When site occupancy hides the rental-home case
This article works through a 420-site manufactured-housing acquisition whose 93.6% site occupancy is unchanged after review. It shows why 18 community-owned homes that are in turn or held for sale still reduce Year 1 NOI by $335,000 and increase required equity by $1.437 million.
An occupied manufactured-housing site can contain a resident-owned home or a community-owned rental home. Both support site rent. Only one supports a separate home-rent premium, requires a home asset record and leaves the owner responsible for home turns and disposition.
That is the issue here. The community has 393 occupied sites: 303 resident-owned homes and 90 occupied community-owned rental homes. The seller's case carries the home-rent premium across all 108 community-owned homes. Twelve are vacant and in turn; six are vacant and held for sale.
The following case is illustrative rather than client data. The purchase price is $38 million. The permanent loan is the lower of 60% LTV and an 11.5% minimum Year 1 debt yield. The twelve current turns require $420,000 of acquisition-period capital outside NOI.
The acquisition case before the home-asset reconciliation
The initial case applies $680 of monthly site rent to 393 occupied sites and a $720 monthly home-rent premium to all 108 community-owned homes. Site rent is $3.207 million and the home premium is $933,000.
The home-level case leaves site occupancy and site rent unchanged. It applies the home premium to the 90 homes with current rental residents, carries twelve homes through their turn schedules and treats six homes as sale inventory rather than occupied rentals.
Property revenue falls by $195,000 and operating expense increases by $140,000 after current rental-home repairs, insurance, utilities and collection performance are included. Year 1 NOI falls to $2.505 million.
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| Underwriting line | Initial case | Home-level case | Movement |
|---|---|---|---|
| Occupied sites | 393 | 393 | — |
| Site occupancy | 93.6% | 93.6% | — |
| Occupied community-owned rental homes | 108 | 90 | −18 |
| Year 1 NOI | $2.840M | $2.505M | −$0.335M |
| Permanent loan proceeds | $22.800M | $21.783M | −$1.017M |
| Equity including rental-home turns | $15.200M | $16.637M | +$1.437M |
Separating occupied sites from occupied rental homes
The community map and site ledger establish 393 occupied sites. Titles, serial numbers and the home asset register identify the owner of the home on each site. That reconciliation produces 303 resident-owned homes and 90 occupied community-owned homes.
Resident-owned homes contribute only site rent to the community. Community-owned rentals contribute the same site rent plus a home-rent premium under the resident lease. The two rent components remain separate even when the resident receives a single monthly charge.
A resident sale in place changes the home owner without creating a vacant site. A home removed from the community changes both home status and site occupancy. The model follows the title and site record rather than treating every resident turnover as the same event.
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| Occupied-site composition | Sites | Annual site rent | Annual home-rent premium | Controlling record |
|---|---|---|---|---|
| Resident-owned home | 303 | $2.472M | — | Site lease and resident ledger |
| Occupied community-owned rental home | 90 | $0.735M | $0.778M | Site, home asset and resident lease |
| Total occupied sites | 393 | $3.207M | $0.778M | 93.6% site occupancy |
Assigning each community-owned home an operating treatment
The 108 community-owned homes divide into three current statuses. Ninety have an active resident lease. Twelve are vacant and have open make-ready scopes. Six are listed for resident sale and have no rental resident.
Each turn home carries its inspection, scope, vendor cost, ready date and leasing date. The $420,000 turn budget is acquisition capital; lost site and home rent remain in the operating forecast until the lease begins.
The six sale homes carry no home rent before closing. Sale proceeds remain outside property NOI. Once a buyer closes and occupies in place, recurring site rent begins under the new site lease without retaining the former community-owned home premium.
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| Community-owned home status | Homes | Year 1 treatment | Current capital or proceeds |
|---|---|---|---|
| Occupied rental home | 90 | Site rent and home-rent premium through current lease | Routine reserve |
| Vacant home in turn | 12 | Site and home rent begin on forecast lease date | $0.420M turn budget |
| Vacant home held for resident sale | 6 | No home rent before sale; site rent begins at closing | $0.540M gross sale proceeds |
| Total community-owned homes | 108 | 90 currently revenue-producing | 18 homes require separate treatment |
Carrying home status into Year 1 NOI
Site rent remains $3.207 million. The home-rent premium falls from $933,000 to $778,000. Utility reimbursements and other revenue fall by $40,000 after occupied rental-home accounts are reconciled.
Community and rental-home operating expense increases from $1.720 million to $1.860 million. The revised amount includes current rental-home repair expense, owner-paid utilities during vacancy, insurance, bad debt and leasing costs without moving the $420,000 turn program into NOI.
Total property revenue is $4.365 million and Year 1 NOI is $2.505 million. The revenue loss and turn capital remain separate uses of the same home-level schedule.
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| Model line | Initial case | Home-level case | Movement |
|---|---|---|---|
| Site rent | $3.207M | $3.207M | — |
| Community-owned home-rent premium | $0.933M | $0.778M | −$0.155M |
| Utility reimbursements and other revenue | $0.420M | $0.380M | −$0.040M |
| Total property revenue | $4.560M | $4.365M | −$0.195M |
| Community and rental-home operating expense | ($1.720M) | ($1.860M) | −$0.140M |
| Year 1 NOI | $2.840M | $2.505M | −$0.335M |
Carrying the home-level case into debt and equity
At the $38 million purchase price, the initial NOI produces a 7.47% going-in yield. The $22.8 million loan is constrained by 60% LTV and opens at a 12.46% debt yield.
The home-level NOI produces a 6.59% yield. At 60% LTV, debt yield falls to 10.99%. The 11.5% minimum sizes proceeds at $21.783 million. Purchase-price equity increases by $1.017 million, and the turn budget adds $420,000 more.
The alternate cases change identifiable homes. Completing twelve turns over six months raises average occupied rental homes to 96. Selling the six listed homes starts their site rent at closing but does not restore the home premium. The downside takes another six homes offline and increases turn cost.
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| Model output | Initial case | Home-level case | Movement |
|---|---|---|---|
| Year 1 NOI | $2.840M | $2.505M | −$0.335M |
| Going-in NOI yield | 7.47% | 6.59% | −88 bps |
| Debt yield at 60% LTV | 12.46% | 10.99% | −147 bps |
| Permanent loan proceeds | $22.800M | $21.783M | −$1.017M |
| Purchase-price equity | $15.200M | $16.217M | +$1.017M |
| Rental-home turn capital | — | $0.420M | +$0.420M |
| Total required equity | $15.200M | $16.637M | +$1.437M |
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| Home-inventory case | Treatment | Average occupied rental homes | Year 1 NOI | Loan | Total equity |
|---|---|---|---|---|---|
| Home-level base | Current leases, twelve turns and six homes held for sale | 90 | $2.505M | $21.783M | $16.637M |
| Six-month turn completion | Twelve turn homes return evenly over the first six months | 96 | $2.550M | $22.174M | $16.246M |
| Resident-sale execution | Six held homes sell in place and begin site rent at closing | 90 | $2.535M | $22.043M | $15.837M |
| Turn downside | Six additional rental homes go offline and turn costs rise | 84 | $2.410M | $20.957M | $17.583M |
Reworking the case in Cap Orbit
Cap Orbit can work across the community map, site ledger, home asset register, titles, serial numbers, site leases, rental-home leases, turn scopes, work orders, sale inventory, purchase agreements, debt quote and existing acquisition model in the same deal. Each occupied site can be resolved to its home, owner, resident and current rent components.
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| Current source | Model treatment |
|---|---|
| Site ledger and community map | Developed site, occupied site and resident established |
| Home asset register, titles and serial numbers | Resident-owned and community-owned homes separated by site |
| Site leases and rental-home leases | Site rent and home-rent premium assigned to the correct resident and asset |
| Turn scopes, work orders and make-ready schedule | Offline period, turn cost and lease date rebuilt for each rental home |
| Home-sale inventory and purchase agreements | Sale proceeds separated from recurring site and home rent |
| Debt quote and acquisition model | Home-level NOI and capital carried through debt yield, proceeds and equity |
From there, you can have Cap Orbit separate site rent from home rent, rebuild each turn and sale date, keep sale proceeds outside NOI and update revenue, operating expense, debt yield, loan proceeds, turn capital and equity in the existing model.
The same deal record supports the cases that matter here: specified turn completion dates, in-place resident sales, added rental-home vacancy or a different make-ready budget. Each case returns the same connected outputs—occupied sites, occupied rental homes, site rent, home rent, NOI, debt and equity.
The standard for AI on this asset class is a home-level case in which site occupancy, home ownership, rental status, turn capital and recurring rent resolve into the same acquisition model.