MHP w/ 100% POH

I am noticing that most of the MHPs in my price range have 100% Park Owned Homes. To me, this an asset that won’t appreciate. Some articles suggest selling off the MHs so if someone would indulge me, please help me understand this with the purchase of “Fictitious Mobile Home Park” located in the beautiful city of Anytown, USA. Like the MHP. all of my numbers below are made up.

Price is $300,000
10 POH, all 20 years old
10 empty pads
Rent is $300

So if I put 20% down, I have a $240,000 note with $3000 per month income. If the MHs were worth $5000 each if sold and I sell them all to the people living in them, I made $50,000 which I could put toward the loan but now I owe $190,000 and am only making $1000 a month rent (if rent is $100 per pad). How does this make sense?
I decide to expand the park by purchasing some good used MHs at $15,000 each. Plus there is the charge to have it moved to my pad. Is the strategy to sell them or rent them at say $500?

Any advice, opinion or direction is appreciated.

No it does not make sense. First your numbers are not real world so it’s harder to explain. Just get the home study course and you’ll understand why your example is so far off, trust me. For starters you just paid 300k for a park worth 90K at best. Why? You capped a worthless asset. Second once the homes are paid off your income goes down but your payments remain the same. I could go on but just go to the bootcamp

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Thank you for taking the time to respond to my question. What I really need though is for someone not to read the actual number as this is “Fictitious Mobile Home Park” aka “Made up mobile home park” aka, none of this is real. Boot camp is a great suggestion and it is freshly on my to do list but since I just signed up on this site today, I am looking for concept and thought. If the goal of this site is to sell me product and service, it really doesn’t serve the common man. Again, I think the boot camp is almost a must, but please, don’t try to sell it to me out of the gate. If you can give me some advice without looking at the actual numbers, please do advise me. What makes sense? I see selling the Mobile Home to the tenant as loosing income in the long run because they aren’t worth much anyway. Pick numbers you like. Again, this is just conversation at this point.

The reason you sell the homes is because that is a sustainable business plan. Home aren’t worth much and tenants treat them that way. Owners, on the other hand, do tend to take better care of their own home. What that means is that your income is a lot more reliable for renting land as opposed to a mobile home.

On your park above, we’ll just assume a lot rent of $300 with a home rent of $500. That means that your lot only revenue will be $36,000. On the homes side, you’ll get an extra $24,000 per year. It may be tempting to look at that extra revenue and want to keep it, but almost all of that extra revenue (and maybe more) will go back into the homes through constant rehabs. In addition to that those ten homes will cost you a bunch of time, effort, and worry along the way.

Another even more compelling reason to not own the homes is that the tenants stay a lot longer when they own the homes. Communities that are lot rent only typically have a tenant base where the average tenant has been in the park for more than 5 years. On parks that own the homes, that is more like 2 years or less. Having stable, seasoned tenants is a huge plus and what makes this business superior to all other forms of real estate.

My third and finale reason is that I talk to a lot of park owners every week. By far the happiest owners, and the ones who enjoy their park the most, are the ones who don’t own any homes. In contrast to that, I recently talked to an owner who owns all 60 homes in his community. This man was so disgruntled that he was planning on shutting his park down after 32 years of ownership. This wasn’t because his park was losing money, it was to spite the tenants. So, you have to ask yourself, would you rather be happy and mostly hands-off, or would you rather be driven so crazy that you are wiling to spend money to destroy your million dollar asset.


Thanks for posting Charles! Great information and exactly what I was looking for. The tenants in the POHs are really paying for the pad rental and home rental separately to equal $800 in your example, correct? And if someone moved their own mobile home there, they would only pay the $300 for the pad.

To my question on adding homes, would you fill the other 10 pad? And if so, with new or used home? Rent them and the pad or try to sell it from the start so that you only have to rent the pad?

To shut down a profitable park after 32 years, you really have to dislike the people who live their. Wow!

Thanks again! Great information!!!

In considering POHs you need to keep in mind that a depreciating asset like a old mobile is actually a liability not a true asset as it will cost more to keep than it will bring in as income under most circumstances.
In addition when considering selling a low value home to what is essentially, in most cases, questionable buyers you can expect a considerable default rate and costly repairs to resell.
POHs are something that you will be struggling to deal with in one form or another in all likelihood for as long as you own the property.

In determining the type of homes to infill with it depends entirely on the quality of the community and residents. Regarding rent or sell you will not find very much support for renting as in general it is not a good business practice. Cost verses income does not add up from a business perspective. You need to keep in mind more than simply the home rental income. To begin mobile home owners are usually very low on the income scale and with that comes other issues. Mobile home renters on the other hand are, from my experience, considerably lower on the food chain and often have social issues that can make a landlords life immensely more difficult. I am certain many on here can relate their own horror stories of POH tenants.

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This is a great topic as a large number of parks for sale on the mobilehomeparkstore website have almost all if not all, park owned homes. Would one of the more seasoned people be willing to pick one listed and give the pros and cons? Or like the person who started this topic was trying to do, make up a park with possible rents close to what is actually for sale. That person’s numbers were off, but the idea is still there. There is a lot of knowledge out there so if someone would share ideas, it could help a lot of readers.

@JessBell. In the example I used the total rent would be $500 on the homes+lots. This example is fairly typical in large metros for 2-3 star parks. Your typical spread will be $200-$400 when dealing with the home rent over the lot rents. When you evaluate parks, you use an income approach type of appraisal. However, you should only use this approach on the revenue derived from the lots (not the homes). For the homes, you look at what you could sell that home for and that is typically the value you give for it. As Greg stated, the homes are a depreciating asset so you definitely don’t want to buy that income stream as if it would be stable for 8-10 years.

As for filling vacant lots, that is a totally different evaluation. For that scenario, you will need to know if your demand is good enough to go through the effort and you’ll establish the maximum price you are willing to spend on a home against the lot rent of the park. To answer your question on wether you should sell them or rent them, I would sell them. For all of the reasons I stated in my first post.

Frank and Dave do an excellent job of including all of these evaluations and strategies in their books, materials, and courses. Jefferson Lilly and Frank Rolfe have also done a few podcasts in the last year or so and they do a great job of giving an overview of the business. This is not an easy business (especially finding the right park(s) to buy), but it is ultimately well worth it.

When considering the option of POHs you need to ask yourself why you are choosing to invest in a park. The primary reason for most investors is so that they can avoid all the headaches associated with landlord responsibilities maintaining brick and mortar housing. There is next to no profit margin in renting a mobile home so no reason I can see to want to do it.
Consider if as a landlord you would chose to purchase a property in the worst/poorest part of your city, predominantly populated by those living in subsidized housing, as your choice of investment. That is the tenant class you would be attracting but without the profit margin associated with actually owning property in a low rent housing district.
Does operating as a non profit subsidized housing provider simply to be able to collect lot rent sound like a smart business plan.

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Thanks everyone for all the great information. We all have to start somewhere. I really do appreciate you time taking to respond.

“I see selling the Mobile Home to the tenant as loosing income in the long run because they aren’t worth much anyway.”

With all due respect, that statement says you don’t understand the MHP business.
Let me explain:

MHP’s are about renting lots.

The mobile homes are only there so the park owner can collect lot rent.
Everything else is a waste of time and resources.

That is the concept the boot camp drives home.

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JessaBell, I like your comment:
“We all have to start somewhere.”

Yes, you are correct that everyone needs a starting point.

My Husband and I own 2 Mobile Home Parks. We have both Tenant Owned Homes and Park Owned Homes.

Can you make money on Park Owned Homes?
Most certainly yes

In order to make money on Park Owned Homes you need the following:

  • Large Delta Between The Lot Rental Price & The Mobile Home Rental Price: Around $400 Or More Delta Between The Lot Rental Price & The Mobile Home Rental Price
  • Licensed Contractor: Licensed Contractor who works specifically on Mobile Homes. This Licensed Contractor must be reliable and reasonably priced.
  • Mobile Homes In Nice Condition: Mobile Homes that are in nice condition with Rental Prices just under market.

Some of the individuals on the Forum believe strictly in “Lot Only Rentals”.

Yes, in a perfect world would I select “Lot Only Rentals”…most certainly yes.

However, that does not mean that there is not money to be made in “Park Owned Homes”.

“Park Owned Homes” just require more time and attention.

However, money does not grow on trees. It takes time and attention to grow your net worth. Park Owned Homes are just another avenue to grow your net worth.

We wish you the very best!

She needs to take my original advice and take the boot camp, but she didn’t want to listen.

If you think it costs money you’re just plain wrong. It saved me hundreds of thousands of dollars in potential mistakes. Also, I would not have had the ability to structure my current deal without the knowledge I gained from it.

Coach62. So far everyone outside of you has given great advise. While I still believe that the training is a good idea, events surrounding my life in the past 2 months prevent me from being more that a few miles from home. Until such time as life goes back to normal, I must rely on the expertise of the masses to fill in a some gaps. There are some very smart people on the forum.
Here’s my advise to you: If you want someone to buy your product, you really shouldn’t try and bully them into buying it.

Thank you Kristin. That gives me something to think about, just differently. Do you find the POH renters to stay as long as someone who might be in an apartment? Thanks for your insight.

“Park Owned Homes” just require more time and attention.

This is the point of most importance related to POHs. They will in fact require more time and attention (money) then a conventional apartment rental property. Generally the quality of tenant will inflict more ware tear and damage than apartment renters which is where the major commitment to POHs enters into the business plan as a major factor. You need to view the POHs as a entirely separate entity from the rest of the business.
You should view the land rental as a passive income property and the POHs as a ongoing hands on business involving both maintenance/repair and high level tenant management.

JessaBell, as per your question:
“Do you find that POH renters to stay as long as someone who might be in an apartment?”

I am a Real Estate Broker-In-Charge and Realtor.

However, Apartments are not my niche area.

Thus, I am not sure how long an average Apartment Tenant will stay. Perhaps one of the Forum Users (who are knowledgeable in Apartments) can help us in this area. I am always learning and love to learn from others.

Now my Husband and I do own two MHPs and have some POHs in each MHP, so I can give you our experience on MHP and POHs.

For Mobile Home Parks and POHs it really depends on the following:
1.) Your Tenant
2.) Rental Options In The Area Of The MHP

Approximately 9 months ago we rented one of our renovated, older, smaller, 2 bedroom / 1 bathroom homes to two, single, twenty something, men who had recently relocated.

Please note that the description of Tenants is just for Forum explanation.

We do NOT discriminate based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability.

These men were/are hard workers. They were able to get promotions in their jobs during this time frame.

As a result of their job promotions they have moved. Not moved in a bad way…but moved in a good way.

They moved across the street in the MHP into one of our newer, bigger single wides with 3 bedroom / 2 bathrooms.

We have multiple long term Tenants that desire to stay in our MHP, but just move to a little bigger and better home.

We had another couple that have been renting before we even purchased the MHP. They just recently ended up moving two doors down in the MHP to one of our newer, bigger single wides.

The majority of our Renters (that went through our Application Process) still live in our MHPs.

However, there are few (that went through our Application Process) that have left. Below is the breakdown. This is out of 15 POHs in two MHPs during a 1-2 Year Time Frame:
1.) Separated & Getting A Divorce: Ended Up Reconciling With Husband & Moving
2.) Non-Payment: Currently, Going Through The Eviction Process - This Tenant Ended Up With An Out Of State Fairy Godmother Who Paid 6 Months Of Her Rent - Then The Fairy Godmother’s Generosity Ended
3.) MHP Gave 30 Day Notice
4.) Parents “Gave” Them A Brick, Single-Family Home

We wish you the very best!

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Thank you Kristin. Your data is really helpful as we are looking into a MHP with 30 rentals. Based on your estimates around 25% will move out of the park.

Does anyone else have data to provide here with their rentals on purchase and what happened when they tried to convert them into tenant owned homes?

Thank you.

Kristen, thank you for your informative posts. I am considering a 25 space MHP with all POH’s. You mentioned your application process, what is your process? Thanks so much!

Janene, as per your question:
“You mentioned your application process, what is your process?”

My Husband and I are very hands on in our MHPs.

We are both the Owners and the Managers.

We believe that the Tenant Base helps to attract or repel other Tenants.

Thus, we have lots of steps for Prospective Tenants.

We are constantly trying to ‘hone’ our process to make sure that we attract the best possible Tenants.

Below is our Application Process:
1.) Craigslist - List Mobile Home: We create a very detailed ad on Craigslist with lots and lots of pictures and a ‘General Area’ of where the MHP is located
2.) Craigslist - Contact Info: Any Prospective Tenant will need to respond to our Craigslist Ad via Craigslist masked email address (Email is their only option.)
3.) Initial Questions - Prospective Tenant To Answer: Once a Prospective Tenant responds to our Craigslist Ad we have a predefined email response with Initial Questions for the Prospective Tenant to respond to (NO questions are asked that would violate Fair Housing Laws)
4.) Location Of MHP & MH - Info Emailed: Once a Prospective Tenant answers the predefined Initial Questions they are then emailed another predefined email response that includes the Location of the MHP & MH. If they are still interested, they are asked to physically view the area, the MHP and the MH to determine if they would like to go further.
5.) View Inside Of MH: If after physically viewing the area, the MHP and the MH, we will show the inside of the MH. This is done at either an Open House or an individual showing.
6.) Application - Fill Out With $25 Application Fee: If after viewing the inside of the MH the Prospective Applicant would like to go forward, they will fill out an Application, sign the Application and pay a $25 Non-Refundable Application Fee for every adult 18 Years & Older

Since our Application Process is Non-Refundable, we process one Application at a time.

We run an Eviction Report and a Criminal Report. The Prospective Tenant authorizes by their signature that we are able to run these reports on them.

We have been blessed to receive a lot of interest from our Craigslist Ads.

Since we have so much interest, we keep our Craigslist Ads up until the Mobile Home is actually rented. However, we do not ‘renew’ the Craigslist Ad to the top of the list. If someone responds to our Craigslist Ad and we have someone in the Application Process, we let that new Prospective Tenant know that we process one Applicant at a time (however, we will still email them the same Initial Questions just in case the Applicant falls through).

Our MHP is located in a great area and our Rents are just under market.

Today we will have a Navy Gentleman move into one of our Renovated, Older Mobile Homes.

Next week we will have a Marine move into one of our Newer, Bigger Mobile Homes.

We wish you the very best!