Mobile home park investing has been on a tear. Cap rates that would make multifamily investors weep. Tenant stickiness that makes turnover almost irrelevant. Demand driven by an affordable housing crisis that isn’t going away.

But there’s a problem — a physical, legal, and financial problem — hiding in plain sight at thousands of older parks across the country. And it has nothing to do with vacancy rates or lot rents.

It’s the electrical system.

What Is a Master-Metered Electrical System?

Many mobile home parks built before the 1990s use a “master-metered” setup: the utility company runs one feed to the park, the park owner owns and operates the internal distribution network, reads individual submeters at each home, and bills tenants directly for their usage.

On the surface, this seems fine. The park owner recovers utility costs, tenants pay for what they use. Simple.

Except it’s not simple at all.

The Legal Problem: You’re a Utility Now

The moment you take over a master-metered park, you’ve effectively become a retail electricity provider — regulated by your state’s Public Utility Commission (PUC). That means:

• You must register or obtain an exemption in many states
• You cannot charge tenants more than the prevailing residential rate (no markups, no administrative fees in most states)
• You are legally required to maintain transparent, itemized billing
• You must have a written dispute resolution process

How many park owners know this? Very few. The Arizona Attorney General’s office issued a public reminder to ALL Arizona MHP owners specifically because consumer complaints about utility overbilling had spiked. Indiana passed legislation allowing courts to appoint a receiver to take over MHPs where owners fail to pay utility bills. The regulatory hammer is coming down.

The Physical Problem: Old Wiring Kills People

Parks built in the 1960s and 1970s often have:

• Aluminum conductors (prone to corrosion and connection failures that cause fires)
• Undersized amperage for modern appliances
• No grounding
• Decades of patched-together repairs with no single-source documentation

Here’s what that means practically: if a tenant gets electrocuted because of faulty wiring in your distribution system, you are liable. Not the utility company — they stop at the master meter. Not the home manufacturer. You. Your distribution system caused it.

We’ve spoken with park owners who faced six-figure legal demands after electrical incidents. One investor discovered during a post-closing inspection that an entire park’s underground wiring needed replacement — a $400,000 job the seller had been quoted on but never disclosed.

The Financial Problem: It Kills Deals

If you own a master-metered park and try to refinance or sell, here’s what increasingly happens: the lender or the buyer’s lender demands a full electrical compliance report. If there are issues — and there often are — the loan gets killed or the deal falls apart.

Insurance is the other shoe. Carriers are increasingly asking specific questions about electrical infrastructure on master-metered parks. Get this wrong on your application and you could find yourself without coverage when you need it most.

What Smart Investors Are Doing

Before buying: Require a full load and safety audit from a licensed electrical engineer as a due diligence condition — not a general contractor, an engineer. Cost: $3,000–$8,000. Worth every penny when the alternative is a $400K rewire you didn’t budget for.

After identifying issues: Negotiate. A documented $300,000 rewire requirement is a $300,000 price reduction. Sellers who’ve been on notice about issues have disclosure liability; use it.

Long-term play: Direct conversion. Several states have utility conversion programs where the local utility takes over the park’s distribution infrastructure. California utilities, for example, will often cover “to-the-meter” conversion costs themselves. When a utility takes over the system, your liability disappears. This should be a goal for any master-metered park you own.

If Conversion Isn’t Possible Right Now

• Get a utility attorney to review your billing practices against your state’s specific PUC rules
• Install or replace submeters with certified, calibrated equipment
• Update all leases with proper billing disclosures
• Register with your state PUC if required
• Document every billing period, meter read, and dispute

The Bigger Picture

The manufactured housing industry is under increasing scrutiny. Tenant advocacy groups are organized and politically active. State attorneys general are paying attention. The days of running a master-metered park on a spreadsheet and hoping nobody asks questions are ending.

That’s actually good news for well-run operators. The parks that get their compliance house in order now will have a significant advantage in financing, insurance, and exit valuations over those that don’t.

At Keel Team, we factor electrical infrastructure into every acquisition analysis. It’s not a footnote — it’s a first-order evaluation criterion. A park with city water, city sewer, and direct-metered electric is worth paying more for. One with a 1968 master-metered system and no compliance documentation is worth paying considerably less for.

Know what you’re buying. Audit before you close. And if you already own a master-metered park — get a compliance review done this year. The bill, if you wait, will be much larger than the audit.

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

Keel Team owns and operates a portfolio of mobile home parks in the Southeast and Midwest. We publish practical insights for MHP investors because we believe a better-informed market is better for everyone.