Self-Storage and Mobile Homes, the Perfect Odd Couple

Cash Flow Connections is focusing on both self-storage and mobile home assets with its latest fund. The two asset classes are seemingly an unlikely pair, but the firm says that they are both a good fit and complementary to each other, providing favorable risk-adjusted returns with healthy cap rates and value-add potential. The fund is still in raising capital, but Hunter Thompson, a principal at the firm, expects it to close with $6 million in commitments.

“The timing of all of this coincides well with the significant increase in prices that other asset classes have seen, particularly multifamily,” Thompson tells GlobeSt.com. “Many of the conversations we have had with investors reveal that multifamily has always been their preferred investment vehicle, but it has just become too challenging to make the numbers pencil. For example, many desirable multifamily markets are trading below 4.5% cap rates, while mobile home parks within 10 miles are trading at 7.25%. Of course, cap rates will not paint the whole picture of an investment, but that alone is intriguing for most investors who are looking to allocate capital in today’s economic climate.”