I have a park under contract and closing is this week. I was unable to get a reply from the police previously but today I stopped by the nearest office to the park and they were VERY familiar.They get 1-2 calls a week for the park. Park is 35 lots with 24 current tenants. Is this too much? I was all set to close until I spoke with the police.
That is a lot of activity for a park that size though all the call could be to one or two homes. They should be able to give a breakdown on the address’es they respond too…
I’d change the culture of the park. Find out who the bad actors are, and evict them. It could be a drug problem. Find/fix the problem. But understand it up front and use it to negotiate a better purchase price for yourself. Parks with troubles are worth less than average parks. This level of police activity is not normal.See my other post about how to rid yourself of drug dealers.Good luck,-jl-
Why buy a KNOW problem–that is a situation the present owner needs to fix before he even tries to sell it. If it was easy we would not be having this discussion.
Carl,Not every park owner is as active in operating their parks as you are. Parks with issues present opportunities to owners that are problem solvers. Your point is well taken if a new owner is looking for a stabilized asset.If someone is looking to add value through more active management, this might be a great deal…
Jim I have owned parks where I have had managers and yes find out the party for which the police are invoked and when you have proper information make a judgment call that informs the other tenants that similar behavior will be an eviction. At that point intelligent residents will make the right choice. As a responsible owner I cannot understand why a seller would place a future owner in the situation of fixing his problem especially if the police NEED to frequent the park. That kind of owner behavior is difficult to understand.
In most cities, you can order a crime log from the local police department, maybe not just for the park but for example within 1/2 mile radius of the park address.The police will provide a list of all calls and responses. You can ask for a 6 month or 1 year look back period.This will provide the answers.I have done this for mobile home parks and other businesses I have owned.It could be a domestic dispute from the same homes or neighbors not getting along. (Neither would influence my decision).
I can’t imagine a better investment than buying a park with problems (at a reasonable cap rate, and in a good economy) from an owner that is not taking steps to correct the problems. If those criteria are met, then enforcing ‘no pay, no stay’ and ‘deal drugs, no stay’ will yield big financial upside for park owners and the residents who can follow the park rules and not commit crimes.Given the often negative image we park owners have in the media, the opportunity to bring good/ethical management to a troubled property should be pursued (and promoted to the media!).Good luck all,-jl-
Owners that allow problems to continue to exist and then try to sell are setting themselves up to lose in negotiations. A buyer can easily turn “police issues” into a major problem at the table as the buyer is in full control of the negotiations. As a buyer you either get what you want or move on to the next deal.
I consider bad tenants and police issues a easy fix and a golden opportunity that I would gladley use to my advavtage in negotiations.
I agree with Jefferson’s statement:'I can’t imagine a better investment than buying a park with problems (at a reasonable cap rate, and in a good economy) from an owner that is not taking steps to correct the problems.'Also as Brian Z noted:'In most cities, you can order a crime log from the local police department…'My husband and I just purchased a park with some ‘issues’.My husband went to the Police Department and had them email us a ‘Crime Report’ for the past year. It was an Excel Report with the date, address and offense. It was not a lot of data but enough to get an idea of which homes are having issues in the park and what those issues are.Also you can get your park on a ‘Special Patrol’. I went yesterday to the Police Department and they kindly placed our park on ‘Special Patrol’ for the next month.Also I believe that it was Frank that recommended paying an off duty policeman to sit in your park at sporadic dates and times.Before you close make sure that you understand your criminal activity…go into the closing with your eyes wide open.However, do not run from the park just because of these police issues. If there are bad peeps (or their guests) in the park, put your Tenants on 30 Day Leases and give them a 30 Day Written Notice to find new homes. If they do not leave after 30 Days, Evict them. You will need to get the bad out before the good will come.We wish you the very best!
We purchased a 120 space park that had almost daily police visits. This was an REO deal and the park was in a nice area, problem was the manager was a druggie and there was almost zero enforcement of rules and regs. Within 6 months we had all the bad apples out and police visits down to almost nothing. Out of 80 residents, there were about 5 causing 90% of all the problems. This seems to be the case in most parks. Its a small percentage causing all the mayhem.
I totally agree. The general rule in parks is that 10% of the people cause 90% of the problems in all areas (collections, rules violations, criminal activity, abuse of water/sewer). And we find that it’s the same 10% that do all of these things. So in a typical 100 tenant turn-around, there are about 10 that you’ll end up either kicking out or shaping up.