Answers to common questions about 52TEN and our mobile home park strategy, as of January 1, 2025.

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The Firm

52TEN is a real estate investment firm established in 2016, headquartered in Scottsdale, Arizona.

The identification, acquisition, and repositioning of mobile home parks.

  • 52TEN, LLC, an Arizona limited liability company, is owned solely by its principals, Jesse (Jack) Martin and Nathan (Nate) Pattee.
  • A Limited Partnership is established for each offering. Interests are offered through a private placement memorandum under Rule 506(c) of Regulation D. 52TEN is the General Partner for each Limited Partnership.
  • Each property is held in a single purpose LLC, wholly owned by a Limited Partnership. 52TEN is the Manager of each LLC.

  • $145 million in assets under management.
  • $59 million in managed capital, through a variety of funds and direct investments.

Yes, at intervals. The principals invest as an LP to the degree liquidity allows, without unnecessarily jeopardizing the firm’s reserves. As the firm grows, most of the principal’s liquidity is applied to attracting and retaining high-quality staff members.

No.

No.

No.

No.

No.

No.

Does the firm or its principals have any prior or current fines or sanctions levied against them by U.S. or international regulatory bodies including the Securities & Exchange Commission, the Financial Industry Regulatory Authority, the Department of Housing and Urban Development, the Office of the Comptroller of the Currency, HM Treasury, or the Financial Crimes Enforcement Network?

No.

Is the firm or its principals on any watch list related to OFAC, Politically Exposed Persons, Ineligible Firms or Individuals, Excluded Parties, Debarred Parties, Denied Persons, Fugitives, Sex Offenders, or otherwise monitored party?

No.

  • The firm has unblemished credit with respect to banking and borrowing.
  • The principals have excellent personal FICO scores.

Operations

The firm currently owns properties in Arizona, Nevada, Texas, Florida, and Nebraska.

Yes, the firm’s vertical integration includes:

  • Asset Management – Property operations, budgeting, and variance reporting.
  • Property Management – Onsite manager and maintenance tech at each property, with regional manager oversight. 52TEN only manages the firm’s properties. (not a service for others)
  • Construction Management – Internal for small capex and maintenance, third-party local contractors for large capex projects.
  • Home Sales – Direct internal sales with local sales agents as the primary strategy, with local retail dealership relationships as a secondary strategy.
  • Marketing – All marketing is managed in-house, including for new residents, home sales, new staff, capital, and acquisitions.

Yes, this license allows the firm to purchase new homes directly from manufacturers, with no middleman.

  • Annual income/expense budgets and capex budgets are set by the property management team, with monthly reviews.
  • Monthly asset management reviews are performed for variance.
  • Weekly reviews are performed with onsite teams for progress.

Third-party IT MSP for enterprise-level data security, systems control, hardware setup and security, business continuity and disaster recovery, technology management, network administration, remote monitoring, phishing training and protection, IT support, cloud services, governance, risk, and compliance.

2FA for employee access to sensitive data where admin level access is required, with permission limits for lower-level access.

  • All expenses are controlled from point of purchase up to the founders.
  • All invoices controlled by accounts payable department.
  • Ramp credit cards with system controls and receipt requirements.
  • Limit controls for regional managers.
  • Internal approval limits set within Avid Exchange.
  • All expenses go through P&L for review, tied to individual expenses/invoices/receipts.
  • All invoices paid through Avid Exchange, following chain of command.

  • Clear resident qualifications.
  • Online application process with background check.
  • Online lease completion with applicable lease riders. (e.g., pet, gun, violence, etc.)

The firm takes a balanced approach to rental rate adjustments, recognizing the importance of affordability for residents while providing for necessary maintenance/operational costs and return on investment for LPs. The strategy typically involves enhancing community amenities, services, and infrastructure to add value to residents first, then aligning rental rates with the market.

Acquisition, Reposition, Disposition

Location – Safe neighborhoods in markets with median home values of 300k or more, and a favorable regulatory environment.

Demand – Growing population in the market, with high demand for affordable housing and strong potential for rent growth.

Size – Larger properties in the price range of 10M-40M, favorable for management, refinance, and exit audience.

Quality – 3-Star quality or better, with serviceable infrastructure, low-density, and good parking.

Upside – Ability to improve performance through capital improvements, expense reduction, improving occupancy, and increasing overall revenue.

Economics – Minimum LP economics during the initial hold period:

  • 14+% IRR
  • 7+% stabilized COC

The firm analyzes specific market criteria, including median home values, population and job growth, housing starts, crime, regulatory favor, and the competition’s vacancy and rental rates.

When considering a new acquisition, the firm attempts to “kill the deal” rather than force underwriting to work. Those properties that prove to be “hard to kill” become candidates to acquire. It’s an approach that reduces the number of properties the firm acquires, but allows for a realistic opportunity to outperform on acquisitions that make the cut.

52TEN has a clear process that addresses 187 items for each property acquisition and transition to the portfolio, to include critical dates, legal & banking, project setup & team communication, escrow, lending, due diligence materials, capital raising, marketing, initial physical due diligence, finance, final physical due diligence, and park turnover to their operations team.

  • Install the firm’s professional management, EOS, software and the firm’s processes & procedures.
  • Execute the marketing strategy, with branding, logo, and website.
  • Establish current leases and a firm rules-based environment.
  • Reduce property expenses, and solve operational inefficiencies.
  • Complete capital improvements.
  • Optimize economic occupancy (to include the use of temporary RV income).
  • Renovate park-owned homes.
  • Fill vacant lots with new homes.
  • Sell homes to new residents.
  • Align rental rates with the market.

The firm has obtained debt from banks, credit unions, life companies, seller financing, and agency (Freddie and Fannie), including the assumption of existing agency debt.

Generally, the firm’s approach is to obtain debt at acquisition with a maturity date equal to or greater than the initial hold period (typically 7 years), thereby eliminating the requirement to refinance during the initial hold period.

Refinance is considered when rates are favorable or when it would otherwise be accretive to the investment.

Each property has its own business plan, tax strategy, and duration, wherein a variety of exit strategies are possible:

  • Exit at market pricing and realize profits.
  • Refinance, return capital, and hold for an extended term to avoid the tax event.
  • 1031 exchange into a newly acquired property.

In all cases, liquidity is provided at the end of the initial term for LPs seeking to exit.

Yes, the firm uses legal counsel with specific expertise in MHPs for document creation/execution and settlement of transactions.

The firm uses third-party tax appeal specialists with specific market expertise to challenge property tax increases.

No.

Yes. Prior to the formation of the firm, its principals’ careers included investments in land, office, single-family, and multi-family.

Since inception, the firm has only owned MHPs and RV parks. In 2019, the firm’s strategy narrowed to focus solely on MHPs. (permanent housing vs. transient)

Although the firm no longer pursues transient RV parks, the firm’s RV experience is valuable, as it is common for a temporary RV strategy to be utilized on vacant lots while a permanent MH infill strategy is pursued.

The firm deploys a “direct-to-owner” acquisition strategy that focuses on properties that are not for sale. This strategy involves building relationships directly with owners and a network of brokers, allowing the firm access to properties not available on the open market. The firm has acquired all 1,641 lots off-market.

Finance

The firm’s book of accounts are prepared by a firm of certified public accountants and verified on a monthly basis by a neutral-party administrator, but it would be dilutive to perform an annual independent audit for each property. To account for this, the firm has created a triangle framework of internal and external finance components (52TEN, RedCedar, and CBIZ).

  • 52TEN manages the day-to-day.
  • RedCedar reconciles on a monthly basis and provides back office accounting..
  • CBIZ finalizes, prepares tax returns, and K1s.
  • LPs receive property improvement reports from the GP on a quarterly basis.
  • LPs receive financial statements from the Administrator on a quarterly basis.
  • The financial statements are reviewed by CBIZ, who prepares tax statements for each LP on an annual basis.

Follow generally accepted accounting principles (GAAP), comply with relevant reporting standards and principles, maintain best practices with internal accounting and bookkeeping processes, maintain best practices with on-site bookkeeping processes, follow PCI DSS compliance to protect credit card / sensitive data, compliance with laws/regulations and tax law.

  • Segregation of accounting/bookkeeping duties between finance team and on-site teams.\
  • Internal controls, implemented accounting/bookkeeping processes and systems for finance team and on-site teams.
  • Restricted access and privileges for users of accounting software, bank accounts, credit cards, eChecks, and digital storage.
  • Month-end process including controls for correcting errors.
  • 2FA access to Chase Bank (token), AvidXchange, eChecks, InvestNext
  • Secure password management with segregated access.
  • Electronic rent payments for property residents.

Banking controls:

  • Co-founders are the only two signers, wire initiators, and final approvers on internal transfers and general ACH transfers.
  • Privileges and limit controls set with co-founder approval.
  • Approval and policy workflows set within the system.
  • Utilization of check fraud protection services across all accounts.

Ramp Credit Card

  • Privileges and controls set for all card users with co-founder approval
  • Approval and policy workflows set within the Ramp system.

  • All financials are analyzed, cross-checked, and balanced to ensure accuracy by the finance manager.
  • Red Cedar performs reconciliation, resolves errors, and drafts the final version of financials.
  • Final approval of financials is performed by co-founders.
  • Once approved, RedCedar issues final financials to LPs, and approves distributions for processing.

  • Only co-founders and the finance manager can move money.
  • Limit controls in place for the finance manager.
  • Amounts exceeding limits require co-founder approval.
  • Supporting documentation shared with Red Cedar.

Staff & Organization

The Executive Leadership Team has 84 years of combined industry experience.

The firm recruits team members based on technical skills and cultural alignment. The full-cycle process includes sourcing, culture indexing, interviewing, onboarding, and training.

The firm conducts pre-hire background screenings for all team members and repeats them as needed during employment.

Induction, software, technical skills, company policies & procedures, regulatory & compliance requirements, fair Housing Act compliance, workplace safety, data protection, and confidentiality.

The firm’s Executive Leadership Team conducts structured performance reviews, aligning individual goals with company objectives. Managers are trained in effective evaluations, fostering goal-setting, development, and recognition to promote continuous improvement and accountability.

The firm maintains strong employee retention by offering competitive compensation, mentorship, strong work-life balance, and a supportive culture. While turnover is natural in the industry, the firm’s strong culture helps keep rates low compared to industry averages.

Business Philosophy & Execution

Raised with strong midwestern values, the principals at the firm maintain a conservative philosophy and prefer to underpromise rather than overhype investments.

The firm’s core values align with its principals’ Midwestern upbringing. These values were established in 2016 and continue to guide the firm today:

WORLD-CLASS TEAM
We believe each employee, contractor, vendor, professional, and software solution should be world-class.

IT WILL HAPPEN
We believe everyone on the team needs to be aligned with the firm’s goals and share the unshakeable belief that “it will happen.”

BEST EXPERIENCE
We believe our residents, employees, contractors, vendors, and LPs deserve the best experience in the industry.

SMART DECISIONS
We believe great investments begin with a smart decision and continue with a series of smart decisions. These include conservative underwriting to accommodate surprises, the courage to pivot quickly, and thoughtful consideration of short-term and long-term goals.

The firm utilizes the Entrepreneur Operating System (EOS), a proactive business architecture aimed at establishing and executing on short-term and long-term goals.

EOS is installed at every property, staff members meet weekly to stay on track, and monitor measurable KPIs that ensure consistent results at each property. EOS gives the firm a competitive advantage and leads to consistently meeting timelines and budgets while offering a realistic opportunity to outperform the pro forma.

Track Record

  • $145 million in assets under management.
    $59 million in managed capital, through a variety of funds and direct investments.
  • View current portfolio

1,779 individual lots.

No. Across every property since inception, the firm has never paused cash flow distributions for any reason.

No. All payment obligations and debt service have been made on time over the entire history of the firm.

The firm is currently meeting or exceeding the pro forma at every property in the portfolio. The average performance across the portfolio (where 100% would be meeting the pro forma exactly) is 123%.

Yes. For a short period of time, one property was below 100%. A pivot in strategy allowed the firm to get back above 100% over a 12-month period.

Yes, 52TEN has completed two full cycle properties with similar performance:

  • 9-11% stabilized COC
  • Outperformed the pro forma by 35-38%
  • 20%+ IRR net to LPs

Yes. The firm’s full-cycle parks have exceeded the pro forma by a wide margin. In fairness, some of the margin was due to low interest rates at the time of exit. However, a great portion was due to property performance greater than the initial pro forma. Of course, past performance is no guarantee of future results, but the conservative approach taken at acquisition has the firm’s entire portfolio performing ahead of schedule.

Capital Management

Yes. All investment vehicles under the 52TEN umbrella are administrated by RedCedar, who acts as the neutral party “referee” to ensure the highest level of transparency and accuracy for LPs, and on-time delivery of distributions and reports. Red Cedar provides the following services:

  • An online portal for onboarding new LPs, ensuring regulatory compliance, KYC, and AML, with secure storage of sensitive data, statements, reports, and documents.
  • Perform portfolio monitoring, which includes reconciliation of contributions, bank accounts, and bookkeeping to ensure all transactions are accurate and in accordance with the Partnership Agreement.
  • On a quarterly basis, provide financial reporting and manage quarterly distributions of cash flow.
  • As properties are refinanced or sold, manage waterfall calculations, return of capital, and distribution of proceeds.
  • Interface directly with certified public accountants to ensure accuracy of LP account balances, distributions, and tax statements.
  • Provide year-end tax and dedicated accounting support.
  • In the event of death or incapacitation of both GP principals, initiate the succession plan complete with a pre-selected successor GP who has focused expertise in mobile home parks.

  • Form D filing by the securities attorney as new entities are formed, prior to any capital being raised.
  • State Blue Sky filing by the securities attorney as capital is raised, within 15 days of funding, for each state.
  • State ADV registration by the securities attorney for the state of AZ, where the home office of the firm is located.
  • Accredited investor verification, KYC, AML, and secure storage of offering documents & sensitive information, managed by the investor portal provided by the administrator.
  • Each LP is required to complete a questionnaire prior to subscription.

  • MHPs as the sole asset type – due to stable cash flow and ability to weather a recession, MHPs are considered to be a defensive, low-risk investment, and are a top choice for capital preservation.
  • Higher-quality properties, located in higher value markets.
  • Conservative underwriting.
  • Sensible approach to debt.

Yes. Mobile home parks are more tax efficient than most other real estate with respect to both straight-line and bonus depreciation, granting significant passive losses to LPs.

  • Bonus depreciation is taken in the calendar year each property is acquired.
  • Bonus depreciation is taken on capital improvements made to each property.
  • Straight-line depreciation is taken on items such as the clubhouse, laundry facility, and any ancillary rental structures.
  • Depreciation is not taken on home inventory. (these are typically sold to new residents in a short period of time)
  • Direct Investments include a strategy to reposition, return LP capital, avoid taxes, and keep the coupon, with a long-term hold objective. This allows LPs to avoid depreciation recapture and capital gains.
  • For properties that qualify for shorter duration, a 1031 exchange will be considered.

For tax losses from bonus depreciation, what was the amount of coverage to LPs for each dollar invested in years prior to 2024?

100% or more

What is the expected target amount of coverage to LPs for each dollar invested in 2024?

75-80%

What is the expected target amount of coverage to LPs for each dollar invested in 2025?

If nothing changes with respect to the tax act, 50-70% coverage is expected in 2025.
If the new administration brings back the full allowance, then coverage will be greater than 100% (this item was on the table in 2024, but it did not pass the Senate).

Assets are valued at the end of each calendar year through valuation practices commonly used in the industry, including cap rate valuation against the net operating income and broker price opinions. Formal appraisals are used when a third-party valuation is required.

For fund offerings, there is a waiting list. Capital calls are issued to unfunded commitments only, on a first-come, first-served basis, with at least a fifteen-day prior written notice. This allows each LP to fund their entire commitment when they reach the top of the waiting list.

For direct offerings, the initial capital call is issued fifteen days prior to close of escrow to each LP at the same percentage pro rata, based on their capital commitment. Subsequent capital calls occur at intervals as projects are completed, wherein each LP’s remaining capital commitment is drawn down at the same percentage pro rata, each with at least a fifteen-day prior written notice.

Distributions are calculated by the administrator, via the waterfall within the investor portal. All historic investment, distribution, reinvestment, return of capital, and split of proceeds are tracked, as well as any unpaid preferred return still outstanding. Payments are made through the portal via direct deposit to each LP’s bank account of choice.

The preferred return will begin to accrue on the day LP capital arrives in the partnership account.

Subject to available cash flow, distributions take place 50 days after the end of each calendar quarter. Most properties can distribute cash flow after the first quarter of ownership. Some heavier value-add properties may have no cash flow to distribute in the initial year of ownership.

No.

As of the date of this document, property progress reports are produced internally and distributed via email to LPs. Coming soon, these reports will advance to an investor dashboard wherein real-time data will be available for each property.
Financial reports are produced by the Administrator and are uploaded to the investor portal with notification via email.

Reporting takes place alongside distributions, 50 days after the end of each calendar quarter.

Have reports ever been late?

No.

  • Fund offerings allow for reinvestment.
  • Direct offerings do not allow reinvestment.

The target for delivery is prior to the end of March. Historically, they have been delivered in mid-March.

Have tax documents ever been delivered late?

No.

No. However, there are cases where a group of LPs pool their funds to make a single investment with the goal of achieving better economics through a higher class of interests.

Yes. Greater economics are given to larger check writers.

Confidence with respect to return of capital begins with the intrinsic performance characteristics of mobile home parks. They are more capable of weathering economic storms than other real estate, so the risk of loss is lower than most commercial real estate.
Neutral party administration is used to protect LP capital from ponzi schemes, cooking the books, misappropriation of funds, and the potential for human error.

By doing what we promise: to be a good steward of LP capital. That means careful selection of the right properties, reporting and distributing every 90 days like clockwork, and delivering tax documents in a timely fashion. It means keeping LPs informed at every step of the way and allowing direct access at all times.

Key Third-Party Service Providers

Fund Administration

  • Red Cedar Advisory Services
  • 612 E 4th Street Royal Oak, MI 48067
  • Services provided: neutral-party referee, 100% portfolio monitoring, bank reconciliation, fund accounting, transparent reporting, cash flow distributions, return of capital, profit distributions, and succession plan.

Investor Portal

  • InvestNext
  • 1420 Washington Blvd, Ste 301 Detroit, MI 48226
  • Services provided: online investor portal, onboarding, compliance, security, document storage, ACH payments, and waterfall management.

Accounting

Cost Segregation

  • Madison Specs
  • 13101 Preston Road Suite 300 Dallas TX 75240
  • Services provided: cost segregation studies and estimate of tax benefit during due diligence.

Securities Attorney

  • Riveles Wahab LLP
  • 545 Fifth Avenue, Suite 502 New York, NY 10017
  • Services provided: advise on entities, structure, strategy, & offering terms, draft agreements and offering memoranda, compliance and filing for Regulation D, Form D, state blue sky filings, & state/SEC investment adviser registration, and provide updates regarding regulatory and compliance changes.

Information Technology

  • Keystone Solutions
  • 3855 N Ocoee St Cleveland, TN 37312
  • Services provided: cybersecurity, technology management, hardware for new employees, network administration, remote monitoring, phishing training & protection, IT support, business continuity, cloud services, governance, risk, and compliance

Legal Transactional

  • Gallagher & Kennedy
  • 2575 E Camelback Road Phoenix, AZ 85016
  • Services provided: acquisition & finance, land use, planning, zoning, and litigation.

Fractional CFO

  • Preferred CFO
  • 478S 100E Salem, UT 84653
  • Services provided: budgeting, financial forecasting, financial modeling, operational optimization, maximize profitability, resolving cash flow challenges, financial oversight, reporting, internal controls, and waterfall modeling.

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