MHP Investing Guide

Has a sponsor pitched you a Mobile Home Park (MHP) deal and you ask yourself…

“Why would I invest in a trailer park??” 

This is a normal reaction.

A better question is: 

“If you could invest in a low supply, high-demand product, why wouldn't you?”

In this article, we explain the MHP space and why we’re bullish. 

Even if you don’t invest with us, we want you to be excited to look at the next offering that hits your desk.


MHP Education
1. History of MHPs
2. What are Mobile Homes
3. What’s a Mobile Home Park (MHP)
4. Types of Homes
5. MHP Utilities

MHP Investing
1. Stable vs. Value-Add

Reasons We're Bullish
1. Demand For Affordable Housing
2. Stable Tenant Base
3. Generational Ownership Shift


Let’s clear the air about MHPs.

MHPs suffer from dramatized bad press (John Oliver) and negative stereotypes (Trailer Park Boys).

Believe it or not (insert sarcasm), MHPs are filled with wonderful people who love living in their communities.

With that, let’s dive in!

MHP Education

History of Mobile Homes / Manufactured Housing

The RV and Trailer Era (Early 20th Century):
The early 20th century marked the development of recreational vehicles (RVs) and trailers designed for leisure travel. 

One notable example is the "Covered Wagon" travel trailer introduced in the 1920s.

During the Great Depression, economic hardships led to an increased interest in more affordable housing options. 

These structures were often built on truck or car chassis.

Trailer park in San Diego

Post-World War II Expansion (1940s-1950s):
Following World War II, there was a surge in demand for housing as returning veterans sought places to live. 

The GI bill, plus a housing shortage, and the availability of surplus military materials led to the growth of the mobile home industry.

The term "mobile home" was coined during this era, but these structures were not truly mobile in the modern sense. 

They were often difficult to transport long distances and required substantial setup at each location.

The Manufactured Housing Act (1976):
In 1976, the U.S. government enacted the National Manufactured Housing Construction and Safety Standards Act, also known as the HUD Code. 

These homes were required to meet specific regulations regarding design, construction, energy efficiency, and safety.

The introduction of the HUD Code brought about a distinction between "mobile homes" and "manufactured homes." 

Manufactured homes were now built to higher standards and were often larger and more permanent in nature.

Evolution and Modern State (Late 20th Century-Present):
Manufactured homes continued to evolve, with improvements in design, construction, and quality. 

Modern manufactured homes are often indistinguishable from traditional site-built homes and come equipped with amenities comparable to those found in conventional houses.

A note on ‘Mobile Home Eras’  design, construction, energy efficiency, and safety.

As time progressed, homes became larger. Below is a home size progression over time. 

      - 1950’s: 8 - 10 ft. wide x 30 - 50 ft. long. Flat Roof
      - 1960’s: 10 - 12 ft. wide x 40 - 56 ft. long. Flat Roof
      - 1970’s: 12 ft. wide x 50 - 66 ft. long. Slightly rounded roofs
      - 1980’s: 14 ft wide x 60 - 80 ft. long. Rounded and peaked roofs
      - 1990’s: 14 - 18 ft. wide x 70 - 80 ft. long. All peaked roofs. 
      - 2000’s: 14 - 18 ft. wide x 70 - 80 ft. long. All peaked roofs
             - Includes Doublewides

What are Mobile Homes / Manufactured Homes

Although the terms ‘mobile home’ and ‘manufactured home’ are used interchangeably, all homes built after the Manufactured Housing Act of 1976 are technically considered manufactured housing. 

Here are the key characteristics of a mobile home: 

Factory Construction:
Manufactured homes are built in a controlled factory environment, where quality control measures are enforced. This results in homes that meet specific HUD construction and safety standards.

Clayton Homes Factory

These homes are designed to be transported on their chassis to their final location. This mobility allows for flexibility in placing the home on various properties.

Manufactured homes typically have a steel chassis that provides structural support during transportation. Once in place, the chassis might be concealed or integrated into the home's design.

Singlewides and Doublewides:
Singlewides are less than 18 feet in width, whereas Doublewides are greater than 20 feet in width. 

Doublewides typically consist of two attached singlewides, thus making a structure of 36 feet in width.

Given the increased size, double wide homes generally offer more square footage and a more spacious layout compared to single wide homes. 

They often feature a more diverse range of floor plans and may include amenities such as multiple bathrooms, larger kitchens, and more open living areas.

What’s a Mobile Home Park (MHP)

A Mobile Home Park is a collection of mobile homes that creates a self-contained community. 

Sounds simple enough, but an MHP has a few specific characteristics: 

Land Lease
In a mobile home park, residents typically own the home itself but lease or rent the land or lot on which the home is situated. 

This arrangement allows residents to have a stable living environment while avoiding the costs associated with owning land. 

Affordable Housing vs. Lifestyle
There are essentially two types of park: affordable housing and lifestyle. We focus primarily on affordable housing. 

MHPs are the best market-driven provider of affordable housing in the US. 

The cost of living in a manufactured home is lower than that of a traditional site-built home, making it an accessible housing choice for folks with limited financial resources.

Lifestyle parks are often called Mobile Home Communities (MHCs). 

These communities typically provide amenities such as swimming pools, playgrounds, clubhouses, and organized social events. 

Family Parks vs. Age-Restricted Parks

Family Parks 
These parks welcome residents of all ages, including families with children. They often provide amenities suitable for families, such as playgrounds and open spaces. 

Age-Restricted Parks
Also known as senior parks or retirement communities, these parks are designed for individuals typically aged 55 and older. 

These parks may offer amenities geared toward seniors, such as fitness centers, walking trails, and community centers.

Types of Homes

Park-Owned Home (POH): 
A POH is a home that is owned by the management or ownership of the park itself rather than by an individual resident. 

In this arrangement, the park operates as both the owner of the land and the owner of the home situated on that land. 

Given the park owns the home, a POH resident pays two rents: 
      - Home rent - the rent for the home itself
      - Lot rent - the rent for the land

With a POH, the park owner is responsible for all the functions of a typical property manager. Home maintenance, repairs, etc. 

These homes generate more cash flow, however they require more management. 

Tenant-Owned Home (TOH):
A TOH is where a resident owns the mobile home that they live in but rents or leases the land or space within the mobile home park on which the home is situated. 

Given the tenant owns the home, they only pay a lot rent and maintain the home themselves. 

These homes don’t generate as much cash flow, however the homes require no maintenance. The park owner is only responsible for maintaining the infrastructure and the park itself. 

Utilities in an MHP

MHPs provide essential utilities such as water, electricity, and sewage connections. 

Water and electric utilities are fairly straight forward in how they’re provided to the community. Infrastructure exists, and the utility is brought to the community. 

However, in terms of payments, they are either 
a) billed back through a master meter or 
b) direct-billed

For master metering, the park has a single meter for the entire park. 

Costs are tallied up then billed back to the residents based on factors such as lot size, occupancy, or other allocation methods. 

Direct billing involves installing meters at each mobile home to measure usage. Residents are billed for their individual consumption and pay directly to the municipality.

Sewer systems are a little more nuanced. They vary widely but generally are split into two groups: public vs. private.

Public Sewer System
Some mobile home parks are connected to a public sewer system, which means that the park's wastewater is transported to a centralized sewage treatment facility operated by the local municipality or utility.

This setup is similar to how sewage is managed in traditional residential areas.

Private Sewer Systems
In parks located in more rural areas, private septic systems are very common.

Septic Tanks
Typically one septic tank will serve several homes.

Septic tanks collect all fluids, organically break down into effluent, and then the effluent is cleaned through the soil.

Park owners are responsible for maintaining septic tanks.

Lagoon System
A lagoon system involves the use of large, shallow ponds or basins to treat wastewater through natural processes of sedimentation and bacterial breakdown.

Lift Stations
In cases where the terrain is not conducive to gravity-based wastewater flow, lift stations might be used.

Lift stations use pumps to move wastewater from lower to higher elevations, enabling the sewage to reach the appropriate treatment or disposal site.

Package Treatment Plants
Some mobile home parks might have their own small-scale wastewater treatment plants, also known as package treatment plants.

Shared Sewer Infrastructure
In larger mobile home parks, a shared sewer system might be established, with a network of pipes collecting wastewater from multiple homes and directing it to a treatment or disposal point.

Differences between MHPs and RV Parks
We get this question a lot. 

There are a few key differences, but here’s the shortcut: 

RV Parks are generally short-term hospitality and MHPs are long-term affordable housing. 

Below is a larger breakdown:


Housing Type

Duration of Stay



Mobile Home Park

Affordable Housing


Either tenant-owned or park-owned homes

Permanent utilities like water, sewage, electricity, and gas

RV Park



Park owns the lot

Temporary utility hookups for water, sewage, electricity, and sometimes internet and cable TV

MHP Investing Strategies

Wealth Preservation vs. Multiplication
Investing in MHPs offers two primary approaches: wealth preservation and wealth multiplication. 

These translate to either acquire stabilized parks or value-add parks

Wealth Preservation / Stable Parks
Wealth preservation focuses on acquiring stable parks with strong, existing cash flows. 

The goal here is to basically buy-and-hold then make regular distributions to investors. 
Here’s a scenario: 

Stabilized Scenario

Total Pads

75 Pads

Occupied Pads

75 Pads

In-place Lot Rent


Market Lot Rent


After rent increases, this leads to the following income projections


Gross Rental Revenue

Est. NOI w/ 35% Expense Ratio


$382,500 / Year

$248,300 / Year


$405,000/ Year

$263,250 / Year

These don’t require tons of management because the heavy lifting has already been done. 

However, as you can see, there’s not a great deal of wiggle room to raise rents and offset expenses. 

This is why purchase price is the biggest success factor in these parks. 

On its face, this strategy falls within the lower risk / lower reward spectrum. 

However, if you buy at too high a price and can’t meet payments, this becomes a riskier strategy. 

Wealth Multiplication / Value-Add Parks
Wealth multiplication involves increasing value through infilling empty lots, improving amenities, and raising rents. 

Value-Add Park With Many Empty Pads

Value-Add Scenario

Total Pads

75 Pads

Occupied Pads

75 Pads

Vacant Homes

25 Homes

In-place Lot Rent


Market Lot Rent


After infilling homes and raising lot rents, it leads to the following income projections


Gross Rental Revenue

Est. NOI w/ 35% Expense Ratio


$150,000 / Year

$97,500 / Year


$405,000 / Year

$263,250 / Year

Raising existing rents to market levels, renovating and filling vacant homes pushes NOI from $97,500 to $263,250 / year. 

This increased revenue ultimately helps better deliver investor returns…

However, it could take several years. 

The risk with value-add lies in execution. 

A turnaround project has more moving parts, and thus requires more coordination, and management. 

Very doable but requires a tad more than just collecting rent.

3 Reasons We’re Bullish

Venture Capitalist Marc Andreesen wrote a classic article on product / market fit with a useful quote: 

“When a great team meets a lousy market, the market wins…

When a lousy team meets a great market, the market wins.”

 A great market underpins our entire thesis. 

3 Driving Market Factors
     1. Strong Demand For Affordable Housing
     2. Stable Tenant Base
     3. Generational Ownership Shift

Reason 1: Strong Demand for Affordable Housing

Simply put, there’s not enough affordable housing supply to meet the demand…

Nationwide, over 10.8 Million households in the US need affordable housing. 

But only 4 Million Affordable Units currently exist…

meaning there is nearly a 7 million unit shortfall

These trends play out similarly at a state level. 

For example, below is relevant data for the state of Tennessee

Tennessee Affordable Housing Stats

Tennessee Low Income Renter Stats

NLIHC Housing Needs

$26,500 / Year (Before Taxes)

$23,320 / Year (Est. After Taxes at 12%) 

$23,320 / 12 Months 

$1,943 / month take home

Not exactly lots of spare cash lying around. 

Tennessee Rental Stats

Here’s a table of what average take home funds are after paying rent in Tennessee


Avg. Rent

Avg. Rent




1 Bed Apt.



2 Bed Apt.



3 Bed Apt



Note: This is aggregated over the whole state, each city is different

Housing Stock

Housing Shortfall: 129,343 units

NLIHC Housing Needs

Given the large shortfall, demand for the product is rather high. 

Reason 2: Stable Tenant Base

The average length of stay for a multi-family apartment building is 3 years. 

The average tenancy for a mobile home park tenant is nearly double that at 7 years. 

Some parks have average stays of 13 years or longer. 

The reason for this comes down to the cost of moving a mobile home. 

Although they’re called mobile homes they’re…not so mobile.

The cost to move and set up a home is $5k - $10k. This is a high figure for most residents so…

they end up staying put.

Reason 3: Generational Ownership Shift

Baby boomers make up about 70 million people. 

Over the next decade, these folks will reach retirement age. 

What does that mean for their businesses?

Of that 70 million, they own an estimated 12 million businesses. 

Over the next decade, over 8.4 million (70%) of these businesses are expected to change hands.

Mobile home parks fall squarely in this category. 

Many parks have been owned by boomers for decades and the owners are ready to retire. 

This means more and more parks will change hands over the next decade.


These three driving factors are the main reason we’re so bullish on the MHP asset. 

Not only is there a high demand for the product among residents, all data indicate that the supply shortfall will not alleviate pressure in the next decade. 

What really excites us about the asset is the generational ownership shift. 

Over the next decade, we expect a large wave of wonderful parks will come available, and we hope to capitalize on that.