Resident groups which want to buy their park often have difficulty getting the attention of their park owner.
There are lots of reasons owners ignore residents:
- Maybe they don’t want to sell their park to ANYONE, let alone the resident group.
- Maybe they don’t think the resident group has any money.
- Maybe their attorneys or financial advisors don’t understand how resident group purchases work (and don’t want to admit it).
Maybe the owner thinks it will take too long and ultimately fail.
Maybe they just don’t think you can do it, that it’s not worth their time.
If you want to buy your park, you have to engage the owner and convince him that your group can do it.
How do you convince him to sell?
- Solve the park owners problem
You have to figure out the owners problem and present your group as the solution.
- Estate planning – maybe their heirs don’t want the problems of dealing with a park or the owner is worried about estate taxes
- Infrastructure issues – maybe they don’t have the money to fix stuff, or can’t sell the park to investors with the current problems
- Code or MRL violations – maybe the park has code problems that the owner can’t or won’t fix.
- Throw money at him
Owners respond to money. Convince the owner that your group can make him more money than his alternatives. You can.
There are lenders that will make attractive loans to resident groups. You are using other people’s money to buy the park.
You can accept park problems that investors would require steep purchase price discounts.
You are willing to increase your rents to buy the park.
- As a last resort (maybe), coercion
This is a delicate area – park owners don’t like to be coerced. And they especially don’t like to be sued.
But lawsuits for Failure To Maintain the park have worked for some resident groups, and they ended up buying the park.
Sometimes Municipal/State pressure can possibly convince the owner to sell.
Lately, Eminent Domain has gained new legitimacy when a CA Housing Authority indicated an interest in using their authority to acquire a park. (I’ll have more on Eminent Domain in another article.)
BOTTOM LINE: If your group can solve the owner’s problem, you might be able to buy your park.
If you would like to discuss any of this stuff, call (415-271-3919) or email me (deane.f.sargent).