There’s a fresh idea emerging in manufactured housing.
It’s one that can provide community owners with an influx of cash, lighten management requirements, and provide an easy avenue to operating a pure land-lease property.
GoFresh Homes CEO Jim Davis had been in banking for 28 years and was contemplating a next career when his desire for a mission-driven business plan brought him to affordable housing.
“It wasn’t difficult to see the opportunity once I began to study the sector,” Davis said. “The consistent cash flows and strong occupancy rates of manufactured home communities make it a compelling story to share with investors.”
Partners and operating investors Howard Lieber, Chris Murray, Scott Pomeroy, and John Rich joined the effort and in less than four years the Evergreen, Colo.-based company has acquired and is managing 83 homes in four states with another 300 to 400 homes in its line of sight.
“Even though we are interested in talking to all sizes of operators, when we have these discussions with larger operators, they’re interested because having cash tied up into rental homes is sometimes deemed inefficient use of their capital,” Chris Murray said.
“In our world, we want partnerships where we can come in and provide cash alongside them as they seek to own more parks or put more homes on their lots for land-lease revenue,” Murray said.
GoFresh takes ownership of park-owned homes, becoming the tenant for a monthly land-lease payment to the manufactured home community owner. They also can assume management responsibilities through their full-service property management company.
“Aspirationally, we’re seeking to own 10,000 homes in the next five years,” Murray said. “And we are flexible, we can work in multiple ways with community owners and managers. We are completely set up to manage but we also are fine coming to an agreement on owning the homes and letting them manage.”
From Niche to National Provider
Davis and Murray went to school and played football together at Cherry Creek High School in Denver. Murray’s early career emphasis was in talent management and representation, which he continues today exclusively for National Football League players.
John Rich, the country musician, entrepreneur, and media personality joined GoFresh in mid 2019.
“I had known John since about 2010 and I had heard him talking on the radio about growing up in a manufactured home,” Murray said. “I called him and asked if he wanted to be involved because his story is genuine, based on personal experience.
“He really wanted to get into the industry and has a lot of love for hard-working Americans who seek to have a home of their own,” Murray said.
Invest in the New Rental Ownership Model
GoFresh provides investment opportunities in the manufactured housing industry by allowing passive investors to put funds into a portfolio of park-owned homes with anticipation of favorable returns.
“We’re creating a new asset class, doing this at large scale,” Murray said, similar to special purpose vehicles, or SPV investments, in other parts of the multifamily offering. “We’re looking at five-to-seven year runways on these investment vehicles. The first one closed in 2016, a relatively small one at $2 million, and the second one of about $30 million is still in flight. We probably have another four-year run on the second fund.
“The approach provides a wide array of exit strategies for our investors,” Murray said.
The Development of Patriot Village
In addition to being a partner in GoFresh, Rich is a high-profile advocate for the industry, and recently began to form plans for a swath of land outside Nashville, where the “Big & Rich” entertainer resides.
“He wants to put his money where his mouth is,” Murray said of the community GoFresh and Rich are calling Patriot Village.
“The memories I have growing up in a double-wide in Amarillo, Texas, from 1980 through 1988 are some of the best in my lifetime,” Rich said. “I love being part of GoFresh, working within the industry to help foster its growth, and listening to heart-felt stories from our residents that remind me of my own story.”
The GoFresh team is developing the small property from the ground up in Ashland, Tenn., and is looking for partners to supply homes, with a commitment to provide affordable housing for veterans of the U.S. Armed Forces.
“One of the objectives is to give a home to a family of a fallen veteran through Folds of Honor, which is a charity that is very close to John’s heart,” Murray said.
