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How an open-end manufactured-housing fund built a durable income base, grew it through two single-asset DST roll-ins, funded its repositioning work without ever issuing a capital call — and is now converting into a defined cash-out through the DST V acquisition.
MHC Stable Income Fund II, LLC was organized as a Delaware limited liability company in 2018, and its confidential private offering launched in January 2019 (the Operating Agreement and Offering Memorandum are both dated January 9, 2019). The idea was the same proven one behind every MHC vehicle: acquire underutilized "mom-and-pop" manufactured-housing communities at favorable cap rates, professionalize them, and fill vacant lots with affordable homes — run as a perpetual-life, open-end income fund.
Managed by MHC Stable Income Fund Management II, LLC (also formed 2018) — three partners, each holding a one-third interest in the manager.
Fund II opened with two stabilized manufactured-housing communities — Sherwood Forest MHC and Rustic Cove MHC — totaling 192 homesites. At year-end 2019 the Fund carried roughly $5.5M in assets, anchored by ~$1.6M of investor equity alongside seller and bank financing. Over the following years the asset base was deliberately expanded (see Chapter 03). Use the filter to separate the founding communities from the later DST roll-ins.
Founding communities, site counts and 2019 balance-sheet figures are drawn from the Fund II Offering Memorandum and the 2019–2022 community-level financials and rent rolls. Community locations and the Twinwall & Friendly Village roll-ins are stated per management; final figures reconcile to the DST closing binders.
To build scale, diversify the income stream, and strengthen the Fund ahead of its eventual resolution, two communities that had been held in their own single-asset Delaware Statutory Trusts were liquidated and added to Fund II. Rather than leaving them as isolated single-asset vehicles, management consolidated them into the open-end fund — enlarging the asset base for every Fund II investor.
Twinwall had been held in its own single-asset DST. That trust was wound down and the community was contributed into Fund II, adding a stabilized, income-producing asset to the open-end portfolio.
Friendly Village followed the same path: its single-asset DST was liquidated and the property was rolled into Fund II, further increasing the Fund's asset base and diversification.
Folding the Twinwall and Friendly Village DSTs into Fund II roughly doubled the community count and broadened the income base — positioning the Fund with more scale and a stronger footing for the DST V resolution to come.
Repositioning and improving these communities took real capital: site and infrastructure work, utilities, and the steady infill of vacant lots. Faced with that bill, management made a deliberate choice on investors' behalf.
Rather than issue capital calls and ask the partnership for more money, management funded the work through partner loans and a partner-guaranteed line of credit. The risk of carrying the capital program sat with the partners and lenders — not with the investor base.
Through years of capital work and two DST roll-ins, Fund II investors were never asked for another dollar. The partners absorbed the carrying risk so the value created by the improvements would accrue to investors — not be funded by them.
The wait is now converting into a defined exit. In March 2026 the remaining Fund II properties were acquired by MHC Affordable Housing DST V.
DST V acquired the remaining Fund II communities using the same installment sale structure that we used to cash-out our Fund One investors in 2021. And just as in the prior transaction, Fund II investors will be cashed out as the DST V equity is raised. The asset base has been built, the capital work was carried by the partners rather than the investors, and the final distributions will be made proportionately as equity is raised.
Remaining Fund II properties acquired by DST V, March 2026.
New investor equity is raised into the DST V offering.
Proceeds flow to Fund II investors as equity is raised — same as DST III.
Value built across the hold — including the DST roll-ins — accrues to you.
The structure mirrors the prior DST III transaction: investors are returned their capital as DST V equity is raised. The pace is a function of the equity raise — not a sign of trouble in the underlying communities, which are income-producing.
MHC Stable Income Fund II, LLC organized in Delaware; manager (MHC Stable Income Fund Management II, LLC) formed the same year.
Reg D private placement opened — up to 200 units / $20M; 8% preferred return + 2% additional; target IRR 15–20%.
Sherwood Forest MHC (127 sites) and Rustic Cove MHC (65 sites) — 192 homesites in Ohio; ~$5.5M asset base at year-end 2019.
Site work and lot infill funded by partner loans and a $2M partner-guaranteed line of credit in favor of Jim Clayton — never an investor capital call.
The Twinwall and Friendly Village single-asset DSTs were liquidated and added to Fund II, growing the portfolio to four communities and broadening the income base.
Remaining properties acquired by DST V on the same structure as DST III; Fund II investors cashed out as equity is raised.