If you spend any time on real estate forums or "FinTwit," you’ve probably heard the pitch. They call it "recession-proof." They say it’s like owning a parking lot where the cars never leave. Investors like Sam Zell—the legendary "Grave Dancer" who built Equity LifeStyle Properties into a multibillion-dollar empire—proved decades ago that there is serious money in "land lease" communities. But honestly? Most people jumping into it today have no idea what they're actually signing up for.
Owning a mobile home park isn't just about collecting rent checks while sitting on a beach. It’s a weird, gritty, beautiful, and sometimes exhausting hybrid of real estate investing and running a private utility company. You aren't just a landlord; you are a mayor, a peacekeeper, and a wastewater technician all rolled into one. If the lift station breaks at 2:00 AM on Christmas Eve, that’s your problem. Not the city’s. Yours.
The appeal is simple math. You own the land, the infrastructure, and the amenities. The residents own the homes. Because moving a double-wide can cost $5,000 to $10,000—if the home is even structurally sound enough to survive the trip—tenant retention is naturally high. It’s "sticky" housing. But that stickiness is a double-edged sword that comes with a massive ethical and operational responsibility that many spreadsheets fail to account for.
The "Invisible" Infrastructure That Breaks Your Budget
New investors often look at the cap rate and the rent roll and think they’ve found a goldmine. They see 50 lots at $400 a month and do the quick math. But they forget about the pipes under the dirt.
In a traditional apartment complex, if a pipe bursts, you fix a wall. In a mobile home park, if you have old galvanized steel or orangeburg pipes (which is basically tar-paper piping from the 50s), you might be looking at a $100,000 capital expenditure just to keep the water running. Many older parks are "mom and pop" operations where the previous owners haven't touched the infrastructure since the Nixon administration. You’re not just buying a cash-flowing asset; you’re buying decades of deferred maintenance.
Then there’s the "Master Meter" trap. If the park is master-metered for water or gas, the park owner pays the city and then tries to bill it back to the residents. If there’s a leak underground that you don’t find for three months? You’re eating that cost. I've seen park owners lose $2,000 a month on "ghost water" because of a tiny crack in a line forty feet underground. Sub-metering is the holy grail of owning a mobile home park, but getting there requires significant upfront investment and navigation of complex state-specific utility laws.
Why the "Trailer Park King" Reputation is Changing
Frank Rolfe and Dave Reynolds, the guys behind Mobile Home University, often talk about the "low supply, high demand" nature of this business. They aren't wrong.
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It is almost impossible to permit a new mobile home park in the United States today. "Not In My Backyard" (NIMBY) sentiment is real. Zoning boards almost universally despise them. This means you are dealing with a diminishing supply of affordable housing. While that’s great for your moat as an owner, it’s led to a lot of scrutiny from lawmakers.
States like New York and Colorado have passed aggressive laws regarding rent control and the "Right of First Refusal." In Colorado, if you want to sell your park, you have to give the residents a chance to organize and buy it themselves. This isn't just a "passive" investment anymore. It’s a highly regulated industry where your reputation as an operator matters. The days of being a "slumlord" and getting away with it are dying, thankfully. Modern institutional investors like GIC (Singapore's sovereign wealth fund) and Brookfield have poured billions into the space, professionalizing management but also driving up prices.
The Lonchera and the Community Pulse
If you want to know if a park is healthy, don't look at the books first. Look at the yards.
Are there sheds? Decks? Gardens? When residents invest in their "curb appeal," they are telling you they plan to stay for twenty years. This is the "lifestyle" part of the business. You’ll find that many parks are tight-knit communities where three generations of a family live five lots apart.
There’s a human element here that doesn't exist in a 200-unit high-rise. You’ll know the names of the kids. You’ll know who’s struggling because the local factory cut shifts. This is why the best park owners are often the ones who show up. You can't manage a park's culture through a screen from 500 miles away. Well, you can, but the park will eventually reflect that neglect.
The Financing Nightmare (And How to Wake Up)
Banks used to hate mobile home parks. To a traditional lender, a park looked like a pile of dirt and some risky tenants. Things have changed, but it’s still not as easy as getting a mortgage for a single-family home.
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- Agency Debt: If your park is big enough (usually 50+ lots) and has paved roads and decent occupancy, Fannie Mae and Freddie Mac love these deals. They offer the best rates and non-recourse terms.
- Seller Financing: This is still the backbone of the industry. Many "mom and pops" want to retire but don't want a massive tax hit from a lump sum. They’ll "be the bank" for you. This is how most of the biggest owners today got their start.
- Local Banks: Small, regional banks often understand the local economy better than the big guys. They might be okay with a park that has "Park Owned Homes" (POHs), which the big lenders generally loathe.
The POH issue is huge. Ideally, you want a "Tenant Owned Home" (TOH) model. When the resident owns the home, they fix the toilet. When you own the home, you’re basically running a horizontal apartment complex with way higher maintenance costs. Most pros try to sell the homes to the tenants as fast as possible to get out of the "Roto-Rooter" business.
The Realities of Resident Relations
You have to be comfortable with conflict. Owning a mobile home park means enforcing rules.
If you don't tell the guy on Lot 14 to move his three broken-down Chevrolets off the lawn, the neighbor on Lot 15—who keeps a pristine garden—is going to get fed up and leave. You are the arbiter of the community standards. It’s not about being a jerk; it’s about protecting the value of everyone else’s home. If the park looks like a dump, the homes are worth less. If the homes are worth less, your land is worth less.
Actionable Steps for the Aspiring Park Owner
If you’re serious about this, stop looking at LoopNet. The "good" deals on LoopNet are usually picked over or overpriced.
Start with "Driving for Dollars." Literally drive into parks. Look for the signs of a tired owner: overgrown weeds, potholes the size of Volkswagens, and a general "I don't care" vibe. Find the owner's name through tax records and send them a handwritten letter. It sounds old school because it is. Many of these owners don't have emails. They have landlines.
Verify the Permits First. Before you even look at a P&L, check the "Certificate of Occupancy" or the operating permit. You would be shocked how many parks have 40 lots but are only legally permitted for 30. If the city decides to crack down, you’ve just lost 25% of your income overnight. Also, check the flood maps. A mobile home park in a 100-year flood plain is a ticking time bomb for insurance premiums.
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Test the Water. If the park is on a well and septic system, you need a professional inspection. A failed leach field can cost $20,000 to $50,000 to replace. If the well goes dry, you’re trucking in water at a cost that will bankrupt you. Private utilities are the number one reason park owners fail.
Audit the "Park Owned Homes." Walk inside every single unit the seller owns. Don't take their word that they are "rent-ready." In the mobile home world, "rent-ready" can sometimes mean "the roof only leaks when it rains hard." Check for soft spots in the floor—especially around the master bath and the water heater. That’s where the particle board rot usually starts.
Understand the "Spread." The goal in owning a mobile home park is usually the spread between your interest rate and the cap rate. If you’re borrowing at 7% and buying at a 7% cap, you have no margin for error. You want to see a clear path to increasing value—either by filling vacant lots, raising "under-market" rents to meet the local average, or cutting expenses like water leaks.
Owning a mobile home park is a massive responsibility. You are providing the last rung of non-subsidized affordable housing in America. It’s a business that rewards those who are diligent, empathetic, and not afraid to get some mud on their boots. If you just want a number on a screen, buy an index fund. If you want to own a piece of the "American Dream" that actually produces cash, go find a park with some bad management and a lot of potential.
The first step isn't calling a broker. It’s calling the local planning and zoning office in a town you like and asking for a list of all "manufactured housing communities" in the jurisdiction. Start there. Look at the dirt. Talk to the residents. See the pipes. That’s where the real money—and the real risk—is buried.