Investment Opportunities

PropertyWorkz Investment Philosophy

PropertyWorkz is all about Investment “Thrivival” (thriving regardless of economic fluctuations). As markets and economic conditions change, we aim to stay ahead of the game by selecting the most effective, stable, and resilient investments. See below our focused asset classes and reasons why we like them, our underwriting assumptions / purchase criteria, and some case studies of previous investments. 

Mobile Home Parks

Mobile Home Parks are quickly becoming the most popular investment class among investors. 

We see the stability, resilience and popularity of this investment class strengthening!

Do you think there is a need for affordable housing?
  • *45 million Americans live below the poverty line and **50% of Americans earn less than $30,000 annually
  • Mobile Homes are among the most affordable housing options in the U.S.
  • There’s only 45,000 known mobile home parks in America
Who else is on board in this industry?
  • ***Warren Buffet’s has become one of the biggest drives behind the mobile home industry with Berkshire Hathaway’s, purchase of the largest mobile home manufacturer in the U.S., Clayton Homes.
  • FANNIE and FREDDIE now offer mobile home park and mobile home financing programs
  • A recent bill has passed allowing section 8 vouchers to now be used towards the purchase (not rent) of mobile homes.
  • Multi-family apartment and self storage investors are migrating to the mobile home park space to benefit from more favorable cap rates, lower operating expense ratios and larger spreads.

*(http://www.huffingtonpost.com/2014/09/16/poverty-household-income_n_5828974.html)
**(http://dailycaller.com/2015/10/25/1-in-2-working-americans-make-less-than-30000-a-year/)
***(http://nreionline.com/finance-amp-investment/why-investors-warren-buffett-are-bullish-mobile-home-parks

Remember the 2007-2008 financial meltdown? 

Those who lost life savings, property or assets do!!!

It’s fair to say;

  • With the volatility of national and international markets
  • Un-recoverable national debt
  • Unpredictable political activity
  • A historical real estate cycle that’s due for a turn

Some type of financial correction, downturn or even crisis could be on the horizon.

If affordable housing is already in high demand, and the economy takes a turn for the worse, then the demand for affordable housing (aka mobile home parks), will increase.

Consequently, mobile home parks can potentially perform even better when economies are failing. 

Put simply, forcing the value of the property to increase. Forced Appreciation is achieved by increasing occupancy, via adding more homes to the community with paying tenants (aka “filling vacant lots”). For this reason we seek out “value add” mobile home communities. 

Self-Storage Units

Given modern lifestyle practices, there is an increasing demand for Self-Storage Units in high traffic areas.

When people downsize, they need somewhere to store their stuff. “l’ll only keep it there a few months,” suddenly turns to years. Typically the cost of ones possessions,  dramatically exceeds the monthly cost of renting a storage space and it is a practical decision for most. 

Put simply, forcing the value of the property to increase. Forced Appreciation is achieved by increasing occupancy, via adding paying tenants via filling empty units. For this reason we seek out “value add” storage facilities. 

The benefit of self-storage investing is the possibility of high cash flow straight out of the gate. With an effective business plan, cash flow can continually increase. Cash flow in self storage investing is an exciting concept from an investment perspective.  

Multi-Family Apartments

Long considered an attractive and popular investment, Multi-Family Apartments have stood the test of time and continue to be a stable and quality asset class.

  • There’s over 70 million Millennials in the U.S.
  • Due to rising costs of living, most Millennials seem to prefer renting over buying a home.
  • We cannot turn a blind eye to the sentiment of Millennials.
  • Apartment living is expected to stay in high demand for years to come.

As seasoned Multi-Family Investors know, there are 4 main classes of quality in apartments: A, B, C & D.

“A” being the highest quality and “D” being the lowest.

  • We typically focus on “B” Class apartments which is considered a quality asset.
  • During a financial downturn, “A” Class tenants may need to move down to “B” Class Apartments.
  • “B” Class Apartments benefit from excellent financing options and are easy to sell for high value. 

You’ve heard the famous saying, “real estate is all about, location, location, location!” It’s famous because it’s true!

We only focus on quality apartments in America’s top MSA’s. So rest assured we’ve got location covered. 

Alternative Investments

Sometimes we we come across exciting alternative investment options that fit our criteria such as: Affordable Housing, ATM investments or Hemp Production investments. Although we only come across alternative investments on rare occasion, it’s worth mentioning. 

ATM’s for example, create revenue from transaction fees as well as opportunistic digital marketing. A high volume of ATM’s in high traffic areas can produce impressive results.

See case studies below to see how investments like this have been structured in the past. 

Underwriting Assumptions

Market Metrics
  • Affordable housing markets with 30K+ immediate town population and 100K+ metro population
Property Profile
  • 40-300 Lots
  • Value-Add
  • Family and Senior parks
Purchase Metrics
  • >7% Purchase cap
  • >17% IRR
Additional Preferences
  • >50% occupancy, 70-80% preferred
  • 0% POH’s preferred, can handle up to 100% POH’s for the right purchase price/terms.
  • 0% RV’s preferred, 10% max
  • 100% public utilities preferred, will take on low-risk private utilities for the right purchase price/terms
Market Metrics
  • Located with exposure to 20,000+ daily traffic
Property Profile
  • 100-1000 Units
  • Value-Add
  • Normal and Climate Controlled
Purchase Metrics
  • >7% Purchase cap
  • >17% IRR
Additional Preferences
  • >50% occupancy, 70-80% preferred
  • Paved roads preferred
  • 100% public utilities preferred, will take on low-risk private utilities for the right purchase price/terms
Market Metrics
  • Larger MSAs. PRIMARY location in metro areas of; Atlanta GA, Greenville SC, North Carolina Cities of Charlotte, Raleigh, Durham, Chapel Hill, Cary
Property Profile
  • 100-300 Units
  • Value-Add
  • B+ Assets
  • Stabilized Occupancy 80%+
Purchase Metrics
  • >6% Purchase cap
  • >16% IRR
Additional Preferences
  • 1985 to 2005 build
  • 100% public utilities preferred, will take on low-risk private utilities for the right purchase price / terms

Note: We aim to meet or exceed our criteria (especially cap rate & IRR). On rare occasions, we may veer from our criteria if it is heavily compensated by other favorable terms like discounted purchase price or favorable financing terms.

PropertyWorkz Case Studies

Sierra Sands Mobile Home Community, CA

  • Purchased 2015
  • 38 space, Mobile Home Community
  • 3 bed SFR + Office / Laundry / Storage building
  • 2 star Community
  • Accredited and non-accredited investors
  • $570,000.00 Purchase Price ( 12% cap rate)
  • Private loan 9% I.O.
  • Trash paid by park
  • Projected annual return 25% (cash flow + equity)
  • Note: All investors in this deal were partners with decision making rights and active involvement in the deal (this deal did not have “limited” partners)
  • Property Managed by our Affiliate Management Company
  • Fill 6 vacant homes
  • Develop 6 lots
  • Convert all home renters to our home ownership program
  • Enforce “no-pay no stay” and “no-play (by the rules) no-stay” community policies
  • Increase rents gradually over 5 years from $280 to $330
  • 100% bill back of water & sewer (X% of recapture at purchase)
  • Market cap rate 7% (purchased at 8.7%)
  • Rents raised from $261 to $320
  • 9% cap rate (based off purchase price)
  • All delinquent tenants have been removed
  • All vacant homes have been filled
  • Developed 6 lots ready for homes
  • Gas and electric meters installed at each lot
  • Trash billed back 100%
  • Roads have been fully repaved
  • Increased from 2 star to 2.75 star community
  • Sold for $1,300,000.00 on 10/2019
  • 57.14% annual returns distributed to investors (significantly above our projections!)
  • Note: This investment was a unicorn and is not considered an average PropertyWorkz investment

Marshfield Mobile Home Community, WI

  • Purchased 2017
  • 200 space, Mobile Home Community
  • 5 star Community
  • Accredited and non-accredited investors
  • $3,000,000.00 Purchase Price ( 8.7% cap rate)
  • CMBS Loan, 5 yr balloon
  • 50% water / sewer recapture
  • 7% preferred return hurdle 70/30 split
  • Projected annual return 22.2% (cash flow + equity)
  • Projected IRR 19.25%
  • Property Managed by our Affiliate Management Company
  • Fill X vacant homes
  • Prep and fill x vacant lots
  • Convert all home renters to our home ownership program
  • Enforce “no-pay no stay” and “no-play (by the rules) no-stay” community policies
  • Increase rents gradually over 5 years from $261 to $x
  • 100% bill back of water & sewer (X% of recapture at purchase)
  • Market cap rate 7% (purchased at 8.7%)
  • 5 yr hold then sell or re-fi
  • Rents raised from $261 to $320
  • 9% cap rate (based off purchase price)
  • All delinquent tenants have been removed
  • All vacant homes have been filled
  • 11 vacant lots have been filled with used remodeled homes
  • 20+ park owned homes have been remodeled
  • Digital meters have been installed to allow 100% water & sewer bill back
  • Roads have been repaired, landscaping and signage improved
  • Infrastructure improved as needed (water / sewer lines and electrical pedestals)
  • Outstanding onsite management
  • Performing exceptionally well during COVID with a solid waiting list of future tenants

Legacy Apartment Portfolio, Atlanta, GA

  • Purchased 2018
  • 200 unit Multi-Family Apartments (2 Properties)
  • Class B Assets
  • Accredited and non-accredited investors
  • $28,007,525 Purchase Price ( cap rate)
  • Fannie Mae loan 3.66% fixed, 30 yr amo, 10 yr balloon
  • 8% preferred return hurdle 70/30 split
  • Projected annual return 19.4% (cash flow + equity)
  • Projected IRR 17.1%
  • Unit renovations: We plan to complete interior renovations for an expected budget of $5,000 per unit at each property for 100% of the units. This will yield an expected $100-164 per month rent for each renovated unit.
  • Exterior renovations: The exteriors at each property (Lanier and Norcross) require only cosmetic and completion of minor deferred maintenance items
  • Operational improvements: the Property Manager will take over the operations of the Park Portfolio upon closing of the transaction. The property manager’s transition process includes soliciting the appropriate current staff (where appropriate) to remain on board to retain “institutional knowledge” about the property.
  • Low risk, fixed-rate Agency Loan: Park Capital Partners will acquire a new fixed-rate loan with a 10-year term. The loan’s rate will be approximately 3.66% and carries 3 years of interest-only payments and amortizes based on 30 years.
  • Exit strategy: Park Capital Partners will seek to sell the properties in approximately 5 years.

The property results for the portfolio have been very strong.  This is despite the Covid pandemic.

Property A

    • Since the acquisition, we have renovated 29 of 100 units. 3 units are currently being renovated.
    • We are renovating units at 80% of the initial cost projections.
    • Rents (for renovated units) are yielding 35% higher rent than the un-renovated units.
    • Rent increases for renewals have been as high as 6.7%.
    • We continue to maintain occupancy in the mid to hi 90’s
    • Since March 2020, this property’s Net Operating Income has increased by 20% on average compared to pre-COVID Net Operating Income.

Property B

    • Since the acquisition, we have renovated 34 of 150 units. 3 units are currently being renovated.
    • We are renovating units at 80% of the initial cost projections.
    • Rents (for renovated units) are yielding an average of 13% higher rent than the un-renovated units.
    • Rent increases for renewals have been as high as 3.84%.
    • We continue to maintain occupancy in the mid to hi 90’s
    • Since March 2020, this property’s Net Operating Income has increased by 7% on average compared to pre-COVID Net Operating Income.

Automatic Teller Machine (ATM) Investment

  • Fund opened in 2019
  • ATM’s managed by Prestige a top 5 ATM operators in the U.S
  • All cash / no leverage
  • Accredited investors only (3rd party verification required)
  • Projected Cash‐on‐Cash Return 23.3%
  • Projected IRR 16.5%
  • Each $104K invested buys 7 ATM’s
  • Investors backed by physical ATM’s
  • 4 month ATM preparation period to wrap machine with marketing banners and add digital screen and topper and pace machine in desired location, then monthly investor distributions begin
  • Monthly distributions at 23.3% annualized
  • 5 year straight line depreciation
  • 7 yr investment term
  • All distributions have been paid in full on schedule (Cash‐on‐Cash Return 23.3%)

For further information on investment opportunities, fill out the section below…

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International Investors…

Are you an international investor wanting to invest in U.S. real estate? Not sure where or how to start? What about: Taxes? Foreign Exchange? Bank Accounts?

We understand the entire process, help our international investors get set up and cut through all the hype. It’s simple and very straight forward. We avoid any pitfalls as we have access to the best U.S. resources to make the process effortless.

Here’s the basics…

Individual Taxpayer Identification Number (ITIN) & Limited Liability Company (LLC)

Setting up an ITIN will register you with the IRS (Internal Revenue Service, aka U.S Tax Department) as a foreign investor here in the U.S.

An LLC is an entity that holds assets, that can provide legal protection and taxation benefits beyond owning Property in your personal name. It is a form of asset protection and a sound tax benefit.

U.S. Accountant & Tax Preparation

Our network of accountants have decades of experience dealing with taxation services, and advice for international investors investing in the U.S.

Get Your $$ to the U.S. Quick, Safe and Easy

Options of transferring your money in and out of the U.S. for rates a lot cheaper than the banks and saving 1,000’s of dollars over the course of an investment.

Financing

If you invest in one of our deals there is no need to obtain U.S. financing, as we secure the debt (our names are on the loan). However, if you are wanting to do your own deals, we can help you source debt as an international investor buying U.S. real estate.

Want to learn more?

Fill out the “Become an Investor Today” section above