Multi-Park Portfolio: How to Structure Ownership Across Multiple MHP Entities

Running one mobile home park with one LLC is manageable. You have one set of financials, one operating agreement, one depreciation schedule, one set of bank accounts. Clean and simple.

Now add a second park. A third. Bring in a limited partner on one deal. Refinance two parks with institutional debt. Consider selling one. That single-LLC approach that worked at the start becomes a liability — literally and figuratively.

Multi-park MHP ownership requires intentional structure. The right architecture protects each park from the others, creates the per-property financial clarity lenders require, accommodates co-investors cleanly, and gives you the flexibility to sell, exchange, or refinance individual parks without restructuring the entire portfolio.

This post covers the entity structure logic for a growing MHP portfolio — from why each park needs its own LLC, to how a holding company connects them, to how investors fit in, to how intercompany transactions must be documented.

Why Each Park Should Be in Its Own LLC

The primary reason for separate LLCs is liability isolation. A slip-and-fall at Park A is a claim against Park A’s LLC — not against Park B, Park C, or the holding company. A judgment that exceeds Park A’s insurance coverage can reach Park A’s LLC’s assets. Without proper structure, it can also reach assets of a combined entity that holds multiple parks.

Beyond liability, per-park LLCs enable per-property financial reporting. This matters for lenders. When a bank or agency lender underwrites a loan on a specific park, they want to see that park’s financials — revenue, expenses, NOI, existing debt — in isolation. A combined entity that blends two or more parks cannot produce clean per-property financials without manual separation, which creates doubt about the accuracy of either set of numbers.

Per-park LLCs also enable flexible ownership. You might own Park A 100% yourself. Park B might have a limited partner who invested in that specific deal. Park C might be 50/50 with a co-operator. If each park is in its own LLC with its own operating agreement, this variation is accommodated naturally. If everything is in one entity, every investor’s interests are entangled with every park.

Finally, per-park LLCs preserve 1031 exchange flexibility. If you want to exchange Park A for a larger park without affecting the rest of your portfolio, the exchange is clean when Park A is in its own entity. If Park A’s assets are commingled in a multi-park LLC, the exchange mechanics become significantly more complex.

The Holding Company Layer: How It Connects the Parks

As discussed in our post on holding company vs operating company structures, the HoldCo owns the membership interests of each park-level LLC. The HoldCo is the parent entity — it consolidates ownership without commingling assets.

In a multi-park portfolio, the HoldCo’s operating agreement needs to address several issues that do not arise when you own one park:

Separate capital accounts per park interest. The HoldCo’s ownership of each park-level LLC is tracked separately. If co-investors have interests in specific parks, those interests are reflected in the capital accounts tied to those park-level LLCs, not blended into a single HoldCo capital account.

Distribution waterfall. When a park-level LLC distributes cash to the HoldCo, who receives it? If it is 100% HoldCo income available to the ultimate owner, the answer is simple. If the HoldCo has multiple members with different entitlements to different parks, the distribution logic must be clearly documented in the HoldCo operating agreement.

Decision-making authority. Who can authorize a sale of a park-level LLC? A refinancing? A major capital expenditure? The HoldCo’s operating agreement should specify what decisions require what level of approval — particularly when there are co-investors.

Where Co-Investors Fit: Structuring Partner Interests

Co-investors in a multi-park portfolio typically invest at the park level, not the HoldCo level. This means they become members of the specific park-level LLC they invested in, not members of the HoldCo itself. This preserves the separation of park ownership — an investor in Park A has no economic interest in or claim against Parks B and C.

Within a park-level LLC, co-investor interests are structured through membership classes or units in the operating agreement. Typical structures include:

Preferred and common interests. An equity investor may receive a preferred return on their invested capital — a priority distribution before common (operator) interests participate in profits. The specific preferred return rate, when it accrues, and how it compounds must be clearly specified in the operating agreement.

Promote structures. The operator (you) may receive a “promote” — a disproportionate share of profits above certain return thresholds — as compensation for managing the park and sourcing the deal. The promote percentage, the hurdle rate that triggers it, and how it interacts with the preferred return must be precisely drafted.

Profit splits. After preferred returns and promotes, remaining distributions are split according to ownership percentage or another agreed formula.

Each park-level LLC with co-investors must have a clearly drafted operating agreement that addresses all of these elements, as well as governance rights, consent requirements for major decisions, and exit mechanisms including buy-sell provisions.

The Section 754 Election: Buying Into an Existing Multi-Park LLC

When a new partner buys into an existing multi-park LLC — either the HoldCo or a specific park-level LLC — the Section 754 election is a significant tax consideration.

Here is the issue without the election: a new partner who pays fair market value for their interest in an LLC has a cost basis equal to their purchase price. But the LLC’s inside basis — the basis of the LLC’s underlying assets — may be significantly lower if the assets have appreciated. Without a Section 754 election, the new partner’s allocable share of depreciation and gain is calculated based on the LLC’s historical inside basis, not the price they paid. They are effectively inheriting a tax basis problem that was created before they arrived.

A Section 754 election allows the LLC to adjust the inside basis of its assets — for the buying partner’s share only — to reflect what the buying partner paid. This adjustment, calculated on Schedule 754 and Form 743, ensures that the new partner’s depreciation deductions and future gain calculations reflect the economics of their actual investment, not the historical cost basis of the existing owners.

The election is made at the LLC level and applies to all future partner interest transfers once elected. For a multi-park LLC that expects multiple partner transactions — new investors coming in, partners buying out others — a standing Section 754 election is often the right choice. Your MHP accountant must understand and implement this election correctly; an error in the basis adjustments has cascading effects on depreciation, gain, and K-1 allocations.

Intercompany Loans: Documentation Requirements

In a multi-park portfolio structure, it is common for cash to flow between entities. The HoldCo may loan money to a park-level LLC for a capital improvement. The management company may advance money to cover an emergency expense at a park. The owner may loan money to the HoldCo to fund a new acquisition.

These transactions must be documented as loans — not informal transfers. An undocumented cash transfer between related entities can be recharacterized by the IRS as a contribution (if flowing in from an owner), a distribution (if flowing out to an owner), or a gift — none of which have the same tax treatment as a bona fide loan.

A documented intercompany loan should have: a written promissory note specifying the principal amount, interest rate (at or above the applicable federal rate published monthly by the IRS), repayment schedule, and default provisions; actual payment of interest on the stated schedule; and recognition of interest income by the lending entity and interest expense by the borrowing entity on their respective tax returns. Loans that don’t meet these standards may be recharacterized as equity, with all the tax consequences that implies.

Consolidated vs Separate Financials for Lender Presentations

Lenders evaluating a multi-park portfolio may want to see both: individual park-level financials (for underwriting specific properties) and consolidated portfolio financials (for evaluating the operator’s overall financial strength and track record).

Per-park LLC accounting enables both. Each park’s LLC produces its own income statement, balance sheet, and rent roll. These can be consolidated at the HoldCo level for portfolio-level presentations without losing the per-property detail that individual property lenders require.

Your MHP accountant should maintain per-park books that produce clean, lender-ready financials on demand. This means clean books — not just annual tax returns — for each park-level LLC. Monthly or quarterly internally prepared financials, or an outside bookkeeper producing them, are part of what a well-structured multi-park portfolio operation looks like.

The intersection of entity structure, tax strategy, and estate planning is where the full picture of a multi-park MHP portfolio comes together. For a complete analysis of how entity structure interacts with succession planning, see our guide on estate planning and entity structure for MHP owners.

Frequently Asked Questions

Disclaimer: This post is for educational purposes only and does not constitute tax, legal, or financial advice. Entity structure decisions involve both tax and legal considerations — consult a qualified attorney and tax advisor before making structural decisions. The MHP Accountant® is an enrolled agent firm; services do not include legal advice.