How to Vet a Mobile Home Park Deal Sponsor as a Passive Investor

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Welcome back to the Passive Mobile Home Park Investing Podcast, hosted by Andrew Keel. On this episode of the Passive Mobile Home Park Investing Podcast, Andrew Keel discusses how to properly vet a mobile home park deal sponsor. Using his experience, and also gathering tips from active passive investors, Andrew goes over ten valuable tips you should use when vetting a mobile home park operator. Andrew’s tips range from background checks to contingency plans and everything in between. Making a passive investment into a mobile home park is a big decision and vetting your operator can save you a lot of trouble and ultimately provide you a better return on the investment.

Andrew Keel is the owner of Keel Team, LLC, a Top 100 Owner of Manufactured Housing Communities with over 1,500 lots under management. His team currently manages over 20 manufactured housing communities across ten states – AR, GA, IA, IL, IN, MN, NE, OH, PA and TN. His expertise is in turning around under-managed manufactured housing communities by utilizing proven systems to maximize the occupancy while reducing operating costs. He specializes in bringing in homes to fill vacant lots, implementing utility bill back programs, and improving overall management and operating efficiencies, all of which significantly boost the asset value and net operating income of the communities.

Andrew has been featured on some of the Top Podcasts in the manufactured housing space, click here to listen to his most recent interviews: In order to successfully implement his management strategy Andrew’s team usually moves on location during the first several months of ownership. Find out more about Andrew’s story at

Would you like to see mobile home park projects in progress? If so, follow us on Instagram: @passivemhpinvesting for photos and awesome videos from our recent mobile home park acquisitions.

Talking Points:

00:21​ – Welcome to the Passive Mobile Home Park Investing Podcast

01:11​ – Number 1: Review and verify operator track records

01:40​ – Number 2: Speak with investor references

01:50​ – Number 3: Meet with the operator in person

05:13​ – Number 4: Drive through the park

06:07​ – Number 5: Review reports and financials

07:00​ – Number 6: Background check

07:20​ – Number 7: Review the operator on social media

07:33​ – Number 8: Ask your known operator

08:01​ – Number 9: Review proformas

12:14​ – Number 10: How is the operator sourcing deals?

13:13​ – Conclusion


Links & Mentions from This Episode:

Keel Team’s Official Website:

Andrew Keel’s Official Website:

Andrew Keel LinkedIn:

Andrew Keel Facebook Page:

Andrew Keel Instagram Page:

Twitter: @MHPinvestors


Welcome to the Passive Mobile Home Park Investing podcast. This is your host, Andrew Keel. Today, we’re going to discuss how to properly vet a mobile home park investment sponsor, also known as a general partner (GP) or deal operator. Before we dive in, I want to ask a real quick favor. Would you mind taking an extra 30 seconds and leaving this podcast a 5-star review on iTunes? This helps us get more listeners and it absolutely makes my day when I get a notification of a new review. Thank you so much for taking the time to do that. All right, let’s dive in.

This information was gathered from a poll I sent out to multiple active professional mobile home park investors. I have most important at the top going down to less important, but still valuable. Number one, review and verify their track record. If you’ve listened to any of our interviews, this was mentioned multiple times. Can they share case studies showing an execution of the value-add components that they plan to execute on in their recent project that you’re considering investing in?

Number two, speak with investor references, at least two. Three is ideal. Ask them about the communication they’ve received from the operator and the overall performance of their investment.

Number three—this is a big one if you can make it happen—meet with the operator in person or on Zoom as a second option, if possible. Ask yourself after the meeting, what does your gut tell you right away about this operator?

Here are five questions to go with that meeting: number one, ask questions about the mistakes they’ve made and their worst-performing projects. This digs into things that didn’t go as planned on the proforma. If they say that they haven’t had any mistakes, likely they’re not telling the truth because learning this business is difficult and it takes time and experience.

Question number two, as you can dive into their background, hey, tell me about your background and what your niches in the mobile home park space. And then look at the deals that they’ve done. Does it meet that specific criteria? Are they going after more value-add properties or stabilized properties? Are they looking at tenant-owned home communities or park-owned home communities? The more clear they are with their objective, the better because they’ll be able to execute what they know. There are a lot of different niches inside of this space.

Another thing when you’re talking about the operator’s background, think of what skill sets they would have learned in their previous life, whether that was another career or jobs that they’ve done. Do they have project management experience? Do they have budgeting experience? How’s their hiring or property management experience? All of that is extremely valuable to bring into their operating of the mobile home parks.

Another question—a really good one—is to ask how the operator learned about the mobile home park asset class. Ask what they’ve done to get educated in this space. Have they been creative or industrious in some way to get started? This could be a good sign. However, if their rich uncle gave them some money to buy their first mobile home park, then that might not be such a good way to start, all things considered.

Another question you should ask is what is their back-up plan in case the operator is out of commission for some reason? Is there someone else that can come in and fill their shoes, or is your investment going to be tied up, and is it immediately sold even if the market is not ready for a sale at that time?

Another question here, how do they plan to manage these assets, and what fees are being charged to the deal? Property management fees, asset management fees, acquisition and disposition fees, how do these compare with the market rates? Typically, we see a 5%–7% of gross revenue property management fee. Another typical fee is an acquisition fee of around 2%. Also a 2% disposition fee, sale, or refinance kind of return of capital event fee that the operators would receive. Then also a 1% asset management fee is common as well.

After you’ve met with the operator, this little tip right here (I think) is one of the most valuable that you can do. I only know this because some of our investors did this, and I just thought it was extremely valuable. Prepare to either drive through yourself one of the mobile home parks that the operator owns and operates now, or you can hire someone to do this and do a drive-through video. Usually, this will cost around $50–$100. You can find someone on Facebook Marketplace or Craigslist. This could be very valuable. Look at this video and see. Are there appliances in everyone’s yards? Is the landscaping maintained? Does the property look like it’s well-managed or not? You’ll likely be able to tell this within a quick five-minute video.

On a number five here, review an example of a previous year-end or quarterly report with financials that the operator has sent out to previous investors for a previous deal that they’ve done. How does it look? Does the project look like it’s going in the right direction? How’s the format of it? Does it look professional? Looking into the financials, what’s the expense ratio? If the expense ratio is around 40% or under, this is a very positive note. Typically, operators know that private utility mobile home parks usually run at a higher expense ratio, near the 40% number. Public utility parks usually run a little bit less expensive and their expense ratios are around 30%–35%. Really dive in and look at those things. That should give you some good insights.

Another item, number six here is, you can run a background check on the operator. This is something that I think is extremely valuable. You should ask their permission first and they may tell you if there’s anything that would show up, just by asking them.

Number seven, review the operator on social media. What are they doing when they’re not working on mobile home parks? What other hobbies do they have? Analyze that and ask yourself, hey, is this the type of person that I would trust with my investment capital?

Number eight, if you haven’t or if you have already invested in mobile home parks but with a different operator, you could ask your known operator to talk with and maybe interview the prospective operator. One way to do this is to have your known operator inquire about being a passive investor in the new operator’s deal. That could give you some really good insights, and you can do it completely remotely.

All right, number nine here, reviewing proformas is extremely important. How does it look? Is it well thought out? Are they rushing into things? Are they taking their time? Are they planning on, say a 100% occupancy? This is something that we see often, and that can be quite scary if that’s what they’re planning on and it doesn’t go as planned, which is probably likely not going to happen.

Again, what expense ratio are they planning for versus what the seller has in place currently? How are they going to decrease those expenses? How aggressive overall or conservative is the operator being in the proforma? Are they playing the infill 50 homes in the first year, or are they planning on scaling that? Maybe doing 10 per year over a 5-year time horizon.

One key indicator from the books that I’ve read about real estate private equity is the exit cap rate. Is the exit cap rate the same, is it higher, or is it lower than the going-in cap rate? Is the IRR driven primarily by operating cash flow—which is a positive—or is it driven mostly by proceeds at the exit? That’s a key indicator as well because the health of the property ultimately is determined by that cash flow. The same thing is the proceeds being driven by cash flow, or is it from a near-term kind of cash out or refinancing event? You don’t want the IRR to be heavily driven from those exits. You’d prefer that the cash flow sustains the returns that are being promised.

One thing that’s important to note here is that capital expenditures are the silent killer in mobile home parks. How much are they raising for the current infrastructure improvements? Whether it’s rehabbing some mobile homes or is it bringing in homes, that’s a really important number and it will change based upon the state that the property is located in.

In Indiana, you could infill a vacant lot with used homes for around $15,000, all in. Now in Pennsylvania, where you have to do much more site prep and you have to have concrete piers that go below the frost line—42 inches deep—is going to be more expensive and that’s going to be closer to $20,000. You’re going to want to make sure you identify those types of capital expenditures and make sure that there’s a good reserve in place.

Another good question, how realistic is the value-add plan or strategy? Again, is it infill-based? Does this operator have experience with infill? That is going to be a huge, huge point. Infill is the hardest way to add value to mobile home parks. There’s no hiding it; it’s well known. If they are over-aggressive in their proforma they may not be able to meet the projections that they are putting in the proforma.

Are they planning to infill with used homes? If they’re going to do that, what proof do they have that they can source and acquire used homes? That is a very tough thing to do if you don’t have experience in that, and not a lot of operators can do that. How will they transport, set, and get used homes if they are acquired? Do they have a good plan to be able to execute the business plan with third-party transporters and so forth? Those are very hard to get on a consistent schedule with.

If their plan is to infill with new homes, how are they going to get new homes delivered in the time frame that they are expecting due to major backlogs right now at the manufactured housing facilities and factories? Usually right now, it’s a 6–8 month backlog from when you order a new home to when it’s actually received. That’s really important that they are accounting for that in their proformas.

Number seven—this is the last one that I have on my list here—how is the operator sourcing their mobile home park deals? Are these primarily off-market? Do they have some mailers or marketing to direct-to-owners? Are they just finding these on from a broker’s list, et cetera? Most mobile home park deals trade off-market. That makes the deals that do trade on-market, heavily shopped and more expensive. You’re going to want to find an operator that has a little bit of both because there are deals that are on-market that are really good deals. But there’s also good deals off-market to be had, and if an operator is doing their own marketing, they’ll be able to dabble in both and pick the right ones.

Anyway, that is all I had for today. Thank you all so much for listening. I hope you get value out of these. I hope you can put them to work and use them in your passive mobile home park investing. I appreciate you all listening. Tune in next week, as we’re going to jump back into another interview. Thank you all so much.

Andrew is a passionate commercial real estate investor, husband, father and fitness fanatic. His specialty is in acquiring and operating manufactured housing communities. Visit for more details on Andrew's story.

Keel Team provides unique opportunities for passive investors to enter the mobile home park asset class without having to deal with the headaches of tenants, toilets or trash.


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