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.

Have a similar MHP deal? Learn about our MHP bridge loan program or submit your deal.

Key Takeaways for MHP Investors

This deal pattern repeats across our lending portfolio with surprising consistency. The ingredients are the same each time: an undermanaged park with strong underlying fundamentals (good infrastructure, decent location, real housing demand), a motivated seller who cannot or will not invest in the repositioning, and a borrower with the operational capability to execute a defined business plan within the bridge loan term.

The mistakes that derail these deals are also consistent. Borrowers who underestimate infill costs (budgeting $6,000 per home when the real cost is $10,000 to $15,000 delivered and set up), borrowers who assume rents can be raised immediately without notice periods and community communication, and borrowers who wait until month 10 of a 12-month loan to start the permanent financing application. The borrowers who succeed plan the exit from day one and build a 3-month buffer into every timeline assumption.

Frequently Asked Questions

Can I get a bridge loan for a mobile home park with high vacancy?

Yes. High vacancy is one of the primary reasons MHP buyers need bridge financing in the first place. Conventional lenders require stabilized occupancy (typically 85%+), so value-add parks with 50-70% occupancy are only financeable through bridge or private capital. Requity Lending underwrites to the stabilized potential, not just trailing income, which is how we fund deals that banks decline.

How much does it cost to infill vacant lots in a mobile home park?

Budget $10,000 to $20,000 per lot for a used home (purchase, transport, setup, and connection to utilities), or $40,000 to $70,000+ for a new home. Used homes provide faster ROI for value-add investors. Many operators source used homes from dealers, park closures, or individual sellers within a 100-mile radius to minimize transport costs. Lot preparation (grading, utility connections, pad work) adds $2,000 to $5,000 per lot depending on existing infrastructure.

What is the typical timeline to stabilize a manufactured housing community?

Most value-add MHP repositioning plans take 12 to 18 months from acquisition to stabilized occupancy. The first 3 months focus on infrastructure repairs and operational upgrades. Months 4 through 10 focus on infilling vacant lots and implementing rent adjustments. Months 10 through 14 typically see the property reach stabilized occupancy, at which point the borrower can begin the permanent financing application. A realistic timeline with built-in buffers is critical when structuring the bridge loan term.