Would you rather own 20 lots yourself or be an LP in 120?

I voted own it, mostly because I've spent long enough analyzing that I know what analysis doesn't teach you. But 20 lots is the number that worries me. At $300 lot rent that's $72,000 gross and maybe $45,000 net, and a single well pump or a 200-foot main repair is a year of it. If you're going to own, own 35 and up so the fixed costs spread.

The list I've been building is all 20 to 40 lot parks and the thing I keep finding is that the small ones almost never have clean books. Owner is 74, runs it out of a checkbook, has three tenants paying cash and one paying in mowing. That's the opportunity and it's also the risk, and you can't diligence your way out of it entirely.

Own it. You already know how to run something small and the whole point of the land-lease model is that the expensive stuff isn't yours. On my long holds the lesson has been that patience only pays if you actually control the asset. An LP position teaches you what a sponsor chooses to tell you, quarterly, in a letter they wrote.

Before you pick a door, one question decides more than the door does. Are the utilities inside that 20-lot park public and metered to residents, or is there a well, a septic field or a master meter? A 20-lot park on city water and sewer with meters in tenant names is close to owning a parking lot that pays you. A 20-lot park with its own well and a drain field is a small utility company with a housing hobby attached, and it needs a licensed operator in most states. Same lot count, completely different job.

Dumb question that I'd want answered before either door. If a resident owns their home and stops paying lot rent, what actually happens? Do you evict the person and the house stays there, and then whose house is it? That process seems like the entire risk of the model and I've never seen anyone explain it in plain terms.

@compass, what it comes down to is that you're evicting from the lot, and the home stays put because moving it costs thousands. What happens to the home after that runs through your state's abandoned mobile home process, which varies a lot state to state and can take months, and you generally need a lawyer for it. That gap is where small owners get hurt. You hold a lot you can't rent with a home on it you don't have title to.

@cairn, on the poll I said LP, and only because my small portfolio taught me that the thing that breaks at scale is my own time. Twenty lots two hours away with one abandonment in progress is a second job that pays about $40k.

LP for me, obviously, since I'm trying to avoid the second job. Though I'll admit the honest reason is that I don't want to be the person deciding whether to raise lot rent on someone's grandmother.

I voted own it and I want to push back on @thicket a little. One abandonment in the first two years is a fair assumption, and you learn the process once and then you know it. The LP path has a version of the same problem where you learn nothing and you can't sell your position when you want out. Illiquidity plus no control is a real cost that the quarterly distribution hides.

Coming from zero I looked at both and what surprised me is how few small parks are actually listed. If you go the own-it route you're doing direct outreach for months first, which is its own project. The LP door is open today. That's not an argument about quality, it's an argument about timeline.

One thing to check on door one before anything else: is the park a legal nonconforming use, and does the local zoning let you replace a home on a vacant lot? I've seen small parks where the ordinance was rewritten in 1996 and the park is grandfathered as-is, so every lot that goes empty stays empty forever. That turns a 20-lot park into a shrinking annuity and no amount of good operating fixes it. Zoning language differs by jurisdiction, so read the actual ordinance and ask the planner in writing.

@parcel, that's the post in this thread. @cairn, if the answer on replacement rights is yes, own it. If it's no or the planner hedges, walk regardless of price.