Memo Walnut Venture

When you put a mobile home park under contract, you should have a stipulation in the contract that will allow you to confirm what the seller has said and to evaluate the overall feasibility of the purchase. Due diligence should involve looking at the physical, economic, demographic and market feasibility of the project. This time period should usually take between 30 and 60 days.

In conducting your due diligence, you are looking to identify anything about the mobile home park that poses a potential issue that you are able to change or fix. These issues usually deal with the cleanliness of the mobile home park, mismanagement, lack of rule enforcement, collections, expenses that can be reduced, etc.

But more importantly, you are looking for problems that you may not be able to fix or that would be expensive to fix. These types of issues usually deal with the size of the lots in the mobile home park, reputation, problems in the local market, flood plains, drainage problems, poor configuration of lots, water, sewer, electric and gas line problems.

In conducting your due diligence, you may call on experts in surveying, accounting, marketing, financing, plumbing, electrical and legal fields.

You should put together a list of questions, and you should evaluate the information you receive from the seller and compare it with the information you receive from outside sources.

Case Write-Up For Walnut Venture Associates (A)

Angel investors are wealthy individuals who usually have an entrepreneurial background of their own. These individuals look for an outlet to share, recycle and increase their wealth and expertise by investing in start-ups. The reasons why they invest in start-ups vary. One of these is to put their wealth and experience to use, the other is to fill the void created by VC’s in the investment space of $1million or less.

For entrepreneurs Angel investment is an attractive way to raise equity capital. Angels will provide capital up to a couple...