Mobile Home Park Due Diligence: The 12-Item Pre-Close Checklist
The 12 items every MHP buyer must verify before close — septic, surveys, leases, and more.
Infrastructure: Where Most Re-Trades Happen
Half of MHP re-trades originate in infrastructure findings. Septic and well systems sit at the top. On any park with a septic system, pull the operating permit, the last three pump-out records, and the engineer's capacity letter. Septic systems have finite remaining life, and a $400K replacement on a 100-pad park completely changes the deal economics. On well water, demand a current water-quality test plus historical data — coliform issues require state remediation that takes 6–18 months and severely limits financing during the cure period.
Surveys come second. Pull the as-built survey and physically count lots; it is shockingly common for a park advertised as 95 lots to survey at 91 once non-conforming lots, easements, and right-of-way encroachments are removed. Each phantom lot costs you the lot rent it was supposed to produce — and at a 7% cap, four phantom lots at $300/month is $206K of valuation that doesn't exist.
Roads, drainage, and utility infrastructure round out the physical DD. A park with private roads needs a road-maintenance reserve; a park in a flood zone needs flood insurance modeling; a park with master-metered utilities is leaving sub-metering revenue on the table that a sophisticated buyer would have already captured.
POH Titles, Leases, and Tenant Records
On any park with park-owned homes, verify each home's title is in the seller's name. We have seen parks where 30% of advertised POH was titled to relatives, prior owners, or LLCs unrelated to the seller — and the buyer had no claim to those homes after closing. The fix is a title-by-title spreadsheet with VINs and current title images, not just a count.
Lease records are the second deep-dive. Pull the lot-lease forms and reconcile every active lease against the rent roll: name, lot number, lot rent, lease expiration, whether the form is signed, whether the form is current with state-required disclosures. Half of small parks operate on month-to-month verbal arrangements and can't produce a lease for any unit. That's not necessarily fatal but it is a financing-friction issue that needs an LOI-stage discount or a remediation plan.
Tenant ledger reconciliation is the third leg. The rent roll says who is supposed to pay; the ledger says who is actually paying. Delinquent units count differently for vacancy purposes, and the lender will want to see the gap.
Zoning, Permits, and Non-Conforming Use
A meaningful percentage of operating mobile home parks are non-conforming uses under current zoning — they were built before zoning passed or before the current code's adoption. Non-conforming status usually means the park can continue to operate at the current lot count, but cannot expand, and may lose grandfathered status if operations cease for a defined period (often 6–12 months).
On any non-conforming park, get a non-conforming-use letter from the local zoning office in writing. The letter should confirm the current operation is grandfathered, state the conditions under which the grandfathering would be lost, and identify any open code-enforcement actions. Without this letter, you are buying the park at the seller's representation about zoning — and zoning is not the seller's call to make.
Permits matter too: certificate of occupancy on each park-owned home, septic operating permit, well operating permit, mobile home park operating license where the state requires one (check Florida, Texas, California, and Minnesota especially). Missing any one can stop the deal at the closing table.
The Financial DD: Reconciling the Story
On the financial side, two reconciliations matter. First, the seller's tax returns vs the rent roll: pull the last two years of Schedule E or 1065/1120-S returns and reconcile rental income to the rent roll. Discrepancies of more than 5% need explanation — usually they trace to non-reported cash income, related-party transfers, or a rent roll being padded for sale.
Second, the operating-expense detail vs industry benchmarks. MHP expense ratios on stabilized parks run 30–40% of EGI. A seller showing a 22% expense ratio is hiding something — usually a chunk of expenses is being booked through a related entity, or capex is being booked as expense, or both. Get the 24-month general ledger and walk it line by line.
Get all 12 items on the checklist — infrastructure, POH titles, leases, tenant ledger, surveys, certificates of occupancy, sub-meter reads, environmental, road maintenance, zoning, tax/operating reconciliation, and operating-license confirmation — before the inspection period closes. Skipping any of them is asking the seller to keep your earnest money.
Surface MHP Risk Flags Before Earnest Money →
Run any park through the 12-item DD screen — POH titles, septic, surveys, sub-meter audit, zoning, environmental. Know what to verify before you wire EMD, surfaced from the OM and rent roll automatically.
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