@ngrov This is a great thread because this always comes up in deal scenarios from what seems ever 4 -6 months .
This is the absolute risk worst case scenario. It sounds like you assessed it and the deal still penciled out so its important to go in with eyes wide open.
My initial thoughts is where you say the park is rough looking, can you elaborate on that? Just older homes? or roads with potholes, no skirting, crocodiles tied to porches? I would immediately try to get a plan and start working to make it a desirable place to live ( this can also be hard with POH that you dont own)
I think what @howardhuang33 said is tremendously valuable. Because if you can see how you can manage the process and what it looks like to fill a vacant lot it will give you an accurate position of what you are facing. But i would get the place in order first. Who knows , if you get nicer, maybe you find you can lure in new home purchasers who are buying at a dealer ( best case scenario) and avoid the hole lot filling process your self.
I also like what @jhutson Says, i didnt even think about this option. See what their long term play is and see if they will consider selling to the tenants and maybe you can spiff that somehow on your side. This will come with secondary options but idea definitely carries merit.
I may have not seen it mentioned but maybe you can also see if they have a number in mind to sell the package for.
Lastly, did this stem from a recent rent increase, meaning they just want to go back to the old rent. Or did you close last month and then they are saying they want the break or have they been there a year and this just come up. I think that plays into the spirit of what you might be in for if you retain them
Given all these factors here is how I would summarize this. Its a big bluff to call to tell them to pound sand , that may or may not have them move out ( aside from that, are there areas that will permit them to move? - regardless still a dangerous bear trap to walk over) . Keep it amicable, you can tell them you appreciate them having the homes in the community ( maybe not the homes but the lot rent you get… lol ). You can tell them you were gong to start working to improve the community and cleaning up some of your TOH or POH and would like to reinvest so revenue would be needed now more than ever. You can also suggest you were considering brining in a new home as well to improve the community appearance ( then they know you also have options)
Then bust out option 2 if they have any interest to selling to tenants or current renters they have if the lot rent wont work,
Or 3 , if they weren’t interested in paying the 20 per month would they consider selling their houses to you.
You aren’t being demanding, it gives the a chance to think, but keep it amicable because you can do your rent drop if you see it fit but you aren’t showing that you are going to get crapped on just yet.
Regardless , if you get through it with them now, long term you need to resolve that so keep it in mind but maybe you can do it in a manner as to not go through a complete loss of revenue on 11 homes.
And always go back to the economics, does someone really want to spent 43k over 220 a month ? Maybe , maybe not. That certainly most likely wouldn’t work in Dallas but at 330 lot rents and 700 rents, you have to really have a pulse on your market and how restrictive it would be to get 11 homes in your park area. It has happened to Frank so this becomes and exercise of managing probabilities for you but see if you can nudge the outcome to what may be most favorable for you. Good luck