401. How to Buy Your First Trailer Park

Key TakeawaysMH parks = land business, not housing business. Owner rents pads, tenants own homes; owner avoids interior repairs and big capex on structures, focusing instead on utilities, roads, and management.Demand is counter-cyclical and supply is shrinking. Parks are the “Dollar Tree of housing,” performing best in downturns; new parks are almost never approved, while 100+/year are redeveloped into other uses.Economics are driven by NOI vs. interest rates. Deals are valued almost purely on income; investors seek cap rates 1–3 points over debt, targeting roughly 10–20% cash-on-cash by raising under-market rents, filling lots, and cutting waste.Expense ratios are lean vs. apartments. A well-run park often operates at 30–40% expenses (lower if tenants pay water/sewer, higher with high taxes or vacancy), compared to ~45–50% in typical multifamily.IDEAL framework for evaluating parks: Infrastructure (city water/sewer, no master meters), Density (lots big enough for modern homes), Economics (spread over debt), Age of homes (prefer 1990s+, paid-off), Location (urban-safe or strong suburban/exurban demand).Moat + controversy come from “stickiness.” Homes are effectively immobile (costly and risky to move), so tenants tend to stay long-term; this creates stable income and investor moat, but also fuels criticism around rent increases and perceived tenant lock-in.