How To Start A Mobile Home Park | Part 2: Buying A Mobile Home Park

Thinking of investing in mobile home parks? We are happy to say that you are well on your way to making an excellent investment. Mobile home parks are simply one of the hottest investment opportunities around at the moment. That being said, buying a mobile home park is not well-document and doesn’t have a very established market. You might be wondering where to even start with such a large and complex investment.

Luckily for you, we feel your pain and want to help you make things easier. This guide will give you all the most pertinent information you need to get started on this journey.

Buying A Mobile Home Park - Featured Image

Why are mobile home parks a good investment?

Here is just a quick recap of why mobile home parks are such a good investment opportunity right now:

  • Demand for affordable housing
  • High capitalization rate
  • Committed tenants
  • Mom and pop owners
  • Diversified and market-independent investment

For a full explanation of these reasons for mobile home investment, read part one of this series How To Start A Mobile Home Park: Understanding Your Investment.

How to buy a mobile home park?

If you’ve made up your mind that buying a mobile home park is a good idea, you might be hung up on how exactly to go about it. After all, it’s definitely not every day that you wake up and decide to make a purchase of this nature. It’s definitely in your best interest to go about this process slowly and with care. After all, it’s a long-term and large-scale investment into your future that will require a lot of effort, time, and patience.

Come up with your personal goals, benchmarks, and deadlines

Sometimes, the best way to get a good start on any project or endeavor is to simply get going! It’s easy to get dragged down by the enormity of the moment, to the point where we never get off the mark in the first place. And let’s face it, this will be no mean feat. One of the things you should do first is set your criteria.

This will be in the form of projected financial goals. The mobile home park you are interested in should be able to reach certain goals at specific times, decided upon by you. To calculate this, you’ll need to take into account the current occupancy rate, the amount of rent that you collect, and the average expenses you will have. Most of this information should be attainable from the current owners but try to make the numbers realistic as they might inflate facts to encourage a sale.

For example, let’s say you want to make 10% of your investment back every year for the first 2, 3 or 5 years. First, decide the period during which you want to earn back the full investment. Next, set a minimum percentage increase of your capital investment (profit) you want to see. If you do the calculations and your numbers don’t match, then you need to be prepared to step away from the purchase.

The other factors you should consider are:
  • Where the park is located – Some considerations include whether you will be present and manage the park yourself or if you’ll hire a management team. Take note of the park’s proximity to the city, which can affect which municipal services are available.
  • The price – This should be a no-brainer. With every purchase, there is an upper limit that you’re willing to pay and this is no different.
  • Park size – The number of lots available in the park as well as its actual area size.
  • Occupancy rate – The higher the rate the more you can collect a month. It’s also an indication of how well the park is currently doing.
  • Current rent – Another factor that will heavily impact your return on investment. Occupants might accept a rise in rent as long as it isn’t too radical.
  • Mobile homes – Make sure how many and which homes are included in the price, if at all. It might also be a park that owns no homes and only leases out the lots. We recommend trying to get parks where you own some or all of the homes if it’s within your budget.

It’s important to evaluate these factors, their impact on your bottom line and how they affect your ownership. Knowing information like this will make your search much faster and less frustrating. You’ll be able to narrow down the options and eliminate parks that would be a waste of your time.

Research requires a fair amount of time but the payoffs are tremendous. For one, it’s less likely you’ll end up being pressured into a buy you’ll regret. You’ll also have one of the most powerful tools at your disposal when dealing with sellers, agents and brokers: information!


Start hunting for the perfect mobile home park

Based on your research, you can start hunting for mobile home parks that fit your criteria. Set yourself goals. For example, plan to visit and analyze this many parks by this date or plan to see this number of agents or brokers.

This is simply the best way to start getting your feelers out there. While it might make your head spin in the beginning, you will soon become adept at handling all the numbers and it will only get easier with time. Understanding the market conditions for yourself will make the whole process more beneficial.

So, where should I start looking?

As you have probably noticed, it’s not like there are mobile home parks with “for sale” signs on every street corner. Luckily, there is this fantastic resource available to find almost anything you can think of and then some. The internet.

There really isn’t a well-established market for mobile home parks. This means you aren’t likely to find as many well-polished and well-populated sites like when it comes to real estate or cars. You will need to expand your horizons a little and resort to places you might not have seriously considered otherwise.


A good place to start is The site has a good collection of mobile home parks and makes the process similar to, and as easy as, shopping online for a normal stick-built home. On top of that, they list various broker’s details and also provide handy resources on mobile home park investments, buying and selling, and ownership.

Other options include sites dedicated to selling almost everything such as Craigslist and LoopNet which is a real estate site. You will need to sift through a lot more junk but the mom and pop sellers on here might be open to significant bargains. You can also try buying a mobile home park that is being auctioned on sites such as eBay and


Real estate brokers who deal exclusively with mobile home parks are another good option. One benefit from the get-go is that you will be dealing with an experienced and knowledgeable person. Another particularly good benefit of brokers is “Pocket-listings.”

These listings are not openly available to just anyone. Instead, the broker will evaluate you as a buyer and reveal the listings to you if you qualify. While repeatedly contacting individual brokers might be time-consuming, this is probably the most structured way to go about things. Remember that brokers literally make a living from curating great buys, so they are more often than not worth the extra time and money.

Reach out and enquire

Another option might be to pick up a directory and look for mobile homes in the area you want to buy one. You can then cold-call, email or drive by and meet the owners to ask whether they are willing to sell. Although this might seem a little desperate (and maybe even a touch rude), you would be surprised how many mom and pop owners are open to the idea of selling after hearing about interest.

The downsides to this approach are that you will have a fairly low positive response rate and that you will need to do the extra effort to reach out and talk to these owners. They might also ask a high initial price because you showed a bit of desperation and because they weren’t looking to sell in the first place.

During this whole process, keep a spreadsheet handy and make sure to have columns for all the most relevant information, including your requirements. This will make it super easy to keep track of what you’ve seen, measure them up against your requirements and each other, and help you retain information and understand it.

Get information from the owners or brokers and inspect the property

This is undoubtedly the hard part. Negotiation is never easy, especially when it involves such a complicated and expensive thing as a mobile home park. The most important thing is to never take anything for granted or to just take someone’s word for it. Whether you are dealing with a broker or seller and it isn’t readily apparent, ask them how they arrived at a certain number or projection. Then work out how accurate it is by your own standards. Question everything.

Also, be prepared to share your own information and financials. Of course, whoever you do business with will want to know if you can keep your end of the bargain. Read the next section on financing a mobile home park as this will also form an important part of the negotiations.

Don’t be ashamed to take notes and update your spreadsheet when you get home. There will be a lot of numbers that might change and variables to keep track of. Cap rates, net operating income, cash on cash return, vacancy and occupancy rates, debt to equity ratio, current rents that may be different depending on the lot and unit, and general maintenance and expenses are just some of the most prominent factors that will come up.

taking notes

The P&L (Profit and Losses) document is an invaluable piece of information. Also, try and obtain the rent-roll and underwriting as this will help you get a clearer picture of the above factors and the overall economic prospects of the park.

Due diligence

During this time, you should perform due diligence on the property. There are two main aspects to look over when it comes to due diligence:

  • Physical property: This includes the actual state of the property, the mobile homes, the utilities such as water, gas, and electrical infrastructure, etc.
  • Location: For this one, you will need to come to terms with the area’s current zoning requirements and ensure the property still meets them. Also, take into account any developments in the vicinity and how this will affect you. Current market conditions and demographics should also factor into your estimations.

Financing options for buying a mobile home park

Now that you have found your dream property, crunched the numbers, performed your due diligence, and you are happy to continue, it’s time to look at your financing options. If you have the cash available to buy the property immediately, good for you! Otherwise, read on for some advice.

As you can imagine, it’s harder to finance an acquisition such as a mobile home park because of its price and perceived risks. To add to that, banks aren’t too keen on financing anything at the moment which makes it that much harder. However, there are still some options available to you.

Seller financing

This basically just means that the seller carries the financing for you so that you can completely bypass the banks or lenders. This typically occurs in one of two ways:

  • You pay off the property by paying the owner a monthly sum that usually includes interest.
  • You make a “Master Lease” agreement. In this type of agreement, you lease the property from the seller and assume management of it. You retain the option to buy the property at any time in the future. During this time, you should be proactive and try to bring down costs, collect more rent, and up the value of the property in general. You can then buy the park, which is now worth much more than its initial appraisal value. This enables you to zero-down on your bank loan.

Bank or lender

Usually, it will be extremely difficult to finance a mobile home park through traditional means. So much so that some end up financing their park through a “Wrap mortgage” which can get you into trouble.

Since it’s very unlikely your first bid will be successful, you will have to approach multiple banks and lenders. You will need to bring all the information you have gathered on yourself and the property to try and convince them that it’s a good investment. They will then approve or deny it based on its merits and things like your credit score. Be prepared for a potentially long and difficult process.

dollars in a metal case

You will need to make a down payment which is usually around 20% of the park’s value and then pay off the rest over a term that’s typically between 5 or 10 years. Interest rates vary wildly on the specific bank or lender, market conditions, the appeal of your bid, and the term.

The obvious upshot is that these loans are very safe and tightly regulated by the government under consumer protection laws.

Are you ready to start buying a mobile home park?

By now, your head is probably spinning from all this information! It’s completely natural. The best way to get accustomed to it and get a clearer picture of what you’re up against is to dip your toes in the water and start doing your own research. If you have any hesitations, make sure you have what it takes to own a mobile home park. For more info, check out this article.

About Dan Paton

Dan Paton has been working full-time in this field for over a decade. Both him and his partner, Dan Leighton, formed EZ Homes back in 2006 and have seen explosive growth ever since. Dan works heavily in the administrative role within the organization. He is a jack of all trades type of guy. Dan and his wife have 4 children.

Written by Dan Paton

Dan Paton has been working full-time in this field for over a decade. Both him and his partner, Dan Leighton, formed EZ Homes back in 2006 and have seen explosive growth ever since. Dan works heavily in the administrative role within the organization. He is a jack of all trades type of guy. Dan and his wife have 4 children.

November 23, 2017