
- Going further afield as you accumulate air miles
- Realtors and mortgage pros willing to comp your travel if you buy
- Combining research with vacations
Setting Up Your Trip for Success
Maximizing your flight success by ensuring you get the most out of your time. If you go without a plan and schedule there is a good chance you’ll mostly just be spinning your wheels, and increasing your carbon footprint. Instead, make sure you line up your trip for success.
Contact Owners in Advance
Have your virtual assistants call around the mobile home parks in the area in advance and try to evaluate acquisition opportunities, and set appointments. Get as much intel in advance and organize it for your reference when in the field.
When possible arrange for lunches or doing coffee with park owners either to directly negotiate a deal or probe them for information on others in the area. Ask the owners, “Do you know anybody who is thinking of selling?”
Send out a strategic postcard mailing to all mobile home park owners in the area to plant the seed and idea of selling before you arrive.
Don’t just limit yourself to mobile home park owners and those that are actively marketing their properties for sale. Get in touch with local real estate agents, members of the Chamber of Commerce, property managers, and others that may have more insight into local development and real estate trends, as well as leads on properties for sale now, and in the future.
Getting the Most Out of Your Time on the Ground
- Drive to every park in that geographic area (even ones you’re not thinking about buying)
- Drive by potential parks at different times of day to gauge quality
- Ask yourself whether you’d park your car there at night time (is it safe?)
- In the evening count how many lights are on to estimate occupancy rates
- Go to local restaurants and coffee shops to talk to the locals and ask them how they feel about the park
- Ask local law enforcement about the park and local crime
- Go to the county assessor and pull up info about park owners if not available online
- Meet with owners and managers of as many local parks as possible
- Speak with residents in mobile home parks to get their feedback
- Take plenty of photos and notes for future reference and load them to the cloud
Set up your future success with great follow up. If you can’t strike an immediate deal with an owner stay in touch and let them know you’d love to make an offer when they are ready. Send a handwritten thank you letter to all those that help out. Remind locals and Realtors you are looking for referrals.
Where will you fly next?