When occupancy is 94 percent on the rent roll and 81 percent on the ground, the aerial is what catches it

Happens more than people admit, especially on seller-provided T12s with no third-party verification.

What I'd want: when were those pads last inspected for utility stub condition?

Pad count delta is a separate line on the appraisal grid for a reason.

The infrastructure question is the one worth losing sleep over. A park in eastern Ohio showing 47 pads on paper and 39 homes actually standing when someone drives it is a common enough pattern, usually with a relocated story attached. What nobody says until you are already in the weeds is that a vacant pad where a home got dragged off can mean the utility stub is compromised and the skirting anchor points are gone, and on a septic system park the lateral may have been damaged during removal. Getting a home back onto that pad becomes a 4,000 to 8,000 dollar rehab on infrastructure you assumed was ready to receive, on top of the lot fill cost. At a 6.8 cap on phantom cash flow, a buyer is paying for occupied lots that are actually broken ground. The thing worth knowing that you did not mention is the water and sewer setup. If it is a municipal pass-through and those eleven pads still had meters running, there is a utility bill trail that should reconcile against the rent roll and expose the vacancy in black and white. A seller who cannot produce 24 months of utility invoices on a park that size is telling you something. Underwriting off actual utility consumption per pad works well as a cross-check on occupancy, and the spread between claimed and real gets uncomfortable fast once those numbers sit side by side.

Eleven "relocated" residents is a specific kind of fraud because it's defensible in court, they didn't fabricate tenants, they just left expired leases on the roll and called the lot rent collectible. I've seen note sellers do the same thing with performing status on loans where the borrower hasn't paid in four months but the cure window hasn't technically closed.

The 5.4 is probably still optimistic if those empty pads have been dormant long enough to need utility reconnection fees or engineered setback re-certification before a new home can go in, and in some counties that alone runs $8-12k per pad.

Passed on one in Laurel, Mississippi in late 2023 where the gap was only six units but the math was almost identical. Seller had a 7.1 cap on paper and I got to a 5.8 after the site walk. What made it worse was that two of the "relocated" residents had actually signed new leases at a competing park two miles up the highway. So the story wasn't just inflated occupancy, it was that the market itself had shifted and this park was losing to someone with newer infrastructure. The T12 was 18 months stale by the time it hit the broker package, and nobody flagged that the trailing period predated the competitor's ribbon cutting.

The thing I would want to nail down before anything else is the vintage of the water and sewer lines under those empty pads. On the Mississippi deal we pulled permits and found that the pad cluster with the highest vacancy was also the section with cast iron laterals from the late 1960s. Rehab cost on that alone was going to eat two years of lot rent on every pad in that zone, occupied or not. A 6.8 cap built on phantom units is bad. A 6.8 cap built on phantom units sitting above failing infrastructure that you now own is a different category of problem entirely.

Walking every pad before LOI is the one diligence step that reliably catches this. Take a 47-pad park in rural Ohio as the illustration. The buyer walks it and finds six concrete slabs with utilities capped and no home on them, none of which appear anywhere in the offering memo. The seller calls them ready to fill, which is technically true, but the T12 has lot rent coded to two of them. Two phantom lots on a 47-pad park move the cap from 7.1 to 6.6, and that is before anyone discovers the water lines under three of the empty pads were cut and backfilled when a home was dragged off in a hurry, which the ground disturbance will usually date to within a year or two. A repair estimate of $14,400 just to make those pads leasable again kills the deal at the original price. In that scenario a seller who comes down $60k gets to a closing, and a seller who will not has told you what the park is really worth. What never holds up is accepting "relocated" as an explanation without a forwarding address or a move-out record. Push on that word specifically and what actually happened is almost always one of three things: an eviction that never got papered correctly, an abandoned home that got stripped and dragged off for scrap value, or a home the park owner sold and pocketed without updating the rent roll. The third is the most common and it is not always malicious, sometimes the bookkeeping simply never caught up, but the income number is fiction either way. Ask for the actual move permits on those eleven. In most states moving a manufactured home requires a transport permit and those are public record. Eleven moves with no permits tells you everything you need to know about what that T12 really was.