Working With an MHP Broker: The Tax Strategy Your Broker Can’t Handle

The best mobile home park brokers in the country are exceptional at what they do. They know which markets are active, which sellers are motivated, what makes a deal price correctly, and how to structure a transaction that gets to closing. Working with a specialist MHP broker — rather than a general commercial real estate broker who occasionally handles a park — is the right call.

But there is a category of decisions in every MHP acquisition that falls completely outside what any broker is equipped to handle. Those decisions are not about price or structure in the deal sense. They are about the tax elections made at closing, the entity structure you acquire into, and the depreciation strategy you deploy from day one. Getting these wrong is just as expensive as overpaying on the purchase price — and they are invisible in a typical closing unless someone is specifically watching for them.

What an MHP Broker Actually Does

A specialized MHP broker brings expertise that is genuinely hard to find. They understand the market dynamics — which parks are trading, at what cap rates, and why. They have deal flow that off-market buyers cannot access. They understand how occupancy levels, POH-to-TOH ratios, and utility infrastructure affect pricing. And they know how to structure deals — purchase agreements, earnest money terms, inspection period provisions, seller financing — in ways that protect their client’s interests.

Brokers like Glenn Esterson and Glen Esterson at MHP Brokers have built deep knowledge of deal structure and market dynamics across hundreds of transactions. That expertise in identifying good parks, pricing them correctly, and navigating the deal process from LOI through closing is genuinely valuable and difficult to replicate.

But the expertise stops at closing — or more precisely, it stops at the moment the acquisition becomes a tax event rather than a real estate transaction. The decisions that begin at that moment require a different kind of specialist entirely.

What Falls Outside Broker Expertise

Every MHP acquisition involves a series of tax elections and structural decisions that must be made at the time of closing — not weeks later during tax prep. These decisions are made by your CPA, in coordination with your attorney. They are not discussed in most closing packages, and they are invisible to any broker regardless of how experienced they are.

Purchase price allocation for tax purposes. When you buy a mobile home park, the purchase price must be allocated among different asset classes — land, 5-year personal property (POHs), 15-year land improvements, and real property. Under Section 1060, both buyer and seller must use consistent allocations. The allocation you agree to has a direct impact on how much you can depreciate and how fast. A CPA who understands MHP asset classification will negotiate the allocation in a way that maximizes your depreciation basis in the fast-depreciating classes.

Entity structure for the acquisition. How you take title — individually, through an existing LLC, through a new LLC, through a partnership, through an S corporation — has lasting tax consequences. The entity structure affects how income is taxed, how you extract distributions, how you add partners or investors, and how you eventually exit. Your broker may have an opinion about entity structure, but the decision belongs to your CPA and your attorney.

Cost segregation timing. The decision about whether to commission a cost segregation study — and when — is a tax planning decision. It is informed by the asset composition of the park, the buyer’s overall tax situation, and whether the study economics are favorable. Your broker can provide information about the park’s infrastructure, but the cost-benefit analysis and the decision to commission the study is your CPA’s domain.

Bonus depreciation elections. Which assets qualify, whether to elect bonus or elect out (for the entire class), and how the election interacts with your passive activity profile — these are all CPA-driven decisions. The election is made on your tax return, but the decision should be made before the assets are placed in service, ideally as part of the acquisition tax plan.

1031 exchange coordination. If you are selling another property and reinvesting the proceeds into this park, the exchange must be properly structured through a qualified intermediary before the relinquished property closes. Your broker may know that you are doing a 1031 exchange, but the mechanics, timeline, and tax analysis of the exchange are entirely the CPA’s responsibility.

The Risk of Not Having Both Specialists

The problem is not that MHP brokers try to give tax advice — most experienced brokers are careful not to. The problem is that buyers sometimes assume the broker’s expertise covers everything, or that a general CPA who has never reviewed an MHP financial package can step in during due diligence and handle the tax side.

Neither assumption holds. The tax decisions in an MHP acquisition are specific enough that they require a CPA with deep MHP familiarity — not a CPA who “does real estate” in the general sense, and not a broker who knows the market.

The practical cost of this gap is real. A buyer who acquires a park with the wrong entity structure may face unexpected self-employment tax on rental income. A buyer who fails to commission a cost segregation study and defaults all assets to 27.5-year treatment loses years of accelerated depreciation. A buyer who does not think about purchase price allocation at closing may agree to an allocation that is unfavorable from a tax perspective — and Section 1060 makes that allocation binding.

How to Coordinate Your Broker and Your CPA

The right model is to engage both specialists at the right time, with clear roles.

Your broker handles the market side: sourcing, pricing, LOI negotiation, and deal structure in the real estate sense. Bring your broker in first — they are the one who gets the deal on the table.

Your MHP CPA handles the tax side: due diligence financial review, entity structure recommendation, acquisition tax plan, purchase price allocation input, and coordination of cost segregation timing. Bring your CPA in as soon as you have a signed LOI — not after closing.

The overlap between the two is the financial due diligence period. During that period, your broker may be negotiating repairs or price credits based on inspection findings. Simultaneously, your CPA should be reviewing the seller’s financials, building the normalized NOI analysis, and developing the acquisition tax plan. The two processes are parallel, not sequential.

One practical coordination point: share the offering memorandum and the due diligence documents with both advisors. Your broker needs the full financial picture to negotiate effectively. Your CPA needs the same picture to build the tax plan. Keeping either advisor in the dark creates avoidable blind spots.

The Decisions That Live Exclusively With Your MHP CPA

To make the division of expertise concrete, here is a list of decisions that belong exclusively with your MHP CPA — not your broker, your lender, or your attorney (though the attorney handles the legal documentation of some of them):

Whether to acquire in an existing entity or form a new one. How to structure a multi-investor acquisition for tax efficiency. What purchase price allocation to propose and negotiate under Section 1060. Whether a cost segregation study makes economic sense for this specific acquisition. Which bonus depreciation elections to make and for which asset classes. How to structure the acquisition if it is funded by a 1031 exchange. How the passive activity rules affect your ability to use depreciation losses against other income. What the estimated recapture exposure will be if you sell within a certain timeframe. Whether an installment sale election makes sense for any seller-financed portion of the transaction.

None of these questions appear in the broker’s engagement letter. They appear in the tax return, in the first-year depreciation schedule, and in the acquisition tax plan your MHP CPA builds. See our overview of what strategic tax planning for MHP owners covers and the full scope of acquisition due diligence to understand how these decisions fit together.

Finding the Right MHP-Specialized CPA

The qualifier “MHP-specialized” is not marketing language — it is a functional description of the knowledge base required. Most real estate CPAs do not have it. MHP-specific depreciation rules (5-year POH classification, 15-year land improvements, RUBS income treatment), MHP-specific due diligence analytical frameworks, and MHP-specific exit strategy modeling require a CPA who has worked exclusively with this asset class long enough to develop fluency.

The right question to ask any CPA is not “do you do real estate?” The right question is “how many MHP acquisitions have you worked on, and can you walk me through how you approach the purchase price allocation and cost segregation analysis?” The answers will tell you immediately whether you are talking to a specialist or a generalist who has handled a park occasionally.

For more on how MHP accounting differs from standard real estate accounting, and why that difference matters, see our detailed comparison post. And for a look at the financial checklist your MHP CPA should work through on every acquisition, see our MHP due diligence financial checklist.

Frequently Asked Questions

For IRS guidance on asset acquisitions and Section 1060 allocations, see IRS Form 8594 Instructions (Asset Acquisition Statement Under Section 1060).

This content is for educational purposes only and does not constitute tax or legal advice. The MHP Accountant recommends consulting a qualified CPA for advice specific to your situation.