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Mobile Home Park
Mobile Home Park Fund IV #2
Multiple Locations
Completed Equity
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Mobile Home Park Fund IV #2
Multiple Locations
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Overview
Mobile Home Park Fund IV #2
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Details
For more information, view the Sponsor's Investment Memorandum.
Estimated Hold Period 5 to 10 years
Investment Type Equity
Sponsor Documents
The offering documents above have been prepared and are being delivered by the Sponsor of this investment opportunity, and not by RM Securities, LLC. RM Securities, LLC and its associated persons did not assist in preparing, do not explicitly or implicitly adopt or endorse, and are not otherwise responsible for, the Sponsors offering documents posted below or any content therein.
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Management
For more information, view the Sponsor's Investment Memorandum.
MHP Funds, LLC

The principals of MHP Funds, LLC ("MHPF") and their affiliated companies are estimated to collectively have the 18th largest mobile home park portfolio in the country with over 7,500 lots in 15 states. The principals have an extensive 15-year track record of success in the mobile home park industry, and have over 55 years of combined real estate investing experience. They have long established relationships with key market participants such as banks, insurance companies, real estate agents and brokers, and are able to source attractive investments through their own popular MHPF listing websites.  Their extensive experience in both the ownership and operation of mobile home parks makes them uniquely situated to quickly assess investments, determine their risks, evaluate possible turn-around plans and analyze future growth potential.  They have established, proven systems for handling all aspects of mobile home park investing, and their extensive backgrounds and relationships help them identify properties that minimize investment risk and maximize cash on cash returns for investors.

MHPF has developed a set of stringent acquisition criteria that addresses both strong cash flow from day one and adding value to each mobile home park through various means such as increasing rental rates and occupancy, reducing expenses, and improving the quality of the community. The overall objective for each property is to provide an excellent return on investment for both the principals and investors involved, while at the same time providing every resident with a safe and affordable place to live.

The principals of MHPF are recognized as industry leaders, highly regarded educators, and consultants, having authored books and written articles on mobile home parks, conducted mobile home park "boot camps" and educational seminars, and served as mentors and advisors to other mobile home park investors. They have also developed some of the most respected websites dedicated to the MHPF and RV park industries.  

Performance of Prior Funds

Members of MHPF have a strong track record in mobile home park investing that spans over a decade. Since 2010, they have raised over $32 million for six similarly structure funds.  However, as with any investment, past performance is no guarantee of future results. 

  1. MHPS Alumni, LLC ("Alumni 1"): This fund was fully subscribed in May 2010. A total of $2 million of investor capital was raised and used to purchase 437 spaces in five parks located in Colorado, Nebraska, Kansas, and Wisconsin. To date, three parks have been sold (La Junta, CO; Crete, NE; and Black River Falls, WI) and two additional parks were purchased (a portion of Elsmere, KY, and a park in Platteville, WI). 
  2. MHPS Alumni 2, LLC ("Alumni 2"): This fund was fully subscribed in October 2010. A total of $2 million of investor capital was raised and used to purchase all or portions of 595 spaces in five parks located in Illinois, North Dakota, and Oklahoma. In addition, the fund has purchased a portion of a park in Elsmere, KY. 
  3. MHPS Alumni 3, LLC ("Alumni 3"): This fund was fully subscribed in June 2011. A total of $3 million of investor capital was raised and used to purchase all or portions of 985 spaces in 12 parks in Iowa, Minnesota, Wisconsin, Texas, North Dakota, Massachusetts, and Colorado. To date, two parks have been sold (New Braunfels, TX and Eau Clair, WI) and a portion of a park in Elsmere, KY has been purchased. 
  4. Affordable Housing Community Fund 1, LLC ("AHCF 1"): This fund was fully subscribed in February 2012. A total of $5 million of investor capital was raised and used to purchase all or portions of over 1,700 spaces in 18 parks in Nebraska, Illinois, Kansas, Colorado, Minnesota, Iowa, Texas, and Kentucky. 
  5. Affordable Housing Community Fund 2, LLC ("AHCF 2"): This fund was fully subscribed in October 2012. A total of $10 million of investor capital was raised and used to purchase all or portions of almost 2,100 spaces in 16 parks in Iowa, South Carolina, Oklahoma, Illinois, Kansas, Wisconsin, and Nebraska. 
  6. Affordable Housing Community Fund 3, LLC ("AHCF 3"): This fund is estimated to be fully subscribed by the end of July 2013. A total of $10 million of investor capital is being raised to purchase all of portions of over 2,000 spaces in 18 parks in states such as Washington, North Dakota, Texas, Indiana, Missouri, Illinois, and Nebraska.
Prior Funds Snapshot (As of January 27th, 2014)*
PARAMETER ALUMNI 1 ALUMNI 2 ALUMNI 3 AHCF 1 AHCF 2 AHCF 3
Date Fully Subscribed May 2010 Oct. 2010 Jun 2011 Feb. 2012 Oct. 2012 July 2013
Investor Capital Raised ($) $2,000,000 $2,014,500 $3,000,000 $5,000,000 $10,000,000 $10,000,000
Investor Capital Returned ($) $450,000 $0 $0 $0 $0 $0
Unreturned Investor Capital ($) $1,550,000 $2,014,400 $3,000,000 $5,000,000 $10,000,000 $10,000,000
Number of Parks Owned (Fully or Partially) 4 5 8 13 14 18
Number of Mobile Home Park Lots (Ownership % Adjusted) 274 492 565 835 1424  
Estimated Current Occupancy (%) 86% 83% 70% 77% 82% N/A**

*As with any investment, past performance is no guarantee of future results

 

Management Team
Management
Dave Reynolds - President

Dave has specialized in the acquisition of mobile home and RV parks for over 15 years, and has managed companies that have owned and operated over 100 parks in 20 states. Dave co-manages multiple MHP investment funds and currently participates in the ownership of over 7,500 MHP lots. Dave is a licensed Colorado real estate broker and has been involved in additional MHP transactions in that capacity. He acts as a consultant to other MHP investors and operators, has authored four books on the subject, and has developed several of the most popular websites dedicated to the mobile home and RV park industries. His websites collectively receive over 10 million hits per year. Since June 2008, Dave and Frank Rolfe have conducted widely attended quarterly MHP boot camps. Dave has a B.S. in Accounting from Mesa State College, and has completed additional graduate courses in accounting and taxation at Colorado State University.

Management
Frank Rolfe - Vice President

Frank has been active in all facets of the MHP business for over a decade. His companies have been ranked as high as the 63rd largest MHP owner in the U.S. Frank has managed companies that have owned and operated over 100 MHPs. Frank co-manages multiple MHP investment funds and currently participates in the ownership of over 7,500 MHP lots. Frank has performed due diligence on hundreds of MHPs for other MHP owners, and is a well-known author and speaker at MHP investing seminars and real estate investment clubs. Since June 2008, Frank and Dave Reynolds have conducted widely attended quarterly MHP boot camps. Prior to his MHP business, Frank was the largest private owner of billboards in Dallas/Ft. Worth.

Management
Eric Siragusa - Vice President

Eric co-manages multiple MHP investment funds with Dave Reynolds and Frank Rolfe, focusing on investor relations, raising capital, and property acquisitions & dispositions, including MHP underwriting and due diligence. Eric participates in the ownership of over 5,000 MHP lots. Eric holds a Ph.D. in Electrical Engineering from the University of California at San Diego, and has been investing in real estate since 2005. In 2006 Eric joined the Board of Directors of the non-profit North San Diego Real Estate Investors Association, Inc. (NSDREI), one of San Diego's leading real estate education and networking organizations. He has served as President of the NSDREI since 2008. Eric also serves as an educator, mentor and consultant to other real estate investors and professionals.

Property
For more information, view the Sponsor's Investment Memorandum.

MHPF currently owns nine (9) mobile home parks in this fund and is in the process of acquiring four (4) additional parks in the next two months. 

Parks Currently Owned/Pipeline
Park Name Location Status Closing Date AHCF 4 Ownership Purchase Price Total Spaces Occupancy Avg. Lot Rent
Riverridge MHC Grand Praire, TX Acquired 9/24/13 100% $2,500,000 111 67.6% $440
Spalls MH Village Monroeville, IN Acquired 10/17/13 100% $505,000 81 49.4% $240
Hillscrest MHP Clarks Grove, MN Acquired 10/30/13 100% $1,400,000 97 93.8% $180
Valley View Terrace Belle Plaine, MN Acquired 11/21/13 100% $1,500,000 68 83.8% $425
Chancellors MHP  Fountain, CO Acquired  12/15/13 50% $1,825,000 121 54.5% $365
Westhill Emporia, KS Acquired 12/18/13 100% $1,200,000 114 84.2% $160
Mobile Lodge MHC Lecompton, KS Acquired 12/20/13 100% $880,000 55 69.1% $305
Mobile Manor Wichita, KS Acquired 12/20/13 100% $2,500,000 277 63.2% $242
Oak Terrace & Cedar Knob Killeen, TX Acquired 12/23/13 40.5%  $866,000 98 75.5% $220
Woodland Estates MHP Decatur, IL Pending 2/15/14* 50% $1,100,000 265 37.0% $280
Hi Vue MHP Sartell, MN In Due Diligence 2/28/14* 100% $3,050,000 167 95.8% $330
Rustic Manor Anderson, IN In Due Diligence 3/10/14* 100%  $395,000 41 92.7% $175
Rex Aire MHP Arnold, MO In Due Diligence 3/10/14* 50% $2,275,000 100 97.0% $240

*Estimated Closing Dates

Property Highlights:

  • Riveridge MHC, Grand Prairie, TX: Riveridge MHC is located in Grand Prairie, Texas, a market where the occupancy for mobile home parks is 95%. The anticipated exit strategy could be to sell to RHP Properties, one of the nation's largest owners of mobile home parks, which also owns a nearby property. The acquisition is a re-capitalization for the current owner, who is a major developer. The primary objective in this investment is to enforce collections, fill lots, reduce high expenses, and work to recapture 100% of the water and sewer costs. This acquisition will likely be financed with a conduit loan. 
  • Spalls MH Village, Monroeville, IN: This is a foreclosure mobile home park that was purchased from the foreclosure sale purchaser. The park is well located in an area near other MHPF owned parks and there are currently 45 occupied spaces from the 85 total lots at the park. The park may potentially be a good short term hold until it is sold or refinanced.
  • Hillcrest MHP, Clark Grove, MN: This park is well located in a strong market nearby other mobile home parks that MHPF owns and operates. The primary objective of this investment is to increase net operating income by both increasing revenue through raising current rents and decreasing costs by passing through particular expenses that are currently the responsibility of the landlord to the tenants, specifically water, sewer and trash costs.
  • Valley View Terrace, Belle Plaine, MN: Valley View Terrace is the only mobile home park in Belle Plaine, MN.  Belle Plaine is 25 miles southwest of Minneapolis, 35 minutes from the Mall of America, and has a population of approximately 7,000. The mobile home park has 68 mobile home lots and 43 storage units. There are currently 57 lots occupied and 11 storage units leased. All of the streets except for one small private street are owned and maintained by the city. The primary objective in this investment is to enforce collections and fill lots. This acquisition will likely be financed with a local bank loan.
  • Chancellors MHP, Fountain, CO: AHCF 4 was the winning bidder for this park at an auction and acquired it for a very attractive price. This park is located in an excellent location in Colorado with substantial upside value.
  • Westhill, Emporia, KS: This park is located in an area that is expected to have a significant number of new jobs come to town in the near future. The primary objective of this investment is to increase current rents and increase occupancy by renting the remaining unoccupied homes, thereby increasing cash flow and property value.
  • Mobile Lodge MHC Lecompton, KS: This park is located in a high demand area near Kansas University. It has been very well kept and shows well. The primary objective is to maximize net operating income by filling remaining occupancy.  
  • Mobile Manor, Wichita, KS: This is an attractive looking park on a mobile home park row in Wichita. Wichita is a growing city in Kansas with a declining unemployment rate. It is well located and has good infrastructure.
  • Oak Terrace & Cedar Knob Killeen, TX: These two parks are located in a strong mobile home market where it is difficult to find parks at under $10,000 per lot. The plan for these parks includes completing some deferred maintenance by way of cleaning the park and completing some road work after which the management team expects to substantially increase the occupancy percentage by filling current vacant lots.
  • Woodland Estates MHP, Dectaur, IL: Decatur, IL has a population of 115,00 and a well-diversified employment base due to the nearby presence of Caterpillar, Archer Daniels Midland, several hospitals and Millikan University. This park is located directly across the street from the Archer Daniels Midland "campus." Archer Daniels Midland is one of the largest companies in the United States with roughly $89 billion in annual sales. In the opinion of MHPF, the current owners of the park have mismanaged the park to the point of virtually abandoned it, which has resulted in a very low occupancy percentage. The business plan for this property will be focused on significantly increasing the occupancy level from the existing 37%.
  • Hi Vue MHP Sartel, MN: This park is currently in due diligence. 
  • Rustic Manor, Anderson, IN: This park is located in a strong market near other parks that are owned and operated by MHPF. Rents for this park are currently under market by $35-$50/month.
  • Rex Aire MHP, Arnold, MO: MHPF believes that this park is superior to another park that it currently owns and operates in the same market due to this park's newer homes and larger lots. However, this park currently generates $240/lot while MHPF's other park currently generates $340/lot. MHPF will look to increase rents to market levels for this park after acquisition, thereby significantly increasing operating income.

Based on the characteristics of properties purchased thus far for MHPF, properties purchased for prior funds (2010-2012), and the types of properties MHPF is currently seeing in the market, the investment criteria below outlines the typical profile for a mobile home park property that could be acquired for this fund.

Profile of a Typical MHPF Property
Parameter Approximate Value Notes
Price per lot ($) $12,300
  • Price close to construction costs
  • Spaces medium sized and larger
Loan-to-value 66%
  • Enough leverage for meaningful returns but not over-leveraged
Utilities: Water and Sewer City services
  • Avoids large capital expenditure risk
  • Reduces operational costs 
Utilities: Gas and Electric Not master-metered
  • Avoids large capital expenditure risk
  • Reduces operational costs 
Metro population 10,000 to 2 million+
  • Target larger markets or smaller growth markets with diversified employment
Location Midwest and Great Plains region
  • Properties in these regions typically meet cash flow and return criteria
Age/condition of homes Mix of newer and older, in average to good condition
  • Lowers home repossession risk
Tenant vs. park-owned homes Mostly tenant-owned
  • Lower maintenance, pride of ownership, stable tenant base
Amenities Few to none
  • Lower operational costs
Occupancy 70%+
  • At or near stabilization
Permit status Only legally permitted
  • Otherwise too much risk
Going-in cap rate Greater than 10%
  • To help meet investor return goals
Going-in cash-on-cash (CoC) Greater than 15%
  • To help meet investor return goals
Financials
For more information, view the Sponsor's Investment Memorandum.
Disclosures
RM Securities, LLC and its Affiliates Compensation

RM Securities, LLC, its registered representatives, affiliates, associated persons, and personnel of its affiliates who may also be associated with it, including our associated persons and personnel of our affiliates who are also be associated with RM Securities, LLC (it (“RM Securities,” “we,” “our,” or “us”) will receive fees, expense reimbursements, and other compensation (“Fees”) from the issuer of this investment offering, its sponsor, or an affiliate thereof (“Sponsor”), or otherwise in connection with Sponsor’s offering. The Fees paid to us are in addition to other fees you will pay to Sponsor or in connection with Sponsor’s investment offering. You will pay Fees to Sponsor, either directly or indirectly as an investor in the Sponsor’s offering. Sponsor will use the Fees you pay, as well as funds you invest in the relevant offering, to compensate us. The Fees paid to us will directly or indirectly be borne by you as the investor (typically, but not always, in the form of an expense of the Sponsor’s offering in which you invest) because such Fees will reduce the proceeds available for distribution to you and reduce the amount you earn over time.

For more information on the Fees paid to us, or any other Fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.

No Approval, Opinion or Representation, or Warranty by RM Securities, LLC

Sponsor has provided, approved, and is solely responsible in all aspects for the information on this webpage (“Page”), including Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). The Investment Documents linked on this page have been prepared and posted by Sponsor, and not by RM Securities. We did not assist in preparing, do not adopt or endorse, and we are not otherwise responsible for, the Sponsor’s Investment Documents. We make no representations or warranties as to the accuracy of information on this Page or in the Sponsor’s Investment Documents and we accept no liability therefor. No part of the information on this Page or in the Sponsor’s Investment Documents is intended to be binding on us.

Sponsor’s Information Qualified by Investment Documents

The information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.

Risk of Investment

This investment is speculative, highly illiquid, and involves substantial risk. There can be no assurances that all or any of Sponsor’s assumptions, expectations, estimates, goals, hypothetical illustrations, or other aspects of Sponsor’s business plans (“Assumptions”) will be true or that actual performance will bear any relation to Sponsor’s Assumptions, and no guarantee or representation is made that Sponsor’s Assumptions will be achieved. If Sponsor does not achieve its Assumptions, your investment could be materially and adversely affected. A loss of part or all of the principal value of your investment may occur. You should not invest unless you can readily bear the consequences of such loss. Sponsor’s Assumptions should not be relied upon as the primary basis for your decision to invest.

No Reliance on Forward-Looking Statements; Sponsor Assumptions

Sponsor is solely responsible for statements made concerning forward-looking statements and Assumptions, which apply only as of the date made, are preliminary and subject to change, and are expressly qualified in their entirety by the disclosures and cautionary statements included in Sponsor’s Investment Documents, which you should carefully review. Neither RM Securities nor Sponsor are obligated to update or revise such forward-looking statements or Assumptions to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Sponsor’s forward-looking statements and Assumptions are hypothetical, not based on actual investment achievements or events, and are presented solely for purposes of providing insight into the Sponsor’s investment objectives, detailing Sponsor’s anticipated risk and reward characteristics, and establishing a benchmark for future evaluation of actual results; therefore, they are not a predictor, projection, or guarantee of future results. You should not rely on Sponsor’s forward-looking statements as a basis to invest.

Importantly, we do not adopt, endorse, or provide any assurance of returns or as to the accuracy or reasonableness of Sponsor’s Assumptions or forward-looking statements.

No Reliance on Past Performance

Any description of past performance is not a reliable indicator of future performance and should not be relied upon as the primary basis to invest.

Sponsor’s Use of Debt

A substantial portion of the total cost of the real estate asset acquired by the Sponsor with investor funds (“Property”) will be paid with borrowed funds, i.e., debt. Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, and there is no assurance that the Sponsor will secure debt at the rates and terms presented on this Page or in the Sponsor’s Investment Documents, or at all. The use of borrowed money to acquire real estate is referred to as leveraging, which can amplify losses and could result in lender foreclosure. In addition, if the debt includes a variable (or “floating”) interest rate, the total amount of interest paid over the term of the debt will fluctuate and can increase. As a result, Sponsor’s use of debt can result in a loss of some or all of your investment.

Sponsor’s Offering is Not Registered

Sponsor’s securities offering will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement”). In addition, the offering will not be registered under any state securities laws in reliance on exemptions from state registration. Such securities (your ownership interests) are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption. All Private Placements on the Platform are intended solely for “Accredited Investors,” as that term is defined in Rule 501(a) under the Securities Act.

No Investment Advice

Nothing on this Page should be regarded as investment advice (either with respect to a particular security or regarding an overall investment strategy), a recommendation, an offer to sell, or a solicitation of or an offer to buy any security. Advice from a securities professional is strongly advised to understand and assess the risks associated with real estate or private placement investments. For additional information on RM Securities’ involvement in this offering, please carefully review the Sponsor’s Investment Documents, and RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.

1031 Exchange Risk

Internal Revenue Code Section 1031 (“Section 1031”) contains complex tax concepts and certain tax consequences may vary depending on the individual circumstances of each investor. RM Securities and its affiliates make no representation or warranty of any kind with respect to the tax consequences of your investment or that the IRS will not challenge any such treatment. You should consult with and rely on your own tax advisor about the tax aspects with respect to your particular circumstances.

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