Applying Science To The Remaining 40,000 Mom & Pop Mobile Home Parks

There are around 44,000 mobile home parks in the U.S., with roughly 40,000 of those still owned by the original moms and pops. It is the challenge – and opportunity – of the current generation to bring these selectively back to life. Some qualify for investment and others don’t, but the trick is understanding what makes money and what’s hopeless and following established guidelines for making them successful again. The photo above is from the 1955 book titled “How to Build and Operate a Mobile Home Park” and, as virtually all mobile home parks in the U.S. were built between 1950 and 1970, the photo above represents the “before” shot for many of these investment projects. So how do you create the successful colorized “after” photos?

Identifying which properties are “investment grade”

Not all mobile home parks are created equal. Some have the right raw material to be a huge financial success but others do not. The first step is to understand the basic infrastructure and density issues that cast the die on the pieces you have to work with. Unfortunately, some number of those early mobile home parks simply have lots too small to fit modern mobile homes on them (although some of these properties can instead be repositioned into RV parks) and others have insufficient water, sewer, electrical, or gas systems that will be too costly or impossible to cure. All buyers and lenders should only put their money into “investment grade” properties that are worthy of capital and debt, and avoid those so poorly constructed or planned that they simply can’t be brought back to life.

Recognizing that not all properties are meant to be brought back to life

Just because a mobile home park has all the right physical attributes does not mean that you should invest in it. That’s because the other piece of the puzzle is the same mantra as all other forms of real estate: location, location, location. We are reminded of that every time we drive by a large mobile home park in the middle of nowhere. America has changed over the past half-century, and some of the locations where mobile home parks were originally built make no sense today. These properties have few, if any customers and the problem is that you won’t be able to move the needle regardless of your capital program simply because nobody wants to live in that location.

Understanding what makes a mobile home park location work

Location, like infrastructure and density, is simple math when it comes to affordable housing. The demand for inexpensive places to live is giant in the U.S., but not all locations share the same level of demand. The normal metric for a successful location is one that has around 100,000 population in the metro area, coupled with at least a $100,000 average single-family home price and $1,000 per month 3-bedroom apartment rent. And then you must put your decision to the test via a “test ad” to actually gauge demand in the market.

Applying the correct analysis

Mobile home parks are valued based on a number of measures including cap rate, cash-on-cash return, and cash-flow. And banks have their own metrics including coverage ratio and some even “stress test” the loan to make sure it has plenty of room for contingencies. Properly pricing a mobile home park requires applying these equations based on real income and expenses. The bottom line is that some mobile home parks simply do not have the potential profitability – based on the seller’s price – to be worthwhile to purchase. Others, due to vacancy or massive deferred maintenance, may make zero sense regardless of the seller’s price.

Sam Zell’s matrix

Sam Zell is the greatest real estate investor in U.S. history, having been the largest owner of office buildings, apartments and mobile home parks in America. And he is dedicated to one simple formula pertaining to risk. His theory is that you should always buy deals that offer low risk and high reward, never buy deals that offer high risk and low reward, and maybe buy deals that offer high risk and high reward. Unfortunately, some older mobile home parks fit the high risk/low reward category and should be avoided. This would include mobile home parks that have serious issues yet lack the ability to push rents or occupancy, thereby removing any opportunity for higher reward.

Following the lessons learned from others

Every day, a number of investors buy old mobile home parks to bring them back to life. They have the confidence to do this because they understand the essential traits of successful parks and have done the correct due diligence to get an accurate assessment. Mobile home parks are not rocket science yet they are more complicated than outsiders believe. There have been large fortunes made in the mobile home park industry and the trail has been forged through trial and error by others who have taken the risk and their results are what have built the math and science of mobile home park investing.


By far the majority of mobile home parks – over 90% -- are owned by moms and pops. Some of these are worth bringing back to life and others should be left for dead. The trick is in being able to pick and choose which can be profitable and which will only be a disaster as an investment.

If you would like help in learning the correct way to identify, evaluate, negotiate, perform due diligence on, renegotiate, finance, turn-around and operate mobile home parks, you should attend our Mobile Home Park Investor’s Boot Camp. It’s 100% live and 100% virtual offering over 30 hours of information with no travel time or expense. It’s also Q&A throughout, so all questions get answered.

Frank Rolfe
Frank Rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. He is currently ranked, with his partner Dave Reynolds, as the 5th largest mobile home park owner in the U.S., with around 20,000 lots spread out over 25 states. Along the way, Frank began writing about the industry, and his books, coupled with those of his partner Dave Reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real estate.