After closing a $15 million fund at the end of July, Saratoga Group has announced its latest Opportunity Zone Fund—Fund VII— with a target of $30 million. The Fund aims to purchase more than $43 million worth of manufactured housing communities, translating into some 2000 sites in more than 25 properties. The Fund already has four manufactured housing communities under contract in Memphis, Tenn.; Nacogdoches, Texas; and Phenix City, Ala.
According to Luke Hales, Saratoga Group CTO, the company will implement improvement programs at the properties. The improvements will comprise the addition of playgrounds, new asphalt, soccer fields, barbeque pavilions and solar streetlights.
From a risk perspective, investing in manufactured homes is better positioned than developing other Class A asset types, according to Saratoga Group’s CEO Sam Hales.
The national average lot rent at a manufactured community is less than $300 per month and the average property Saratoga acquires is 55 percent occupied. The company expects to have 5000 lots under ownership and management by the end of the year.