The mobile home park looked great on paper. Strong rent roll, high occupancy, below-market lot rents with obvious upside. The seller was motivated. The broker said it was a “clean deal.”

Six months after closing, the buyer got a bill for $180,000 to replace a failed water main system they didn’t know was polybutylene.

This isn’t a hypothetical. Variations of this story play out constantly in the MHP space — and almost always for the same reason: buyers are underwriting the income but not the infrastructure.

At Keel Team, we’ve acquired manufactured housing communities across the Southeast and Midwest for years. The deals that have cost us the most weren’t the ones with bad markets or slow rent growth. They were the ones where we didn’t look hard enough at what was underground.

Here’s what we’ve learned about MHP due diligence that the deal brokers won’t tell you.

Why MHP Infrastructure Due Diligence Is Different

In a single-family rental or apartment deal, your inspection is relatively straightforward. You’re looking at structures you can see and systems that are mostly accessible.

In a mobile home park, the most expensive systems — water mains, sewer laterals, electrical distribution — are underground or hidden behind decades of deferred maintenance. The homes on the lots are often tenant-owned, so your inspection isn’t even focused on the right things.

The “asset” you’re buying is the land, the infrastructure serving the lots, and the leases. Two of those three things are invisible to the naked eye.

The Five Infrastructure Categories That Kill Deals

1. Water Distribution System

The most expensive and most commonly overlooked. Key questions:

• What is the pipe material? Polybutylene (PB pipe, common in parks built 1970s–1995) has a well-documented failure pattern and is being replaced in parks across the country at costs of $3,000–8,000 per lot. Galvanized steel has similar issues.
• When were the water mains last scoped or pressure-tested?
• Are there any active or recent leak repairs?
• What’s the park’s water loss percentage? The gap between master meter readings and sum of submeters — loss above 10% usually indicates active leaks.

Get the last 24 months of water bills. Compare master meter consumption to what residents were billed. Any unexplained gap is a liability.

2. Sewer and Septic Systems

If the park is on city sewer, this is relatively straightforward — though you still need to camera the main lines for root intrusion and assess the condition of connections to each lot.

If it’s a private system — lagoon, septic field, or wastewater treatment plant — this is a different animal entirely. You need:

• Current environmental permits and compliance history
• A licensed engineer’s assessment of remaining system capacity and life
• Clarity on “grandfathered” status: a lagoon operating under a historical variance may face forced closure if the park changes ownership in some states

At Keel Team, we don’t buy parks with lagoons or on-site wastewater treatment. It’s a firm line. The regulatory and capital risk is too high.

3. Electrical Distribution

Many parks built before 1980 have electrical distribution systems that are technically functional but operating well beyond their designed lifespan. Key risks:

• Undersized service to individual lots (especially if residents have added HVAC or other high-draw appliances)
• Aluminum wiring in service connections (fire risk, increasingly flagged by insurers)
• Park-owned distribution means you’re liable for any injury or property damage from faulty infrastructure

Get a licensed electrician to do a full load assessment before closing. Your insurance carrier will likely require an inspection anyway — do it on your dime before you own it, not as a condition of your first renewal.

4. Roads and Drainage

Roads look fine until they don’t. Asphalt in a poorly-drained park will have a dramatically shorter lifespan than the same surface in proper conditions.

Walk every road in the park. Look for cracking, heaving, soft spots, and standing water patterns. Get a rough estimate of what full road replacement would cost — in most parks it runs $50,000–100,000. If the roads are clearly at end of life, that’s a credit negotiation item.

5. Environmental

This one can kill deals entirely. Triggers for a Phase 1 environmental assessment:

• Former fuel storage on the property
• Dry cleaning or light industrial uses adjacent or historically on-site
• Underground storage tanks (USTs) for generator or heating fuel
• Historical use of the site as anything other than residential

A Phase 1 runs $1,500–3,000 and is cheap insurance. If it comes back with recognized environmental conditions, pause.

The Full Due Diligence Checklist

Before every acquisition, Keel Team runs through a structured checklist covering all five infrastructure categories plus:

• Permit and regulatory status for all utility systems
• Insurance loss run history (5 years)
• Capital expenditure history — what has the seller actually spent on infrastructure?
• Tenant-owned home title verification (homes with missing titles become your problem post-closing)
• Zoning confirmation and non-conforming use status

Sellers — especially mom-and-pop operators — often don’t have organized records. The absence of documentation isn’t necessarily disqualifying, but it means you’re pricing in additional uncertainty.

Structuring the Deal Around Infrastructure Risk

Once you’ve identified infrastructure risk, there are three ways to handle it:

Price it in. Every dollar of likely CapEx in years 1–3 should reduce your purchase price by at least $1. If the deal still works at a lower price, proceed.

Escrow it at closing. Negotiate a portion of the purchase price into an escrow that releases only after infrastructure inspections are completed post-closing, or after a defined period without major failures.

Seller credit. A cash credit at closing to fund known infrastructure repairs. Sellers often prefer this to a price reduction because it doesn’t reset the precedent on value.

The Bottom Line

The parks that hurt investors the most aren’t the ones in bad markets. They’re the ones with beautiful P&Ls and ugly infrastructure hidden underground. The due diligence investment — $10,000–20,000 on a $2M acquisition — is the best money you’ll spend.

At Keel Team, we’ve walked away from deals that looked excellent on paper because the infrastructure inspection told a different story. That discipline isn’t exciting. But it’s saved us from some very expensive lessons.

For a complete due diligence system used on 50+ acquisitions, check out the MHP Due Diligence Playbook at keelteam.com/mhp-due-diligence-playbook.

Follow along — we publish detailed resources on MHP due diligence and acquisition strategy regularly.