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top 10 things we've learned from owning our first mobile home park

For most of my life, the thought of owning a mobile home park never even crossed my mind.

Over the years, I've invested in small commercial buildings, single family housing, and small multifamily properties, with the hopes of eventually trading up and owning an apartment building. That said, even in my early aspirations of real estate investing, I had no idea of the power of larger multifamily properties and all the benefits that go along with them (cash flow, forced appreciation, risk mitigation, etc.).


In 2008, I purchased a nice duplex in Washington State in a neighboring town. Fast forward ten years later, when compared to all my properties, nothing had performed quite as well as my only “multi door” asset. Over time, I was able to double rent, increase cash flow to over $800/month, all while vacancies were essentially non-existent. More importantly, I had built up a nice chunk of equity, had studied apartment investing, and was ready to trade up via a 1031 Exchange. 

My primary objectives were first to find a property that generated at least 15% cash-on-cash returns, and second to find value-add opportunities to increase Net Operating Income (NOI) and subsequent value. As I started my search, I quickly become disappointed. Reality set in and it appeared I was going to have trouble meeting my criteria in the white-hot apartment market. It seemed everybody else also had the same brilliant idea and were bidding up prices and forcing down cap rates. I could not imagine why anybody would be happy with purchasing at 5 and 6 caps and only achieving single-digit cash-on-cash returns. I wanted cash flow, instead of only speculating on future 


As I was searching for apartment buildings on one of the more popular retail sites for commercial real estate, I noticed a box that I had not checked in the multifamily filter option. It was “Mobile Home Parks / Manufactured Housing”. So, I checked it. The results were exciting as I saw mobile home parks all over the country for sale at 10%+ cap rates on actuals. This was still 2017 and 2018, so 10 cap mobile home parks were still available. 

 **As a side note, as other apartment investors started looking outside their asset class for more yield, they also found the MHP space in 2019 and started bidding up MHP prices.

To make a long story a little shorter...


I and my business partner ended up buying a mobile home/RV park in North Carolina on April 30Th, 2019, a mere 2,293 miles from our home! Up to this point, I had never been a remote investor. In 6 months, I went from a duplex 10 miles away from my house, to a 39-unit mobile home park on the other side of the country! To say the least, we did not sleep the night before we closed on the park! 

As of this writing, we have owned this park for over a year now. We have received our MBA in mobile home park investing. Now we want to share our experience with you in old fashion bullet form (in no order):

Our biggest takeaways...



If you do, make sure you know what you are getting into and underwriting them appropriately. Our park consists of 39 spaces, half of which are long term RV pads. Under the prior ownership, when a mobile home space went vacant, the owner would convert the space to 2-3 smaller RV pads. Each original mobile home pad had a single water and electrical connection metered by the local utility company along with one small septic tank rated for 3 bedrooms. After the conversion, the new cluster of 2-3 RV pads would be serviced by the single electrical/water connection and septic system. In the end, the owner converted rent of $280/month for the mobile home pad to $450-$500 per RV pad (including all utilities). Yes, the economics sounds exciting. It excited us when we were underwriting the property. And yes, for the most part, those economics have withstood the test of time.


That said, it is not quite as rosy as it seems.


In reality, it is MUCH easier for an RV tenant to hook up their RV to their truck and leave. They don't even have to move furniture! On the contrary, it is MUCH harder for a mobile home lot renter to move their mobile home. In fact, in many cases, it is cost prohibitive or simply impossible. If you are going to purchase a park with RV pads, underwrite higher vacancy, turnover expenses, and subsequently a higher cap rate into your overall valuation. Fortunately our RV pads have been relatively easy to fill. That is, once we put the right management in place. More on this below. In the end RV pads can be profitable, but be ready for increased turnover and higher management costs.




Did I mention this park is over 2000 miles away? And... we literally have not seen it since we acquired it! We were going to make our annual trip this month, but our friend COVID-19 hit and squashed our travel plans. 


Going into this project, we knew proper management would make or break the investment. As such, we put a lot of thought into how we would accomplish this. The park came with a resident who performed light management duties, rule enforcement, mowing, maintenance, etc. He was the unknown variable, so we also hired an offsite professional property management company to handle leasing, showings, notices, evictions, rent collection, bill pay, accounting, etc. More importantly, our “professional" offsite management company was to be our “eyes and ears”. They would accomplish this by driving through the park weekly to create checks and balances among our on-site management and tenants. Essentially, they were going to keep the onsite manager honest.


So what happened? For starters, our occupancy plummeted! Almost immediately, we lost RV pads and home renters (the park came with 10 Park owned Homes). Although the park was being advertised on the Property Managers website and other mediums, our occupancy was going down. Worst yet, our residents hated the offsite managers. We were failing! It turns out our “professional” offsite managers were awful! Their employees were rude and condescending to our residents. They made a substantial amount of accounting errors that could have cost us thousands had we not kept our pulse on the financials. Getting accurate and timely reports was extremely challenging. They did the bare minimum. Their owners were toxic, and it permeated throughout the company. By the way, our “unknown” variable, the onsite managers, ended up being awesome! As long-term residents, we learned they knew everybody in the park, and also wanted the park to succeed. Over time, they have been kind but firm on rule enforcement, and take great pride in the community. Today, the park is immaculate and the residents love the onsite managers. 


Our first mistake was not adequately vetting the property management company. We should have called other property owners who used them in the past. We should have asked around. It turns out this company was notorious for being horrible. Our second mistake was we signed a year contract with them. When you are dealing with an unknown property manager, do not ever sign up for a long-term commitment. Since then, with other properties, we always push back on signing a long-term contract.  And to date, we have always been successful. If the property managers are as good as they are telling you, then they should have no problem proving themselves before asking for a long-term commitment.  


So what did we do? 

About 6 months into our first year, we moved all showing and prospective tenant relations to our onsite managers. We forwarded our main phone number to the onsite manager’s cell phone. Pro tip here, source your own phone number and forward it to your property managers. Do not advertise their number. This gives you a lot of flexibility in hiring and firing management without having to repaint signage, update websites, advertisements, etc. Since we were still in contract with our offsite managers, we renegotiated our rate down by 3 percent and limited their responsibilities to only rent collection, paying bills, and accounting (which they continued doing horribly). The result? Within a month we went from 80% occupancy back up to 95%. It turns out that having a friendly, enthusiastic, always available person to show units is very effective in filling vacancies.   

Now that we are at our year mark, we are firing our offsite professional managers and handing over all duties (except accounting and bill pay) to our onsite managers. We are happy, they are happy and our residents are happy.  However, we will continue to have a “checks and balances” systems. We are big fans of “trust but verify”. We will talk more about the process of converting management and our management systems in future posts.  




Proper diligence is the ONLY truth: Do not trust anything the seller (or selling broker) communicates. Verify everything. You know the rent roll you received in the Offering Memorandum? You will need to make sure everybody is actually paying. We inherited a few tenants that were basically living for free. Some had not paid rent in months. The previous owner lived in a house right next to the park, had made friends with the residents, and was too nice. This is just one example of proper diligence. Among many other things, beyond the scope of this article, you must verify all income and expenses, zoning, licenses, environmental, titles, market rents, demand, and about a hundred other things. Take the emotions out of diligence and do not cut corners on this step. It can kill your investment career before you get started. 




Luckily, we learned this before we made our first offer. However, we almost made this mistake. Fortunately we educated ourselves on the economics of mobile home parks before getting too serious. This is the biggest mistake most new MHP investors make.  It’s also the number one way unscrupulous selling brokers inflate prices in an effort to trap a newbie into paying an inflated price. You must only factor lot rent into your overall income calculation. For example, if the park owns a home that is renting for $800 per month and market rent for lots in the area is $350 per month, you would only use $350 in your income calculation. If you want to assign a value to the home, only use a very conservative “shell” value. Better yet, if it is an older single wide, do not assign any value to the home at all. This is a very important exercise in arriving at a value for the land. Furthermore, most lenders will only use the land value for when appraising the property. 


That said, income from the homes is real cash flow and can contribute positively to your return on investment. However, you must be over conservative on the expense side to maintain the home. Unlike stick-built homes or apartments which usually perform at a 45% - 50% expense ratio, older mobile homes were not built as well and could run as high as 75% - 100% expenses when compared to revenue. Note, we generally use 75% expense ratios when underwriting cash flow from Park Owed Homes.  


Stay tuned for the next 6 things we learned in our first year of owning a mobile/RV park.  We will talk about things like government programs, cheap value-add projects, utilities, submetering, and more!

Cadia Capital Group 


Cadia Capital Group is committed to growing passive income and wealth through affordable housing assets. These include mobile home parks and affordable apartment communities. If you are an accredited investor and interested in connecting with us, please complete the form below.

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Prior to about 2 years ago, I had a very limited understanding on what a mobile home park even was. This was despite

the fact I was raised in a mobile home and practically lived with my grandparents in their mobile home (in a park) every summer. Having always been an active real estate investor, for me, the “promise land” was owning apartment buildings.


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