I would argue that the most exciting day in acquiring a new mobile home park isn’t closing day, but rather the day the sales contract gets executed. That moment holds so much hope and promise. Reality hasn’t set in yet, and all the focus has been on getting the seller to the table and to sign the contract. It might have taken months or even years to reach this point—numerous calls, trips, and hours spent going over contracts and numbers to make the deal work for both parties. So, when the contract is finally signed, there’s pure excitement, a victory over all the stress and back-and-forth.
But any seasoned investor knows that victory is only the beginning. It’s far from over.
On the opposite end of the spectrum, the most stressful day is when you start raising capital to purchase the deal. All the hard work and conviction have to be conveyed in a few documents and presentations to potential Limited Partners (LPs). Will they like it? Will I be able to raise the necessary capital? What questions will they ask, and will they agree with my assumptions and projections?
For many LPs, it can be a confusing time. They might not have heard from the General Partner (GP) for months, or even all year, between investment opportunities. As a Capital Raiser and Mobile Home Park Operator, we often get so focused on managing our properties and raising capital for deals that we forget to share the journey it took to get here.
The Importance of the Journey, Not Just the Result
Last year, I ran into this during a $2.5 million capital raise. I had LPs who had expressed interest in investing with me, but I hadn’t communicated with them since the previous raise a year before. I didn’t have an abundance of opportunities to bring to them, and I assumed they only wanted to hear from me when I had something concrete.
I was wrong.
When I started emailing and calling, I hit a brick wall of rejection. The questions and responses I received were generally negative, and LPs weren’t excited about the opportunity I was presenting.
What I realized was that they only saw the result—not the journey. They didn’t understand the work it took to get to this point, or that I had passed on countless other deals before bringing them this one. They weren’t aware that this opportunity was chosen because it was, in my view, the best.
This made me rethink how I, as an Operator, should be sharing the journey, not just the final product.
The Long Road to a Good Deal
In 2020, I spent most of the year learning about mobile home and RV parks and trying to figure out how to buy them.
By 2021, I had chased two deals but made zero offers, mainly because I was hesitant and unsure of how to make the numbers work. More Importantly I lacked confidence in my ability to raise the capital, causing me to hesitate on pursuing them more competitively.
In 2022, I became more vocal about my pursuit of mobile home parks, investing heavily in marketing and calling over 1,800 park owners. I visited five parks and made six official offers, eventually buying one.
In 2023, I ramped things up. I revisited those 1,800 owners and added brokers and wholesalers into the mix. I signed up for real estate groups and buyer lists to get more off-market deals. I made 18 offers, visited five parks, purchased one, and contracted another to close. We put 2 others under contract with a wholesaler that did not end up moving forward to Due Diligence. I flew to two different states, drove through a dozen more parks, knocked on owners doors, and sat in the kitchens of sellers who weren’t quite ready to sell. The amount of work I put in from the previous years was significantly increased. It paid off with the purchase of our second Mobile Home Park with an RV park component.
By 2024, I had fully analyzed and officially offered on 34 mobile home parks,while also flying and driving to three different states to visit nearly two dozen communities in person. I raised capital and closed on our third Mobile Home Community. The better part of the year I spent meeting with sellers, agents, and wholesalers at three different parks we were negotiating, but had to cancel the one new deal we had gotten under contract.
The Deals That Didn’t Happen
2023 the Year of Wasted Time
In 2023, I had two specific parks under contract with the same wholesaler. They were in close proximity to each other so I was excited to create a new presence in a well populated metro. I flew to North Carolina to meet with the seller of one park and the property manager of another. While I was boarding the plane, the seller called to tell me he no longer wanted to sell. I had already booked the trip, and sitting in my seat, so I told him I was coming anyway. He agreed to meet me anyway. I met him, we walked the property, but he was not changing his mind.
We met and he showed me the park and the homes, but no matter what I said, his mind didn’t change. The second park? The property manager didn’t want to accompany me for a walkthrough because it was “too dangerous”, she said. She told me to come to her office and get the keys, I could go myself and meet the tenants if I wanted. I had to walk it alone. Tenants told me horror stories, and I soon realized the seller hadn’t disclosed the delinquency and crime issues in the community. The lack of management from the 3rd party property manager caused significant deferred maintenance. For the price being requested and the work needed to improve it, it just didn’t make sense. I had to cancel both deals. I was upset and felt defeated, a lot of work to result in nothing new to add to our portfolio.
A Close Call in 2024
In 2024, I contracted a community in a wholesale deal that seemed promising. The seller offered seller financing, and we needed to move quickly. They wanted to close shortly after the due diligence period ended, which gave me little time to complete the necessary checks and raise the capital.
The deal seemed exciting at first—36 lots for $700,000 with $50,000 down and a 5% interest rate over five years on a 30 year amortization schedule. The park was only making $5,500 a month, but with lot rents at $125 and home rents at $450 (both significantly below market), there was immediate upside potential. The park was supposed to have 24 occupied homes and 12 vacant lots, and everything looked viable.
Due Diligence Begins
As soon as the contract was signed, I began the due diligence process. I collected rent rolls, mobile home information, opened the title process, placed our deposit, and started diving into the park’s financials and details. The seller was slow to provide the needed information, but I persisted. I also reached out to the city for zoning information, and a helpful wholesaler connected us with city officials for a site visit. We ordered a survey, contacted our insurance agent for quotes, and scheduled a walk-through of the park.
Red Flags Appear
During the site visit, the first red flag popped up. The home placements weren’t aligning with the lot count stated by the seller and the county. Instead of 36 lots, I could only count 27. We tried to confirm the lot count with both the seller and the county, but the seller was adamant we were wrong. We found out of the 12 vacant lots we were told about, we would need to move or rotate six homes to open up six more lots, and another four would require clearing land and installing utilities—none of this had been disclosed.Then came more issues. The park was supposed to have 19 tenant-owned homes, but we discovered it only had 11, with just nine being occupied.
Pushing Forward Despite Concerns
Despite these issues, I continued. By then, we’d already initiated the syndication process, hiring our attorney to draft the necessary legal documents for the capital raise. This cost us $13,000 in legal fees alone, not to mention the time spent on reviewing documents and preparing our Offering Memorandum and deal notes for investors. The seller’s hard deadline for closing was a red flag, but I was determined to make the deal work, so we pushed forward.
Title Issues Emerge
At this point, we hit another major snag—titles. The seller couldn’t produce the titles for the homes. We spent weeks going back and forth trying to sort out the missing titles, offering to do the legwork ourselves if the seller would just coordinate access with the tenants. He refused. Then we started getting conflicting information from tenants, with many claiming they owned the homes, not the seller. This was not the story we were told.
We asked the seller for access to collect VIN and serial numbers so we could trace the titles ourselves. Again, he refused. The seller made it clear that we had to accept the park as is, title issues and all, with no renegotiation on price or extension of the closing timeline.
Tough Decisions
By this point, between due diligence, travel, legal fees, and deposits, we had invested nearly $20,000 into the deal. I had two options: proceed with the deal, raise the capital, and hope for the best while sorting out the title and lot count issues after closing—or walk away and accept the loss.
After weighing the risks, I realized the deal no longer made sense. The issues were too numerous, and the price we’d agreed on didn’t reflect the amount of work needed to rectify them. I decided to cancel the deal. We managed to get our $5,000 deposit back after a fight but were left with about $15,000 in sunk costs.
Reflections
Not long after, I visited the park while passing through the area and saw that work was being done. I was curious, was the seller improving the park? What I found was that the seller had sold the park to another investor for the same $700,000 we had contracted it for.
Do I regret not buying it? Not at all. Even though another investor took the deal at the same price, I’m confident I made the right call. It wasn’t worth the time, effort, or risk for our Limited Partners. While I lost money on the due diligence, I didn’t risk any investor capital, and I learned valuable lessons along the way. There have been many deals I missed out or passed on I regret, but this is not one of them.
What I Learned:
Capital Raising Process
- Staying Connected: One mistake I made was thinking LPs only wanted to hear from me when I had a deal ready. Wrong! Moving forward, I realized I needed to share more about the process—what goes into getting a deal from initial contact to contract execution.
- I started newsletters and two blogs: Let’s Talk Passive Investing in Real Estate and Let’s Talk Mobile Home & RV Park Operations.
- This way, I provide live insights and keep investors in the loop throughout the journey, not just when I’m raising capital.
Deal Rejection
- Evolving Criteria: My criteria for deal rejection or acceptance today looks very different from four years ago.
- Each offer I make and every due diligence process teaches me something new.
- Getting the right info upfront: I push for detailed information early on—rents, mobile home details, infrastructure—so I can make a solid offer without needing to re-trade later.
- Rent Rolls vs. Projections: I focus on actual rent rolls, not projections. Sellers love showing what “should” be collected, but I want the reality.
- Title confirmation: Knowing which homes have titles in hand before making an offer is key. If titles are missing, I need to structure the offer to address that.
- Not deal-breakers: I don’t solely rely on Current Cap-Rate, Rent Rates, Occupancy, Collection rate, or vacant lot/home count to determine if a deal moves forward.
- Levers to improve value: These factors are guides and potential areas for improvement, but not hard criteria to accept or reject a deal.
- Key influences: Local income caps, government regulations, demand, and affordability can significantly impact a community’s potential.
- Vacancies: I assess whether vacancies are due to lack of capital or local market limitations.
- Focused evaluation: I evaluate each community holistically, understanding whether I can pull the necessary levers for improvement.
Infrastructure
- Upfront Infrastructure Questions: Asking about infrastructure up front is non-negotiable. It affects CapEx, the capital raise, and the entire business plan.
- This prevents surprises during due diligence and limits the need for price renegotiation.
- Knowing this at time of the offer allows us to even decide if want to make an offer.
Title & Due Diligence Issues
- Major Concerns:
- Title issues can be a nightmare, as I learned the hard way.
- I now require clear documentation of titles before I move forward with syndication
- I’ve since connected with a respected lawyer, Ferd Neiman, to create a rock-solid purchase agreement that clearly outlines expectations for both parties..
- Our due diligence clock doesn’t start until the seller provides us with the agreed-upon documents, giving us time to fully vet the deal.
- I now have 34 items we request from the seller for Due Diligence.
- Included at time of offer not after the contract is signed
- Provides upfront clear communication of expectations
- Title issues can be a nightmare, as I learned the hard way.
Communication
- Lesson Learned: I used to only reach out to LPs during a capital raise. Bad move.
- Now, I keep them updated regularly via newsletters, blogs, and social media. It builds trust and keeps them engaged.
- My ongoing communication now includes detailed quarterly reports with financial statements, an operational summary, and a personal letter from me.Not just at year-end!!
Risk Management
- Mitigating Risks: Every deal involves risk, especially value-add investments.
- The key is getting as much information upfront and not starting the syndication process until the majority of due diligence is done.
- Lessons learned? Don’t spend large sums on legal fees (like syndication docs) until you’ve sorted out big-ticket items like titles.
- Based on my experience fighting to get my Earnest Money back, I’ve taken steps to reduce that risk by improving the Purchase Agreement.
- The new agreement ensures that my rights are protected and guarantees an automatic refund of the deposit if the deal is canceled during the Due Diligence Period, without needing seller approval.
- I also negotiate for the smallest possible Earnest Money Deposit to minimize financial exposure early in the process.
Syndication Costs
- Handling Sunk Costs: The reality of this business is that some deals just don’t pan out. I once spent $20,000 on a deal I walked away from.
- I treat those costs as a part of doing business. Better to lose money on due diligence than to lose investor money on a bad deal.
Scaling
- Scaling to 100 Parks: The goal is big—100 parks—and that requires scalable systems.
- With each transaction, we’ve gotten better at handling accounting, title management, and due diligence.
- I’ve built a solid team to manage these processes, but due diligence still falls largely on me. I plan to hire a more robust team to handle this as we grow.
- Communicate more so current and prospective Limited Partners see my Mobile Home Park journey.
My Final Thoughts on My Lost Deals
Behind every investment opportunity presented is usually months of marketing, countless days of due diligence, hours of analyzing, and endless minutes of commitment. Spending the time and effort to find the ones that offer the best potential to meet the operator’s standards and the requirements of the Limited Partners. It takes discipline to walk away from a deal that doesn’t align, especially when your entire business is based on doing deals and building a portfolio. I think this is where many operators lose alignment with their Limited Partners—the need to get a deal done for the sake of staying relevant and growing. However, walking away from deals is how we protect the investors’ capital and ensure only the strongest opportunities reach the Limited Partners’ inbox.
Scaling responsibly means focusing on the quality of a deal, not just the quantity. Growth should not come at the expense of making bad decisions. The lessons I have learned from rejected deals and failed contracts are what make me a better operator today than when I started. As most fear that not bringing deals to their investors means they will lose relevancy, I look at relevancy not as a product of bringing deals every month or every quarter to my partners. Rather, relevancy is communication and sharing the journey through newsletters, videos, emails, and social media—allowing current and potential partners to see that I don’t just work when it’s acquisition time, but that I work all the time, and here’s what I do.
Warren Buffet had a quote that I think is very apropos:
“The most important quality for an investor is temperament, not intellect. Outstanding long-term results are produced primarily by avoiding dumb decisions, rather than by making brilliant ones.”
This quote is often interpreted to mean that sometimes the best decisions are the deals you don’t make, as they help you avoid unnecessary risks and potential losses.
Looking back, I have learned that courage and discipline means saying ‘no’ when something isn’t right, even when ‘yes’ seems easier. I don’t take shortcuts, and as a General Partner, I shoulder the costs of failed deals so that my partners don’t have to. Trust should be at the core of any operator’s or General Partner’s strategy—not rushing into a deal just because you need to do a deal. Every opportunity presented to Limited Partners should be meticulously vetted, with countless deals passed over to protect capital. The goal should not just be growth, but to be responsible stewards of the investment capital trusted to us. I believe you only truly learn that lesson when you walk away from a deal, leaving money on the table as a result. It’s easy to claim this “courage” or “discipline” when things go smoothly, but those character traits will only truly be tested when you have to make that tough choice to walk away from a bad contracted deal, even at a loss.
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If you want to talk about my Deal & Acquisition Criteria or Process in more detail, Passive Investing, or just Park Operations in general, use this link to set up a Zoom Call with me. Let’s Talk!
Lock N’ Load
–The MHP Operator
Disclaimer: The information provided in this article is for educational and informational purposes only. It is not intended as financial advice. I am not a licensed financial advisor, lawyer, or CPA, and you should consult with a licensed professional before making any legal or investment decisions.
