Collection Losses/Bad Debt - Mobile Home Parks

[Scott Lakas]

What is a normal collection loss (in addition to vacancy) for a standard mobile home park with proper management? How much should I forecast? The region is South Alabama - Middle Income. I have no clue what to expect. Generally, with multifamily, it is 1%-2%, but a self-storage development - I have seen as high as 20%, but 5% is usually typical from my experience. Thanks for the help! 

[Mario Dattilo]

Scott, we run at <5% uncollected MTD and <2% uncollected YTD. We normally recoup our lost rents/legal fees by renovating the homes and selling them. It’s going to depend on how good you are at collecting and the market etc of course. Remember with MHPs you have collateral that you often get when they are evicted. That’s unique to MHP and most other property types don’t have that.