Resident-owned community purchases fail because co-ops can't outbid PE firms

When a mobile home park goes up for sale, residents theoretically have the best incentive to buy it — they live there, they'll maintain it, and they'll keep rents affordable. About 300 resident-owned communities (ROCs) exist across 20 states, proving the model works. But in practice, resident cooperatives lose most purchase opportunities to private equity buyers because of three compounding barriers. First, bank financing for co-ops requires higher equity contributions and shorter amortization periods than commercial loans to PE firms, meaning higher monthly payments on smaller loan amounts. Second, conduit loans (CMBS) — a major financing source — have been largely unavailable for resident purchases. Third, residents must organize, form a legal cooperative, secure financing, and close the transaction within the same timeline as cash-rich institutional buyers who can close in weeks. Even in states with right-of-first-refusal laws, the notice period is often too short for residents to arrange financing. The structural reason this persists is that the financial system treats a cooperative of 50 working-class families as a riskier borrower than a PE firm planning to extract value and flip the park, even though ROCs have a nearly zero failure rate.