The 52TEN Story: A Recession-Resistant Investment Strategy is Born
The 52TEN Story: A Recession-Resistant Investment Strategy is Born
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In 2016, Nate Pattee invited me to join him to discuss a new kind of investment strategy, which would solve a gigantic problem facing investors. As we looked back at the Great Recession of 2008, we clearly recalled how people were devastated emotionally and financially. We remembered how people lost their homes, their jobs, and their investments. We knew people who watched helplessly as half their wealth was stolen by the market crash.
Worst of all, we were painfully aware that investors didn’t have a better option that could have saved them from financial tragedy. Their only options were traditional, market-based investments that were especially vulnerable to cyclical market fluctuations. With their wealth tied to these investments, investors had no control, and they were at the mercy of vicious market cycles.
That gigantic problem investors faced in 2008 is the same one investors continue to face today — and Nate and I committed to solve it. We knew there had to be a better way.
This glaring need for an alternative solution was the genesis of 52TEN. We joined forces with a shared goal:
Create a recession-resistant investment strategy that would perform in all market cycles, particularly during times of uncertainty when everything else is in chaos, so we and our investors would never have to worry about market volatility again.
With over 40 years of combined real estate investment experience, it was clear to us that this new strategy would center around true recession-resistant performance, while also including attractive returns and the world-class experience that every investor deserves.
52TEN’s Three-Pronged Strategy for Success
Nate and I spent the better part of a year architecting 52TEN and our investment strategy to solve this problem. As we designed the business, three critical components stood out: the right real estate, the right core values, and the right business architecture.
1. The Right Real Estate
The foundation for our new investment strategy would need to answer the most difficult investment riddle: How can you make consistent returns while avoiding risk of loss, regardless of market conditions?
While it’s extremely rare to find a secure investment vehicle that can deliver predictable results through a market correction, it does exist. In our experience, there is one asset class that consistently outperforms others, in good times and in bad: mobile home parks.
Though mobile home parks are not as well known and often misunderstood, their unique ability to provide consistent cash flow through every market cycle made them the perfect real estate for 52TEN’s investment strategy. The solution was clear to us: Build a portfolio of mobile home parks that offer recession-resistant cash flow and the opportunity for substantial appreciation.
2. The Right Core Values
A company’s core values are the timeless principles that guide its founders and staff as they make decisions. Properly followed, these values affect every aspect of business, from the long-range vision of the company down to the day-to-day operations.
The core values we established for 52TEN align with our own midwestern values, our conservative approach, and our mobile home park strategy. Today, these values shape the people we work with, how we invest, and the culture of our company.
A World-Class Team We believe that each employee, contractor, vendor, professional, and even software solution — across every aspect of the business — should be of the highest quality.
Unshakable Belief We believe that everyone on the 52TEN team needs to be aligned with our goals and share the powerful belief that “it will happen.”
Smart Investment Decisions We believe in taking a conservative approach to selecting properties, underwriting, and using leverage, which rewards us with quality assets and consistent cash flow.
The Best Experience We believe in delivering the best experience for everyone involved in our business. For the residents at each property, that means ensuring their living experience is always improving. For our employees, contractors, and vendors, that means providing clear direction, support, and an incredible working environment. For our investor partners, that means maintaining alignment of interests, structured communication, transparency, timeliness, and accessibility. No matter who we work with, we strive to pleasantly surprise them with the best experience they’ve ever had.
3. The Right Business Architecture
To minimize the growing pains and reactive behavior commonly found in emerging businesses, we chose to build 52TEN on the EOS system, a business architecture outlined in the book Traction by Gino Wickman. This proactive method of running a company allows for the planning, execution, and control of every component of the business, down to the smallest detail at each property.
With Traction as a guide, we developed a long-range vision and broke it down into short-range goals that we tackle one quarter at a time. Along the way, we give thoughtful, proactive consideration to each decision, with our core values and long-range vision in mind.
Sometimes more time or money is required to solve a particular challenge, but this system ensures the right decision is made for the long term, instead of simply applying a short-term bandage. EOS encourages us to lay the right brick on the foundation, go the extra mile, and do the things others are not willing to do.
This architecture has allowed 52TEN to become a complete package as a real estate firm and investment sponsor, avoiding the problems and shortcomings that hinder others.
Protection, Predictability, Peace of Mind
Our vision was to create a recession-resistant investment strategy so we and our investors would never have to worry about market volatility again.
Today at 52TEN, Nate and I manage a low-leverage investment fund which targets underperforming mobile home parks, designed to deliver stable cash flow, substantial appreciation, and protection from the chaos of market cycles.
It is the solution to that gigantic problem investors faced in 2008 and other recessions, and we couldn’t be more thrilled about how it has come to life. With the right real estate, the right core values, and the right business architecture, our private investor clients have the inside track to a better way of investing for market cycles and the best experience they’ve ever had.
This content is the perspective of the author and is not intended to be relied upon as a forecast, recommendation or investment advice, and is not an offer or solicitation to buy any securities or to adopt any investment strategy. The information and opinions contained in this content are derived from experience, historic data, and other sources deemed to be reliable, are as of the date of this content, and may change as subsequent conditions vary.
Curious how mobile home parks could provide you with recession-resistant cash flow?