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Four Peaks Income Fund V, LLC (the “Income Fund”) seeks to raise up to $5,000,000 to acquire a blend of distressed and stabilized mobile home parks (the “Parks”) in order to renovate and add value to communities that have been mismanaged by legacy owners.For more information about Four Peaks click here to visit their website.
By restoring and aggressively turning around these parks, not only do we continue to do our part to return pride of ownership to the communities, but we add a tremendous amount of value to these assets. This immense value creation is what allows us to provide investors in this fund an 8-10% preferred return with 80% of cash flow and 50% of the upside, which will be paid on a quarterly basis as well as provide further diversity in the Income Fund’s holdings.
This Income Fund is ideal for investors who are looking to place their capital in a real estate-backed investment that produces consistent and predictable monthly cash flow, along with back-end appreciation participation. Since the close of Four Peaks’ last fund, it has paid out 10% annualized return to its investors.
The purpose of the Income Fund is quite simple. To acquire a range of parks, some mismanaged and distressed, and turn them around in 18–36 months. In some instances, FPCP can acquire parks at 25% to 50% occupancy and bring them up to 80% to 90% in as little as 18–24 months. After the rents are stabilized for an additional 6-12 months, conventional financing allows us to refinance the property and pull out the majority of the value-add created in that time.
At this point, the Income Fund will return the initial capital to investors. Once 100% of the initial investor capital has been returned, we will hold the assets long term, or until we deem the appropriate time to sell. If we do not return 100% of the initial investor capital within 5 years, the properties will be sold with investors receiving their share of the backend appreciation and the fund will be retired. All fund owners will have the right of first refusal to Four Peaks’ then current Income Fund, which we anticipate will continue to offer strong, predictable streams of income
It’s Real Estate. Mobile Home Parks are real estate, and so all of the reasons we love real estate (tax benefits, leverage, favored government asset, hedge against inflation, and maybe most important: it’s NOT a Wall Street or a paper asset) are applicable here.
They are Cash Cows. There is no other way to put it. There is an incredible demand for affordable housing and mobile homes in particular.
The unfortunate reality today is that according to the US Census Bureau, over 50% of Americans are living on less than $600 a week. And when it comes to retirement, over 75% of retirees have less than $30,000 in retirement accounts with a whopping 47% having NO savings whatsoever.
We always hear that Baby Boomers are retiring in record numbers: 10,000 per day for the next 18 years. But what we don’t always hear is that the average social security benefit of these retirees is just $1,294 per month. Coupled with the alarming statistics of retirement savings account and current incomes, the mobile home park industry has seen a steady increase in demand over the past decade.
And how has affordable housing addressed this increase in demand? One would expect with an increase in the supply of mobile homes. Except the exact opposite has occurred.
Warren Buffet. Why is Warren Buffet, through Berkshire Hathaway subsidiaries Clayton Homes and 21st Mortgage, one of the largest players in the mobile home space?
For starters, the term mobile home is atually quite a misnomer. These homes rarely leave their parks due to the high cost of relocation: typically, around $5,000 and as much as $8,000 in some markets.
Warren Buffet bets on value assets and is in it for the long term. PPC is honored to have partnered with Clayton Homes and 2
The offering materials to be reviewed and considered by investors with respect to this offering include the information described in the website content relating to this offering (as amended and supplemented through and until the closing of the transaction) and the subscription agreement relating to such securities (see the "Documents" tab). We refer to all of this information collectively as the "Property Information Package". Investors should review the Property Information Package in its entirety before investing and should consult with appropriate legal, tax, and investment advisors. Please note that RealtyeVest is not serving as your fiduciary or advisor with respect to this opportunity.
Below are certain risks associated with this investment that should be carefully reviewed prior to any investment in this opportunity:
Forward-Looking Statements: Investors should not rely on any forward-looking statements made regarding this opportunity, because such statements are inherently uncertain and involve risks. We use words such as “anticipated,” “projected,” “forecasted,” “estimated,” “prospective,” “believes,” “expects,” "plans,” “future,” “intends,” “should,” “can,” “could,” “might,” “potential,” “continue,” “may,” “will,” and similar expressions to identify these forward-looking statements. Similarly, the financial forecasts contained herein and in any other offering materials are based on numerous assumptions. Although these assumptions are believed to be reasonable, they are all subject to uncertainty. Non-Transferability of Notes: The transferability of the Company's Notes is restricted both by the subscription agreement for that entity and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer the Notes. There is also no public market for the Notes and none is expected to be available in the future. Moreover, although there is a defined redemption date for the preferred equity investment in the Fund, an extension option may be exercised and in any event, there can be no assurance that the investment will be liquidated at or promptly after such maturity date (as it may be extended). Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.
Real Estate Market Risk: Investments related to real estate are subject to market valuation risks that may be caused by changing economic and local market conditions such as local real estate market conditions, prevailing interest rates, the rate of unemployment, the level of consumer confidence, the value of the U.S. dollar, energy prices, changes in consumer spending, the number of personal bankruptcies, disruptions in the credit markets and other factors. Such conditions are beyond the control of the Company and of the Fund. Real estate markets are affected by many factors, such as general economic conditions, supply and demand for real estate investments, interest rates, the availability of financing, and other factors, all of which are beyond the control of both the Company and the Fund.
Borrower Credit Risk: The Company’s obligation to make payments on a Note will not be guaranteed for the length of the term corresponding to the borrower’s loan. The Company (and thus investors) will be relying on the borrower for the execution of its business plan in a way that enables the sponsor to repay the principal of the corresponding borrower loan. The borrower may not have a significant record of performance and may be unable to sell or refinance the underlying property in a way that enables the borrower to fulfill its obligations under the corresponding borrower loan. The borrower loan is being made with respect to a property that does not generally meet the financing criteria for conventional mortgages from institutional sources. Credit risk is inherent in the mortgage lending industry, and there can be no assurance that the creditworthiness of the borrower will be sufficient to assure the full repayment of the underlying borrower loan. The Company does not guarantee payment of the Notes or the corresponding borrower loan, and the Notes are not obligations of our borrower.
Four Peaks is one of the largest virtual private investment firms in the United States focused on alternative assets. We’ve spent the past several years building a proprietary system to invest in this fragmented asset class with challenging processes and tremendous upside potential.
Our core mission is to acquire undervalued alternative assets, add value and provide excellent returns and tax-advantaged investment options to our partners. We help passive investors discover new opportunities, stay safe from the volatility of Wall Street, and create their own economy. Through this process, we ultimately achieve financial freedom together.
Our Acquisition Team has over 30 years of experience identifying, analyzing, and negotiating Mobile Home Park investment opportunities. We foster direct relationships with owners in our target markets through years of boots-on-the-ground experience, direct mail campaigns, and other methods to keep PPC known to local and National Park owners.
We conduct a detailed demographic analysis before investing in any market. Investments are evaluated with a near-term perspective on improving property performance and a long-term perspective on the health of the immediate and regional markets.
The Team has years of experience in creating, building, and running multi-million-dollar investment platforms and organizations. The Team is actively involved on a day-to-day basis in every phase of operations, from acquisitions to active asset management.
We utilize advanced, proprietary technological tools to track each stage of the acquisition, repositioning / improvements, and the overall asset-management process. Operational excellence is achieved through customized systems that allow us to closely monitor and manage a national portfolio of properties with local and regional area experts.Please see OM in Document Section for case studies.
Andrew Lanoie: Andrew is an expert at building teams and connecting people with opportunities. Formerly a Talent Agent at William Morris for 16 years, he represented some of the world’s biggest celebrities, including Tim Allen, Sheryl Crow, Barry Manilow, and Peter Frampton, to name a few. In 2009, Andrew began investing in single-family residences and acquired well over 100 properties in less than 4 years. During this timeframe, he discovered the massive demand for affordable housing in America and chose to leave the agency and focus full-time on real estate investing. After a few initial investments in manufactured housing and Mobile Home Parks, Andrew realized the opportunity for a powerful and positive disruption in the market by providing the dignity of a free-standing home with the affordability of manufactured housing—and hence the creation of Park Place Communities TM. In less than 2 years, Andrew and team have closed on 13 manufactured housing communities in 7 states, with close to 1,000 lots, quickly making Park Place Communities ™ a Top 100 Owner / Operator in the U.S. With his sights set firmly on becoming a national Top 10 owner and operator, Andrew will continue to lead the vision and execution strategies for PPC on a daily basis. Andrew will focus on the growth of PPC through strategic partnerships, scaling the companies, and investor relations.
Michael Ayala: Mike Ayala has been active in construction and management since he was 15 years old. He graduated from the Associated Builders and Contractors 4-year project management program at age 22 and then became a licensed instructor. Shortly thereafter, his first project was the management and oversight of a multi-million-dollar casino remodel. By age 24, Mike founded his first construction company and has been involved with over 2,000 projects totaling over $1 billion, including hospitals, courthouses, federal buildings, casinos, mills, gold-processing facilities, civil projects, multi-family homes, and shopping centers. Of the companies he started, most notable is the construction company that scaled quickly to more than 100 employees and sold at a $12 million valuation, making it onto the Inc. 2009 “2500 Fastest Growing Companies in America” list. Additionally, Mike currently owns 160 Mobile Home lots, has renovated over 500 units, and manages over $1M a year in rents under management.
As the population continues to age and also grow, the need for affordable housing strengthens. Single-family home affordability continues to decline and is at an all-time low, while the aging population retires. Over 50% of Americans are living on less than $600/week.
New Mobile Home Parks are largely not being developed. Sprawling metropolitan areas Are crowding out many Mobile Home Communities, and municipalities’ zoning restrictions discourage development of new parks. On a net basis, MHPs decrease in supply nearly every year as properties are converted to higher and better uses as areas gentrify.
The lack of new supply further increases demand and represents opportunity to fill existing parks with new units and tenants. As the U.S. wage gap continues to increase, there has been a shift towards lower-paying jobs, which leads to an increasing demand for affordable housing. Baby Boomers on fixed incomes are retiring in record numbers, creating a greater demand for affordable housing that will only continue to grow.
Lack of savings and earnings is fueling the affordable housing market. 10,000 Baby Boomers retire each day with an average social security benefit of just $1,294 per month. 75% of retirees have less than $30,000 in their retirement accounts, and the bottom 50% have zero measurable savings. 55% of mobile home owners reported annual household incomes less than $30,000.
Manufactured Housing is the last dream of homeownership for Americans. 75% of owners expect to stay in their Mobile Homes for 5 years or longer, and a large percentage expect never to sell. Of those planning to move or sell, 34% expect a Mobile Home to be their next residence (up 3% from 2008 Market Facts). MHPs are one of the most stable and predictable investments during a recession and recovery. 68% own or are buying their Mobile Homes; 24% rent.
Many MHPs are owned by legacy investors who are not professional landlords. ‘Mom and Pop’ operators mismanage everything from income potential to operational standards. PPC improves the tenant experience and mitigates operational risks thereby delivering more reliable income streams. Often ‘Mom and Pop’ owners have not invested to upgrade their parks and attract a stable, long- term tenant base. When rents are below market, PPC is essentially buying at a discount and is able to come in and slowly bring rents to market and realize significant gains along the way. Many park owners face difficulties in bringing new homes into their parks to attract new tenants. PPC is exploring several partnerships that will allow it to not only bring in brand new homes but also do so with little to no costs. PPC’s ability to cultivate these types of partnerships gives it an advantage over ‘mom and pop’ owners for whom this would be too capital intensive.