Q. There doesn't seem to be a lot on the market. Where are the deals?

A. We've got over 1,000 listings on Mobilehomeparkstore.com, and there are several hundred more on Loopnet.com. That does not even count the brokers listings that pop up several pages more of listings if you click on them. That's quite a bit already on the market. On top of that, you should hit park owners with direct mail, phone calls, and brokers with the same. It's not hard to find an enormous stack of mobile home park deals fairly quickly.

Q. Sellers seem to be unrealistic in pricing, asking 7% cap rates. What's up?

A. Same difference as the asking and selling prices of homes right now. Many sellers refuse to accept the reality of the marketplace. They think that, since someone offered them $1 million for the park three years ago, it must be worth $1 million or more, even though the income barely supports $500,000. If they own it free and clear, and don't mind sitting on it for 20 yeas, then they can just wait out the market. The others don't have that luxury. In the end, anyone who seriously wants to sell is going to have to price it at a 10% cap or higher. The ones who are adamant that they want 7% are often impossible to reason with, but many of them are, at this point, ready to look at reasonable offers.

Q. Did Warren Buffett sell Clayton?

A. Not that we are aware of. A search to Google News just now showed no such report.

Q. Can you expand on the New Home Solutions program?

A. We try to match up park owners and manufacturers to see if new homes are attractive based on their new, low prices vs. higher repo prices and costs to renovate. Obviously, if you can buy a new home or a used home for the same price, you're going to buy new. In some markets, that's already the case. It depends on the type of home you are trying buy (singlewide vs. doublewide, metal s. vinyl, 14' wide vs. 16' wide) and where you are located at. But isn't it worth a quote if you are looking at buying some homes to put into your park?

Q. Why would the owner of a land-only park want to sell and carry paper?

A. If I sell a park for cash, I have to pay tax on it and then put what's left in a CD paying 2%. If I carry the paper, I pay the tax out over time, and earn 8% interest in the note - that's more than four times more to me each month by carrying the debt. Many older sellers don't need the cash, they need the income. Seller carry improves their income.

Q. How do you value a decommissioned park? Have you purchased any?

A. You have to value it based on current income - but, of course, that's zero. So the value is not going to be real high. You could only buy such a park if you planned to bring in the homes yourself and sell them off. But when you add in the cost of bringing in enough homes to stabilize it to 80% occupancy, as well as all the necessary capital improvements to the infrastructure required of an abandoned park, the numbers are probably just not going to work. The only exception would be an incredibly desirable location with a very high lot rent ($400+) where the infrastructure is perfect - but even then, you have to bring in the homes, so it would be a hard gamble.

Q. How do you come up with a cap rate when the park is only 40% occupied?

A. You have to go by the current income at a 10% cap or better. You can't put any value on the vacant spaces. That's not what the owner wants to hear, but that's reality.

Q. If the location does not have a City Hall, where do you go to check the permit?

A. Good question. You have to go to whoever has authority over that property. Normally, head to the county offices and ask them. Also remember that with private water and sewer, there are other groups involved, including the State.

Q. I am currently billing back water and sewer using a RUBS method (people per household). Should I add sub meters?

A. The RUBS method has its problems. The tenant is not paying for their own usage, but the park average, which is not totally fair. It certainly does not foster conservation as there is no direct accountability. On the plus side, you don't have to read any meters and create bills from them. It also does not require the cost of installing meters and maintaining them.

Is RUBS legal where you are? If not, you better change system quickly. If it is legal, then why change to individual meters? Your net effect (-0- water/sewer paid by the park) does not change. So how much is it worth to you to foster conservation and be more "fair"?