Park under contract and found that 1/3 of residents are late, is this normal?

Hi All, I just got my first park under contract. It has 40 spaces rented of 49. When asking for records, I found that 13 of of the residents are a month behind on rent in January. Is this normal for a MHP? The owner says that folks tend to get behind after December and then catch up after tax time. Thanks!

Some owners relaxed about rent collections and it gets shown in the tenant behavior. I think it would be important to look at the length of time tenants have been at the park. Also, is he collecting late charges? If not , there sometimes is not a large incentive for people to pay on time. Try and get the monthly ledger collections if possible and see if you can find out how long tenants have been there. Do you own any of the homes or just renting the lots?

Talk to the owner about his methodology in collecting rent. If he’s not following this format, then it would not be uncommon to have that much delinquency.

  1. Rent is due on the 1st and late after the 5th

  2. Send a demand letter on the 7th

  3. File an eviction after the demand letter expires

  4. Go to court and get the eviction

  5. The date the appeal possibility ends, get the writ of execution

If the seller is following these five steps, then it would definitely be a huge concern that so many tenants are behind. But I doubt he is.

We have cleaned up collections far worse in the past – parks with 50% uncollected by the middle of the month, for example. You can get a park’s collections turned around in about 90 days by enacting a “no pay/no stay” policy. It isn’t pretty on the front end, but after you train the tenants that rent comes first, they rarely fall back into the trap, as long as you stick with the five steps shown above.

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The present owner has trained his tenants that it’s OK to pay late you simply need to retrain them to be good tenants. Tenants will come to you initially with all sorts of sob stories and lame excuses. Never fall for their excuses for any reason. Tenants need to understand rent is paid ahead of all other expenses including heat, food and medicine. Their personal problems are not your problem.