EP358 Manufactured Housing Using the Fund Model with Sean Gibson and Alden Guajardo

A Canadian Investing in the U.S. with Glen Sutherland

This episode explores the world of manufactured housing as a unique investment opportunity in the US. Glen is joined by Alden and Sean, who specialize in originating notes and investing in manufactured housing communities, providing insights into this niche market. Key Highlights 1. Defining Manufactured Housing Often confused with RVs or trailers, manufactured homes are single-move properties transported from the factory to a lot. Typically found in established communities with amenities like pools, city utilities, and more. Units are personal property, titled through the DMV, unlike traditional real estate. 2. Property Features Focus on 3-4 bedroom homes (800-1300 sq. ft.) to cater to families. Renovated properties with modern amenities like granite countertops and new appliances. Homes are placed in family parks or 55+ communities. 3. Investment Opportunities Note Investing: Individuals can purchase notes secured by manufactured homes, earning returns without managing tenants or properties. Accredited Fund: The Silvercrest Opportunity Fund offers diversified portfolios of notes, with 1-year (10% net) and 3-year (12% net) investment terms. 4. Risk and Mitigation Note Investing: Slightly higher risk due to potential non-performance, but supported by the fund's back-office services for repossession and resale. Fund Model: Diversifies risk across multiple notes, with the management team handling repossessions, retitling, and remarketing. 5. Advantages of Manufactured Housing Affordable housing demand continues to rise. Investment provides opportunities for passive income, with lower risk than traditional real estate. Evictions for non-performing notes are simpler and less costly than traditional foreclosures. 6. Underwriting Process Buyers are rigorously qualified with credit checks, employment verification, and substantial down payments. This reduces repossession risks and ensures steady cash flow. Host’s Takeaways Manufactured housing provides diverse investment pathways: individual notes, accredited funds, or direct property ownership. Eviction is a cost-effective recourse compared to traditional foreclosure, minimizing potential losses. Negative stereotypes around manufactured housing are outdated as the market evolves with modern communities and high standards. Closing Remarks: Alden and Sean emphasize the significant opportunities in manufactured housing, particularly for investors seeking affordable entry points and consistent returns. They invite listeners to explore this growing sector further, highlighting its potential to diversify portfolios.