CAP Rates can be a beautiful thing, they allow an investor to get a quick comparison of properties without digging too deep into the deal.

When using CAP rates on MHPs I want to give a few warnings because there are additional variables to consider. Your CAP rate will be dangerously inaccurate if you calculate expenses incorrectly so let's break those down.

Utility Set-up- As an overview you need to know the difference  between city-provided utilities and onsite such as Septic Tanks with Leech fields, lagoons, Wells, Etc

Getting more specific what utilities are maintained by the community, paid by the community vs the tenants.

I will give you a quick example, I own a park with a bunch of multifamily manufactured units of which I pay the electricity bill. During the Winter months because they are all electric I am paying a fortune in electricity like $2,500. There are many cases where seller don't make these facts clear before purchase and you will find out the hard way later.

Park Owned Homes vs. Tenants Owned Homes- I will keep this simple, POHs are infinitely more costly to maintain than TOHs. We are just talking about dollars but they also suck way more time in management.

Infrastructure- Apart from the utility infrastructure I want you to think of amenities like improved roads, pools, clubhouses etc 

Delinquent Tenants and Poor Management- It is not unusual to purchase communities where the owners have not been completely forthright with their rent collection. You can try to use their taxes for verification but it is still difficult, CAP rates will not reflect tenants that need to be evicted.

Hopefully, this has been helpful in providing some additional aspects that are unique to CAP Rates and Mobile Home Parks.