Is one of these easier, less time consuming and cheeper ~ an eviction or financing repo? (Or they may be both about the same - in that case you can still use the following for an additional security interest in your parks.)
I ask because in some states evictions are expensive and time consuming but a repo can be fairly straightforward and inexpensive.
One solution in this circumstance is to use a collateralized note payable to turn the eviction into a repo. How?
When a tenant goes into default, instead of issuing a statutory demand notice for eviction I would have the tenant sign a collateralized promissory note to repay the lot rent instead. The conversation goes like this - Mr. tenant, until you can bring the whole amount of the rent current we will need you to sign a promissory note stating you will repay the park for the back lot rent. They sign for the back lot rent with a repayment schedule and interest. Now here’s the good part, lien the MH (or car/boat/rv/whatever) until paid in full (that cost for recording the lien is disclosed to the tenant and added into the note for repayment). If they do not repay the lot rent as agreed you now have a choice of how to handle it - repo, or eviction, or both. Best thing is that you secure the home as collateral (or find out who really owns it or if there are other liens on it, etc.)
Maybe this will help you?
PS - IMO, infill programs are infill programs (they all come with a percentage of deadbeats - maybe higher if free and maybe not since the burden of housing payments is that much lower). The term of the client base is what I’m interested in. If all the tenants moved in for free but had been there for 2 years or more (as reflected on the parks financials and tax returns) then I’m OK and will pay a premium for a nice turn key project. If they all moved in on Lonnie deals and have only been there for less then 1/2 of their lonnie deal term, AND you have to buy out all those notes without a DEEP discount, that is not worth the same as the previous park.
I advise people to become good judges of the quality of the various cash flows they are buying. You do this by looking at the term and turn over of the client base, total monthly housing obligations, and equity of the final collateral (the Mobile Home). In other words: A park with little to no turn over (besides death) and free and clear homes (think 55+ senior park) is a far superior cash flow to a park with high turn over and a bunch of lonnie deals/rentals (turn around family park). Especially if you have to buy all the notes/homes with the park. I may pay a 7-9 cap (contingent on non recourse debt leveraging) for the former and completely pass (i.e. 12 cap or higher) on the later. I think we can all agree that there is a reason that “the new banking system” does not like vacancies, rentals, notes, or homes. Again, FWIW…