A bridge loan lets you close on a mobile home park in as few as 21 days, then spend 12 to 24 months fixing infrastructure and raising below-market lot rents before you refinance into permanent debt. This playbook walks a borrower through that sequence using a 60 lot park as the working example.
Why bridge debt fits a value-add MHP
Most acquisition parks do not qualify for agency or bank financing on day one. The income is depressed by deferred maintenance, vacant lots, and lot rents set 25% to 40% under the submarket. Bridge financing funds the purchase and the work, then you exit into a stabilized loan once the numbers support it.
Our bridge product is interest-only and standardized. The rate is a fixed structure, not something you negotiate park by park, and it sits under a ceiling of 8.5% to 13% that we never exceed.
Step 1: Underwrite the real economics
Start with trailing 12 month financials, then rebuild them on actual collected rent, not the seller pro forma.
- Lot count and occupancy: 60 lots, 48 occupied (80%).
- In-place lot rent: 285 dollars per lot.
- Submarket lot rent: 395 dollars per lot.
- Deferred infrastructure: aging water lines and a failing private septic system.
The gap between 285 and 395 dollars across 48 lots is roughly 63,000 dollars in annual revenue you can capture without filling a single vacant pad.
Step 2: Size the loan and the budget
Bridge proceeds should cover the purchase plus a funded reserve for the capital plan. Separate your budget into two buckets.
Infrastructure capital
- Replace failing water lines.
- Convert septic to municipal sewer where available, or rehab the existing system.
- Repair roads, grading, and metering.
Operational lift
- Bring lot rents to market on a posted schedule that respects local notice requirements.
- Submeter utilities so tenants carry their own usage.
- Fill vacant lots with rent-ready homes.
Step 3: Execute during the interest-only term
Because the loan is interest-only, your monthly debt service stays predictable while you deploy capital and grow income. Sequence the work so revenue gains and expense reductions show up in the trailing financials before the refinance window opens.
Document everything. A clean record of completed infrastructure work and a verifiable rent roll is what turns a value-add park into a financeable asset.
Step 4: Stabilize and refinance
Once occupancy holds and lot rents reflect the submarket, the park supports a permanent loan sized on stabilized net operating income. In the 60 lot example, moving 48 lots to 395 dollars and filling several vacant pads lifts NOI enough to refinance and recover a meaningful portion of your invested capital.
Plan your exit before you close. Know the debt service coverage your permanent lender will require and confirm your stabilized projection clears it.
Common mistakes to avoid
- Trusting seller pro forma rents instead of collected rents.
- Underfunding the infrastructure reserve and stalling mid-project.
- Raising lot rents faster than local tenant protection rules allow.
- Failing to line up the refinance lender during the bridge term.
If you are evaluating a park acquisition, review our mobile home park loan options and bring your deal numbers so we can size the bridge against your capital plan.