MHP Due Diligence Is Different
Mobile home park acquisitions are not like buying an apartment building. The infrastructure is older, the regulatory landscape varies wildly by state, and the financial records are often incomplete. Skipping even one critical diligence item can turn a promising deal into a six-figure mistake.
Requity Investments has underwritten hundreds of manufactured housing communities. This checklist reflects what the team verifies on every acquisition, not textbook theory.
1. Verify Lot Count and Occupancy Independently
Do not trust the seller's reported occupancy. Walk every lot. Count occupied pads, vacant pads, and pads with abandoned homes. A park listed at 85% occupancy might be 70% once you account for non-paying tenants and homes that are effectively abandoned.
Get a current rent roll with move-in dates and payment history for the trailing 12 months.
2. Confirm Zoning and Entitlements
Many older parks operate as legal non-conforming uses. That means they are grandfathered in under current zoning but cannot expand or rebuild if destroyed beyond a certain threshold. Check with the local planning department directly. Get the zoning designation in writing and confirm what happens if more than 50% of the park is damaged.
3. Test the Water and Sewer Systems
This is the single largest hidden liability in MHP investing. Parks with private well water need water quality testing (bacteria, nitrates, heavy metals). Parks with private septic or lagoon systems need capacity assessments.
Replacing a failed septic system can cost $500,000 or more. A well that tests positive for contaminants can trigger EPA involvement and remediation costs that exceed the purchase price. Always budget for a Phase I environmental assessment and utility inspection.
4. Inspect Roads and Drainage
Private roads in manufactured housing communities deteriorate faster than municipal roads because they are built to lower standards. Repaving a park with 100 lots can cost $150,000 to $300,000. Check for potholes, drainage issues, and whether the roads can handle emergency vehicle access (a fire marshal requirement in most jurisdictions).
5. Review All Leases and Rental Agreements
Lot lease terms vary significantly. Some parks operate on month-to-month agreements, while others have annual leases. Check for any below-market legacy leases, rent control provisions, or tenant protections that limit your ability to raise rents.
In 2026, tenant protection laws are expanding in multiple states. Know your state's rules before you underwrite rent increases.
6. Audit Utility Billing and Expenses
If the park master-meters utilities and bills back to tenants, verify the billing methodology and collection rate. If the park pays all utilities, model the cost of converting to sub-metering. Sub-metering conversions can add $50,000 to $100,000 in annual NOI for a 100-lot park, but the upfront cost and regulatory approval process vary by state.
7. Title Search and Survey
Order a full title search and ALTA survey. Look for easements that cross through occupied lots, boundary disputes with adjacent properties, and any liens from unpaid utility bills or contractor work. In older parks, the legal description on the deed sometimes does not match the actual footprint of the community.
8. Count Park-Owned Homes vs. Tenant-Owned Homes
The ratio of park-owned homes (POHs) to tenant-owned homes (TOHs) dramatically affects your operating model. POHs generate higher gross revenue but come with maintenance liability, turnover costs, and vacancy risk. TOHs provide lower but more stable lot rent income.
Most institutional buyers target communities with 80% or more TOHs. If you are buying a park with a high POH count, your business plan should include a strategy to convert POHs to TOHs over time.
9. Insurance and Flood Zone Check
Get a flood zone determination for the entire property. Even if the main office is outside a flood zone, individual lots may be in a floodplain. Insurance costs for MHCs have increased 20% to 40% since 2023. Get actual insurance quotes during diligence, not estimates.
10. Review Capital Expenditure History
Ask for receipts and invoices for any major repairs or improvements over the past five years. If the seller has not invested in the property, you are inheriting deferred maintenance. Common items: electrical pedestals ($1,500 to $3,000 each), sewer line replacements ($10,000 to $25,000 per section), and tree removal ($2,000 to $5,000 per tree).
11. Market Rent and Comp Analysis
Pull lot rents from competing parks within a 15-mile radius. In 2026, average lot rents nationally are $350 to $500 per month for well-located communities, with premium parks in tight markets pushing $600 or more. If the subject property is significantly below market, that is your value-add opportunity, but verify that local regulations allow the increases you are projecting.
12. Interview the Park Manager and Tenants
Talk to the on-site manager (if there is one) and at least five tenants. Ask about maintenance responsiveness, community issues, and any recurring problems. Tenants will tell you things the seller will not: which lots flood, which neighbors cause problems, and whether the water pressure drops in summer.
Bottom Line
Thorough due diligence on a manufactured housing community takes 30 to 45 days and costs $15,000 to $30,000 in inspections, surveys, and environmental testing. That investment protects you from surprises that can cost 10 times as much after closing. If you are evaluating an MHP acquisition and need bridge financing to close, Requity Lending funds mobile home park loans in as few as 5 business days when your file is fully prepared, typically within 10. Request a term sheet to move on your next deal.