Recession-Resistant Real Estate: Inside 52TEN Fund III with Randy Smith - 584

at a whole or structurally taking a look at this type of investment, this makes a lot of sense to add into a portfolio of passive investments. It, it will not give you the, you know, 20% IRRs that you might see in some development or very, very heavy value-add returns, but it will give steady, predictable, durable cash flow.

What if one investment could provide passive income long-term equity growth, and meaningful tax advantages without becoming a second job. Today we're going to explore how 5210 Fund III is designed to pursue all 3 through recession-resistant manufactured housing. Welcome to Streams to Impact, brought to you by Steedtalker Capital. I'm your host, Dr. Allen. This podcast is for High-income earners, physicians, dentists, engineers, and other entrepreneurs with high incomes and high-achieving professionals who are not looking for a second job. You're looking to put your money to work through passive investments that can create multiple streams of income and move you closer to financial freedom. Today, we explore how 5210 Fund III is designed to pursue passive income, long-term equity growth, and meaningful tax advantages through recession-resistant manufactured housing. If you're an accredited investor and would like to learn more about 5210 Fund, please visit stevetucker.com. Schedule your 15-minute Path to Prosperity discovery call. Now let's go inside 5210 Fund III and examine the opportunity. But just before we do that, a brief disclaimer. All information shared on Streams to Impact is for educational purposes only and should not be construed as investment, financial, legal, or tax advice. This discussion does not constitute an offer to invest, and all offers are made solely through the RLS Wealth Fund investor portal and only to qualified investors who are registered. Review the applicable offering documents. and satisfy all equitable requirements. All investments invoke risk. You should not invest unless you are prepared to lose 100% of your investment. You're always encouraged to consult your legal, accounting, and tax advisors before making any investment.

Randy Smith is the Director of Investor Relations at 5210, and he brings more than 25 years of experience in sales, leadership, business development, and investing. Before joining 5210, he founded a private investment firm that helped investors deploy more than $13 million across multiple operators and asset classes. Today, Randy leads investor engagement and capital raising initiatives at 5210. So Randy and I are going to sit down here today and we're going to take a look at actually 5210 Fund III, and I'm going to explain how investors participate through the RLS Wealth Fund and review our projected investor returns while Randy will explain how 5210 acquires, operates, and creates value within the underlying assets. So welcome, Randy. Glad that you are with us today. So before we get into the 5210 Fund III itself, I just want to briefly explain why the RLS Wealth Fund exists. and why we selected this opportunity and how our investors can participate and potentially benefit. So the RLS Wealth Fund was created to solve a significant problem in private market investing. So at any given time, there's approximately 20,000 general partners who are seeking private equity capital. And meanwhile, there are roughly 13.6 million accredited investors here in the United States, yet only about 5% of those investors successfully cross really this invisible wall that separates them from the private placements itself. So that leaves an enormous amount of investor capital without meaningful access to opportunities in the private market. And so the RLS Wealth Fund was created to just really help bridge that divide. We launched the fund in November of 2025. Since then, we have deployed more than $4 million of investor capital across 5 different offerings, and 52fund3 will be our 6th offering. And we're really excited about this. We selected this opportunity because we believe it brings valuable diversification to our investors. And our existing investments include multifamily real estate and oil and gas. Fund 3 adds exposure to a very different sector, and that's the manufactured housing communities commonly known as mobile home parks. Some people call them trailer parks, but there's a huge difference between a mobile home park community and a typical trailer park, and Randy's going to go into what some of those differences are. So this offering is really exciting to us, and it has been really conservatively underwritten to project a 12.6% internal rate of return over an anticipated 5 to 7-year investment period. And this brings in a projected 2.18 times equity multiplier, which in practical terms, what that means is that a total projected return of 2.18 times your original investment. And that includes the return of your capital, Over the lifetime of this investment. So these projections are not guarantees. However, 5210 has historically exceeded their projections, and this really truly establishes a record of underperforming and overdelivering. And so we are really excited to be working with 5210 in conjunction with this opportunity. So Randy, let's, let's begin with the investment itself. Why has 5210 chosen to focus exclusively upon manufactured housing communities and what exactly will 5210 Fund III be acquiring?

Yeah, great. First of all, thank you, Dr. Allen, for having me on the show here today. Always a great opportunity to get in front of you and your audience as well. So 5210 actually was launched about 10 years ago. And the 2 founders had both spent at the time about 15 years in real estate-related activities, one through very high-volume fix-and-flip business and another through construction management. And then ultimately, they came together in the multifamily space and started looking at manufactured housing. So, if you think back 10 years ago, we were in that 2015 range. And as they were looking historically across performance of all of the different asset classes, whether it be multifamily, self-storage, RV, manufactured housing, historically manufactured housing always performed significantly better during both economic challenging times as well as economically thriving times. So if you look back to 2008 and other challenging economic times, manufactured housing historically did extremely well and did not have the challenges that all of the other asset classes in this space had. So that was really the main reason why we chose to dive into manufactured housing. And when you couple that with this affordable housing challenges, the lack of supply of manufactured housing and this need for stable, durable income from an investment standpoint, coupled with significantly better tax benefits, it really, really creates an argument for manufactured housing. So that's ultimately why we chose this. We've been doing this exclusively for 10 years now. And Fund III is really an extension of what we've been doing over the last 10 years. And the focus of this fund Well, just to be acquiring high-quality assets, cash flowing from year 1, and providing significant tax benefits in the year that we acquire.

And yeah, I just want to reiterate, I mean, that is exactly why we are coming to 5210, because of their background, their experience. And we definitely want mobile home park communities in our portfolio just because of what Randy has explained there. They are So resilient. I mean, they are more resilient than any other asset class out there. So Randy, one of the central attractions of this offering is the opportunity to increase the value of the communities. And you can do that in physical improvements, but also through just operational improvements through management. What have you that way. So what specific operational improvements are you looking at in this particular fund?

Yeah, thank you. Thank you, Dr. Allen. That's ultimately— that is the best question to be asking when you're looking at these types of investment is what is actually going to drive value here. There's operational efficiencies that you can improve. There is construction efficiencies. You can add infill. new homes or sell homes in the, in the, in the communities. But this specific fund is focusing on acquiring highly stabilized assets, essentially 98 to 100% occupied day one. But the main opportunity with these is that there is about a $250 to $300 per month lot rent variance between where the in-place market rents or in-place rents are and where the market rents are. So having a stabilized asset, you don't have the same execution risk that you would have if you were having to bring in a very large number of new homes, if you were having to do a lot of construction, if you were having to do a lot of riskier types of value-add. in a business strategy compared to just simply increasing lot rents, bringing in our property management, and then actually improving the efficiency of the day-to-day operations. So that's really the main difference. This is not a heavy value-add that relies on infill. This is an operational lift where we just simply bring in our third-party— or I'm sorry, our in-house property management, couple that with Regular increases in lot rent, and over the course of the first 3 to 5 years, just taking those up to market rent, we guarantee the returns for our investors.

And that's another reason we just are really truly interested in this particular fund because hard lifts like infill and like physical improvements on property Those are where the real challenges are. It's so much easier to improve on, on management and, and take advantage of underperforming assets that have been well taken care of. And that's what this fund is really centered on. And so, Randy, can you talk to— go ahead.

Yeah, I wanted to jump in on that a bit. So now when we, we start looking at the type of parks that we're acquiring, yes, we're buying stabilized assets from an occupancy standpoint, but we're primarily focusing mom-and-pop owners. So we're buying from what you could argue are less sophisticated operators that don't have the professional day-to-day property management that 5210 brings. So quite often there are some easy wins that we can get right out of the gates just simply because these operators generally don't know how to operate these assets to the level that 5210 does. So we will have a complete expense overhaul when we come in, usually within the first 3 to 6 months. And then when you couple that with the day-to-day dedicated management, both from a community manager standpoint and maintenance management, it really will improve the offer— overall NOI of the asset very quickly.

Yeah, and that is really the way to go whenever you can. So Randy, if you could explain, you've already got one asset in, uh, in the portfolio, looking to add 4 to 5, uh, within the next couple of years. So just kind of take us through this, this first asset, what it is, where it is, because I think it illustrates what the fund is really striving to move towards.

Yeah, thank you for asking that. So yes, we were able to acquire, and we actually closed last week on the first asset in this fund, Paradise North, which is a North Phoenix asset, 55+ age-restricted. It is 148 lots, and I believe we're 98% occupied. I had the opportunity to walk that property through the due diligence process, and it's, it's a beautiful asset. Nice homes, very well-manicured landscaping. Not a lot of upside for bringing in new homes, but it's over $300 per month below market rents. In fact, the in-place rents, I believe, are $528. And I drove the competing or the comps in the area, and the comps are in the $800, $900, even $1,000+ range in market rent. So there's a lot of upside to increase market rents right out of the gates. In fact, we'll likely do a lot rent increase January 1st is what we suspect. One of kind of an easy lift with this, this is located in Phoenix, Arizona, and we all know extremely hot in Arizona. And they've got a beautiful clubhouse with a nice kitchen area, seating area, pool table. There's a pool just outside, just a beautiful area, but they didn't have air conditioning in the clubhouse.

Really?

You're kidding. Yeah.

So what would happen? Oh my gosh.

Yeah. The clubhouse is great, but nobody uses it in the summer months.

Well, obviously.

Right. So, a very easy fix for us is to spend a very small amount, especially relatively, to put an air conditioner in that unit. So, immediately, our residents will be extremely excited that they have access to this clubhouse during the summer months. So, that's just an indication of the way that this had been managed up to this point where they didn't want to spend the money to put an air conditioner in it. Even though that would have been bringing tremendous value to the, uh, to the owners of the homes.

To the tenants.

So, beautiful asset. Um, I do want to clarify as well, we've actually— we've made the decision at this point that we're going to close the fund out towards the end of this year. So, we will likely have 2 assets in this fund. There's a potential for a 3rd asset, but one of the benefits of knowing that this is closing early is that this is really no longer a blind fund. We have the 2 assets already identified. The second asset looks very close to that. I'm sure we'll talk, talk about those details as well, but investors will know which assets that are included in the fund and see the cash flow from day one on these assets.

And another thing that you did— you didn't mention— this is a gated community. It has a 6-foot concrete wall all the way around the community. So this is not a trailer park. It is a Class A mobile home park community.

Yeah.

And Randy, while we're talking about Paradise North here, talk to us about the terms on this because they are outstanding terms.

Yeah, so this is— and I'm not even sure that you have been privy to an update we heard just in the last couple of days, but we were able to negotiate on the front end 7-year fixed-rate interest-only debt from the seller at 3.5%. So, um, 3.5% debt in this environment is what allows us to be able to provide the cash flow, significant cash flow that this offering will provide. And this last week when we closed on Wednesday, we were able to negotiate at the closing table a 3-year extension at 3.5% as well. So essentially we have—

Wow.

10-year fixed-rate interest-only debt at 3.5% on a 3.5, 4-star park in North Phoenix, which is one of the largest Fantastic.

And I hope viewers and listeners, you can understand why we're working with 52-10. I mean, these are just unheard of terms and remarkable. Obviously, they're good negotiators. I knew this was the target, but I'm glad to hear that it has solidified. So talk to us about— you've just, in general, you've gone over The management plan. Talk to us about your, your total management structure of 5210, because you're— it's totally integrated structure. So tell us about that.

Yeah, and that's really important point. I think a lot of groups that come into this space think that they can come in and use third-party property management. And what you find is that the revenue that's being generated at these parks It is usually significantly less than a multifamily, which makes it much more difficult to pay a third party to do that property management. And it really increases the need to bring that in-house. Now, in order to bring property management in-house, you need to have the structure to support that and give it the attention. So, and that ties back to the type of parks that we buy. So this one specifically, it's 148 units. It's large enough where it gives us the ability to have a dedicated onsite community manager that is there full-time, as well as a dedicated onsite maintenance manager. So those 2 individuals will manage the day-to-day operations of that asset. Now, one layer above that, we have our regionals that cover about half of our portfolio each now. So there is a regional manager that sits above that, and then we have a senior vice president of operation that sits above that. So we have an entire team that is dedicated to managing the day-to-day. Community managers handle day-to-day interactions with the tenants and the homeowners. The regional managers manage the managers, and then the operations VP, of course, is managing the full organization. So as of today, we have about 35, might be 37 employees internally at 5210, and we just continue to grow.

So I hope that you all are getting the picture as to why we are excited about this. Uh, an established company, not a fly-by-night company. This is not their first rodeo, and they have a well-developed management structure from the bottom to the very top, and That is why they can under-promise and over-deliver on such a consistent basis. So, Randy, before we close here, talk about the, the next property that is coming into the fund.

Yeah, yeah, absolutely. So, the, the second property looks very, very similar to the first property from a metric standpoint. The IRR, the cash flow, the equity multiples, are almost identical across the 2 assets. So they both fit our buy box very specifically. Second park is located in Randleman, North Carolina, which is just outside of Greensboro. This is a 202-lot park. It's a newer park, so newer vintage than Paradise North, and just absolutely beautiful park. We have, I believe, tennis courts and basketball courts and outside swimming pools. And just again, we're talking $250 to $300 below market rents. And this one has a unique piece to it in that we have 44 acres that are adjacent to the property that are already entitled, that we can, if we choose, develop those into 100+ additional lots. So that those lots are not even factored into the underwriting model. Because we didn't want to have the requirement in that depend on whether we execute that additional value-add component. Now, it is possible that we won't ever do that, and we'll leave that as additional kind of meat on the bone for the next buyer, or we could potentially even sell the land for a very hefty price. That would be a very great way to return investor capital, increase reserves. add to CapEx. Essentially, it gives us cushion in this deal to where we feel very confident that the in-place pro forma can very easily be met.

Just real briefly, if you could talk to us about the exit strategy from the fund.

Yeah, so this is unique to our offering. There's a few others that are doing this, but this is a legacy hold model. So our goal is to buy assets that are cash flowing in year 1, take maximum depreciation, which we've not talked about, so we definitely need to talk about the depreciation benefit as well. But take maximum depreciation year 1, stabilize these assets over the next 3 to 5 years, and then start to take a look at doing cash-out refinance to return all or a portion of investor capital when the market allows us to do so. And, and Transparently, when we have in-place fixed-rate debt at 3.5% on the first one and 4% on this one, it lends itself to a later refinance than earlier because it's going to be very hard to replace that debt. Okay. So, yeah, absolutely. The goal is to return some investor capital and take risk off the table, take chips off the table, and then hold these for long-term cash flow. So ultimately, you do a refinance to return capital and then hold within-place cash flow, where really there's not a reason to sell those assets and then have to deal with the depreciation recapture and, of course, the capital gains taxes that you have. So a long-term hold model is very different than others, albeit we do give investors the ability to pull out. at increments in the future with the refinances. But it is a long-term model for long-term cash flow.

Well, go ahead and talk to us about the bonus depreciation and the first-year cost segregation.

Yeah. So we, we do cost segregation studies on all of our properties in the first year. In this situation with seller financing, we will be able to guarantee 1-to-1 passive losses to our investors for 2026. We're limited to 1-to-1 because of the seller finance. Now, it does open up a unique situation where when we do a refinance in the future, it will free up additional losses that investors will be able to benefit from to the tune of 50% to 70% of their invested capital. So year 1, you'll get 1-to-1 in losses, and then In the year that we do the refinance, you could potentially get another 50% to 70% passive losses as well.

Well, Randy, before we close out here, is there anything that we've neglected to talk about that you would like to address?

You know, I would just say as at a whole or structurally taking a look at this type of investment, This makes a lot of sense to add into a portfolio of passive investments. It will not give you the 20% IRRs that you might see in some development or very, very heavy value-add returns, but it will give steady, predictable, durable cash flow through highs and lows and changes in the recession combined with these tax benefits that we just talked about. So, when you When you marry those into a portfolio with other assets like your oil and your gas and your multifamily, it creates a portfolio that is much more stable and predictable and lower risk by bringing in the predictability of the income stream in the mobile homes. So, I think it's a great addition to what you're sharing with your organization and your investors will benefit greatly from it.

Absolutely. And we truly are thrilled about being involved in this particular offering. So Randy, thank you for joining me and helping us to really understand 5210 and the 5210 Fund Number 3 in particular. Well, today we examined both sides of this investment, the operational strategy managed by 5210 and the structure through which our investors participate in the offering, which is the RLS Wealth Fund. And for accredited investors, this is an opportunity designed to pursue passive income, long-term equity growth. As Randy explained, it's legacy growth and also providing meaningful tax advantages without requiring our investors to take on another job. So if you'd like to learn more about this, you can review the offering documents on the RLS Wealth Fund portal, and you can click on the QR code to take you to the portal. The URL is https://investor.avesterinc.com/rlswealthfund. So Thank you so much for being with us, Randy. Thank you for joining us, all of you investors. Uh, once again, I'm just going to reiterate, uh, the returns on this are 12.6% average annual rate of return with the 2.18 equity multiplier. And once again, We've looked at all of 5210 records for the last 10 years, and they have consistently outperformed projections. They truly do under-promise and over-deliver. Thank you also for being with us. We look forward to being with you in the next episode.

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