Step By Step Process to Buying a Mobile Home Park!

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I vividly remember the day I decided to buy my first mobile home park.  I was a complete beginner and didn’t have a clue what to do first, second or third.  I spent hours reading and reading and talking with other investors.  It seemed the more I learned the more confused I became.  What I didn’t have was a simple and concise overview of the entire process from beginning to end.   If you are beginner, you’ll save you a lot of time and money if you memorize and follow this step-by-step process to buying your first Mobile Home Park!

Goals, Objectives & Purchase Criteria

Goals & Objectives are an investor’s best friend. A good investor is 100% clear about what they want to accomplish and why it is important.   Goals should be supported by short to medium term objectives that are specific, measurable, attainable, relevant and time specific.  Here are some examples:

  • Goal:  10% cash on cash return each year for 7 years and a 100% increase on capital invested
  • Objectives:  meet with 3 brokers who specialize in MHP sales by May 31, complete an analysis of 7 MHPs currently on the market by June 30th, write 3 offers by September 30

Purchase Criteria are defined based on the goals and objectives and serve to focus the investor on a property type, geography, size, condition, price range, etc…  My current purchase criteria include the following: MHP, N. California, 30-50 spaces, city services, priced between $1M and $1.5M, 80% occupied or greater and rents 25% below the comps in the area.

Market Knowledge & Prospecting

With goals, objectives and purchase criteria in hand, an investor can enter the “deal flow” to learn about the market and identify any good prospects.   Start your search on the Internet and visit websites like LoopNet, Craigslist and mobilehomeparkstore.  Obtain a list of every mobile home park in your target geography and import it into Excel (or another database tool) so you can add notes and quickly sort, search and select out parks that appear to meet your purchase criteria.

Call brokers who have MHP listings and ask them to provide their underwriting, package or a P&L and current rent-roll.  The broker will want to get to know you so be prepared to share your goals, objectives and purchase criteria.   Work through all the numbers to understand how they arrived at their revenue, expense, cash on cash return, NOI, CAP rates, debt to equity ratios, etc…   If the package includes comps, review them closely to understand how the subject property compares in terms of rents, vacancy, revenues, expenses, mix of singles to doubles, etc…  Do a “drive-by” that includes the comps, other similar properties and of course, the subject property.

Within a few months you’ll have good knowledge of the market(s), be proficient at evaluating properties and quickly able to identify any that fit your criteria and look like good prospects.

Qualify the Property

So you’ve got something that looks like a good prospect, now what?   If you’ve not already done so, ask the seller or broker for underwriting, package, P&L’s and rent-roll and any other financial information they’d like to provide.  Work through their data and reports so you understand how they arrived at their numbers and confirm their calculations.    Then reconstruct the current P&L using the rent-roll as the basis for the revenue number, adding in utility reimbursements, laundry, propane sales, storage, etc.   Complete the same exercise on the expense side.

Build a projected P&L for the next 3-5 years that reflects your assumptions and plans for the property including increases in revenues, decreases in costs and the resulting increased NOI.   Now it’s time to engage a loan broker or MHP lender and see if they are interested in financing the deal and at what terms.  Plug these terms into the projected P&L to calculate the cash on cash return and other key rates and ratios.  If the numbers meet your goals, it’s time to “put it in writing” or disengage and let the seller/broker know you are continuing to look at other properties.

When drafting the purchase agreement, in addition to the financial terms, make certain it meets all your requirements including: data and disclosures you want from the seller, contingencies and the timing or schedule to close.

Due Diligence

You’ve started the financial due diligence and need to continue forward and take your investigation to the next level.  You’ll want to review copies of bank statements to verify deposits and see copies of actual bills for utilities, taxes, insurance and other maintenance items.

Physical due diligence is about understanding the current condition of the physical elements of the MHP including homes, structures, electrical, gas, water and sewer/septic systems, etc…   You want to make grounded projections about operating costs for the 3-5 year P&L and estimate any capital costs over your expected hold period for upgrades and replacements.  Be sure to ask the seller for a list of all capital improvements that are not reflected in the P&Ls.

Locale is the final element of due diligence and it’s about location!  Locale considerations include the economics of the market, zoning, land use and development plans for the subject property and neighborhood and current compliance with respect to licenses, permits, restrictions and regulations.

Remember to triangulate all data and answers with multiple sources to ensure completeness and accuracy.  Hire professionals to inspect the complicated and expensive infrastructure elements.  Take a phased approach to releasing contingencies to demonstrate good faith with the seller and buy extra time to complete the investigation before a final “sign off” and acceptance!


By now you should be working to clear those final contingencies.  Hopefully, the due diligence process confirmed your initial impressions when the property was qualified.   If not, prior to releasing contingencies, final negotiations and adjustments to price or other terms can be made between buyer and seller.   You should be contacting the lender every couple of days to ensure they’ve completed the appraisal and the “first reviews” by the loan committee have been positive.  It’s not unusual for the bank to ask for more documents, more signatures and more “blood” so be prepared.  Get to know your title officer and periodically ask for an updated preliminary closing statement and work through the numbers and calculations.   Be certain to verify the security deposits and carefully review the prorations for rent, taxes, propane in the dispenser tank, supplies and pre/post paid items like licenses and permits, etc…   Finally, have the seller provide a list of inventory including tools, office equipment, furniture in the club house, etc…

Related: Mobile Home Park Due Diligence Checklist!


It’s the day of the close and your hand is tired from signing all those documents!  There are no doubt some surprises ahead and lots to learn.  Take comfort in the fact that you’ve followed a disciplined approach by defining goals, objectives and purchase criteria, studying and prospecting the market, qualifying several properties, completing an exhaustive due diligence process and finally, closing on your terms with significant attention to the final prorations, deposits and inventory.

Photo: subewl

About Author

John Vashon is a California real estate broker and owner of Iron Oak Properties. John focuses on multi-family residential properties, specializing in Mobile Home Parks. For more information about John visit or


  1. David Beard on

    John, nice article, it’s great having an MHP guy contributing. What are some of the red flags that really give you pause when looking at a park, either the historical P&L, the breakdown of MH ownership, the physical condition of the infrastructure, etc. Also, what are the things that are simply “no go’s” for you.


  2. Thanks for your comments and good question. If the park has lost it’s economic viability, most often a function of location, it’s a “no go.” Otherwise, if the price is right and the problems can be fixed, there’s a deal in there somewhere!

  3. Robert Steele on

    My wife and I always drive by this mobile home park on the highway service road. It must have been there since forever. Everything has grown up around it. The owner must be sitting on a goldmine with the land value. Anyway, every time we drive by my wife sighs and tells me that is her dream investment.

    • I have some good friends who purchased parks 40 years ago in urban areas and they made a lot of money selling out to developers or local municipalities. Although this “fate” is unlikely for most, MHPs offer steady cash flow and excellent overall returns. If you are interested in MHP investing I encourage you to continue the search!

  4. I LOVE this….

    “Objectives: meet with 3 brokers who specialize in MHP sales by May 31, complete an analysis of 7 MHPs currently on the market by June 30th, write 3 offers by September 30”

    This objective would really work for any type of RE investing because it sets concrete goals and dates.

    If you don’t mind me asking John, how did you get started in MHP investing? Did you just jump right into it and start your RE career there? Did you have a lot of your own money when you started or did you have to use OPM to get into deals?


    • Thanks and yes, absolutely, this approach of setting goals, objectives and purchase criteria is applicable to ALL types of real estate investing.

      Prior to MHP investing, we started with rentals, single family homes. We enjoyed significant appreciation in the 1990s to the mid 2000s, when we sold out last rental and exchanged into MHPs.

      Keep your questions coming and again, thanks for your reply!

  5. Hi john, helpful info here. Im looking at a few MHP with owner financing, and was curious what accounting or program would you suggest for management purposes? I currently use quickbooks for my other business.

    • MHP accounting is pretty simple and even manual systems work just fine. However, if you have sub metered utilities, I’d recommend using specialized software to ensure the billing is accurate and legal. We use Rent Manager’s “cloud” version for all billing (including utilities) and Quick Books for payables. I’m interested in moving away from Quick Books and using just Rent Manager and our bank’s online bill pay service and will explore this option later in the year.

  6. La Nae Duchesneau on

    John loved your article. Let me ask you though, I am looking at buying a mobile home park. But, I am getting put off on the idea. It seems my profit is better in buying individual mobile homes instead of a park. I was looking at a park that had 8 units and was $375,000. Well I can buy 8 units for $50,000 and make a good profit. Why would I consider buying a mobile home park?

    • Thanks, glad you liked the article. I replied to one of your earlier queries in which you asked me to explain or contrast the pros and cons of buying mobile homes vs. buying a MHP. They are two completely different types of investment and it’s really up to the investor to decide which is more appropriate given their access to capital, experience, geography, age, financial goals, etc… If you have a system that works for you then “full speed ahead” and keep up the good work!

  7. Hello John. My husband and I are wanting to get into the game of rentals and we are extremely interested in purchasing a MHP. We are both young and don’t have an extreme amount of money. I have two questions….
    1.) Do we a. get an investor to help us get into the game and work out terms with him, b. save our money and purchase once we can get a loan or c. start with single home rentals like you and grow as our capital grows?
    2.) Would you buy in the city/state where you live so you can keep a close eye on the property or does it matter?
    Bonus question… can you recommend any books or publications on this subject that can help us with the process?
    Thank you for writing this article. It’s great to see the game plan laid out in simple terms.

    • I read your question from 2 years ago. I am in the same situation as you were with the exact same questions. How were they ever answered and how did you go about earning the money to invest?

      • Brandon Phillips


        It can be difficult to get started. It helps if you have a good full-time job. Once you have that then banks will give you money. My first property I bought with a conventional mortgage. I bought the second property with my own saved cash, I eventually refinanced into a mortgage and used that cash to buy a third property with 2 investors in an LLC. I’m now looking to buy much larger properties. Again it helps to have a good stable job and/or be able to show 2 years of profits from rental activities. I had to take a few variable rate loans and 25% down.

  8. John,

    I have been interested in this type of investment for some time. I don’t have enough cash to do a deal like this and do not think I could get a loan for it either so I would be looking for an investor. My question is how do I structure a deal if I have someone willing to invest in a deal like this? From their standpoint wouldn’t they just ask what they need me for? How do I make money in a situation like that?

    • La Nae Duchesneau on

      You do have enough money. You can buy a one bedroom for $1500 and rent it out for $595, making a $285 profit per month for your $1500 investment. Now, those are my numbers for where I live in Florida. But go and do your research. Go look at a few parks, get some prices and see if you can swing it. If you can’t afford it, save up. Remember, you want to make your money work for you.

      • I just read your posting and I would like to get more information on what you are saying. Seems like you have a very good knowledge on this. I only have 25K to invest and I would like to get more information on MHP. I will appreciate if you can give some pointer.

        • La Nae Duchesneau

          If you are looking to invest in mobile homes, your first step is to call all if not most of the mobile home parks in your area. Say within 30 minutes of your house. You want to ask them if they allow rentals in their park? What is included in the lot rent- garbage, water, lawn care- do they have amenities like on site laundry facilities, club house, pool? Is this an all age park or a 55+ park? And do they have any for sale right now?
          Once you get your 1-2 parks that allow rentals and are all age parks (I do not buy rentals is the 55+ parks but this is up to you), go and drive through the park and write down phone numbers or people who are selling their mobiles. There should be a few with for sale signs in the windows. If the park has some for sale, go look at those.
          So now you can see if you will make a profit if you do buy a mobile home. You will know your lot rent, and what is included in the lot rent, and you will see what the homes are selling for (always barter, never give them what they are asking for). Figure out what you will be charging for rent. Look on Craig’s list or in the paper and see what the mobiles and apartments are renting out for.
          Personally, I like to see at least $200 profit per month. But again, this is up to you.
          So take these first few steps and keep me posted on your progress!

  9. Hai Van Nguyen

    Thank you very much, John. The article has been here for some years but I just read it today. It is still very valuable to me! I have noted down your article into steps by steps, total 15 steps! I will follows your steps and let you know the first outcome! Again, thank you very much for sharing the knowledge and experience!

  10. Mike O'Reilly on

    John Great article. I am looking at purchasing a 14 acre park with no current tenants. In your experience how long could it take to attract tenants. People who will purchase their own mobil home and move it here ? My concern is when someone is looking to move it is much easier to simply rent a apartment than to buy a mobile home and move it here.


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