When most investors think about mobile home park due diligence, they focus on occupancy rates, lot rents, and cap rates. They look at the income statement. They model out rent bumps.

What they rarely budget for is what’s buried six feet underground.

A 2025 Associated Press investigation revealed a stark reality: nearly 70% of mobile home parks operating their own water systems violated safe drinking water regulations in the past five years. That’s not a rounding error — that’s a systemic failure affecting millions of residents and creating enormous, largely hidden liability for park owners.

At Keel Team, we’ve acquired and operated mobile home parks across the Southeast for years. Infrastructure due diligence isn’t something we bolted on after a bad deal. It’s been baked into our process from the start. Here’s what we’ve learned, and what every mobile home park investor — new or experienced — needs to know before signing on the dotted line.

Why Aging Infrastructure Is the Industry’s Dirty Secret

More than 60% of manufactured housing communities in the United States were built during the 1970s and 1980s. That means pipes, water mains, and sewer systems that are 40–50+ years old. Some parks have galvanized steel pipes that should have been replaced decades ago. Others are running on polybutylene, a material so failure-prone it was the subject of a major class-action lawsuit in the 1990s. A few — particularly rural parks on private wells — have essentially no oversight at all.

The AP’s investigation described pipes in some parks as being “like spaghetti in the ground.” In Iowa, residents’ tap water looked like coffee. In Michigan, it resembled tea and routinely ran dry. In Utah, a park operated under a do-not-drink order for nearly ten years because well water contained arsenic at 10 times the federal limit — and nobody, including state regulators, knew the park existed.

This isn’t a fringe issue. It’s the norm.

The Numbers That Should Scare Every Investor

Here’s what infrastructure replacement actually costs in 2025:

• Full water + sewer replacement: approximately $3,200 per space
• Water lines only: approximately $2,000 per lot
• Individual home repipe: $4,500 to $37,000+
• Sewer line replacement: $1,400 to $5,300 per run (and higher for complex jobs)

For a 100-space park, a full infrastructure overhaul is a $320,000+ capital event. That’s money that doesn’t appear in the seller’s financials. It’s not in the offering memorandum. And if you’re underwriting based on trailing 12-month NOI without accounting for it, you’re buying a time bomb.

New EPA regulations are adding urgency. Parks with lead service lines now face a mandatory 10-year replacement timeline. PFAS contamination rules are creating new compliance costs for parks on private well systems. The American Society of Civil Engineers gave U.S. drinking water infrastructure a “C−” grade in 2025 — and wastewater a “D+.” The clock is ticking.

How Keel Team Does Infrastructure Due Diligence

Before we close on any park, infrastructure gets its own dedicated due diligence track. Here’s what that looks like in practice:

1. Pull the EPA ECHO database first. The EPA’s Enforcement and Compliance History Online database logs all Safe Drinking Water Act violations. If a park runs its own water system, we look for violation history going back 5+ years. Any violations — especially repeat violations or health-based violations — get elevated scrutiny.

2. Mandate video sewer camera inspection. Before closing, we require a licensed plumber to camera-scope the main sewer lines and report on condition, material, and estimated remaining life. This typically costs $500–$1,500 and has saved us from six-figure surprises multiple times.

3. Hire an independent civil engineer. For any park above 75 lots or where infrastructure age is unknown, we bring in a civil engineer to assess the water distribution system, any private sewer treatment, and stormwater. The report costs $3,000–$8,000 and is worth every penny.

4. Analyze utility billing history. Sudden spikes in water bills are often the first sign of a leak in the distribution system. We pull 24 months of utility bills and flag anomalies.

5. Model infrastructure capex explicitly. We don’t hide infrastructure risk in a generic “reserves” line. We model it as a specific capital event with a timeline — “replace water main in years 3–5, estimated $180,000” — so our operating partners understand exactly what’s being invested in.

For a complete breakdown of our due diligence framework — including the full infrastructure checklist — see the Keel Team Mobile Home Park Due Diligence Playbook.

The Silver Lining: City Services as a Buying Filter

One of the smartest risk filters you can apply when evaluating mobile home park deals is simple: city water AND city sewer only.

Parks on municipal services don’t have the same EPA compliance exposure. They don’t have aging private systems. They don’t face PFAS contamination lawsuits. And critically, they don’t have the operational headache of being a de facto utility company for your residents.

At Keel Team, our buying criteria explicitly require city water and city sewer as a baseline condition. Yes, it narrows the universe of deals. But it also means our team isn’t getting a midnight call about raw sewage backing up into 40 homes.

The parks that do qualify under this filter — 70+ lots, 35+ occupied, city utilities, within an hour of a 100K+ MSA — are exactly the assets we target. And because infrastructure-quality parks tend to trade at tighter cap rates, the ones with aging private systems often represent a pricing opportunity if you know exactly what you’re buying and have priced the capex in appropriately.

The Bottom Line

Mobile home park investing is a compelling asset class. Low management intensity, affordable housing demand that isn’t going away, and strong occupancy fundamentals. But the infrastructure piece is where deals go sideways — and it’s almost always preventable with proper due diligence.

Don’t underwrite off the income statement alone. Look underground. What you find there will tell you more about the real value of a park than any trailing 12-month P&L.

Keel Team acquires and operates mobile home parks in North Carolina, Tennessee, Georgia, and South Carolina. Learn more about our acquisition criteria and due diligence process at keelteam.com/mhp-due-diligence-playbook.