Mobile Home Park Acquisition Model
Real Estate Financial Model (Free Excel Download)
Underwrite manufactured-housing communities using sites, occupancy, lot rents, utility recovery, maintenance, capex, financing, and stabilized NOI.
professionals from Deloitte
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About this model
A Mobile Home Park (Manufactured Housing Community) Acquisition Model underwrites the value-add purchase and 7-year hold of a 120-pad community bought at 83% occupancy (100 occupied pads) for ~$6.0M, derived from $360K in-place trailing NOI capitalized at a 6.0% going-in cap rate (~$50K/pad). The thesis is classic MHC value creation: lot rents sit below market at $425/month and are pushed 4% annually (Base case), while a disciplined infill program brings ~4 vacant pads online per year toward a 95% stabilized occupancy (114 pads). Because residents own their own homes and maintain them, the community carries a very high NOI margin (~60-65%); the operator only maintains roads, utilities, and common infrastructure. The deal is financed with agency-style debt (70% LTV on purchase price, $4.2M at 6.0%, 30-year amortization with a 2-year interest-only period) and ~$2.2M of equity, plus a small capital-improvement budget funded at close.
The Operating_CF sheet drives revenue from four streams: Lot Rent (potential rent on all 120 pads times economic occupancy, net of a 2% credit loss), Home Rental Income from 15 park-owned homes earning a $325/month premium, Utility Reimbursement (RUBS, recovering 70% of the community's water/sewer/trash cost), and Other Income (3% of lot rent for late, application, and pet fees). Operating expenses are built per-pad and escalated at 2.5%: property taxes, on-site payroll and management, repairs and maintenance, gross utilities, insurance, and general and administrative, plus an off-site asset management fee of 4% of effective gross income. NOI flows to unlevered free cash flow after a per-pad capital reserve and infill capex (cost to ready each newly occupied pad, tapering to zero at stabilization). The Debt_Schedule rolls the loan forward with interest-only years then PMT-based amortization, testing DSCR and debt yield each year. The Returns sheet exits in Year 7 at a 6.25% cap on forward NOI, nets selling costs and the outstanding loan balance, and computes unlevered IRR, levered IRR, equity multiple, average cash-on-cash, and yield-on-cost.
This model suits manufactured-housing investors, value-add real estate sponsors, and institutional LPs evaluating MHC roll-ups, a sector prized for sticky tenancy, low turnover capex, and constrained new supply. A built-in scenario selector (Base / Upside / Downside) flexes lot-rent growth, infill pace, and exit cap rate. Typical levered IRRs land in the 13-18% range with a 1.8-2.5x equity multiple over the hold; the headline value-creation signal is yield-on-cost (stabilized NOI / total basis ~7.5-8%) running well above the going-in cap. Key sensitivities are achievable lot-rent growth (the dominant driver), infill absorption pace, expense recovery (RUBS adoption), and exit cap rate, where a 25 bp move materially shifts net sale proceeds and equity returns.
What every model includes
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
What's inside the Mobile Home Park Acquisition Model
- Scenario toggle driving lot-rent growth, infill pace, and exit cap rate
- Acquisition basis and Sources & Uses (price from in-place NOI and going-in cap)
- Occupancy infill ramp and four income streams including RUBS recovery
- Per-pad operating expenses plus asset management fee and NOI build
- Agency-style debt schedule with DSCR, debt yield, and cap-rate exit returns
- Four revenue streams: lot rent (dominant), park-owned-home rental premium, RUBS utility recovery, and other income
- Infill occupancy ramp from acquisition occupancy toward a stabilised cap, not a flat vacancy
- Below-market lot-rent mark-to-market with a separate lot-rent growth assumption
Mobile Home Park Acquisition Model: Underwriting Value-Add MHC Deals
This mobile home park model helps you evaluate a manufactured housing community acquisition over a 7-year hold. It builds up lot rent, home rental, utility recovery, and other income, then subtracts operating expenses and capital costs to produce net operating income.
From there, it sizes levered IRR, equity multiple, cash-on-cash, and yield on cost under Base, Upside, and Downside scenarios. Rates and financial results described here reflect illustrative model settings, not industry benchmarks.
Operating Drivers: Occupancy, Rent Growth, and Utility Recovery
The model is built around four revenue streams, with lot rent contributing roughly 80% of effective gross income. Occupancy is not a flat input: it follows an infill ramp, where occupied pads grow from the acquisition level toward a stabilised cap.
- Each year, occupied pads are the lesser of the stabilised cap or the opening occupied pads plus the annual infill pace. Average occupied pads use a mid-year convention, so a pad filled during the year earns about half a year of rent.
- Below-market lot rents can be pushed toward market, and RUBS recovers a share of water, sewer, and trash costs from residents. Other income, such as late fees, is a small percentage of net lot rent.
Calculation Flow: From Revenue to Net Operating Income
Effective gross income sums net lot rent, home rental premium, utility reimbursement, and other income. On the cost side, six per-pad operating expense lines cover property taxes, payroll, repairs, utilities, insurance, and general and admin.
- Fixed expenses are charged on all pads, while consumption-driven expenses like repairs, utilities, and capital reserve are charged only on average occupied pads, so vacant pads do not carry consumption costs. An asset management fee of 4% of EGI is added.
- Net operating income is EGI minus total operating expenses. Below NOI, a per-pad capital reserve and infill capex tied to the change in occupied pads are deducted to arrive at unlevered free cash flow.
Outputs: Acquisition Basis, Debt, and Return Metrics
The acquisition sheet derives purchase price by capitalising an in-place NOI bridge built from the model's own drivers, rather than typing a broker figure. Total project basis adds closing costs, an acquisition fee, and a capital improvement budget.
- A single senior loan is sized at 70% loan-to-value with a fixed rate, 30-year amortisation, and a 2-year interest-only period. The debt schedule tracks interest on the live opening balance, principal, and closing balance, and tests DSCR and debt yield against a 1.20x covenant.
- Returns are calculated from unlevered and levered cash flow streams over a 7-year hold, exiting on a forward NOI capitalised at an exit cap rate. Metrics include unlevered IRR, levered IRR, equity multiple, average cash-on-cash, and yield on cost.
Practical Use: Scenario Toggle and Validation Checks
A scenario toggle on the assumptions sheet flexes three drivers: lot rent growth, infill pace, and exit cap rate. Switching between Base, Upside, and Downside re-runs the model through named ranges.
- The checks sheet validates structural relationships, such as sources equalling basis, occupied pads not exceeding total pads, and minimum DSCR clearing the covenant. One check may return REVIEW if the broker-stated in-place NOI differs from the derived bridge by more than 2%, which highlights a diligence step rather than a model defect.
- Returns are pre-tax and exclude depreciation, so cost segregation benefits are not captured. The model is a values-only preview and does not include live formulas.
Formatted to IB standards
Named theme colors repaint the whole workbook in one click, on top of an investment-banking structure with clear input, output, and cross-sheet reference styling - brand-ready, institutional-grade, and fully auditable.
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Frequently asked
What is a mobile home park financial model?+
A model that projects lot rent, occupancy, operating expenses, NOI, debt service, and exit value for a manufactured housing community, used for acquisition and value-add underwriting.
Why are mobile home park NOI margins so high?+
Residents own and maintain their own homes, so the operator only maintains roads, utilities, and common areas. Low turnover and minimal capex push stabilised NOI margins to 60 to 70%.
What is RUBS and why does it matter?+
A Ratio Utility Billing System bills water, sewer, and trash back to residents. Implementing RUBS is a common value-add lever that lifts effective gross income and NOI without raising base rent.
What is a typical going-in cap rate for a mobile home park?+
Going-in cap rates generally run 5.5 to 7.0% depending on market and condition. Below-market lot rents at acquisition drive yield-on-cost well above the going-in cap as the value-add plan executes.
Can I model the infill and value-add business plan?+
Yes. The model ramps occupied pads toward stabilisation, grows lot rents annually, and recovers utilities, with a scenario toggle to flex rent growth, infill pace, and exit cap rate.
How does the infill ramp work?+
Occupied pads equal the lesser of the stabilised-occupancy cap and occupied-at-acquisition plus the infill pace times the year, so economic occupancy climbs year by year rather than jumping to a flat stabilised number.
Why is agency debt used?+
Fannie Mae and Freddie Mac actively lend on manufactured housing communities at attractive terms - high LTV, long amortisation, and interest-only periods - which improves the levered return and is modeled directly.
Who uses a mobile home park acquisition model?+
MHC investors and aggregators, real estate sponsors and acquisition analysts underwriting value-add deals, and fund managers benchmarking against operators like ELS and Sun Communities.
Have more financial modelling questions? Contact us
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