All Forum Posts by: Tariq K Frantz

Hi Thomas, sorry for the delay in my response, crazy end to my year and havent' been on BP for while. Will be back on regularly now. Regarding OKC, I haven't pulled the trigger yet, quite frankly was having a hard time finding properties with the right rent purchase price ratio for my underwriting relative to other markets. I am in the process of setting up an LLC with a friend and plan to refi to BRRRR properties in Indiana that we just finished the rehabbing. I will let you know as to the difficulty in LLC once complete. Happy to connect anytime over the phone, will send you a private message. Best, TK

LOL, Shweta - I have incorporated these points into my elevator pitch :)  I am just finishing up a $75M 506(b) equity raise in conjunction with an MHC (acquirer/owner/operator) client of mine.  We have purchased 5 properties since last December - two in AZ, two in FLA and one in CA.  We still have plenty of dry powder to put to work and like you are continuing to look for off-market deals, we have a number of LOIs out but as you know the demand for this asset type is growing, pricing is pretty rich and it's often hard to convince owners to sell.  I look forward to keeping in touch.  Best, TK  

Jack & Shweta - clearly you've both done your homework, I will continue preaching to the choir and get even a little more granular on the positive points you have made: 

Affordability: Wage growth has lagged cost of housing growth in the U.S. over the past 35 years. This trend is expected to continue for years to come. Housing is a necessity and MHC is one of the most cost-effective options.

- Increasing Demand Across Age Cohorts: Boomers downsizing coupled with a growing number of Americans who can no longer afford to rent or own traditional housing continues to drive demand for MHC - see chart below.

- Limited Supply: Only 10 new MHC sites have been approved in the U.S. over the last two decades - see chart below.

- Downcycle Outperformance: MHC is the least sensitive property type to negative changes in GDP - the average stay in in MHC is 13 years, unheard of in residential real estate - resulting in stable predicatble cash flow with an ability to consistently, yet responsible increase rents.

Lastly, a quick glance at some MHC investors and proponents:

Warren Buffett is a significant investor in the MHC space, favoring the sector for its stable, predictable cash flow. He owns Clayton Homes and 21st Mortgage, the largest manufacturer and largest financier of manufactured homes in the country, respectively.

Sam Zell is on record as saying that MHC is the one property type he would never sell. In 1998, he started Equity Lifestyle Properties (NYSE: ELS), the largest MHC REIT in the nation by market cap. ELS has reported quarter-over-quarter NOI growth for 20 consecutive years, including throughout the Great Recession.

Blackstone is one of the largest, most sophisticated real estate and private equity investors in the nation. In June 2018, the company made their first foray into the MHC space, acquiring a 14-asset portfolio for $172M.

Green Street is the gold-standard for independent research within the commercial real estate industry. The firm has had MHC as its top performing property type for the last year and a half and a November 2018 report described MHC as “one of the most attractive property types in both the public and private markets due to 1) a best-in-class cap-ex profile; 2) structural barriers to new supply; and 3) still-too-high nominal cap rates.”

Best, TK

Thanks, Jack.  I agree on the RV Parks, quickly becoming an institutionalized asset class as well.  Best, TK

Hi Odie, sorry for the delay in my response, I was on vacation last week.  I agree with you on local banks; my reasoning for local HMLs is, because I am out of state, I like to get opinions from those with local knowledge and I like a second set of eyes on my deal metrics as well.  Best, TK

Hey Caleb, thank you for reaching out.  I'm an out of state investor, so I try to find local folks but if I am not able to in OKC, I will be sure to be in touch on my next deal.  Thanks again, all the best, TK

Hi Cassi, thank you for taking the time to respond. I will reach out to the firms you referenced. Do you invest in OKC? No pressure but would love to pick your brain, I'm thinking about starting to buy BRRRR properties there but am still doing some market research. Kindest regards, TK

Thank you, Michael. That was my initial feeling, as well, to do an out of state SFR on my own first. Best, TK

For those researching Manufactured Housing Communities / Mobile Homes Parks, here is the investment thesis in a nutshell, from an industry leader and one of the worlds' most successful real estate investors. The returns quoted belong to his public REIT. Best, TK

Love it! Go after your dreams!  I live in California but have lots of family that was born and raised and  have stayed in and around Detroit.  Micro market knowledge will be key and I have also heard there is also plenty of opportunity in the burbs.  The one thing I have consistently heard is that there is a lack of good PMs, sounds like an opportunity for a young star like you.  Good luck.