Paul Mershon Featured in Bloomberg’s “Where to Invest $1 Million Right Now”
On March 5, Bloomberg updated their article, “Where to Invest $1 Million Right Now,” featuring six national experts offering investment ideas for a post-pandemic future, including Paul Mershon, CFP®, CLU, ChFC®, RHU and Founder & CEO of Silverhawk Private Wealth.
As Bloomberg put it, “the Covid-19 pandemic and its impact have dominated investment ideas over the past year, but with more than 270 million vaccine shots given and lockdowns easing, expectations are rising for a return to a new normal. With that in mind, our panel of experts recommend infrastructure stocks, mobile-home parks and equities to fulfill energy-storage needs. There are also more unusual and potentially fun-filled opportunities, for those fortunate to have the money to invest: vintage Mercedes, soccer jerseys and music royalties.”
Paul Mershon’s commentary was as follows:
We see a lot of attraction in real estate for manufactured housing — or what you might call mobile home parks. It’s an area many institutions are starting to wake up to. The returns are ridiculous. Over the last decade, investors have seen appreciation as high as 600% to 700%.
When you look at the demographics, there’s logic to it. Baby boomers have had a huge economic impact during each decade of their life. Over the next 12 years, the youngest of the boomers are turning 65, so 20% of the U.S. population will be over 65. That means a high percentage of people selling homes to capture liquidity and becoming renters, or seeking lower-cost housing. A mobile home is a third of the cost of a stick-built house. The average tenure in these parks is 15 years and occupancy rates are high nationwide. Renters tend to be older, fiscally conservative and capitalized adequately and you don’t see problems with rent abatement.
There are about 50,000 of these manufactured home parks in the U.S., but there’s only been about 10 developed in the past decade. Most city councils aren’t very excited about a brand new trailer park and there are zoning restrictions so it’s pretty hard to build a new park. Those that remain dominate the space. Large investors like Zell’s Equity LifeStyle Properties and Sun Communities still only control 5-6% of the market; 95% are mom and pop operators. It’s highly fragmented. That’s the definition of opportunity for the private-equity world.
Another way to play: Investors should consider the Mercedes Benz 300 SL. These models were manufactured between 1955 and 1961 and really represent the gold standard for classic car collectibles. If the car market migrates higher, they will be some of the first to rise in value. If the market declines, these models will typically experience only about 30% to 50% of the general market decline. And the Mercedes is recognized worldwide and followed by the global collectible market, not just limited to U.S. buyers, so that serves to increase demand.
Depending on condition, they tend to sell for about $800,000 to $1,500,000 most years. We’ve seen a drop in price in the last 24 months of about 15% to 20%, as we have across the spectrum of classic-car collectibles, so this may present a great entry point assuming you can find a willing seller.
Read the entire article here: