Has anyone actually made money owning the land under a small home community long term

What is the average home value sitting on those pads, because that single number decides whether you have a financing problem or not.

The cap rate spread you cited (7 to 10) is not a data problem, it reflects two genuinely different buyer pools. Institutional land-lease buyers, the ones who push cap rates toward 7, want scale, professional management infrastructure, and a track record of stable rent rolls. A 20-pad community in Stark County is a private buyer or a small regional operator. Those buyers price closer to 9 or 10, sometimes higher, because they cannot finance it cheaply and they are absorbing your execution risk. If you underwrite to a 7 exit and the actual buyer wants 10, the value differential on a $7,700/month gross is not academic. That is the assumption doing the most work in your model right now.

The home-financing question is the structural risk you named but maybe understated. Chattel lending on manufactured homes is available but expensive and lender-specific. Site-built or modular homes on leased land hit a different wall: conventional conforming loans (Fannie, Freddie) generally require fee-simple ownership of the land, so a buyer of a home on your pad is likely looking at portfolio lenders, credit unions, or chattel products. That compresses the buyer pool for every home sale in your community. A compressed home-buyer pool means your tenant turnover events are slower and messier, which means your pad vacancy risk is higher than a straight residential vacancy model suggests. Confirm the current secondary market treatment of ground-leased residential parcels with a lender who does this product in Ohio before you model occupancy.

On approval rights for incoming tenants: ground lease terms vary widely, and what you can legally require for tenant approval, income verification, credit thresholds, right of first refusal, is a function of how the lease is drafted and Ohio landlord-tenant statute as applied to ground leases specifically. A real estate attorney in Ohio who has done land-lease residential work, not just commercial ground leases, needs to draft that document. This is not the place for a generic template.

Your $190k against a $310k land purchase puts you at roughly 61% LTV before you spend anything on pad infrastructure, utilities, or entitlements on a parcel that was graded for a project that failed. What did that project fail on, and have you pulled the entitlement history?

The exit cap rate question is real, but the structure you pick to get there matters more than the spread itself. If you hold as raw land-lease income with no community infrastructure ownership, institutional buyers (the ones who move that cap rate toward 7) want scale, usually 50-plus pads, and a proven rent escalation clause tied to CPI or a fixed annual step. At 18 to 22 pads you are more likely selling to a regional operator or a private buyer, and those buyers price it closer to 9 or 10 because they are buying your management headache alongside your income stream. The structure that wins at your size is one where the ground leases have 10-year initial terms with automatic renewal, documented rent escalation, and explicit approval rights over home transfers, because that paper is what a buyer is actually acquiring.

On the home-sale financing question, this is where site-built versus modular matters enormously. A site-built home on a leased lot can get conventional financing if the ground lease term extends at least as long as the loan term plus some buffer, typically 20 years beyond loan maturity for most lenders, and your approval-rights language has to be narrow enough that a lender does not read it as a blanket right to refuse transfer. Chattel financing exists for manufactured homes on leased land but it carries rates 150 to 300 basis points higher than a conventional mortgage, and that financing cost depresses what a buyer can pay for the home, which depresses your pad's desirability over time. Modular, titled as real property and affixed to a permanent foundation, can follow the conventional path, but only if the ground lease is structured to satisfy secondary market guidelines, which you should have a real estate attorney draft with that specific requirement in mind.

The assumption you are carrying that I would pressure-test is the

The financing thing you flagged is the one that actually bites. I have watched two people in central Ohio try variations of this and the leasehold financing problem is not theoretical, it shows up at the first resale and it does not go away. Conventional lenders will not touch a purchase where the buyer does not own the dirt, full stop, and the pool of portfolio lenders willing to do it in Stark County or anywhere near Massillon is thin enough that you are basically telling your future pad tenants they can only sell to cash buyers or people with access to chattel financing, which on a site-built or modular is complicated because chattel is priced for manufactured housing and the appraisal process for a modular on leased land is a mess. What that actually does to you is suppress the resale value of the homes on your pads, which suppresses demand for pads, which makes your occupancy projections optimistic from day one.

The thing I have never seen work is the assumption that pad rent can float upward at lease renewal without triggering a political or legal fight. Every version of this I have heard about, the landlord goes to bump ground rent after year five and the homeowners, who have zero mobility because they own a structure they cannot easily move, organize and either get local press or push for municipal rent stabilization on the land component specifically. Massillon is not a big city but it is not nothing either, and a news story about a landlord raising rent on people who own their own homes is a rough look. What actually happens is owners either eat the flat rent for years to protect the relationship or they sell the land at a cap rate that reflects all this uncertainty, which I suspect is closer to that 9 or 10 end of your range, not the 7. What is the current zoning on that parcel and has the county already seen a

The lender question on the homes is the one I keep hitting when I read PPMs for similar structures. Chattel financing exists but it prices at 8 to 10 percent and 20-year amortization, which compresses what a buyer can pay for the structure and directly limits the pool of people who can take over a pad. That illiquidity is not theoretical, it shows up in your absorption timeline before you are even thinking about exit.

$350 a month in Massillon also feels light to me. Stark County land lease rents I have seen quoted in operator decks are closer to $420 to $475, and even that struggles to justify the infrastructure buildout cost on raw graded land that still needs utilities stubbed to 20 pads.

What did the seller tell you the grading and utility work already completed is worth, and did you get an independent estimate on what finishing it actually costs?

Chattel lenders like 21st Mortgage will finance the structure but their rates punish the buyer enough to thin your tenant pool fast.

The ground lease approval rights question is where I would focus before the cap rate math, because those two things are connected in a way that is not obvious at first. If your lease gives you broad tenant-approval authority over incoming buyers, that language looks protective but it is exactly what makes a conventional lender nervous about financing the home purchase, since the lender holds collateral they cannot freely sell without your sign-off. The cleaner structure is a lease that grants the incoming buyer a right of first refusal on a new ground lease at the same terms, with your approval rights narrowed to creditworthiness criteria spelled out in advance, which gives the lender a cleaner path to foreclosure and disposition if they ever need it. That distinction, broad discretionary approval versus criteria-based approval, is what separates a community that refinances and trades at a seven cap from one that gets repriced to a ten because buyers cannot get financing and the pool of exit buyers shrinks to cash-only investors. On the parcel itself, the number doing the most work in your model is not the pad count, it is whether Stark County will permit the density you are penciling given the setbacks and whether the grading that was already done matches a residential use or something commercial that got abandoned. What infrastructure stub-outs, if any, are already on that parcel?