The Investment No One Brags About

[vc_row bg_type=”image” parallax_style=”vcpb-default” bg_image_repeat=”no-repeat”][vc_column][vc_column_text]The economy hinges on supply and demand, which is crucial to assessing the state of its health. [/vc_column_text][vc_column_text]No economic report would ever be complete without jobs or housing reports. And when it comes to employment, everyone wants to know the unemployment rate. A declining unemployment rate is typically a sign that the supply of available jobs grew, therefore, reducing the number of people that are out of work. What about housing prices? A dip in prices usually means one of several things – an increase in supply, a dip in demand, or both.[/vc_column_text][gem_quote style=”4″ no_paddings=”1″]Recently, in the housing market, there have been more and more reports of dropping home prices in major markets across the country.[/gem_quote][vc_column_text]Take Seattle, for example. According to a May 2019 report by real estate website Redfin.com, Seattle was one of five major cities in the nation where home prices are lower now than they were at the same time last year.[/vc_column_text][vc_column_text]The study found that median Seattle home prices dropped by 1.3 percent between April 2018 and April 2019. The report also found that the number of homes on the market in Seattle rose by 57 percent over the same time last year – the second-highest rate in the nation. This glut of homes, along with a dip in demand explains the price drop.[/vc_column_text][vc_column_text]The oversupply of homes in mid to high-end markets like Seattle that have seen recent price drops is not unusual since one of the common issues with most middle-class real estate, like new condos or new home construction, is builders creating an overabundance of homes. [/vc_column_text][vc_column_text]When this happens, like in Seattle where there is an oversupply of homes along with shrinking demand, prices drop. A drop in home prices usually results in a corresponding reduction in rental rates since landlords start to charge lower rents due to competitive pressures from new landlords who are buying homes for less than existing landlords and can afford to charge lower rents to attract tenants.[/vc_column_text][vc_column_text]From an investor and landlord perspective, this is not an ideal situation where the possibility of oversupply can affect the bottom line due to reductions in rent. The ideal real estate segment would be one in which oversupply – whether from new construction or low demand – is uncommon, where rent reductions don’t occur and where consistent and continually growing income streams can be expected backed by historical data.
[/vc_column_text][vc_column_text]Well, there happens to be a real estate asset class that fits this description, but it’s one only a few will openly brag about because of the social stigma associated with it. While it’s often overlooked and not often boasted about in the locker room of your local private country club, it is actually one of the most exclusive and most profitable.[/vc_column_text][vc_column_text]What is this asset class?  Mobile home communities (“MHCs”).  What? Why? For one, MHCs fall within the affordable housing sector, which has consistently seen undersupply and overdemand since the Financial Crisis. 
[/vc_column_text][gem_quote style=”4″ no_paddings=”1″]IN FACT, IN MANY MAJOR MARKETS WHERE PRICES HAVE FALLEN DUE TO OVERSUPPLY AT THE MID TO HIGH LEVELS, THE OPPOSITE HAS BEEN TRUE FOR AFFORDABLE HOUSING ON THE LOW END.[/gem_quote][vc_column_text]According to a recent CNBC.com article, “There is also a growing bifurcation in the market. High demand and short supply on the low end have kept prices high, while low demand and high supply on the high end has hit prices.” Olick, Diana (May 7, 2019) Home Price Gains Keep Shrinking, but Housing is Still Overpriced. Retrieved from https://www.cnbc.com/2019/05/07/[/vc_column_text][vc_column_text]Another reason for the profitability of MHCs… [/vc_column_text][vc_column_text]While demand has seen an upsurge from baby boomers and millennials seeking to downsize, supply remains stagnant because unlike with middle class and high-end real estate, there is no overbuilding nor much chance of it in the near or distant future. Why? Many local municipalities are not allowing the development of new MHCs because people look down on them. Because of this social stigma, the fear is that the proliferation of MHCs in a municipality would only drag down home values in the mid to high ranges.[/vc_column_text][vc_column_text]With stagnant and even diminishing supply (when MHCs are put out of commission) coupled with increasing demand, what does this mean for the real estate investor interested in MHCs? It means investors can have the security of knowing that the supply vs. demand dynamics of MHCs will ensure high demand, occupancy, and rents for the long-term.[/vc_column_text][vc_column_text]With no relief in sight for the supply constraints plaguing MHCs, MHC investors can be confident in knowing they should be able to reap the significant financial windfalls from this unsexy but highly profitable segment for years and decades to come.[/vc_column_text][vc_column_text][/vc_column_text][/vc_column][/vc_row]

DISCLAIMER

This is neither an offer to sell nor a solicitation of an offer to buy the securities described herein.

THE OFFERING IS MADE ONLY BY THE PRIVATE PLACEMENT MEMORANDUM. THIS MATERIAL MUST BE READ IN CONJUNCTION WITH THE PRIVATE PLACEMENT MEMORANDUM IN ORDER TO UNDERSTAND FULLY ALL OF THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES ASSOCIATED WITH AN INVESTMENT IN THE SECURITIES TO WHICH IT RELATES AND MUST NOT BE RELIED UPON TO MAKE AN INVESTMENT DECISION.

The offering of securities described herein will not be registered under the Securities Act of 1933 (the “Securities Act”) or the securities laws of any state and the securities are being offered and sold in reliance on exemptions from the registration requirements of the Securities Act and such laws. Neither the Securities and Exchange Commission nor any other federal or state agency has passed upon the merits of or given their approval to the offering of the securities, the terms of the offering or the accuracy or completeness of the offering materials. The offering of securities is being made only to Accredited Investors, as defined in Rule 501(a) of Regulation D of the Securities Act. An investment in the securities is highly speculative and involves substantial investment and tax risks. All prospective investors must review the Private Placement Memorandum in its entirety, including the section entitled “RISK FACTORS” before investing.

An investment in Four Peaks Capital Partners, LLC is highly speculative and involves substantial risks, including, but not limited to: (1) Four Peaks Capital Partners, LLC success depends upon the performance of the Manager in managing Four Peaks Capital Partners, LLC and its investments, including decisions involving investment of Four Peaks Capital Partners, LLC’s capital and the acquisition and disposition of properties and there is no guarantee Four Peaks Capital Partners, LLC will raise enough capital to perform its investment objectives; (2) There can be no assurance that a prospective investor will receive any return on investment in Four Peaks Capital Partners, LLC and/or realize any profit on a prospective investor’s investment in Four Peaks Capital Partners, LLC and a prospective investor could lose all or a substantial portion of its investment; (3) The Manager has limited or no net worth and there can be no assurance that the Manager will have sufficient funds to meet its obligations to Four Peaks Capital Partners, LLC or to otherwise financially support Four Peaks Capital Partners, LLC; (4) The Class A members and Class B members have no power to take part in the management of Four Peaks Capital Partners, LLC and have limited voting rights and will not have the opportunity to evaluate or approve any of Four Peaks Capital Partners, LLC’s investments; (5) The Class A Interests and Class B Interests will be illiquid, and the transferability of the Class A Interests and the Class B Interests will be substantially restricted; (6) Four Peaks Capital Partners, LLC may not have the cash flow necessary to make distributions to its members; (7) Four Peaks Capital Partners, LLC will not diversify its investments and, therefore, the success of Four Peaks Capital Partners, LLC will be dependent upon the success of the properties; (8) There are substantial risks associated with real-estate investments and ownership of storage facilities and mobile home parks; (9) There are various potential conflicts of interest among the Manager and its Affiliates and their principals.
Investors must read and carefully consider the discussion set forth under the section entitled “RISK FACTORS” in the Private Placement Memorandum for a complete discussion of these and other risks pertaining to this investment.

These projections are speculative and based on specific assumptions, which, if incorrect, would cause the actual returns to differ materially from the projected returns. You should review the entirety of the assumptions and risks set forth in the Private Placement Memorandum.

Any underlying assumptions and any forward-looking statements herein may not be accurate, the projections herein shown may not occur, and actual results could differ materially due to risks and uncertainties that are beyond the Company’s ability to control or accurately predict. To the extent, the information in this communication conflicts with the information in the Private Placement Memorandum, the information in the Private Placement Memorandum shall govern.

The securities offered are an illiquid investment and involve a high degree of risk; Investors should be able to bear the loss of some or all of their investment. Investors should read and understand all of the risks and the entire Private Placement Memorandum before making a decision to invest. Past performance is no indication of future results and there can be no assurance that Four Peaks Capital Partners, LLC will be able to execute the investment objectives for the Properties or the Offering.

This material is for general information purposes only and does not constitute legal, tax, investment or other professional advice on any subject matter. Information provided is not all-inclusive and should not be relied upon as being all-inclusive.
Any capitalized terms used but not otherwise defined in this Presentation shall have the meanings set forth in the Private Placement Memorandum.

Any reference to “Four Peaks” “we” “our” or “fund,” regardless of capitalization, shall refer to Four Peaks Capital Partners, LLC, and its Affiliates.

For additional risks and disclaimers, visit https://www.fourpeakscapitalpartners.com
Four Peaks Capital Partners, LLC

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