You’ve just invested a significant portion of your net worth with an operator. You thought you did your due diligence, asked the right questions, and found a solid addition to your portfolio. The mobile home park looked promising, the projections seemed realistic, and the operator passed your vetting process. All seems well, and you’re eagerly awaiting your first distribution to hit your account.
Then, a month later, you’re scrolling through social media and see the operator discussing buying another park. Then another. And another.
That’s when the worry sets in—is your money still safe? Is the operator’s attention being spread too thin? How can they manage your investment, Park A, while onboarding five more parks in the same year?
As a limited partner, these questions are normal—and honestly, they should be at the forefront of your mind. Scaling too quickly can be a major red flag. And if you’re not asking these questions upfront, you could be blindsided by the operator’s focus shifting away from your investment.
Scaling: An Operator’s Game Plan
In my experience as both a capital raiser and operator in the mobile home park space, the fees earned from a single deal rarely cover the costs of managing that park effectively, especially when starting. Scaling—done right—creates efficiencies and economies of scale that help operators hire the right team to manage multiple investments and produce better results for investors.
From my own experience, as well as conversations with other operators in the industry, there are key fees involved in any deal, including acquisition fees (3-5%), property management fees (8-10%), and asset management fees (1-2%). When operators are just starting out with one or two parks, these fees often aren’t enough to cover operating costs, especially if the parks are smaller. That’s why scaling—raising capital to acquire more properties—is crucial for hiring the right team, building infrastructure, and improving management systems.
In theory, this benefits both the operator and the LP. But scaling too fast? That’s where the risks show up.
Scaling Too Fast: Lessons from the Field
I’ve seen a variety of scaling strategies in my career, both good and bad. Here’s a lesson I learned—and one I’ve heard echoed by others in the industry.
I remember listening to a podcast featuring a newer operator in the mobile home park space. This person was scaling by acquiring parks of just 20-30 lots in different states—three states, in fact. Oh and the states were on opposite sides of the country. I couldn’t help but think: That’s a tough game.
Managing parks in multiple states adds significant complexity. For one, there’s the travel—lots of travel—which can quickly lead to burnout. These smaller parks often don’t generate enough cash flow to hire on-site staff, so the operator is forced to manage the properties themselves or rely on remote solutions. But as I’ve learned firsthand, and as others have shared with me, it’s nearly impossible to effectively manage small parks in different states when scaling so quickly. Maybe if the parks were all next to eachother, or even 2x their current size, I might have thought something different.
Another podcast I listened to featured a more experienced operator who had scaled to almost 40 parks in under 4 years. They were focused on growing fast, acquiring a high volume of properties, but as they admitted, many of their parks were neglected in the process.
This operator was scaling aggressively in a single geographic location, which was smart, but even so, they found themselves overwhelmed. They were acquiring parks at a pace that outstripped their ability to properly manage them. As a result, several parks suffered from poor management, incomplete upgrades, and lackluster tenant relations. They told a story of how they didn’t have a good record of which tenant was on which lot, missing contact information for residents. They were scaling without focusing on the operational side—putting more emphasis on acquisition than on properly turning around the parks they already owned.
During the post pandemic runup this operator went full cycle on a few properties and was able to produce good multiples on investor equity. Ultimately creating a good reputation with investors and creating the ability to raise even larger pools of capital. On the show they admitted their systems weren’t fully in place and they now, 40 parks later, are putting focus on systems. The chaos of acquisition had prevented them from building the necessary processes tooperate efficiently and consistently across the portfolio.
Listening to this, I thought about the impact on the limited partners (LPs) invested in those parks. Were the returns meeting their expectations? Could the operator have delivered better performance if they had slowed down and focused more on getting each park stabilized before scaling further? If that operator had slowed down their acquisition spree, focused on building better systems and improving tenant satisfaction, could they have increased the value of the parks faster? In my opinion, scaling too quickly leads to too much lost potential.
One of the tactics this operator used to avoid rehab costs was giving homes away. The idea was to focus solely on lot rent and not deal with the hassle of home repairs. While this may have seemed like a quick fix, it left a lot of money on the table. By giving homes away, they missed out on potential profits from home sales and repairs that could have significantly increased revenue. It is one way to do it, but is it the best way? Additionally, they raised rents across the board in an attempt to drive up revenue. Raising rents too aggressively is a dangerous game, as it can alienate tenants and create turnover, further compounding operational issues. It’s a practice that can hurt both residents and the industry as a whole.
On the other hand, I’ve listened to a veteran operator who scaled much more gradually, buying and turning around parks one by one. They talked about the long journey of scaling—how they started with one park, then bought another, spaced the acquisitions out, and only expanded further once they had built the right team and systems. He had started investing before social media existed, so undoubtedly there was no comparison envy or societal force to push scaling too quickly.
Even though this operator shared a long list of mistakes and lessons learned, I didn’t question their process. Their approach made sense because they were focusing on improving the value of each investment, stabilizing it before moving on to the next. They weren’t chasing the next deal—they were focused on the long-term health of their portfolio.
I also learned how they strategically built their team over time. Initially, they handled most of the work themselves, but as they scaled, they added staff and delegated responsibilities. They focused on the areas of greatest need first, ensuring that each new acquisition had the right support and processes in place before moving forward.
The contrast between these three operators made it clear to me that there’s an art to scaling. It’s not just about how fast you can grow—it’s about building a foundation that will support that growth.
From these examples, I started to better understand the dos and don’ts of scaling. I also started thinking more critically about what LPs should look out for when considering an operator’s ability to scale effectively. Here are a few things I learned:
- Focus on Operations, Not Just Acquisitions: Don’t let growth become a distraction. Make sure the operator has the systems in place to manage each park properly, even if it means scaling more slowly.
- Ensure the Operator Has a Team and Structure for Growth: As an operator scales, they need a solid team to support them. Look for operators who are building their teams gradually and have a clear plan for scaling their internal operations to match their growth.
- Look for a Balanced Approach to Revenue Growth: While increasing rents may seem like a quick win, operators should focus on improving the overall value of the park and building long-term, sustainable cash flow. Raising rents too aggressively can backfire, especially if the park isn’t fully stabilized yet.
The Right Way to Scale: Insights and Best Practices
In contrast to the “buy now, figure it out later” approach, I’ve heard many seasoned operators share their experiences of scaling more methodically. One thing is clear: Scaling should never be rushed. This is true in any business, not just Mobile Home Parks. Here are a few lessons learned from my own experience and from speaking with other operators who’ve gone through the growth process.
Location Matters
A strategy I’ve found effective is focusing on a specific geographical region. I personally operate in just two states right now, but I have a six-state “buy box”, in mind for future acquisitions. All of those states are touching and easy to travel to- it’s critical to keep parks close enough to your base of operations so that travel and site visits aren’t too burdensome. As I’ve learned, trying to manage parks scattered across the country can lead to neglect and inefficiencies. When I see an enticing park across the country, I have to stop and ask myself does this fit my portfolio and will it add unnecessary strain to my operations. Scaling into parks in numerous states, far apart, too early can cause mismanagement and cause projections to be missed.
Size Matters Too
The size of each park is crucial when scaling. Starting with smaller parks can make it difficult to generate enough cash flow to hire dedicated staff, such as Community Managers. When a park is the only one in a state or region, the operator will struggle to efficiently utilize staff across multiple parks, and even using a Regional Manager becomes tough due to travel inefficiencies.
When scaling, it’s ideal to target larger parks—at least 50 lots—in new locations. This size provides the cash flow necessary to hire a Community Manager and still leave room for the operator to earn a reasonable management fee to cover travel costs and stay on top of day-to-day operations. A 15-lot or 20-lot park making $5k/month will have a hard time covering the costs of a manager and the operator’s travel, especially if that operator needs to visit the park quarterly or more often.
Scaling with small parks can work if they are supported by a Hub and Spoke model, where the operator has multiple parks within close geographic proximity. An operator who builds a portfolio of parks in the same region is much better poised for success than one who tries to scale by buying small parks scattered across various states or regions.
How Many and How Fast?
The quantity of parks an operator scales into depends on the team and resources available to support them. Early on, operators often have to handle most of the work themselves as they build their team with limited income. Scaling too quickly before building the right support can lead to mismanagement and hurt returns.
Purchasing a new park requires tenant transitions, updating leases, inventory management, and vendor hiring. Rushing this process can lead to neglect of earlier acquisitions.
I recommend leaving 3-6 months between purchases to focus on each asset, get projects started, and hire necessary vendors. When I began, I waited a year between acquisitions, which allowed me to give each park the attention it needed. Trying to buy multiple parks in my first year would have been overwhelming and counterproductive.
As systems and teams are built, the time between acquisitions will shorten, but rushing too soon can set back both the operator and investor.
Team Is Everything
Building the right team comes with the usual business challenges: setting up systems, finding the right people, and getting them in the right roles. In the early stages, operators often do most of the work themselves or with a partner. Once you acquire your first park, it’s common to hire administrative help. As you scale, you’ll need to expand the team to include staff focused on leasing, operations, accounting, and maintenance.
Strategically building your team in areas of highest need will help you scale efficiently. A strong team allows you to manage parks more spread out with regional managers who can travel between properties. This saves time and ensures a consistent focus on the business plan. A well-organized in-house team with the right systems can also allow you to acquire smaller parks without requiring onsite management.
As your team grows, it becomes easier to scale into parks in various locations. The right staff can handle transitions quickly and implement improvements faster, allowing the operator to acquire new communities in a shorter time frame.
What to Look for & Questions to Ask
As I’ve mentioned, scaling is inevitable in this industry, and as a Limited Partner, you should expect it—and be prepared for your operator to scale beyond just the deal you’re invested in. Being prepared with that basic understanding will help you select the right operator. To know what to look for in an operator and what questions to ask regarding their ability to scale, you need to understand their background and the foundation they’ve built.
The foundation of any operator is built on skill and ability, which come from their knowledge, experience, and overall capability.
Understanding the Operator’s Background
When I say background, I don’t necessarily mean just their experience in mobile home parks, but also in business or their past career. Many of us come from various backgrounds, and knowing where the operator’s skills come from can give you insight into their approach. For example:
- An operator who has managed a large division of a company might have enhanced skills for building and managing a great team.
- An operator with a construction background might be well-suited for handling field operations and improving park infrastructure.
- An operator with a sales background brings valuable experience in leasing and selling homes quickly.
There is no one-size-fits-all approach, but understanding how their experience translates into mobile home park operations is crucial for gauging their ability to scale effectively.
Knowledge Through Experience
Experience is key, and as with any investment, it’s essential to assess what knowledge the operator brings to the table. Is this their first park investment? What have they learned so far, and how has that experience shaped their approach?
- Has their experience in other industries or businesses translated well into mobile home parks?
- Have they encountered and overcome operational challenges in their previous ventures, and are they applying those lessons to the current investment?
Although every operator has to start somewhere, if you’re considering someone who plans to scale, you want to be sure their knowledge has developed ahead of their ambitions. Scaling is about more than just buying more parks—it’s about managing them effectively and strategically.
Capability: What Are They Truly Capable of?
Capability comes from the skills and expertise honed through hands-on experience. The more someone does something, the more capable they become. If an operator has spent years refining their craft and handling various aspects of mobile home park operations, they become far more proficient at navigating the complexities of scaling.
- How capable is the operator at managing the day-to-day operations of multiple parks?
- Have they demonstrated the ability to implement effective systems and processes?
When someone dedicates their life to a craft, they develop an invaluable toolkit of skills. Compare that to someone who jumps from one industry to the next, never truly mastering any one thing. The most capable operators are those who focus on a specific industry long enough to understand the nuances and challenges that come with it.
Understanding Their Scaling Ability
The combination of experience, knowledge, and capability creates an operator’s overall skill set. These qualities will guide you in assessing whether the operator can scale successfully and at what rate.
- If the operator is newer and still building their knowledge base, they may be better off scaling slowly—taking the time to learn, adjust, and build systems that will support growth.
- On the other hand, a seasoned operator who has already proven their ability to translate their experience into the mobile home park business may be ready to scale faster without compromising the quality of existing investments.
As an LP, you should understand where the operator is in their journey and assess whether their current skills align with your expectations for scaling. An operator who is still acquiring knowledge may need a slower scaling process to ensure their growth doesn’t negatively impact your investment. But for an experienced operator with a well-established skill set, scaling at a faster rate might be appropriate and even beneficial.
Questions to Ask Before Investing
- What’s your plan for scaling?
- How many parks do you want to own in the next 3-5 years? Are you aiming to grow rapidly, or do you have a more deliberate approach to acquisitions? Understanding their timeline for scaling will give you insight into whether they have a realistic vision or are just looking for fast growth.
- How do you plan on scaling while still maintaining focus on my investment?
- As you acquire more properties, how will you ensure that my investment gets the attention it needs? It’s critical to know how the operator plans to balance their time and resources between new acquisitions and maintaining quality in existing parks.
- Do you plan on entering other asset classes, like RV parks, self-storage, or apartments?
- Is your focus solely on mobile home parks, or are you looking to diversify into other asset classes? This can give you a sense of whether the operator plans to spread their focus and resources too thin.
- Do you plan on selling the parks you buy in 3-5 years or keeping them long term?
- This is crucial for understanding the operator’s strategy. Are they building a portfolio for long-term growth, or do they plan to flip parks quickly for short-term profits? Their exit strategy will determine the approach they take to manage the properties and deliver returns.
Team and Operations
- How do you plan to manage your team as you scale?
- What kind of team do you have in place to handle the increased workloads that come with scaling? Scaling requires a strong team to support the operator—understand whether they’re building that team strategically or if they’re going to be trying to do everything themselves.
- How will scaling affect your ability to manage current operations?
- Scaling brings new challenges. How do you expect scaling to affect your current parks? This question helps you gauge whether the operator is aware of the operational adjustments needed when adding new properties.
Cash Flow and Financial Stability
- What’s your strategy for managing cash flow as you scale?
- Will your revenue and profits from new acquisitions support the increased workload and staffing needs? Scaling too quickly can lead to cash flow issues, so you want to make sure the operator has a plan to keep things running smoothly and maintain profitability.
- How do you plan to keep tenant relations strong while expanding?
- As you scale, how will you continue to prioritize tenant satisfaction and maintain good relationships? It’s easy to let tenant management slip when focusing on acquisition, but it’s important that tenant satisfaction and retention remain a key part of the operator’s strategy.
- How will you address the operational challenges that come with scaling?
- Scaling can be a logistical nightmare. How do you plan to handle maintenance, rent collections, and park improvements across multiple locations? Ask about their systems for managing these aspects as they scale—if they don’t have solid processes in place, it could lead to inefficiencies and neglected properties.
Communication and Investor Relations
- How will future capital raises affect your communication with investors?
- As you raise more capital and expand, will communication with investors become less frequent or less direct? It’s essential to know how the operator plans to keep you informed, especially as their portfolio grows.
- How will scaling affect your availability for direct communication with investors?
- As your portfolio grows, will you still be personally accessible, or will investor relations be handled by someone else? If personal communication with the operator is important to you, this is an essential question to ask upfront.
Portfolio and Long-Term Growth
- How do you plan to manage your portfolio’s growth in a way that benefits all investors?
- What steps are you taking to ensure that growth doesn’t come at the cost of the quality or performance of my investment? Operators often focus so much on expansion that the long-term health of each investment suffers. Ask how they plan to avoid that.
A Conservative Investor’s Timeline
Although I can’t speak for all operators, I want to share the plan I developed as I started my journey in the mobile home park space. This timeline isn’t about the “ideal” path—it’s about scaling the right way, step by step, and understanding the time it takes to build a solid foundation.
Year 0: Education and Finding a Deal
Everyone starts at the beginning, but I believe that journey starts long before buying the first park. It starts with investing time in learning the industry. Whether it’s through books, podcasts, seminars, or mentors, this education phase might take anywhere from a few months to a year (or more). Without this foundation, Year 1 will be much harder—you’ll be learning as you go, making mistakes that could have been avoided if you took the time upfront to prepare.
Year 1: Figuring It Out, Focus, Hands-On
Once you have the education, it’s time to dive into the first deal. It’s all about learning by doing. In Year 1, the operator needs to get their hands dirty—managing tenants, passing notices, evictions, doing maintenance, and everything that goes into running a mobile home park.
I spent my first year focused solely on Park 1, making plenty of mistakes along the way, but those mistakes taught me critical lessons. If I had tried to scale too quickly in Year 1, I would’ve carried those mistakes over into my second park. The first year should be about learning, fine-tuning systems, and getting real experience before moving on.
Year 2: Building the Team and Systems
By Year 2, the operator should have enough experience to build the right systems and start developing a team. I had systems in place, but they weren’t the right ones. By Year 2, I was able to reevaluate, optimize, and bring in team members to help. I began to scale with more confidence, purchasing a second park and setting the stage for future growth.
This phase is critical. Without the right systems or team in place, scaling becomes inefficient and disorganized. If you’re scaling too quickly, you’ll miss the chance to build these core components.
Year 3: Portfolio Focus
By Year 3, your focus should be on strategically building your portfolio and ensuring that each acquisition fits well with your overall goals. This is when I focused on acquiring properties that complemented the ones I already owned, making sure each park had the support it needed before acquiring more.
In Year 3, operators need to balance growth with the ability to manage a more extensive portfolio. If scaling feels rushed, it could lead to scattered operations and neglected parks.
Year 4: Optimization
By Year 4, you should be in a place where you’ve got the basics down, and it’s time for optimization. This is when you start tweaking your systems, improving operational efficiencies, and scaling your team. This is when I started focusing on better quality staff and fine-tuning the operations of my portfolio. It’s a good time to refine systems and practices for larger-scale operations.
I believe Year 4 is when most operators are ready to scale more rapidly. But don’t rush this phase. You should feel fully confident in your systems, team, and processes before expanding too fast.
Year 5 and Beyond: Scaling with Purpose
While I’m not quite at Year 5 yet, but I’m focused on hiring key staff to help take the business to the next level. I’m also scaling my Capital Partner Network to support future growth. At this stage, operators should feel fully equipped to handle a larger portfolio and continue scaling strategically—but the foundation must be strong.
Conclusion: The Operator’s Roadmap to Success
Ultimately, scaling in mobile home parks requires a strategic plan. Fast growth can lead to mistakes, mismanagement, and burned-out operators. I’ve seen this happen, and I’ve learned the hard way that it’s important to scale at a sustainable rate.
If you’re investing as an LP, it’s crucial to understand the operator’s plans and approach to scaling. It’s not just about asking whether the deal will perform—it’s about understanding how the operator plans to grow and whether they have the capacity to do so effectively.
Every operator has their own methods, but what matters most is a clear, strategic approach to scaling that ensures your investment remains a priority—no matter how many parks they acquire.
Don’t be afraid of your Operator scaling, but make sure their goals and methods align with your expectations and needs as a Limited Partner.
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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 or legal 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.
