This case study illustrates how bridge financing enables mobile home park acquisitions that conventional lenders will not touch. The deal details have been generalized to protect borrower confidentiality, but the structure, timeline, and economics reflect a real transaction pattern common in our lending portfolio.

The Opportunity

A 68-lot manufactured housing community in a secondary market in the Southeast was listed for sale by a retiring owner-operator who had managed the property for over 20 years. The park had solid infrastructure (city water and sewer) but suffered from deferred maintenance and inconsistent management. Occupancy sat at 60%, with 27 vacant lots and several abandoned homes. Lot rents were $225/month in a market where comparable communities charged $350-$400/month.

The asking price was $1.1M, reflecting the property's underperforming condition. At stabilized operations, the estimated value was $2.2-$2.5M.

Why Bridge Financing Was Necessary

No conventional lender would finance this deal. The 40% vacancy rate, below-market rents, and deferred maintenance made it ineligible for agency debt or traditional bank financing. The seller also wanted to close within 30 days, making a conventional timeline impossible even if a lender would approve the deal.

The Financing Structure

  • Bridge loan: $825,000 (75% LTV on purchase price)
  • Improvement holdback: $180,000 (for infrastructure repairs, lot preparation, and home placement)
  • Total bridge facility: $1,005,000
  • Rate: 10.5% interest-only
  • Term: 18 months with option to extend 6 months
  • Borrower equity: $275,000 (for down payment plus closing costs)

The improvement holdback was structured with milestone-based draws: funds released as specific work was completed and verified.

Execution Timeline

Months 1-3: The borrower took over operations, installed a professional property manager, and began infrastructure repairs. Water line repairs and electrical upgrades were prioritized. The first lot rent increase was announced with 60-day notice, moving rents from $225 to $275/month.

Months 4-8: Vacant lots were cleared and prepped. The borrower sourced 12 used manufactured homes at an average cost of $8,000-$12,000 each and placed them on vacant lots for rental. Community amenities (common area, signage, lighting) were upgraded.

Months 9-14: Occupancy reached 92% (63 of 68 lots). A second rent increase brought lot rents to $325/month, still below market. Monthly NOI stabilized at approximately $14,500, up from $5,800 at acquisition.

The Exit

At month 14, the borrower refinanced into a Freddie Mac manufactured housing loan at 6.2% fixed for 10 years. The appraised value came in at $2.35M based on stabilized operations. The permanent loan of $1.65M (70% LTV) repaid the bridge facility in full, returned the borrower's equity, and provided approximately $370,000 in cash-out proceeds for the next acquisition.

The Numbers

Total capital invested: $275,000 borrower equity + $180,000 in improvements = $455,000. Value created: $2.35M appraised value minus $1.28M total cost basis = approximately $1.07M in equity. Return on equity: over 230% in 14 months, plus ongoing cash flow from the stabilized asset.

Evaluating a similar opportunity? Requity Lending provides bridge financing for manufactured housing acquisitions with term sheets delivered in 48 hours.