What can I do about delinquent rent issues at a property in Stone Mountain, Georgia?

Question

I am a real estate investor buying multifamily apartments. I have a 100+ unit property under review in Stone Mountain, Georgia and it has operational issues that we do have a confident choice of management for if we were to take over but there are delinquency issues in rent. We are new to buying real estate and I want to make the most of an opportunity where I see one-- and I see opportunity in this property by improving its operations. It's being sold by the lender and there's $50k+ per unit of equity built-in at purchase. It is below an agency lender's occupancy minimum so expenses are 70% of total NOI but we plan on buying cash.

I won't go into all of the details but I just want some ideas on how I can relieve the property's bad debt issues.

So far I've had the idea of doing payment plans like I've seen on some property websites.

I won't go into all of the details but I just want some ideas on how I can relieve the property's bad debt issues.

So far I've had the idea of doing payment plans like I've seen on some property websites.

Janice Carter · Answer

Bad debt at takeover is typically a process and enforcement issue, not simply a tenant issue. Payment plans can be effective in limited situations but only when paired with strong screening, consistent enforcement and a clear distinction between tenants who can be stabilized and those who will not perform.

At acquisition, I would focus on 1) An immediate audit of the rent roll and delinquency aging 2) Clear pay-or-quit notices with defined timelines 3) Short-term payment plans only for tenants who demonstrate both ability and intent to cure 4) Tightened collections, improved leasing standards and a visible onsite management presence

Resolving bad debt is typically a 90–180 day operational reset. The opportunity is real if you are prepared to act decisively and consistently. I am a real estate broker and property manager in Atlanta. If I can be of assistance, please feel free to reach out.

Stephen Quesinberry · Answer

Hi Ajaydah,

I also operate multifamily properties, and delinquency can be challenging. In my experience, it requires a firm and consistent approach to collections—you have to reset expectations and retrain residents on timely payment. Chronic late payers or tenants who consistently carry balances should be non-renewed.

At the same time, tighten things up on the front end by strengthening screening standards, raising minimum credit score requirements, and, where appropriate, requiring higher security deposits. You may see slightly higher vacancy or softer revenue in the short term, but over time the rent roll improves and stabilizes. It’s a cleanup process that takes patience and is also highly dependent on the submarket you’re operating in.

Frank Pyle · Answer

Payment plans can work, but only if you start with clean ledgers and a hard line on what happens if they miss the plan. On a deal like this I would first dig into the delinquency aging and separate true non pay from billing mistakes, unposted subsidies, and tenants who are already gone but still on the books, because lender owned assets get messy fast. Then you usually need a fast triage that mixes firm enforcement on chronic non pay with cash for keys on the worst units so you can turn them, plus a short amnesty window where people can get current with a down payment and a signed plan. At the same time tighten screening, verify income, require full deposits, and push any old balances to a third party collector so on site staff can focus on occupancy and current rent. Also sanity check that pro forma assumes a realistic loss to lease and economic vacancy because if delinquency is high, you might not be buying 50k per door of equity, you might be buying a big collections problem.

What does the aging look like over 30 60 90 days, and are these mostly the same tenants month after month or a bunch of recent move ins from the current manager?

Chris Seveney · Answer

if you're new to buying real estate, why are you buying 100 unit. you are setting yourself up for failure due to lack of experience in knowledge - sorry to be so blunt, just being brutally honest

What can I do about delinquent rent issues at a property in Stone Mountain, Georgia?

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