Financing Options for Manufactured Home Communities

By Joe Evans and Jeff Meierhofer

Mobile home communities are a hot commodity on the investment property market today. We have seen a demand for financing this property type as buyers and investors have been purchasing these properties for as low as a 5% cap rate in some markets. The appeal of a mobile home community is that maintenance expenses can be low and cash-on-cash return can be extremely profitable.  Plus now is a great time to refinance as rates are at an all-time low.

Finding a right lender to provide financing for this property type can be tough without having expertise and contacts in this market.  That’s where working with an experienced team like The Madison Group can help you navigate the system and get you the loan terms to meet your financial goals. Here are some examples of the many lending programs available for manufactured home communities:

Local Bank or Credit Unions:

Bank lending is usually limited geographically to the footprint of the bank’s network as they usually prefer to lend only to those local borrowers to whom they can provide additional banking services.  General loan terms: 3-5 year fixed pricing at a 5-6% interest rate with a loan to value of 60-75% and with a 15-25 year amortization.

Pros:  Some local lenders are willing to work with the property having a higher percentage of park owned homes. Most lenders prefer that the parks are 90-100% “pad rental” and generally require that less than 20% of the total lots be “park owned homes”. Some banks can work with 30-40% of park owned homes.  Banks and credit unions offer low prepayment penalties, however you may get a shorter fixed rate in return.  A personal guarantee is almost always required. Some banks can offer a partial guarantee depending on LTV. Loan fees tend to be generally lower than nonrecourse loans.

Cons:  Rates can be higher on these property types. Banks usually only like to write for a 15 to 20 amortization for manufactured home communities, so that can really restrict your projected proforma on your cash-on-cash return on the property.  Also, your rate might only be fixed for a period of 3 years, 5 years, or maybe a 7 year period.  Bank financing can sometimes take more time to underwrite and close.

USDA or Rural loans

Pros:   It is possible to get loans in a smaller city where most lenders aren’t otherwise willing to lend.  Often you don’t have to have the perfect looking property with smooth paved roads and beautiful facilities to get a USDA loan  The government wants to provide a means to finance affordable housing in smaller towns.  The loan does not have a call or balloon payment. Your rate is usually fixed for smaller interim periods of 1, 3, or even 5 years, and then it will just reprice over whatever index is predicated in the loan terms.  A 30-year amortization is available for Mobile Home Communitys.

Fees – There is generally a government fee attached to doing this type of loan of 2-3% of the loan amount up front (similar to an SBA loan for a business) which helps covers government costs.
Availability – The quantity of these loans made available can vary state-by-state and some state USDA offices are not always willing to lend to manufactured housing communities depending on what funds are allocated to their offices.
Time – These loans generally take 75-90 days to fully underwrite, get approved by the state offices, and close. If you are planning to get a Mobile Home Community under contract in a smaller town, plan on making sure your seller is aware of extended closing deadlines.

Fannie Mae

Fannie Mae is willing to finance Mobile Home Communitys as well with a great rate. Some MHC requirements worth noting are as follows:

• Minimum loan amount is usually over $1,000,000
• 50% or more of the sites can accommodate a doublewide
• Amenity package is competitive in the marketplace
• Physical occupancy is 85% or greater
• Maximum density is 12 home sites per acre
• Majority of the property, including the entrance, is not located in a flood zone

Pros:   Nonrecourse loans are available with a 10-year fixed term, and a 30-year amortization with interest rates as low as 4.4%

Cons:  These loans are generally reserved for only the 5-star, best quality, double wide, larger mobile home communities in large metropolitan areas. Generally, the park must have smooth paved roads, skirted homes with less than 10% of the community consisted of “park owned homes”. These loans are reserved for larger parks with a value of $1-3 million dollars or greater.

CMBS or Conduit loans

If a nonrecourse loan is what you need, then this type of lender may be the best option for you.  Nonrecourse loans are made to you and your investors and then are sold and traded on the investor market (secondary market as a security). General loan terms: Nonrecourse loans with a 10-year fixed rate with a 30-year amortization offered at rates of 4.5%-5.3% depending on the market rates with defeasance.

Pros:  Nonrecourse loans are available with longer fixed terms with a 30 year amortization. These loans are assumable.   They are made directly to the LLC entity structure, with a “warm body carve-out signer”.  These loans are much easier to securitize than a Fannie Mae loan described above.   The loans is usually assumable to a qualified buyer, so if you lock in a low interest rate now and the rates go up, your loan can be assumed by a new qualified buyer in the future at today’s low rates!

Deposits and Fees – Once your loan offer is made, the lender generally required a $8,000-$15,000 deposit for appraisal, site visit, environmental.  Also a deposit for Lender Legal fees and can range from $10,000-$25,000 range depending on the size of the loan being securitized.
Defeasance – Since these loans are being sold as securities in the investor market, the lender doesn’t want their money back. If you choose a 10-year fixed, low interest rate loan, plan on being in that loan for 9 years and 9 months.

Seller Financing:

Look at the offering memorandum for any Mobile Home Community currently on the market and if seller financing is an option. General loan terms are 50-60% LTV with a 7-8% rate and a seller is willing to take your payment for a period of 3-10 years before they want to be paid in full.

Pros:  Buyers do not have to qualify through a bank, which can help if your credit was damaged or other factors.  Sellers may want to receive a monthly check for a stretched out period of time instead of one lump cash sum, especially in situations where the occupancy is lower or there is a very high consistency of “park owned homes”.

Cons:  Rates tend to be higher: usually 6-8% is the standard interest on seller financing.  The Seller will generally requires a large cash injection or down payment of 30-40% down on the purchase price.

How to select the right loan program for you?

There are an abundance of lenders in the marketplace for Manufactured Home Communities, but how do you determine who is the best fit for your unique situation?   It often takes extensive research to find out who to contact.  By working with a commercial loan broker, you can have access to many institutions and their programs.  An experience commercial loan broker works with the best lenders and already has a relationship with the Representatives on the inside. In addition, the broker can help you assemble your loan documents to make sure you present the best possible loan package.  With an attractive, complete package, you will have the best options for the optimal loan terms.  You are not only hiring a finance expert, but a whole team of associates that will work in your best interest.

The broker submits your package to obtain offers to finance your property.  He will consult with you determine which scenario works best for your financial goals.  He will also help you negotiate with the lender, if needed, for prepayment penalties options, origination fees, amortizations, and an assortment of other loan terms.

The broker and his team will partner with you every step along the way to the loan funding.  They work with the third party reports, and underwriting conditions, to ensure you have a success closing.  Often, unknown conditions pop up, and the team is invaluable to eliminate these potential deal breakers.

I you are needing financing for you Mobile Home Community purchase or refinance, consider hiring a experience commercial loan broker like The Madison Group.

About the authors:  Joe Evans and Jeff Meierhofer are Commercial Loan Specialists at The Madison Group.
TMG have a proven track record for originating and funding MHC loans since 2001.   Joe and Jeff can be reached at 435-785-8350 or or  Visit to see the recent closed loans and client testimonials.

The Madison Group Facilitates a $2.475M Nonrecourse Loan for Senior Mobile Home Park

Transaction Description:  The Madison Group (TMG), a commercial loan broker, has facilitated the financing  of a Senior Mobile Home Park. The park has102 pads with 96 occupied and was being underutilized with excessive expenses. The park had a somewhat storied history, but was an excellent purchase – with great potential upside for our experienced group of investors

The borrowers took the property under contract with a down payment and a short-term seller carryback note. To finalize this purchase the group looked to enhance their position by creating a larger loan than would be possible at the time of getting the park under contract. TMG was able to provide a funding source that gave them a larger loan amount, based on the increased value from the time of contract to the time of closing the long term financing. The buyers were able to pay back their investors and have a holdback for additional monies upon hitting certain milestones.

Challenges:  The borrowing group required a non-recourse loan to provide a vehicle for the investment team. When the park was purchased, it had below current market rents and higher than normal expenses. The borrower needed to get a loan that would allow for trailing 3-4 month in-place income while they raised the income and lowered the expenses. 

TMG successfully closed the transaction, locking in a great rate of 4.90% with a10 year fixed term, 30 year amortization, and LTV of 78.5%. The final loan amount exceeded normal underwriting standards based on the lenders ability to set aside additional funds that will be dispersed upon the continued reduction of expenses and increased revenues. Once the borrower hits the milestones funding the final tranche will be dispersed. This allowed the borrowers to maximize their loan amount and to capture the aggressive rates available in the market and to avoid refinancing at a future date to recapture equity. It also allows buyers to have monies available for the purchase of other properties.

The financing was arranged by Jeff Meierhofer at The Madison Group.

The Madison Group ( is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including:  multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States.  Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital.  TMG works efficiently and effectively to get the transaction closed and funded.

The Madison Group and Jeff Meierhofer can be reached at 435-785-8350 or by emailing Jeff at

Manufactured Homes Best Performing REIT Sector in Q1 2105

Manufactured homes were the REIT industry’s best performers in the first half of 2015 with a 3.75% return, followed by self-storage with a 3.72% total return, according to the National Association of Real Estate Investment Trusts.

Apartments were up 0.82% in the first half of the year with the office sector down 5.25%, retail down 7.24%, and industrial falling 11.33%. For mortgage REITs, the commercial financing sector was down 1.70%, and the home financing sector fell 6.12%.

Read complete article here:

How to Build Pride of Ownership in Your Manufactured Home Community

I will never forget my first drive through of one of my communities with a conduit lender. The property was about a one-star in quality, but was a cash-flow wonder. I wasn’t sure what the bank’s reaction would be to my down and dirty “family” community status. As we drove out of the property, I nervously asked the lender “so what do you think?” His response: “well, they seem to have a pride of ownership”. With the loan in hand, that term has grown to sum up what I feel is the most important in any community. Even a lower demographic property like mine can be redeemed and affirmed through “pride of ownership”.

Continue reading

Overview of Mobile Home Park Lenders

Agency Lenders

For 4 or 5 star parks there are Government Agencies – Fannie Mae or Freddie Mac can provide some of the most desirable loan terms. Notoriously picky: parks must have 50%+ double-wides, curbed streets, not more that 5% park owned homes, etc. and locations near major metro areas. Most parks don’t manage to qualify. Loans are nonrecourse and have yield maintenance prepay penalties but are assumable. Look for rates in the 3%s on 5 year and 4%s on 7 or 10 year fixed, 30 year amortization and 75% LTVs.

National Banks.

A handful of lenders are cautiously active about how and where and to whom they will lend: mostly in larger metro areas, 3+ star parks, limited tolerance to park owned homes, RVs, non-city services, etc. LTVs are 65-75%. Typical rates are 4.00% for 5 year fixed and 4.50% for 7 year fixed on 30 year amortizations. These types of lenders will mostly only do similar parks the Agency Lenders would, but with a bit more flexibility. A couple of national banks break the mold with super low rates and can be the best alternative if they can do the deal.

Regional and Local Portfolio Lenders (local banks- most MHP loans are done this way)

Service a few states or locally within a geographic area and will only lend to either or both properties and/or borrowers in their “footprint”. Loans are held and serviced by the lender. For greater US markets: 70% (usually) up to 75% LTVs, 20 to 25 year amortizations and usually 7 year maximum fixed rate periods at typical rates of 4.75%-5.00%. A few regional lenders offer lower rates of 3.80%, 5 year and 4.25%, 7 year fixed periods and 30 year amortizations. Full personal guarantees required and global income ratios evaluated and overall credit profile (680+ FICO) and net worth equal to or exceeding the loan amount with liquidity of 10% of loan amount and experience in RE investment is needed to qualify.

CMBS Lenders (for everything else)

Conduit loans are expensive – with $35k upfront deposits for 3rd party reports, legal and lender fees. But the fees are the industry standard costs of qualifying the loan for inclusion into the portfolio of mortgages that will be securitized and sold as bonds. What do you get in return? 75% LTV, 10 year fixed rates at about 4.50% currently (3/15/15) on 30 year amortizations. The loans are also nonrecourse. Underwriting is thorough but more liberal than Agency or Regional Lenders for operating structure. Loans can handle large portion of park owned homes (must have adequate lot rent income to support the loan), investor owned and homes sold on contract are not a problem. They can handle unusual ownership structures like co-ops and some condominium hybrids. They can loan most anywhere in the country to 2 star + parks with all single-wides and some RVs. The loans carry “defeasance” prepay penalties. Loan amount minimums are now down to $1.2Mil with our lender.

For a Confidential Review, Call or Email David Harley
(415) 250-5300 ●
BRE 01334092

BluePoint Commercial Mortgage ● 655 Redwood Hwy, Ste. 311, Mill Valley, CA 94941●

PRESS RELEASE: The Madison Group Facilitates a $1,095,000 Non-recourse Commercial Loan for a MHP in Channelview Texas

PRESS RELEASE: The Madison Group Facilitates a $1,095,000 Non-recourse Commercial Loan for a MHP in Channelview Texas
Feb 2015

The Madison Group, a commercial broker and loan consultant, has facilitated the financing for the purchase of an 84 pad manufactured home community in Channelview Texas, within the Houston MSA. The purchase was deemed a true value-add-potential for the buying entity. The park had shown reasonable income over the course of time, but was in need of updates and capital improvements. The Madison group was able to source a transaction that facilitated a nonrecourse loan to a tight knit group of investors.

The $1,095,000 loan was sized to 64% of the loan to value. The borrowers received aggressive terms of 4.38% with a 10 year term and 25 year amortization. The nonrecourse loan allowed them to have an entity be the borrower with no recourse to individuals in the LLC other than standard carve outs. In addition, future increased cash flows will allow the entity to increase their return on investment.

“All parties involved worked diligently to price and size a loan that made sense for the investors and the lender, said Director of Finance Jeff Meierhofer. “Sourcing the right lender from the beginning that understands the product type in the geography of the asset made for a timely closing.”

The financing was arranged by Jeff Meierhofer, Director of Finance at The Madison Group.

The Madison Group ( is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including: multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States. Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital. TMG works efficiently and effectively to get the transaction closed and funded.

TMG and Jeff Meierhofer can be reached at 435-785-8350 or by emailing

ARA’s National Manufactured Housing Group Executes Sale of 798Site Valley Brook Estates FourStar Community Sits Minutes From Indianapolis International Airport

ARA’s National Manufactured Housing Group Executes Sale of 798-Site Valley Brook Estates
Four-Star Community Sits Minutes From Indianapolis International Airport

Indianapolis, IN (March 02, 2015) — Atlanta-headquartered ARA, the largest, full-service
investment advisory brokerage firm in the nation focusing exclusively on the multi-housing
industry, is pleased to announce the sale of Valley Brook Estates, a 798-site community
located in Indianapolis, IN.

ARA National Manufactured Housing Group’s Andrew Shih based in Austin, TX, Todd
Fletcher and Jon Shay, based in Denver, CO represented Southfield, MI based seller Sun
Communities in the transaction. The buyer in the transaction was Denver, CO based Casa
Feliz LLC.

“Just a few years ago, it was very difficult to find financing for communities like Valley Brook due to its
lower occupancy; however, today it qualifies. With over 60 conduit shops in the market looking to
finance manufactured home communities, the terms are very attractive.” said Todd Fletcher. “We are
seeing owners around the country looking to shed non-core assets and buyers coming in with fresh
equity, conduit money and new business plans,” added Todd Fletcher.

“Although there were 146 community owned homes included in this transaction, almost all of them were
occupied with quality tenants,” said Shih. “We think the buyer will be very successful in improving
performance as they plan to add homes to the community to increase occupancy,” he added.

Constructed from 1973 to 1998 in phases, this mobile home community is located just 13 minutes south
from the recently developed Indianapolis International Airport and just 15 minutes from downtown
Indianapolis, the state capital of Indiana and 13th-largest US city with a population in the MSA of nearly
1.8 million. Several large companies are headquartered in Indianapolis including Eli Lilly, Brightpoint,
Wellpoint, Marsh Supermarkets, Finish Line and hhgregg. The unemployment rate in Indianapolis for
October 2014 was 5.0%, well below the national average of 5.7%.

Valley Brook features an outstanding amenity package including a clubhouse, two swimming pools, two
basketball courts, two playgrounds and RV storage. Public bus transport sits a short fiveminute
walk from the property and will take passengers directly to downtown shopping and entertainment with no
transfers. The local elementary, middle and high schools are all within walking distance of the property.

Occupancy at the time of sale was around 52%.

To schedule an interview with an ARA executive regarding this transaction or for more information
about ARA, nationally please contact Lisa Robinson at , 404.990.4900 or Amy
Morris at , 404.990.4902; locally, Eva Coffee at
or 512.637.1216.

ARA’s National Manufactured Housing Group Executes Sale of Western Reserve MHC

ARA’s National Manufactured Housing Group Executes Sale of Western Reserve MHC
Buyer Acquires a 152SiteFamily Community in Madison, OH

Madison, OH (February 09, 2015) — Atlanta headquartered ARA, the largest full service investment advisory brokerage firm in the nation focusing exclusively on the multi housing industry, is pleased to announce the sale of the 152 site Western Reserve Manufactured Home Community in Madison, Ohio.

ARA National Manufactured Housing Group’s Andrew Shih based in Austin, Texas, and Todd Fletcher
and Jon Shay based in Denver, Colorado, represented the deceased Owner’s Trust in the transaction. The
buyer was a private investor from San Diego, who has been building a small portfolio of manufactured
housing communities primarily throughout the Midwest.

“Unfortunately, our seller passed away during the marketing of the property,” said Shih. “He was a
longtime owner but the property needed some work and a new capital infusion will greatly help the
property operations,” commented Fletcher.

Western Reserve is conveniently located just steps away from the shores of Lake Erie in Madison, Ohio,
which has a population of over 3,000. This community is located within the Madison Local School District, which received the “Excellent Rating” by the State of Ohio’s Board of Education. This sizable
community is also in close proximity to several retail and entertainment destinations including the
Madison Plaza Shopping Center, which is home to Great Lakes Outdoor Supply, Walgreens, Rite Aid,
Sports & Sports, Giant Eagle and Radio Shack, along with several other restaurants.

The city of Madison is conveniently situated off major thoroughfare Interstate 90, which leads to
Cleveland, 45 miles to the southwest and Ashtabula, Ohio, 16 miles to the northeast. Cleveland is also
home to the corporate headquarters of companies such as Applied Industrial Technologies, Cliffs
Natural Resources, Eaton NACCO Industries, Sherwin Williams, and KeyCorp.

To schedule an interview with an ARA executive regarding this transaction or for more information
about ARA, nationally please contact Lisa Robinson at, 404.990.4900 or Amy
Morris at , 404.990.4902; locally, Eva Coffee, at ,

ARA’s National Manufactured Housing Group Executes Sale of 25-Site Fran Kirk Mobile Home

Well Maintained Community Located Just Over a Mile Outside Tulsa, OK

Broken Arrow, OK (February 09, 2015) — Atlanta-headquartered ARA, the largest privately held,
full-service investment advisory brokerage firm in the nation focusing exclusively on the multi-housing
industry, is pleased to announce the sale of the 25-site Fran Kirk Mobile Home Park, located in Broken
Arrow, Oklahoma.

ARA National Manufactured Housing Group’s Jon Shay and Todd Fletcher based in Denver, Colorado
and Andrew Shih based in Austin, Texas, represented the Broken Arrow, Oklahoma based Trust that
sold the community. The buyer in the transaction was Park Street Partners from Southern California.

“Park Street Partners was buying in the area so they were a natural fit for Frank Kirk,” commented Todd
Fletcher. “In spite of several bumps along the way, both buyer and seller came together to make sure this deal made it over the goal line,” Jon Shay said.

Constructed in 1962, this mobile home community holds 25 mobile home sites as well as 1 single family
home structure and features an attractive, well-manicured,low density landscape. Fran Kirk Mobile
Home Park is 1.5 miles outside of Tulsa, Oklahoma, which was ranked the 14th fastest growing MSA in
the country regarding 2011 per capita personal income. The Fiscal Times in 2011 ranked Tulsa the
fourth best city in the country to find a job, and in 2012 data from the Bureau of Labor Statistics ranked Tulsa eighth among the largest U.S. cities for growth in manufacturing jobs. Due to bolstering job growth reports in the area, many high profile businesses have recently announced plans to locate in the Tulsa region including Macy’s, Verizon, Mid-states Petroleum and Garmin International.

Fran Kirk Mobile Home Park is located within walking distance to Broken Arrow High School, the only
high school in Broken Arrow to receive an A+ rating on the Oklahoma State Department of Education
Accountability Report.

To schedule an interview with an ARA executive regarding this transaction or for more information
about ARA, nationally please contact Lisa Robinson at, 404.990.4900 or Amy
Morris at , 404.990.4902; locally, Eva Coffee, at or

About ARA
ARA is the largest privately held, full-service
investment advisory firm in the
nation that focuses exclusively on the brokerage, financing and capital sourcing of multi-housing
properties including conventional, affordable, distressed assets, notes sales, seniors, student &
manufactured housing and multi-housing land. ARA is comprised of the country’s top investment
professionals who leverage a unique and fully integrated cooperative business platform of shared
information, relationships and technology driven solutions. ARA’s unified enterprise approach ensures
that clients are delivered the broadest asset exposure, effective matching of buyers and sellers, and the
shortest transaction timeframes in the industry. The combination of resources, unparalleled market
expertise and nationwide presence in the multi-housing marketplace has resulted in an annual production
volume of more than $10.2 billion in real estate transactions in 2013. For detailed information on
ARA’s extensive multi-housing investment services, visit .

Mobile Home Park Investing Tips – 21 to 24

Our Weekly Mobile Home Park Investing Tips.  Along with comments from investors.  Enjoy!


Mobile Home Park Tip #21

Keeping in Contact with your Manager:

I have to admit that I have made some mistakes in the past with communicating with my onsite management. For the most part, I let the managers run the park and assumed that if I did not hear from them, everything must be going well.

This approach has come back to bite me a couple of times and I have since resolved to have myself or someone in my office talk with the manager at least once per week. I have adopted the following strategy and it appears to be working.

Each week, I have the manager write down any problems or issues in the park, and then fax them or email them to me every Monday morning. This is working great so far and now I have a paper trail of everything important that is going on in the park.

Then on Thursday or Friday of every week, we call the manager just to see how things are going. The managers like to know that we are thinking about them and appreciate these calls. In the past, I had some managers that we talked to only once per month when there was a problem. It is much nicer to talk to them now and find out that there are no major problems.


Mobile Home Park Tip #22

Types of Mobile Home Parks to Consider:

When deciding on purchasing a mobile home park, you can basically look at four different types:

Building a New Park:  This is starting from scratch and will take time, money, and patience.  This is usually the riskiest and drawn out option but can be potentially a great opportunity.

Buying a Stable Park:  These parks usually have low vacancy, are operating smoothly and have rents at or near market.  You are buying a cash flow that should increase as rates increase over time.  You will pay a premium price for this type of park.

Buying a Park that is mainly filled up but is not running efficiently.  In these types of parks you want to buy them based on the current income and expenses and then increase the value through such things as raising rents to market, collecting rents, sub-metering utilities.  This is the type of park that I am on the lookout for.

Buying a Turnaround Park:  In addition to increasing rents and reducing expenses this is the type of park that is either half vacant and needs rent to own homes or the type of park that the owner has forgot about and is run down.  This type of investment usually has the best potential to increase in value for existing parks but will take the most time, money, and efforts.  Make sure that the extra time and efforts will be worth it.   Turnaround parks are often better deals as the owner may have lost interest or is having financial difficulties.  The opposite is true of the stable parks.


Mobile Home Park Tip #23

When looking for a park, you can basically choose:

Large Metro Areas:  There is usually more competition here from investors but they are generally regarded to have greater stability and less market fluctuation.

Small Cities & Rural Parks: There is generally less competition here from investors and you will usually be able to buy the parks with a higher cap rate.  These parks will typically have a larger risk due to dependency on one or two major employers.  However, in the right cities and markets these will often represent great investments.

Adult & Senior Parks:  These are usually more desirable as your tenant base willl have greater stability and tend to care for their homes and lots better and pay their rents on time.  However, many of the residents in these parks will have a lot of time on their hands and require more amenities and offer more resistance to rent increases.

Most REIT’s (Real Estate Investment Trusts) and larger mobile home park investors are looking to purchase parks that are in the 150+ site range so the competition and pricing is generally higher for these larger communities.  I would suggest you focus on the parks that are in the 25 to 150 space range.  Lower than 25 spaces if you live nearby and are able to manage the park yourself.

Any size of park can be run efficiently and profitably.  Some 10 space parks are easier to run from a distance without a manager than one that is 100 spaces with a full time manager.  There are many factors.  Some parks require weekly visits, monthly, yearly, or whenever you are bored.

When deciding what type of park to buy, you need to decide on your investment goals, evaluate the amount of time you have, talk to others in the business about the time requirements for your potential purchase and then begin your search for parks that will fit with those goals.  Make sure your goals are reasonable.  It is not likely your are going to buy a 100 space park in a good market operating well for a 15 cap and it is not likely you will find a park operating well in a good market that will be purchased for no money down, etc.


Mobile Home Park Tip #24

The Double-Wide Two Step:

What to expect when one half of a multi-section home is destroyed.
By Kurt Kelley of Mobile Insurance in Texas

When one section of a manufactured home is destroyed, the question becomes -”What is the extent of this loss? Half the home or the whole home?” The destruction of one-half of a multi-section home can be more traumatic to the home’s owner than the destruction of the whole thing.

Today, in most circumstances, manufacturers refuse to build a replacement section. Manufacturers report that if they rebuild one section of the home it will not match the remaining section(s) like it would have if built at the same time. Carpet colors, paints, etc. can vary slightly and create product quality and image concerns. Furthermore, sections may not match-up at the marriage line accurately.  Nevertheless, the retailers that own a home which has had one section destroyed, and their respective insurance companies, only want to pay to replace half the home, not the whole thing. To make things more interesting, many manufactured home physical damage policies only offer to pay for the physical damage to the home.

Thus, if an insurance company pays to replace a destroyed section, the insurance company may have technically satisfied its policy obligations, whether or not the home owner can actually replace just one section of the home. This leaves the home’s owner with a large uninsured loss. In the battles over the years between insurance companies and manufacturers on whether to build a replacement section to home, both have prevailed.

To protect yourself from a large uninsured loss, make sure your insurance policy has specific language in it stating that if one section of a home cannot be rebuilt, then the home will be considered a total loss.

Furthermore, you should demand that all hired transporters carry a “cargo insurance policy” that includes a “pair and set” or “multi-section” clause.  If you do these things, you may not limit your time on the dance floor doing the double-wide two-step, but at least you know you will have a chair when the music stops.

(For a copy of a model Transporter/Installer agreement, visit  and go to the forms section).

Contact Kurt at 281-367-9266 or email


By Dave Reynolds and Frank Rolfe

Dave Reynolds and Frank Rolfe are mobile home park investors and together own and operate over 100 parks. Frank also leads regular Mobile Home Park Investing Bootcamps through