Lease a MHP?

After attending Tony and Scott’s motivating boot camp last August, I offered to purchase a mobile home park I have been running by myself with no help for several years. The owners informed me the land

is worth much more than a mobile home park, they are only holding on to it for the appreciation of the land, which is incredible.

I gave them notice I was going to move on to other things and to find a new

manager and good luck finding one as dedicated as I was/am.

They are now suggesting that I lease the mobile home park only and they of course will hold title to the land. I am very excited about the prospect

but do not know where to start.

Please, I need a little feed back from the vast knowledge that is out there among my peers?

Thank You


It all depends on your goals and the terms. Will it pay you enough to make it worth your time, what is your cut? Can you get a long term lease with a stiff early termination clause. Is the park full? Do you live there? What are your short term and long term goals? It is a great thing to have on your “resume” when you do try to buy a park. How long do you think it will be until it is sold for higher and better use? Will you be ready then to buy a rearby park and shuffle the homes over to that park? Could be a win win but set it up so you make money.

Hey Jim!

Great to see you taking action!!!

You may be on the right track with this deal but working the numbers backwards like we taught will tell if this deal makes sense from a cash flow standpoint or whether or not the sellers are trying to make the “higher and best use” profit they believe the land alone represents.

As much as it may be nice to buy the park you are so familiar with, if the seller is not reasonable or motivated, you may not be able to reach terms that make it affordable. No problem, there will be other deals.

Greg Meade has written some great posts recently regarding his use of the lease/option strategy to control parks. Take a look at Greg’s posts and please post any questions you may have.

Be sure to understand your exit from this property and how you will get it financed (if you intend to keep the park) or if you are simply looking to flip the park using the option.


I am looking at a park with 50 rental homes. It’s adjacent to a golf course, and the owner thinks it’s a gold mine. He is firm on his price and the golf course has declined to purchase it for what he’s asking, but he owns it free and clear and is open to some kind of lease with option. This may be the type of deal that only makes sense for cash flow, and I may never exercise the option. I will structure my offer with as long an option period as possible, and maybe in 10 years it’ll be worth his price. So it’s similar to your situation. My main concern is that it pays me very well for the headache of running it day-to-day.

You need to find out about the underlying financing and determine what the property’s debt service requirements are. That’s not set in stone, and it’s possible that they can refinance to make it a better fit for you, but that’s a starting point. You’re also going to need P&L statements and your own projections based on how you’ll run it, like Tony and Scott talk about in the boot camp. There may be plenty of money for you in this deal even without the land. And you’re miles ahead of anyone else being so familiar with the park.

Hopefully Greg Meade will chime in here.


Let me see if I understand this correctly. The owners will lease your the park for x number of years but they will hold the land until it appreciates to highest best use. Then they will sell it out and you will have what? So you will run their park til they get a great deal. I would only do this if the lease gave me Big payday each month. Unless you are careful on the lease they will have their cake (income with no worry) and eat it too (you take over all the work/worry). If I owned a park I would do this in a heartbeat. The best you will have is a good paying job for a few years at best. The other post seem to suggest you will have a lease opition, but I think you are just talking lease. So good luck and let me know if I misunderstood. I would do land home packs or get my own small park. You are still working for someone else. Best of Luck , Garry

I want to thank every one for of you for your posts. You make me feel like I am not alone.

A few facts that I know: The park (built in the 50’s) was inherited by three siblings several years ago.

When I came on board it was in the red. Tenants had not paid for up to three years. Cops visited every weekend. I was led to believe if I worked hard for small pay some day (maybe) I could buy into the pardnership. Not!

Six years later: The park is paid for and has no debt. All of the drug and alcohol problems are history and the sheriff’s department congradulated me this year in that they had not had to visit our park in over three years.

The park has a waiting list. Parks are not being built here they are being torn town down for the higher and better use.

I talked with the park’s accountant today about the lease. I need at least a five year lease which she thinks would be workable as the owners have other business interests that requires all their time.

I own a third of the homes in the park the rest are owner occupied. I could raise the space rent 30 to 40%. Thats how far below market it is. All my homes have paid for themselves and then some as we live in the highest rental bracket in the state of Colorado. If I negotiated a lease that ended in five years I could walk away and not have lost any money and hopefully made some.

The accountant is trying to put numbers together based on some kind of an income approach going five years out to base what I would pay yearly. She is trying to be cautioius as she is my accountant too. So she is only going to open the negotiating table with a suggested number.

I believe that the next step is going to be what my yearly lease will be and

what the park nets. With this information I will be able to see if I can actually make the money I feel this job should pay.

I don’t think a lease with option would be what I want. Hopefully without an option in the lease I can enter into a lease with none of my money invested in the deal.

Again thank you for your posts as each one helps me look at something you have seen and lets me test drive your ideas.

I will let you know what happens, hopefully by the first of the year.

Thanks for the clarification. Since they don’t owe anything on it, I’d squeeze them as tight as possible on the lease payments. If this scenario is to work, they get the appreciation, you get the cash flow.

Don’t let the accountant choose the lease number! It’s YOU who decides what it’s worth to continue to run the park. And shoot high! Do you want $200 or more per unit in your pocket? Use current rents to achieve this number. Any lot rent increases belong to YOU, so don’t pay for them up front. It sounds like the hard work is done as far as turnaround, but you’ve probably been paid minimally for the truly hard work. You’ve been misled about the partnership. Make it totally worth your while or walk away. Don’t let the accountant in on the fact that rents are below market. This is your ace in the hole and your reward for learning your job and knowing the market.

Good luck.


I totally agree with Lin. Let us look at the facts:

  1. You have done the heavy lifting of cleaning up the park & have had minimal reward for it. To put it delicately, the owners cannot be trusted to reward you “someday”. I am not saying they deliberately cheated you, but the point is you have not been adequately compensated for your work. You need your reward now in the form of significant monthly rent.

  2. The owners do not seem to care about monthly income, holding the park for appreciation. Their other business interests apparently take care of their needs. BTW, think about this. What if you had not cleaned up the park & it deteriorated even more. Does it ever happen that towns invoke eminent domain or other cute things to take over undesireable property? What happens to the owners then? Hint: no highest & best use & no big payday.

  3. Given the above,you have proven that you are a very valuable employee, almost irreplacable. Anyone who has suffered with the typical lousy employee will appreciate that. Your compensation should be sufficient for you to purchase your own park at the end of the lease. And also during this time you will continue to build your local contacts & reputation.


would allow you to lease the proerty and owner owned homes for possibly 1/4 of the actual CURRENT cash flow. You would pay insurance and taxes and maintain homes. Any increase comes directly to you. You will need POA to transact business and pay bills.

Substitute 1/10 or 1/5 if the above numbers don’t work. You will have 5 years of excellent cash flow with very little out of pocket. Win/win.

Try to get an option for 500 or so to get first right of refusal at 1K per home on park owned homes. In a sale, these will be the first to go…maybe make decent dough selling off these homes AFTER the sale. E mail me for a killer lease with option.

Just my .02 and worth exactly that LOL

Greg Meade

thanks greg,

 A master lease would be a master tool for me at this time as time is of the essence. 

 I tried to find the lease you are referring to in the creonline archives.

The message is that it is unavailable at this time.

 Certainly would appreciate a path to this lease.


jim paquin

this afternoon to show 2 homes…will e-mail you my L/O. The lease will do the trick for master lease with some tweaking…disregard the Option and Estoppel Letter. Or maybe use the letter if it fits your deal…this could be a VERY good thing for all concerned.

Good Luck Jim,

Greg Meade