The genesis of Lotmoxie was borne out of our exploration of whether it made economic sense to develop a tract of land we owned that was zoned for Mobile Home Parks (MHP). That exploration lead to the understanding that developing a new MHP is difficult for a variety of reasons, but more importantly that the MHP non-asset class was superior by traditional economic metrics to the core assets classes that we historically invested in and / or developed such as apartments, office and land.
It is clear to us that this is where we need to continue to spend our time and investment dollars over the next 5+ years. We believe that the MHP industry is where self-storage was 10-15 years ago. Self-storage is another non-core asset class that has some of the same strong economic and other characteristics as MHPs, such as strong yields, low capex and fragmented ownership. While institutional investors such as private equity firms and public and private REITs have invested heavily in MHPs particularly since 2011, private investors, consisting of both large real estate investment firms like MHP Funds and small Mom & Pops, remain the dominate buyers and owners.
Lotmoxie has established an investment platform for the acquisition, reposition and disposition of MHPs. In doing so we intend to provide our investors with near-term income, mid to long-term equity growth and capital preservation while providing much needed affordable housing for thousands of families. Lotmoxie will continue to acquire parks nationwide with an emphasis on the Southeast / Mid-Atlantic states. We will target acquisitions of MHPs that are all-aged, stabilized or value add with 40+ lots. The biggest challenge is to retain adequate and reliable debt and equity capital, competent property management and source the few parks that will meet our investment criteria and survive our due diligence scrutiny.
Our management team has extensive experience in most aspects of commercial real estate for a few core asset classes including lending, debt and equity placement, property and asset management, development and disposition. While MHPs are non-core we think that this property type is more straightforward than with other property types. Success lies in 1 ) find suitable MHPs to acquire, 2 ) strong and expedient due diligence, 3 ) enhance and implement competent property and asset management. The remaining part of this investment cycle including repositioning and disposition will be a byproduct of these upfront initiatives.