POH...Finding New Tenants...What Is Your Procedure?...Thanks!

QUESTION:  What is your Procedure in procuring ‘Great’ Tenants for Park Owned Homes?We would love to know what has worked for you and what has not worked for you.Do you advertise POHs with the Rent Credits?  Do Rent Credits secure you better Tenants?Currently, we use the following Procedure:1.)  Craigslist - List POH - With Pictures:  List Mobile Home On Craigslist:  We take lots of pictures of the home with lots of information.  We actively renew this Ad at every chance available.  2.)  Craigslist - Respond To Potential Tenants:  When a Potential Tenant responds to our Ad, we send additional questions to the Potential Tenant (such as Where do you work?  How much do you make?  Have you ever been evicted?  Do you currently or previously owe Landlords money?)3.)  Identify Potential Tenant & Verify When They Can Move In & That They Have All The Money Needed:  After we receive the Second Reponses from the Potential Tenant we identify a Potential Tenant.  We then verify that they can move in when needed and that they have all the money needed to move in.  We require first month’s rent & security deposit (same amount for both).4.)  Have Potential Tenant Drive By POH To Determine If They Are Still Interested5.)  Show POH:  If Potential Tenant Is Still Interested After Driving by POH we will show the inside of the MH.6.)  Fill Out Application:  If The Potential Tenant Is Still Interested, We Have The Tenant Fill Out An Application.  We Then Run A Background & Eviction Report.  Previously, we have run a Credit Check.  However, our new Reporting Company will not do a Credit Check without some extra money and viewing the MHP.  We just started using this Reporting Company, so I am seeing if we even like them.7.)  Approved Or Denied - Potential Tenant:  After The Background & Eviction Report is completed we either Approve or Deny the Potential Tenant.We have received the best Tenants from Craigslist.  We have had a lot of Individuals do ‘Drive Bys’ and call us.  We have found that these Individuals are driving by because they are in the process of being Evicted from their current residence.In the past we had a Lonnie Dealer (which we do not allow now) who followed the Procedure of securing his Tenants from outside the Bail Bondsman (or at least it felt that way).  This Procedure did not work for us.Thanks So Very Much!  

You are too involved.  This is taking way too much of your valuable time.Your #1 above is perfect.  But stop doing #2, #3, #4, and #5. Have your ads direct both to your website (which has photos of homes available and hours of operation), and to your phone number, which is a virtual PBX system with an extension with a recording giving hours and directions (and, also your manager on a different extension).  Leave your homes open Tu - Sat 9 - 6.  Put applications on your kitchen counters (and downloadable from your website).  If you want to provide written guidance in your ads and/or website as to income or other criteria, fine.  But make this process automated.  Let people come by your houses whenever is good for them.  Don’t try and coordinate appointments to show the homes; that’s too frustrating for all parties involved.You’ll then run the applications through Kroll or other service which will provide a ‘yes’ or ‘no’ response to the resident and to your manager.  Don’t check credit.  All these folks have 550-and-under credit.  The only things you care about are sex offender status (ever) and violent felonies (in the past 10 years).RTO your homes only.  Do not rent.  Filter for residents with enough ambition to save up $1k - $2k for a down payment and have some skin in the game and motivation to take care of the home you are providing to them.Get yourself any/all Lonnie Dealers you can find.  Make sure you are clear with them that their tenants have to go through your screening process PRIOR to moving-in and that you will deny all ‘Bail Bondsmen’-type residents.  A properly-managed Lonnie Dealer investing his/her own capital in your community is a huge benefit.My 2 cents worth,-Jefferson-

Your screening process will depend a great deal on your personal situation. If you own only one or two parks and are in a convent proximity to the parks then a more thorough screening process as you have posted is workable. I personally always do a credit check not only to find their credit score but to find out if there are creditors presently chasing the applicant and to confirm their present address and employment. If they do not have consistent employment (2 years) they are rejected. I always visit their present address to determine how they maintain it and often knock on the door to see how they live, confirm pets etc. The reality is that if they have a poor credit score and are renting they will likely stop paying or be late on paying rent. The worse their score the more upfront cash you will need from them on a RTO. The riskyist applicants will drop out on their own. Prior to showing the home I will arrange to have them call me before I leave home to confirm they are still showing up.As for Lonnie dealers that is a personal call on your part. I do not like to have sub let situations and prefer to purchase the homes myself as opposed to allowing dealers in the park. I do not trust them to be reliable. If you do allow them in I would suggest you do the same screening on them as on their sub lets. I would strongly suggest to keep the Lonnie dealer as your tenant and have them pay you the lot rent directly. The Lonnie dealer rents the lot and the sub tenant only rents or makes payments on the home until ownership is signed over to them. Once their tenant/buyer actually owns the home you can then sign a new lease with them. This way if their sub tenant does not work out you serve the Lonnie dealer with the eviction order not their sub tenant. They then would evict their tenant while continuing to pay their lot rent. This gives you leverage with the dealer keeping them responsible for their tenant. 

I like Jefferson’s answer, although I do think there is at least some value in credit checks if you don’t have to pay too much extra for it. The actual score is meaningless to me, but what can sometimes be valuable is to see what bills they haven’t paid and how old they are. Too many recently unpaid bills, especially utility and phone bills, puts me on alert. But the biggest thing the credit check shows me at times is whether a previous landlord is owed money. The applicant may have moved out of a location without being evicted, but if they were behind on rent and/or had substantial damage in the home, some landlords will make sure that shows up on their credit report. When I see that, I need an awfully good explanation (which they never have), or it’s an automatic denial.As to your goal of securing “great” tenants, you may be better off simply trying to find “good” ones. The way we deal with borderline applicants is simply to require a much higher security deposit or rent credit payment than normal. That helps cover us if they turn out to be a bad apple.

Jefferson, Greg & Suburban, thank you so very much for your comments!We greatly appreciate them!

@ Jefferson,"You’ll then run the applications through Kroll or other service which will provide a ‘yes’ or ‘no’ response to the resident and to your manager.  Don’t check credit.  All these folks have 550-and-under credit.  The only things you care about are sex offender status (ever) and violent felonies (in the past 10 years)."How about recent misdemeanors, unlawful detainer, etc? I’m new at this myself and am not sure what a good MH tenant background check result looks like. Or doesn’t.

The entire “credit and criminal check” industry was designed for a different type of customer. If you are renting or carrying debt on a Mercedes, McMansion, high-end condo, etc., then the system works great. You approve the 700 credit scores and get spooked by a single DUI. But this is the trailer business, and the system fails us miserably as it does not measure the one quality that we need in our tenants: the “fight” to get the rent paid no matter what. Mobile home park tenants, in most cases, live a tough economic lifestyle in which they try to deliver shelter, food, transportation, schooling, and medical attention to their household on very little money in the bank. This complete lack of safety cushion often results in a tough choice of what bills to pay and which to walk away from, and you need the tenant who says “there’s no way I’m not paying the landlord, even if I have to work three jobs and borrow from every relative I know”. That score – call it the “FIGHTCO” score – would be the key measure of a good tenant in a mobile home park. Since that’s not available, the best we can do is give everyone a fair chance, and see how they perform. If you won’t allow in recent misdemeanors, etc., then you will have very few applicants to choose from. Not that mobile home park tenants get in more trouble than those in other housing types, but they do not have the funds to hire good lawyers to get them out of those raps (think O.J., and Casey Anthony for starters).I would also like to point out, before anyone snickers at the poor plight of many tenants, that some of the lowest scores I’ve ever seen on the FIGHTCO meter are from McMansion residents who fell on hard times. I would take a guy who’s lived on minimum wage at McDonalds any day over an executive at Boeing that’s gone broke. Those trailer park tenants now how to survive and get the job done when the chips are down, and seldom resort to suicide or running off and abandoning their families in tough times.

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Frank, thank you for your comments!

Chuckee, my Husband and I are physically present multiple times a week at our MHPs.Thus, one of our show stoppers is ‘Criminal Domestic Violence’ charges.Unfortunately, I have heard about too many ‘innocent’ bystanders who have been injured or killed by Criminal Domestic Violence perpetrators. I do not want my Husband, my ‘innocent’ Tenants or myself killed by a CDV perpetrator.We wish you the very best.

We’ve found that domestic violence felons are still not likely to do violence to ‘civilians.’  So it is not a show-stopper for us.@chuckee:We don’t care about any recent misdemeanors, unlawful detainer (any more) or anything other than sex offender status (ever) and violent felonies against strangers (in the past 10 years).  By ‘any more’ I mean we no longer rent; we only RTO.  When we used to rent, if someone had been evicted in the past 2 years, we would require them to RTO (e.g. come up with $2,000 down, rather than the usual 1 month’s renter’s security deposit).  But now that we only RTO, so everyone has to come up with $2,000, so we don’t care about evictions.  If they were evicted yesterday, and have $2,000 plus first month’s rent, they can move into any of our communities.  We enforce NPNS, and may end up evicting them in a month, but at least we have their $2,000 plus that first month.  And so far their longevity seems to match those that don’t have recent evictions.  Requiring residents to have skin in the game goes a long way to filtering for residents that have ‘fight’ in them as Frank rightly mentions.  And, frankly, you’ll weed-out 95%+ of recently-evicted prospective residents by requiring a $2,000+ down payment.Another 2 cents worth,-jl-

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Weekly, we receive Police Reports on our Mobile Home Park.The minute we saw that one of our Lonnie Dealer’s Tenants was arrested for the following in our MHP, we had the Lonnie Dealer non-renew the Tenants’ Month-To-Month Lease:-  Criminal Domestic Violence-  Resisting ArrestOne of my ‘previous’ careers was working at the Solicitor’s Office (Prosecutor’s Office).  The Solicitor’s Office is in charge of prosecuting all criminal cases (including Criminal Domestic Violence and Sex Offenders).Criminal Domestic Violence is very real and very dangerous not only for the man and woman, but for everyone around them.My Husband and I have a Business Model that includes being physically close to our MHPs and physically visiting them multiple times a week.Thus, for us and our Business Model Criminal Domestic Violence charges are a show stopper.As per Jefferson’s website (www.lillyandcompany.net):‘Lilly & Company is a real estate investment and advisory firm specializing in the manufactured housing industry…We are actively raising money and acquiring properties now through our new partnership - Park Street Partners.’ Jefferson Lilly:‘Jefferson Lilly leads a team of four individuals who manage and maintain our investments and assist with acquisition and consulting due diligence.’ As per Jefferson’s website he manages and maintains investments.Thus, Jefferson’s Business Model is different from ours.Both Business Models are perfectly acceptable.  They are just different Business Models.Thus, what my Husband and I would do for our Business Model might be different from what Jefferson would do for his Business Model.We wish you the very best.

Every park owner is a business owner. Depending on the scale of your business there is a range of business practices you may follow. You have options. The advantage of being a small business is that you can take the time and make the effort to closer manage that business. Stricter screening policies is one of the major advantages of being small. As a small business owner I have the luxury of being able to screen to the n’th degree. There are certain things I simply will not tolerate in my tenants and one of those is criminal behaviour. I have zero tolerance simply because I believe it is my personal responsibility to insure all of my tenants live in a safe and secure community. I can afford to care about more than my immediate income and have made that my primary business practice when screening.As a result of diligent and strict screening my residents live in a Community not predisposed to criminal activities of any type. Remember it is easier to screen out undesirable applicants than to evict bad tenants. I believe having a vacant unit has less of a negative impact than having a bad tenant. Additionally with stricter screening over time you will have a more stable tenant base and ultimately a higher quality community with lower costs and less effort to manage. If you wish to make your life easier and turn your trailer park into a community it begins with who YOU allow to live there. On the other hand if your present business practices are fulfilling your business needs there is no reason to change.   

Greg, thank you very much for your comments!