Posted by Jeff-oh on July 30, 2007 at 13:45:33:
I think you may have mis-understood Ken. Ken is saying have the seller sign the right to collect back lot rents over to the new buyer. i.e. the park buyer gets the right to collect the bad debt.
He is not saying the new buyer will collect from $$$ the seller. The buyer will collect from the tennants.
Also he is not buying or selling a MH but the MHP.
New Owner / delinquent rents - Posted by Greg Little
Posted by Greg Little on July 29, 2007 at 16:25:37:
I just bought a mhp where some tenants are delinquent (some as much as 12 months). The previous owner will not likely go after the tenants. What advise can the experienced owners give concerning whether I as the new owner should hold the delinquent tenants accountable or give them a “fresh start” ? Thanks. Park is in TN.
Re: New Owner / delinquent rents - Posted by Rolf
Posted by Rolf on July 30, 2007 at 18:27:51:
I had this same situation. During the DD period, I attempted to find
out whether or not the numbers given to me were accurate. Turns out
the manager was collecting cash and then putting it in her pocket. The
numbers supplied to me were pure fantasy and in no way good enough
to stand up in court.
I told everyone all back rent was forgiven and they got a new start.
However, if anyone was ever late, they would be out of there so fast
they wouldn’t know what hit them. A couple of late charges (collected)
and one eviction (currently in process) told them I am serious.
Collections are now at 100%.
Let it go and start everyone anew. The goodwill you will engender will
make it easier to jack the rents or charge back the water.
Rolf
Re: New Owner / delinquent rents - Posted by Daphne Lowe
Posted by Daphne Lowe on July 30, 2007 at 09:52:00:
When we took over our park, we did not forgive past due collections.
We worked out a payment plan so they could begin to reduce it, and
made them sign a promissory note to pay the balance with their tax
refund money (which was about 6 months out). If they didnâ??t abide by
our arrangement, we took them to court and won. The end result was
we collected some amount from everyone who owed, a few moved out
(no tears spilled), and some paid up entirely. We viewed this money as
gravy; the primary reason for going after them was to set a tone for
going forward.
Daphne
Re: New Owner / delinquent rents - Posted by Rick
Posted by Rick on July 30, 2007 at 05:09:43:
Hello All
I have been lurking here for a while but this is my first post. I am a commercial real estate banker with over twenty years experience buying CRE loans in the secondary market. We have purchased over $12 billion of loans this way and a significant number were delinquent when we bought them.
Buying a park with delinquent rents should be no different from buying a loan with delinquent payments. Make sure your P&A is clear that you are buying the delinquent rents and that the former owner provides you with all documentation of the amount owed. Obviously, the better your seller documented and tracked payments, the easier it will be for you to get a judgement against the tenant.
On another note, I am in the process of buying my first mhp. Hopefully I will have a signed LOI today. When it happens I will be looking for some Lonnie dealers who work in central Illinois and have an interest in placing homes in my new park.
P.S. I just tried to post this and the webmaster grabbed it saying the name of my company and email address was offensive. Someone needs to adjust the settings on the software.
Rick Williamson
Re: New Owner / delinquent rents - Posted by Tony Colella
Posted by Tony Colella on July 29, 2007 at 17:58:28:
Start your term as owner now and begin to take control under your leases etc.
Trying to collect for money owed the last owner is opening up a game of he said, she said. You will never be on solid ground enough to stand up in court anyways.
Let them know where and when the rent is now do and hammer the first one that doesn’t pay. Know your state’s landlord/tenant act better than they do. Spend a couple of hours in your local courthouse one time so that you will know what to file, when to file, how much it costs, where you stand in court and what documents and testimy is requested.
Make an example of the worst one and most will fall in line. From there you take them down one at a time until you get the park dialed in.
Note. It will never be perfect but your list should get shorter and less immediate.
Tony
Re: New Owner / delinquent rents - Posted by ken
Posted by ken on July 29, 2007 at 17:28:04:
Unless you made a deal with the former owner you can’t go after them.When i buy property like that i ask the seller at the closing if i can have the back rent in order to use that to start an eviction immediately and they usually will say yes and sign whatever you put in front of them.I bought a property from a city one time and got them to sign it and started the eviction and the local welfareoffice paid 4 months of rent which was pretty funny considering i bought the house for less than the rent check they sent me.If you are on good terms with the former owner call him and ask him to allow you to do that and meet him and have him sign something so you can start the evictions right away
Re: New Owner / delinquent rents - Posted by Greg Little
Posted by Greg Little on July 31, 2007 at 20:10:01:
As the one who made the original post, the experienced opinions seem to be split on this issue. Perhaps more information would help. This is a 74 pad park with 22 vacancies. It has suffered from no management structure for several years ( I’m now there everyday). As this will be my first month collecting rents, I’m not entirely certain how many delinquents I actually have. Based on due dilligence my estimation is at least five. At least three are over 12 months behind. Personally, I don’t think it is fair to the good paying customers to allow delinquents. However, I also understand that a fresh start could promote goodwill ( at least among the ones behind). I am still unsure how to handle these so more experienced opinions would be appreciated.
Greg (TN)
Re: New Owner / delinquent rents - Posted by Joe
Posted by Joe on July 31, 2007 at 08:48:33:
the staff at creonline do their best to maintain this a board to answer and ask questions without alot of businesses advertising here and making it a circus like someother boards I have seen… its a great source for information…welcome!
Re: New Owner / delinquent rents - Posted by linda
Posted by linda on July 30, 2007 at 16:35:46:
I’m in central Illinois and looking for parks. Please email me w/info. Thanks!
Re: New Owner / delinquent rents - Posted by james(CA)
Posted by james(CA) on July 29, 2007 at 21:41:41:
Ken,
Hi Ken,
What do you call that legal document that the owner signed and paid you back rents? In case of large number delinquent rents, I guess an park owner might not pay much back rents to a new buyer but it is good to ask first.
Thanks