Case Studies

Asset Purchase(1%-100%):

LA County MHP Investors

Description – The LA County MHP property was a 500+ space mobile home park. The asset was owned by 11 partners with a variety of goals and interests. Out of the 11 partners, 9 wanted to sell their interests and 2 partners wanted to retain ownership in the asset. Those 2 partners wanted to purchase additional interests from the selling partners as well.

The Remaining Partner’s goals:

  • Replace selling partners with a new partner with the same business philosophies and management style
  • Establish new long-term debt for the property
  • Improve management at the park
  • Find a partner to collaborate and invest together with into the future for new assets
  • Create durable income, cash flow plan

There were several steps to this fractional interest purchase:

  • Step 1: Rutherford and the remaining partner worked on a voting structure that was sustainable for collaborative future decision-making
  • Step 2: Rutherford purchased < 50% fractional interest of the property from the selling partners
  • Step 3: Rutherford and the remaining partner placed new, long-term debt on the property
  • FStep 4: The selling partner is responsible for property management of the property and Rutherford is involved in asset management/li>
Number of Partners: 11 2 (One original Partner, one new Partner)
Ownership Structure: Partnership Partnership
Purchase (100% or Fractional) 1 Partner wanted to hold interest long-term; 10 Partners wanted to sell Purchased Fractional Interest < 50% from selling partners; Remaining Partner purchased the balance of selling partner interests
Management 3rd Party Management In-house management
Operating Efficiency: $200,000 delinquencies Management eliminated on-going delinquency
Issues Different goals between the partners Business philosophies and ownership horizon align between partners