What Cap Rate Should I Pay for a Mobile Home Park in Dallas, TX?

By PrimeX Capital Research Team

The Dallas-Fort Worth (DFW) metroplex continues to be a hotbed for commercial real estate investment, and Mobile Home Parks (MHPs) stand out as a particularly resilient and high-performing asset class. For investors looking to enter or expand their portfolio in this market, understanding the current capitalization rate (Cap Rate) is the single most important factor in determining a fair purchase price.

Understanding the Current DFW MHP Cap Rate Landscape

A Cap Rate is a fundamental metric used to estimate an investor’s potential return on a real estate investment. It is calculated by dividing the property’s Net Operating Income (NOI) by its purchase price.

Cap Rate = Net Operating Income (NOI)/Purchase Price

Based on our analysis of the DFW market in early 2026, the Cap Rate landscape for MHPs is segmented by asset quality and location, closely mirroring the broader multifamily sector:

Asset Class	Localização	Typical Cap Rate Range (2026)	Estratégia de investimento
Class A / Stabilized	Prime DFW Suburbs (e.g., Plano, Frisco)	5.5% – 6.0%	Core/Core-Plus: Focus on stable income and minimal operational risk.
Class B / Value-Add	Secondary DFW Suburbs (e.g., Lewisville, Garland)	6.0% – 6.5%	Value-Add: Focus on increasing NOI through operational efficiencies and light renovations.
Class C / Fringe Market	Outer Rings (e.g., Terrell, West Tawakoni)	6.5% – 7.5%+	Opportunistic: Focus on deep value-add, heavy repositioning, or development plays.

The Cap Rate is a Reflection of Risk

The primary reason for the variation in these rates is risk. A lower Cap Rate (e.g., 5.5%) indicates a lower-risk, highly stabilized asset, meaning the investor is willing to accept a lower initial yield for greater security and predictable income. Conversely, a higher Cap Rate (e.g., 7.5%) signals a higher-risk, value-add opportunity, where the investor demands a greater initial return to compensate for the operational challenges and capital expenditure required to stabilize the asset.

For PrimeX Capital, our strategy often targets the Class B / Value-Add segment. We seek properties trading in the 6.0% to 6.5% range, where our expertise in operational improvements and capital deployment can quickly force appreciation and drive the effective yield well above the initial Cap Rate.

Key Factors Driving Cap Rate Decisions in DFW

When determining the Cap Rate you should pay, PrimeX Capital considers several critical factors beyond the initial number:

1. Zoning and Development Potential

The DFW area is highly regulated, making the creation of new MHPs nearly impossible in many municipalities. This scarcity drives up the value of existing parks, pushing Cap Rates lower. However, recent legislative changes (like TX SB785, effective September 2026) aim to reduce local regulatory obstacles, potentially making fringe markets with favorable zoning (like the “No Zoning” areas near Terrell) more attractive for opportunistic development plays, which may temporarily trade at higher Cap Rates due to the execution risk.

2. Utilities and Infrastructure

MHPs with Public Utilities (city water and sewer) are significantly more valuable and trade at lower Cap Rates than those on private utilities (septic and well). Private utilities introduce higher maintenance costs and regulatory risk, justifying a higher Cap Rate (and thus a lower purchase price) for the buyer.

3. Park-Owned Homes (POH) vs. Tenant-Owned Homes (TOH)

The ratio of POH to TOH is a major Cap Rate driver. Parks with a high percentage of Tenant-Owned Homes (TOH) are preferred, as they shift the capital expenditure and maintenance burden to the tenants. Parks with a high percentage of Park-Owned Homes (POH) require more active management and capital reserves, which typically translates to a higher Cap Rate to compensate for the increased operational hassle.

PrimeX Capital’s Conclusion

For a well-located, stabilized MHP in the DFW area, investors should expect to pay a price that reflects a Cap Rate in the 5.5% to 6.5% range.

However, the true opportunity lies in the Value-Add space. By targeting properties with operational inefficiencies or deferred maintenance that trade at the higher end of this range (6.5% to 7.0%), PrimeX Capital can implement a strategic business plan to dramatically increase the NOI and achieve a much higher Yield-on-Cost than the initial Cap Rate suggests.

Ultimately, the “right” Cap Rate is the one that aligns with your investment strategy and risk tolerance. For PrimeX Capital, it is the rate that allows us to create the most value for our investors.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. All investment decisions should be made in consultation with a qualified financial professional.