Florence MHP Webinar | Titan Impact Group

Foreign. And welcome. Super excited to be with you guys on this presentation. We are super excited to be presenting our latest investment Florence MHP portfolio in Florence, South Carolina. One of the really exciting things about this investment is we already have a portfolio in in the Florence area. It's actually in the county of Florence just outside the city. And we're super excited to be bringing this four part portfolio to you guys today. And this is located inside the city. I believe three of the communities are actually inside the city and one is in the county. We've had great success in this market already. We have been able to hit our targets way ahead of schedule and we're super excited to be expanding in this market. So. So just a quick disclosure here. I'm not going to read this whole thing. The long of the short is is we are not CPAs. Attorneys, financial advisors. Make sure to do your own due diligence and to refer to your own financial advisors, CPA and attorneys to make sure that you're making the right decisions here. Beautiful. Here's a couple of photos of actual photos of the homes in our community here. Beautiful. So what we have Here is a four park portfolio located in Florence, South Carolina accumulated. There's 214 lots consisting of four parks. The parks are a five minute drive from each other. So you drive park to park. They're five minutes from each other. The parks are located less than three miles from the Florence Regional Airport, less than eight minutes from downtown Florence and less than 90 minutes from Myrtle beach which is a very popular kind of vacation spot in South Carolina. Our projected business plan is to purchase this portfolio with attractive debt terms and seller financing, increase the occupancy of 43 self storage units and remodel and lease 43 vacant mobile homes or vacant park owned homes. We plan to convert our park owned homes to tenant owned homes to mitigate risk and also to gain agency financing. Refinance. So we have a refinance built in this investment which we're going to talk about here shortly. We also Plan to fill 64 vacant mobile home lots with new and used homes as well. We also looking to resurface the roads and improve the esthetics to increase the curb appeal and increase the star rating at these communities. We're also capitalizing on affordable housing demand by increasing rents for the projected 5 year hold period and reducing operational expenses with our vertically integrated property management company, asset management company, construction company and in house mobile home financing as well. And we project to refinance at the end of year three where we anticipate to return 100% of investor capital and then investors get to stay in the deal for the full five year cycle. So up in the top right hand corner here we have a little bit of an offering summary. We're going in at a purchase cap rate of 4.12%. We have an exit cap rate assumption of 8.5%. We've got really, really conservative underwriting. We're going to go over that in great detail during this webinar here. And we've put built in a very big buffer allowing the possibility for cap rates to massively increase between now and exit. And if they don't increase as much as we're stating, then that's going to be a better opportunity for everybody. Here we have a year one expense ratio 40%. We have a occupancy, an acquisition occupancy of 50%. Purchase price is 7.1 million. We've got a projected five year hold period and the total equity that we're bringing to this deal is a little under 4.3 million. So we have a couple of different scenarios that we've run here for our projections. We have ultra conservative recession resistant underwriting scenario, which we believe if everything that we think that could potentially go wrong, if the economy did go wrong, then that scenario covers this for everything. And it's very, very conservative. In fact, so conservative we don't know anybody else in the mobile home space, the multi family apartment space or the self storage space that has as conservative underwriting as us. And that's kind of like what we like to look at as the worst case scenario. And then we also have a probable case scenario as well, which has still a lot of the same conservative underwriting in the ultra conservative scenario. But then we have a couple, we've changed a few of the metrics to make it a little bit more of a probable scenario. Some of the metrics in that are actually based off our historicals. So based off the actual productivity that we've had and the performance that we've had on the projects that we've been working on. So when we're looking at our ultra conservative recession resistant underwriting, we've built that out with 43 park owned home remodels and 20 vacant lots to be filled with qualified tenants by the end of year one and then an additional eight new homes in year two with the remaining lots split over years three and four being filled. Now in our probable underwriting scenario, we have the same thing in year one, we've got 43 park owned home remodels and 20 vacant lots. Then in year two we had a cadence of filling those lots a little bit quicker. We got 20 lots to fill in year two and 23 in year three. So the difference between those two scenarios is that we have a quicker cadence cadence of filling the vacant lots in the probable underwriting scenario, which is much more of a likely scenario of what we're looking to do in reality. Now let's take a look at this little chart below here that there's some other differences that we have in these underwriting metrics. You will see that we have our ultra conservative refinance that we projected to happen in year three. So that's the end of year three. But the probable case scenario is that we would be doing that refinance at the end of year two. That's been how historical oracles. We've projected a lot of deals to do the refinance at the end of year three. And then we've end up getting to the refi somewhere in the 18 to 24 month mark. So when we look at the refinance occupancy, we actually have a ultra conservative occupancy of 80% at the refinance. So we're saying at year three with the refinance we'd have an 80% occupancy and in year two we'd have a 90% occupancy, which is in all reality we're going to be shooting for 100 occupancy. But we like to still be conservative even in our probable case underwriting scenario. Now current market interest rates 6.7% for the refinance. If we were to refinance right now in today's market with the type of loan that we would get, which would be the agency we'd be, we'd be refinancing at a 6.7% interest rate. However, in our ultra conservative underwriting at the year three mark, we projected a 10% interest rate for agency financing. And in the two year mark for the probable case we projected a 9%. So we have a healthy increase allowing for either the probable case and the ultra conservative case to have quite a jump in interest rates between now and those refinances. And right now our current market cap rates in the 5% range. And that is even pretty healthy. I think that, you know, some of a lot of the parks in this market can be trading in the fourth 4% range. So I think it's even conservative to say the current market is 5%. But we underwrote without refinance cap rate for our ultra conservative to be 7.5%. So we added a whole 2.5% the refinance cap and 6.5% to the refinance cap, which is a 1.5% increase there. Then our exit cap rates assumptions, we've added another percent basically to our ultra conservative. We have an 8.5% cap rate rate at the exit. In our assumptions that means that we can handle, in the ultra conservative model we could handle cap rates going up 3.5% between now and exit. And in our probable case scenario we can handle them going up 2.25%. I can tell you if cap rates go up 3.5% between now and our five year exit, it's going to be a very insane market out there. That is a very, very high jump. So we feel like we've got a lot of wiggle and built in there right now. We're currently raising rents in this market 10% year on year. But we underwrote with a conservative 5% in both of these scenarios. We have four different tiers of investment structure for this investment and it's based off the investors minimum investment we plan for limited partners to receive depending on their class that they've come into. It would be somewhere between an 8% preferred return and so that preferred return would be accruing from the beginning of our operations. And then 100% of excess cash flow goes to investors until we get to refinance, at which point we are projecting to return 100% of original capital to investors, leaving investors in the investment with a zero capital balance thereafter where we'd split cash flow to 50 and well that's for, for class D that. We'll talk about the different splits for the different classes in a minute here. But we would then split the cash flow and equity based off our chart below. I do want to state that if there was any time or if there was any reason that we couldn't return 100% of investors capital at the refinance. Let's say for example, an investor invests $100,000 and instead of returning $100,000, we could only return $98,000 at the refinance. That would mean that the Investor has a $2,000 capital balance. So the preferred return would still apply post refinance. That preferred return would apply to the remaining capital balance, in this case $2,000. Then once that preferred return would be met, then it would split based off the chart below, depending on which minimum investment tier Investors come in on. And I also do want to state that on our previous projects we have gotten to the point where we projected to do a refinance at the three year mark on a specific project of ours, anchor mobile home community. And then at about the 18 month mark, which is like half the time of what we projected, we went to refinance and then we found out that we would only get 75% of return of capital at that point. So instead of doing that, which we could have done, we waited and we built up the NOI for a couple of months and now refinancing. So we are at that return of capital to investors. So we are very committed to giving that whole return of capital to investors or as much as we can of it. And in that case, 75 wasn't going to cut it for us. We wanted to get a lot more back to investors, even if it was twice as quick as what we said we were going to do it. And then post refinance, investors can remain in the deal and get their cash flow and equity splits based off the chart below, which I'm actually going to go through in a minute here. And I want to point out that when investors get their money back at the refinance, that means that investors can go then reinvest. Maybe in one of our deals, maybe in a different investments can compound the returns, but they're still staying in this investment for the full five year cycle. And although that we can project what the returns would be based off our conservative and probable case underwriting, we cannot project what the compound returns would be when investors go and reinvest that capital, which could exponentially increase the overall returns of working that money. So like I said, we have four different classes in this investment based off the minimum investment. So let's look at class D first because that's the lowest minimum investment. We have a minimum investment of $50,000. And so investors that invest a minimum 50 would get 8% preferred return and then 100% of excess cash flow goes to investors until the refinance, until we project to return original capital to investors. And then investors would get a 50% split on the cash flow and equity and a 50% split on the proceeds at the exit as well. Class C has a minimum investment of $500,000 with a 9% preferred return, still 100% of excess cash flow until the refi. And then we move to a 66.5% split of cash flow and also proceeds at the sale event as well. Class B moves up to a minimum investment of $1 million. We've got a 9.5% preferred return, same 100% of excess cash flow to the refi. Then we move to a 70.5% split on cash flow and equity. And then class A has a 2 million dol minimum investment where we have a 10% preferred return and a 75% split on cash flow and equity. And so as you can see there, we're basically rewarding investors for bringing a bigger check to the table and they get a little bit of a larger slice of the ply and it kind of increases as the check size increases as well. And we also, we've written in here that we anticipate quarterly distributions and reporting. Now I would say that the quarterly reporting would stay the same, but there's something that we've never actually mentioned to anybody yet. But we are going to, beginning of January next year, start doing monthly distributions. So we're going to be sending out monthly distributions to our investors for this investment, also for our investments moving forwards, also for our investments in the past that we've previously been doing quarterly distributions on. We just believe that in today's market where there's a lot of investments that aren't paying out cash flow and not paying out distributions, that not only would it be helpful that we do that, and we've been lucky enough to be able to do that on all of our investments so far, that we will be doing it on a monthly basis to make sure of that more regular payment coming in from our, from our distributions. Okay, now we are looking at projected returns and assumptions here and we're looking at a couple of different tiers here. We've got a 50k minimum investment, but a 500k investment and a $2 million investment in that return summary there. So we have the ultra conservative recession resistance scenario and we also have the probable case scenario as well. So the probable case scenario is with the more realistic underwriting but still a lot of really conservative metrics and then the ultra conservative, which is with the three year finance and some of those other metrics that we talked about earlier on there. So for this here we're looking at LPs IRR for the ultra conservative to be 23.47% with average cash on cash of 11.61% and a annualized return of 19.81% with the equity multiple just below 2. And then if you move down to the probable case scenario, you can see that because of the underwriting things move up a little bit there because we have a Little less conservativeness on the cap rates and some of the other assumptions in there, which we still feel is extremely conservative in any scenario anyway, but less conservative than the ultra scenario. And then we have LP IRR of 28.85%. We also have the cash on cash of 10.31%. And then we have the annualized return of 20.92% with an equity multiple of just a little over two, two times there over a five year period. One thing that I did want to point out here guys, is that we cannot calculate what would happen when an investor goes out and reinvests the money that they get returned to them at the refinance. So essentially after the refinance, investors are making an infinite return because they would have a zero capital balance in the deal. And so to a certain extent we can only project what would happen without that money being reinvested. But when an investor goes and reinvests that money at the year three mark, or if we refinance earlier and we do it at the two year mark, when they reinvest at the two year mark, we cannot build in what those returns would be because we don't know when the investor is going to replace that money and what they would invest in and what the returns would be. So let's go over some of the investment highlights here. So the projected business plan is to purchase with attractive seller financing and an acquisition loan and increase the occupancy by remodeling 43 vacant homes, infilling 64 vacant lots, resurfacing the roads, increasing the lot and park owned home rents through the whole period and projected refinance at the end of year three or end of year two. Based off which of the underwriting models we go with, where we anticipate to return investor capital renovations. There are 43 vacant park owned homes. We plan to remodel those and lease them in year one. We have in house construction crews. They work at a cadence of remodeling seven park owned homes a month. That's usually the minimum of what they do. So we've got crews that are going to go in there and knock out these remodels very quickly. The way that we do it is we have our crews work on the the remodels that need the least amount of work first and then go to the medium ones and we leave the heavy remodels for last. That way we can put the homes on the market as soon as possible. And then once a home is completed and it's remodeled, we Have a cadence of filling that with a qualified tenant in less than 30 days. That's the typical cadence that we actually do it in. We have recently worked on another portfolio in Florence, South Carolina and it was about 50% occupied. We did a bunch of remodels and we fill those homes extremely quickly. So there's a lot of demand in this market and we really like working in this market. Also looking at increasing occupancy increase, we look at leasing all of these homes by the end of year one. More than likely it'll happen significantly quicker than that. And we're certainly pushing to do that a lot quicker than the end of year one. We are also bringing in our top performing management team to handle the day to day operations. A regional manager will be overseeing the infill project and lease signups and actually living at one of these mobile home communities as well. And our construction crews are on standby ready to begin remodels as soon as we close and have begun. And we have already begun identifying discounted materials for this project to keep construction costs down and mitigate some of the supply chain and material price inflation risks. So basically we go out there, we buy all the materials we need, we move our construction crews in there and then we just rock and roll to knock out all these remodels as quick as we can. Most other operators are doing about one remodel per community per month. We're doing a minimum of seven. So we're significantly faster than other people and we actually put that down to one. We have a lot of crews that we send in to do these remodels. And also we do a lot of pre planning way before start time so that we've got all of our ducks in row and everything lined up ready to rock and roll once we close on the property. I also mentioned that we have one of our construction managers actually living at this park as well, overseeing this infill project. Refinance. So we anticipate a refinance at the end of year three where we project to return all or as much as possible of original investors capital and reducing risk and exposure for limited partners. Giving limited partners the advantage of redeploying that capital to compound returns. So when that money comes back, you can go and reinvest it in another deal, whether that be one of ours or some other deal. Compound the returns, but stay in this deal for the full five year life cycle. And like I said before, we didn't increase the return on investment. Should you reinvest your capital because we wouldn't know when the investors are going to reinvest that capital, at what month they reinvest it, and what the return projections or returns would be for that. So we can only base it off our investment, knowing that if you, if you reinvest that money and it's in a profitable investment, then that would consequently compound the overall returns and the working of this money. Over the five year business plan, we anticipate exiting in about five years and we actually anticipate cap rates to continue to compress and demand for the mobile home park space to increase, given that we could potentially be coming into a heavy recessionary environment. Usually people scale down from housing and they go from single family homes to A class departments, to B class to C class to mobile home parks. And we see that compression come down into the mobile home park space, which means that demand increase for affordable housing increases, which consequently often means that cap rates still keep compressing and demand keeps increasing in the mobile home park space. And we believe that we could still sell for a 5% cap rate on exit in five years from now. And we still, we feel pretty strongly that we could sell for a 6% cap rate. However, we love to be ultra conservative in the way that we approach our investments. So in our ultra conservative scenario, we have an 8.5% exit cap and which represents a 3.5% increase that we could handle between now and exit on cap rates. And our probable case scenario has a 7.5% exit cap, which is 2.5% increase between now and exit, which we feel gives a lot of wiggle room for the market to shift and for cap rates to go up throughout the whole period. So regardless of which of the two scenarios we go with, I'm going to go over some of the baseline underwriting metrics we have. And then after I go over these baseline metrics, then I'm going to get into some of the more specific metrics that we have for the ultra conservative scenario and the probable case scenario. These are all of the assumptions that we have behind the investor return projections. So we could raise rents on occupied park owned homes from 786 to 950 plus on day one. This would represent $164 raise in year one. But we underwrote with a mere $23 park owned home rent increase in year one and a 66 lot rent increase, $66 lot rent increase in year one and then 5% rent increases each year from years two to five, even though we could raise to market market in year one and we could raise an extra 10% each year thereafter. And so we underwrote with this. When we in actual operations, we will be raising as close to market as we can. Sometimes it's a, it's a little bit of a delicate calculation and we always like to, to be the clear and obvious choice in our market that if someone's looking at parks in the market and they're looking at equal quality parks, we're going to be the best, most affordable option for them. And so that way we have a lot of demand and we fill our lots extremely quickly. Having those underwriting projections of conservative rent raises allows that through the five year hold period, if there's an insane market shift and downturn, we can handle it. And also if rent controls come in in South Carolina in the next five years, if something wacky like that happens, we've only built in a 5% rent increase each year, so we'd be totally covered on that too. We also project the rent of all the 43 self storage units in year one to rent them in year one at $63 and rent 11 units in year two and rent five units each year thereafter with only a $5 annual rent increase. We have been filling self storage units on other properties that we have. We've had a bit of a history of buying mobile home parks that have a self storage component to them. So we've already built pre good momentum with, with filling the self storage units. And we actually do that under our self storage brand, which is safeguarded and we've already built a lot of momentum under that brand. So a lot of the heavy lifting's already been done. We can just add this self storage facility into something that already is spinning and already is moving and making momentum. So we're looking really forward to that. We estimated a 20 increase to insurance costs from what our actual costs are quoted to be to hedge against potential insurance increases throughout the WHO period. And we did the same thing with our property taxes, but we built in a 70% tax increase in year one and then a 5% annual increase thereafter. The reason we did that with property taxes is there's been a lot of money printing quantitative easing that needs to be paid back by the general public through form of taxation. One form of taxation is price inflation. Another form of taxation could be property taxes. And although nobody stated that they're actually going to come for our property taxes, if that happened throughout the hold period, we're actually covered for it. We also underwrote with expenses to run 40% out of the gate. And we anticipate reducing expenses to 30 to 35% post refinance. Now this size community with the structure that we actually have here, we could actually have our expenses running as low as 25 to 30%. So we feel like we've been pretty conservative there. Obviously the expenses are a little bit higher, higher in the beginning when we have a lower occupancy. Once we fill up the occupancy and increase the rents and, and build back any applicable utilities then we can get these things down to 25 to 30%. We underwrote with a 15 expense ratio on our park owned home rent. Now the interesting thing is we're going in there, we're remodeling these homes. So the, the expenses on these park owned homes is going to be very minimal because we're going in there and we're doing a good remodel model of them straight out of the gate. We also have our maintenance crews thereafter go in and do quarterly inspections to make sure the homes are being taken care of and they're in really good shape. And in our capital expenditures budget we have budgeted for 100% of park owned home turnover during the five year hold period. Which means we could handle a 20% turnover each year of park owned homes. Now the interesting thing is, is in the multi family apartment space have 40% a year turnover. Yet in the mobile home park space we only have a 5% turnover. Maybe if you're in a really challenging market there would be 7% turnover. But we've got 20% built in each year in our capital expenditures budget plus an additional 15% on our expense ratio for our parked home home rent. So we think that we've hit this twice and given a lot of extra wiggle room room on those expenses there. And we also believe that we overstated the amount of capex. And this is to build in for the potential of price inflation supply chain issues. Any costs going up throughout the whole period are really mainly between now and refinance. And we're doing most of the construction. And what we typically do when we fall under budget is that we have some money left over from capital expenditures riches. Then we go out. We've been buying a small mobile home park in the area, adding it to the portfolio to increase the cash flow and, and also the equity and value of the overall portfolio as well sometimes which can also contribute to the value of the refinance as well. Okay, now we're going to talk about the, the different in some of the other parts of Our underwriting. So what we just spoke about applies to both the ultra conservative scenario scenario and the probable scenario. But now we're going to split the difference in some of the other metrics that we have. In the ultra conservative scenario, we underwrote with 43 vacant park owned home remodels and 20 vacant lots to be filled in year one, an additional eight remodels in year two with remaining lots being filled over years four and five. And we use the least favorable loan term metrics our lenders provided with a refinance interest rate of 9% in year three three, which is a 2.3% hike over current agency rates. And this conservative approach adds significant padding to mitigate interest rate increases between now and the three year refi. We underwrote with a 7.5% refinance cap rate. So that's a one and a half to two and a half percent increase over 36 months. So that's a very healthy increase that could happen in that 36 month period period. And then we've got a 8.5% exit cap. So it's actually 3.5% over five years because market cap rates right now 5% or less. And we're projecting 80% occupancy at the refinance as well, although we're aiming for 100. So the difference in the probable case scenario, we're doing the same thing in year one, but then in year two, filling 20 lots in year two and 23 lots in year three. So just a faster cadence on filling lots there with the vacant with the new and used homes. And one thing I want to point out on that too is we underwrote in both of these scenarios that all of those vacant lots are filled with brand new homes. However, when we actually come to operate this properties, we will be looking for discounted used homes to bring in. And we can do that for a more cost effective cost than new homes. But we wanted to underwrite with new homes just in case for some reason we didn't do used homes. But should we do used homes, which there's an extremely high probability that we'll do do that throughout this whole period, it will increase the returns because we will be able to have lower costs per lot, but we'll still get the same overall value at the end of the deal. So that's just something that I wanted to mention. That's a strategy that we have on all of our properties. We underwrite with the most conservative metric and then we actually try and apply something throughout the Whole period, which is going to work out to be even better. And that's bringing in used home homes. We projected the refinance at 9% year two and a cap rate of 6.5. And then we underwrote with about a 90% occupancy and we have a 7.25 exit cap. So still very conservative. That has a much more probable cadence. We, we really do anticipate refinancing this thing closer to the two year mark. We've got 43 vacant park owned homes and we plan to leverage our in house mobile home financing to keep the cost down and finance all 43 park owned home remodels. Let me explain how that works. So the old way we used to do this is we would come into a community, we would remodel a home. Let's say we spend $10,000 remodeling the home. Now we'd have a $10,000 balance in that home. Then we would go out and we would rent it to a tenant. We'd make lot rent and home rents, but we'd still have our $10,000 in the home. What we're doing these days is where we're putting the $10,000 in, we're doing the remodel. Then we were going out and we were finding a qualified tenant tenant who wants to buy the home. Then through our mobile home financing company, the tenant then gets the financing with our financing company. They pay a down payment to the financing company, which essentially is a debt fund. So they pay a down payment to the debt fund and then the park puts an additional $1,000 in, but pulls the $10,000 out. So now instead of having a $10,000 balance on that home, we only have a $1,000 balance on that home, but we're still receiving the lot rent. We just increased the value of the property by 50 to $75,000, depending on where cap rates are at the time of exit or the time of refinance. And it only cost us $1,000. Then over here on the debt fund, our investors on the debt fund make 1% a month or 12% a year. So that jives over here on the debt fund. And our tenants actually have affordable hous. They have a monthly payment that totally jives with the market and it works out for everybody. It's win, win, win. We do the same thing with our new homes, except new homes cost more money. New homes could cost say $50,000, as opposed to us having $10,000 in one of the used homes. So obviously there would be a bigger down payment that needed to be paid for that because it's a larger loan. So we do the same thing. We go out, we order the homes, and our debt fund actually pays for the homes. Then we bring the home and then the park pays for the skirting, the stairs, the hookups and everything to get the home ready. And then the debt, we go out and find a tenant and the tenant gets a loan with the debt fund. Same thing, we pull back out our money, the park pulls out the money that we spent on the skirting and the decks and the stairs and the hookups and all of that kind of stuff. And then the tenant gets financing with the debt fund, pays a down payment to the debt fund, pays the lot rent to the park and the home rent to the or the home payment to the debt fund. But this time the park puts $9,000 in there as an additional down payment to sweeten the loan to make sure that the monthly payment is still affordable for the tenant in that market. And so that everything drives over here in the debt fund as well. And so that means that some that either with a used home it would be $1,000, or with a new home it could be $9,000. Or if it was an extremely high quality used home, it might be somewhere in between there. But for somewhere between 1 to $9,000 per lot, we get to increase the value of that lot by 50 to $75,000 by having a paying tenant in there. By the way that the value of mobile home parks are calculated and we do that for somewhere between one to $9,000 dollars. Plus our tenants are happy because they have an affordable payment. It's very attractive and we can attract tenants to come in very quickly. And everything also drives for our debt fund as well. So although I'm not going to be giving too much details on the debt fund in this presentation, there will be opportunities coming up very soon here to invest in our debt fund as well, which actually helps amplify all of the metrics over on our mobile home home park operations as well. It also gives us some more control because if we have the control over the loans of the mobile homes in our community, if something weird and wacky happens in the economy, in our markets throughout the whole period, then we're in control and we can move things and we can adjust things and it's a lot more malleable than if we were with third party financing. And so to date, we've been doing a pseudo version of that with one of our joint venture partners. But We've now brought that in house, so we're actually doing it in house. And we have 64 vacant lots throughout the four parks. And like I said, we plan to fill these with either new homes, used homes, or organic move ins. And we've had a lot of luck in the South Carolina markets of bringing in organic move ins. An organic move in is, hey, hello, 10 tenant. You would like to move into our community and you would like to bring your home in into our community as well. And what we usually do in that scenario is we say, hey, you can do that and we'll actually chip in and we'll give you a little bit of a concession towards your transportation and setting up your skirting and the hookups to make it a little bit more appealing for you to come in. And we negotiate different terms with each different person that comes into our community on organic moves in. And it's anything from usually $1,000 to $6,000. So again, same scenario for $1,000 to $6000, we have a new home that moves into our community with a new paying tenant and it increases the value of the property by 50 to $75,000 per lot. So our preference is to bring in organic move ins on vacant lots. Our second preference is to bring in used homes and our third preference is to bring in new homes homes. And we may do a variety of all of those. However, we underwrote in both scenarios with the more expensive new home to be ultra conservative. And all of these pictures that you guys are seeing here as well are all actual pictures of this portfolio. So we also have a self storage component to this property. There's 43 self storage units in one of the four parks. We plan to lease these units to current residents, residents and also people in the surrounding community. And like I said, we already have our self storage brand that we do this, that we've already built a lot of momentum. So we get to plug this property into a machine that's already moving at a pretty decent pace. Here's a look at our capex budget. So we've got a total total capex of 1.1 million. A little bit over that. Well, one of the properties has septic and so we've carved out $50,000 for septic, which we feel like is a pretty healthy carve out there. And then for our park owned remodels, we've carved out $258,000. And remember, we're also leveraging the financing where we get to pull out the money from all of our remodels on those used homes as well. And so that's part of the scenario. We've built in to have 100% of park owned turnover. So we're built in for a remodel to happen, a light remodel in between 100% of the park owned homes turning over throughout the whole period, which ends up being 20% a year, which is a much higher than what we anticipate because our market says 5% a year. We've built in $100,000 for landscape and signage. We also have a pretty decent wiggle room in there. We usually jazz up the signage, put some nice flower gardens at the entrance and put some flags up to attract a lot of people coming in. And usually we have a little bit of extra wiggle room in that budget too. Also we've got some room in there to repave the roads as needed. In each particular park, we typically patch the roads and just keep them alive until we've got all of the new homes and used homes in the community. Because when we have the transportation trucks come in, they turn the corners and they rip the roads up a little bit. So we don't do our resurfacing until we've got all of the homes in there, but we've got a pretty healthy budget. Carved out road roads there, there. And that's a combination of patching and also resurfacing as well. We do cost segregations on all of our properties and we are planning to close this before year's end in which we qualify for 2023 bonus depreciation. And we are doing a cost segregation on these properties as well. So we've carved out a little bit of our capex budget for cost segregations. And that front load loads the tax benefits to year one. So on our 2023 tax returns, that's when we would see the tax benefits there. We also have a new home budget as well. Remembering that we are also leveraging our financing company to do the new homes there as well. And then we also have a commercial building and we have $50,000 carved out for that or remodel for that. That's is. So let's take a look at the loans. And there's actually two loans here. We're actually getting a new loan and we're getting a seller financing second. And the reason we're getting a seller financing second is to increase the overall ltv, making the overall deal jive a little bit better. And we've been really good at getting seller financing lately at a lot of our mobile home communities, which is super attractive and super appealing. So we're projecting that end at the end of the year three, we anticipate refinancing the property, but until then, these are the debt terms. And also at the refinance, I do want to mention that we anticipate achieving agency financing. And so we're converting a lot of our park owned homes to tenant owned homes. One of the qualifications for agency refinance is that we have 30% or less of park owned homes. Technically we could get up to 35% but we like to keep it a little bit lower, lower. So we know we've got a definite shoe in and we have qualified for agency on smaller portfolios with a less of a star rating. So we actually feel extremely strong about agency financing for our refinance here. And that's basically what our whole business plan is revolving around. So that's super exciting. So on the acquisition we've got some new debt which a principal balance of 2.5 million million, a fixed interest rate of 8.7%. We've got interest only for two years and a five year term and that's amortized over 30 years. And then we have a seller financing second with their balance being a little over 1.7 million, which represents a 25% loan to purchase with an interest rate of 6.25% that's also fixed. There's no interest only on the seller finance and that's also amortized over a 30 year period. And the seller financing is coterminous with the first position loan. So what that means is that when we refinance we'll be paying off the acquisition debt plus the seller financing and we'll be with 100% agency financing at the refi and beyond. Yeah, so we've already gone through this section here, so I'm just going to skip this slide here. Let's take a look at the breakdown of the lots and a little bit of a property overview here. Purchase price is 7.14 million. We have 80 park owned homes and 67 tenant owned homes. Water is build back to tenants, sewer is build back to tenants. Trash is built back to tenants and electric is build to tenants directly builds. So the electrical company directly bills the tenants. The other ones are billbacks. Then we have 80 park owned homes and 37 of those are occupied, 43 are vacant. Our current average rents are 452 but market rents is 475. So a little bit of room to increase there. Straight out of the gate. Tenant owned homes we've got 68 of them. 68 of them are occupied. The average rent there is 452 and market is 475 self storage units, $65 market rents. We've got 43 of them. There's currently none of them occupied. So they're all vacant. And that, that represents a total of 66 vacant lots. And we've got 214 lots. Total. Total 105 occupied. 152 vacant. Cool. That's if you, if you go back to that one. This is basically where our properties are located. You can see there we're very close to the airport, very close to each other and very close to downtown. So we already have gone through the financial analysis. This is basically repeating the financial analysis again. Here we have the ultra conservative profile former. So obviously there's a lot of numbers in here. So I'll let you guys review that at your own discretion. I will mention that the fees that we charge on these properties is we have a 2% acquisition fee. So that gets paid at closing and that is 2% of the purchase price. And that goes to the general partnership. Then we have a 2% of gross revenues as an asset management fee. We have a 5% of gross revenues as a property management fee. And we have a 1% of loan amount as a loan signing fee. That happens at the loan acquisition and also the refinance as well. Apart from that, we're not heavy on fees. We really would rather just be performance based, which is how we actually structure our deals. And then here is the probable case scenario as well. Again, tons of numbers in here. Up to you guys to totally review that and let us know if you have any questions. So the cool thing about this market is, is we're already in this market. We've already got an existing portfolio there that we bought and we have, I think we bought it less than a year ago or about a year ago ago. We took it from 50% to 100% occupied. We're ready to refinance. We projected to do our refinance very far in the future, but we're well ahead of the game. We've had great success in filling our homes here. We've had a very quick cadence of bringing tenants in and we really just enjoy the market. We're super excited to grow in this market. Our previous portfolio or existing portfolio should have, say is in the county. And now we've got three of the parks in this portfolio in the city. So we're really, really excited about that. And you know, South Carolina is definitely one of the top states that we've seen for the great American migration. Since the lockdowns in early 2020, we've seen a lot of people moving from states because people aren't specifically needing to live in big cities anymore and they're moving more to areas that they want to, they want to move to. So we've seen seen a massive, massive influx of people coming in that are working virtually, et cetera, coming into South Carolina. That's super exciting. And then we've got some information on our demographics here and our topic employers, a lot of information there. So I'll let you guys review that at your own leisure. Again, the really cool thing about this market is we're already there, We've already tested the market, we've already seen the performance in that market. We're very impressed, which is why we wanted to really dig our heels into this market and expect expand another map of our mobile home communities. And then you'll also see that we have a bunch of case studies here as well. I'm not going to go over these right now, but we have 100% track record of exceeding our projections so you can review those at your leisure as well. So the management team, I am the CEO and co founder and my other co founder is Nolan and he is our CEO coo. Together we leading up the charge here and we also have a really strong team of a player managers. We've got regional managers, we've got operations managers, we've got director of development, we have a lot of construction guys. We have a pretty big team and our team's been growing very rapidly and we're super, super excited about all of the awesome people that we get to work with on a day to day basis basis. We also have Rachel Richards who's a finance specialist and Christopher Larson who's also a finance specialist joining us in this investment. And we have Jordan Stenholm, our investor relations manager who most of you will be communicating with. And if you were not introduced to this investment through the cultivate collective inner circle, please be sure to reach out to your sponsor for in next steps on how to invest in this investment. When we're talking about all the the next steps on this live webinar here on how to invest in this investment, it will only be applying to those who are part of the cultivate collective inner circle. If you are working with another sponsor on this investment, please make sure to reach out to them to find out the next steps of how to invest here. We've got some of the support team. We've got Innovate Collective, which is our vertically integrated property management company. Company. We've got Cultivate Collective, which is our vertically integrated asset management company. We also have Generate Collective, which is our construction company. We have our mobile home financing company as well and we work with provision for our CPA and tax advising and accounting and we work with the MHP lawyer for our legal and transactional real estate transactions. The cool thing about the MHP lawyer, obviously they specialize in mobile home parks. And Ferd Neiman, who is the principal of that company, he's actually a mobile home park investor expanding his portfolio. So he really, really gets the game. So let's talk about some next steps here. So if you're part of the Cultivate Collective inner circle, the the next next step, if you haven't done this already, is to reserve your position as soon as possible. We have a lot of interest in this investment and we anticipate becoming fully subscribed very soon here. So make sure to log into our investment portal, reserve your position and then you still have until December 8th at 5pm to review and sign your documents. And if you have any questions in the meantime, if you you can just shoot us an email if you have a couple of questions. If you have anything more in depth, you can set up a call and Jordan Stenholm will be there to answer your questions and jump on a call with you. We're totally here to support you guys then the funding deadline for this investment is December 15th. And the reason why we're moving at such a quick cadence here is because we are working to close this investment before year end. And that doesn't mean that we're closing before New Year's. It means we're closing before Christmas, where our estimated close is actually 1221. So that's December 21st. And we're looking to get all of this done well before Christmas. So in order for us to do that, we need to receive funds in by Friday 12:15. And we are working really hard to get all of this done before year's end. And again, if you are working with a different lead sponsor that's brought you in and introduce you to this investment, make sure that you reach out to them for further investment instructions. So we have some frequently asked questions in here. I'm going to go through some of these and meanwhile, if you guys have any questions, make sure to drop them in the chat chat. And we're actually going to break out into a question and answer session and I want to answer as many questions as I possibly can. So again, if you have any questions, drop it in the Q and A chat and Nolan will read those out to me and we'll do everything we can to get back to you on all of those. So when does my preferred return start to accrue? Well, that starts to accrue day one of operations. And typically when we pay out our distributions, it's usually after the first full quarter of operations. So after the first full quarter of operations. So if we're closing In December, the first quarter of operations would be Q1 of 24. So that means that distributions and reporting would go out shortly after Q1. So we typically allow up to six weeks for our reporting to go out. And in our reporting we typically send out financial, we send out a video update and we also send out some progress photos as well. We talk about the performance of what's happened over the last three months and we talk about what we're projecting to achieve over the next three months. And then there'll be some communication about the refinance around the refinance times as well. And then we also provide our profit and loss there as well. So even though the reporting is going to remain core quarterly and the reporting could happen up to six weeks after each quarter, so in this case, the first actual reporting could be in February, you know, 15th or earlier. We, we do our best to get it out earlier, but sometimes it takes a little while to, to get everything in order and make sure everything's been checked. Having that said though, we like to get our distributions out significantly earlier. So we, we'd like to send our distributions out and the first couple of weeks after the quarter. But we're actually starting to do monthly distributions as well. So after the first full month of operations, give us a couple of weeks and we're looking to send out our first monthly distributions and then we're looking to do it at a monthly cadence thereafter. So you guys can get 12 payments a year instead of four. Another question here is can I invest through my self directed iron IRA? Yes, we accept qualified international investors and qualified national IRAs as well. So we've worked with American IRAs, we've worked with Australian IRAs, we've got people from Asia and Canada as well. So totally work with that. If we are working with a self directed ira, please reach out to us quickly and identify that because there's a little bit of an additional steps that happen on our documents signing and the process of the IRA custodian approving documents, etc. It just takes a little bit longer. So please reach out and make sure that we can take care of you quickly on that one. Will the offering utilize debt financing? Yes, we've got a acquisition loan plus seller financing at the acquisition and then refinancing into agency estimated at the end of year three. Could be as early as year two. I just went over when the first distribution goes out, do I have to be an accredited investor to participate in this investment? We can have up to 35 qualified non accredited investors and an unlimited amount of credit investors. So we can allow up to 35 non accredited investors into this investment. And another question here, can I sell my shares before the offering is lifted, liquidated? If you're thinking about selling your shares as part of your business strategy, this is not the investment for you. Having that said, if something crazy and wacky happens and you're in a situation where you would like to sell your shares or you need to sell your shares, there is a possibility that it could happen. There is a process to follow. There is a non refundable deposit and we can't get which is typically $1,000,000. And we can't guarantee what the outcome is going to be because it really depends on you going out and finding the person to buy those shares. We don't, we don't facilitate that. I mean we would do the best that we could to see if anybody else wanted to buy those shares. But if it's something that you're thinking about right now and you think that's going to happen throughout the whole period, then this wouldn't be the investment for you. You know, you'd want to be looking at this and anticipate that your money be held up in this for three years and until that refinance. And but if you did need to, and if some kind of crazy emergency popped up, reach out to us. We'll work with you on it. We'll do the best that we can. We can't make any guarantees because there's a lot of variables involved in the process. We certainly do have a process for it. We can buzz that slide here. And you've still got a couple of weeks until 8 December to sign docs until 15 December to fund your investment. If you came to us through a different sponsor, make sure to reach out to that sponsor for next steps.