Acquisitions
Size We buy MHCs of all shapes and from sizes of $10 million in value to sky’s-the-limit. From single properties to multi-state portfolios.
Quality Our sweet spot is two to four star communities. (We don’t add value to five stars. We can’t improve one stars to our standards.) Vacant sites, failing infrastructure, title defects, expansion land, community owned homes, flood zones and other challenges are value-add opportunities.
Development We don’t yet do ground-up development. We welcome re-developments of existing communities. This may include adding new housing sites, acquiring adjacent land, filling vacant sites with new homes, and other value-added redevelopment.
Location We have evaluated every Zip Code for its investment prospects. (Almost AI.) That analysis allows us to invest across the United States. We focus on growing populations of greater than 100,000, diverse economic drivers, and relatively high home prices.
Community Owned Homes We already own communities with more than 50% community owned homes. We are fine with them.
Consideration We pay all cash, with no financing contingency.
Tax Planning We have innovative structures to help sellers postpone and reduce their capital gains tax.
Timing Have a fire drill? We can put it out. Usually, though, we ask for 30 days for diligence and 10 days thereafter to close.
Management We often retain on-site operating teams and regional managers when buying portfolios.
Loans
Your loan is funded with discretionary capital, kept on our balance sheets, and we do the servicing.
Structures We are bridge lenders on transitional, value-added business plans.
Term Terms range from two to seven years.
Leverage Typically, 60% to 75% loan to value. Debt yields are also an important criteria.
Amortization Nah.
Recourse Only the usual bad person provisions.
Loan size The bigger the better, either in the first loan or with a pipeline for an over-all relationship. Senior loans start at $30 million.
Interest Floating rate. Caps will be needed – we never want to own your collateral! If any bank were still lending non-recourse, we would beat their pricing.
Prepayment Without penalty after a year or so.
Relationship We foster long-term relationships with our borrower-clients. We often work with mortgage brokers.
Timing- Within 48 hours, you will know if we have interest (bad pun). For approvals and closing, 40 days is typical from inquiry to funding.
Location We will lend anywhere we would buy.
Quality Three star to five star. As MHC owners, we’ve lived most of the unusual challenges and can address those in loan underwriting.
