Disclosure

• THIS PRESENTATION IS CONFIDENTIAL. BY ACCEPTING IT, YOU AGREE NOT TO REPRODUCE ANY PART OF IT OR TO TRANSMIT, SUMMARIZE, OR REFER TO IT, OR ANY PART OF IT, TO ANYONE WITHOUT RUNNER CAPITAL’S (THE “INVESTMENT MANAGER”) WRITTEN CONSENT.

• THIS PRESENTATION PROVIDES INFORMATION ABOUT THE INVESTMENT MANAGER’S PROPOSAL TO FORM AND MANAGE CERTAIN PRIVATE INVESTMENT FUNDS (THE “FUNDS”). IT IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF ANY FUND. WHEN AND IF THE FUNDS OFFER THEIR SECURITIES, THEY WILL DO SO ONLY BY MEANS OF AN OFFERING MEMORANDUM THAT SPECIFICALLY STATES IT OFFERS THOSE SECURITIES (AN “OFFERING MEMORANDUM”). YOU MUST REVIEW THE APPLICABLE OFFERING MEMORANDUM FULLY BEFORE YOU INVEST. IF ANYTHING IN THIS PRESENTATION IS OR APPEARS INCONSISTENT WITH AN OFFERING MEMORANDUM, THAT OFFERING MEMORANDUM, AND NOT THIS PRESENTATION, WILL GOVERN.

• THE INVESTMENT MANAGER EXPECTS INVESTMENTS IN THE FUNDS TO BE SPECULATIVE AND ILLIQUID INVESTMENTS THAT INVOLVE SIGNIFICANT RISK. THEY WILL NOT BE SUITABLE FOR EVERY INVESTOR. TO INVEST, YOU MUST BE ABLE TO BEAR THE ATTENDANT RISKS AND YOU MUST MEET SUITABILITY REQUIREMENTS DISCLOSED IN THE OFFERING MEMORANDA.

• THE INVESTMENT MANAGER IS PRESENTING THE FUNDS’ INDICATIVE TERMS AND OTHER INFORMATION FOR DISCUSSION PURPOSES; THEY ARE SUBJECT TO COMPLETION OR AMENDMENT.

• THIS PRESENTATION CONTAINS STATEMENTS THAT MAY BE CONSIDERED “FORWARD-LOOKING,” GENERALLY IDENTIFIABLE BY WORDS SUCH AS “MAY,” “WILL,” “SHOULD,” “EXPECT,” “SEEK,” “ANTICIPATE,” “INTEND,” “ESTIMATE,” “BELIEVE,” COMPARABLE WORDS, OR THEIR NEGATIVES. THEY ARE INHERENTLY UNCERTAIN. ACTUAL EVENTS MAY DIFFER FROM THOSE REFERRED TO IN OR CONTEMPLATED BY THOSE STATEMENTS, FOR REASONS THAT MAY OR MAY NOT HAVE BEEN PREDICTED AT THE TIME THIS PRESENTATION WAS PREPARED. NEITHER THE FUNDS NOR THE INVESTMENT MANAGER CAN OR DOES MAKE ANY GUARANTEE OR REPRESENTATION THAT THE FUNDS WILL MEET THEIR INVESTMENT OBJECTIVES OR BE PROFITABLE.

• THIS PRESENTATION DOES NOT CONSTITUTE INVESTMENT, TAX, LEGAL, OR ACCOUNTING ADVICE. YOU MUST ASSESS THE INVESTMENT BENEFITS AND RISKS OF INVESTING IN A FUND, AS WELL AS THE POTENTIAL TAX, REGULATORY, AND OTHER IMPLICATIONS, BASED ON YOUR PARTICULAR CIRCUMSTANCES AND ADVICE FROM YOUR OWN ADVISERS.

• THE INVESTMENT MANAGER CANNOT AND DOES NOT PROVIDE ANY ASSURANCE THAT THE FUNDS WILL ACHIEVE THEIR INVESTMENT OBJECTIVES OR WILL AVOID SUBSTANTIAL OR TOTAL LOSSES.

• PAST RETURNS ARE NOT INDICATIVE OF FUTURE PERFORMANCE, AND THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL ACHIEVE THE STATED INVESTMENT OBJECTIVE.

Runner MHC Fund II

Seeks capital appreciation by acquiring and operating Manufactured Home Communities (MHC) with strong reliable cash flows and multiple avenues to add value

Maintains obsessive focus on maximizing operational efficiency and productivity while providing a scalable platform to facilitate deployment of capital

Runner Philosophy

Focus on idiosyncratic properties with compelling risk/reward metrics where the investment outcome is not dependent on general market trends… we do not pretend to predict the direction of cap rates

The pursuit of momentum is eventually wrong (hence boom/bust cycles)... contrarian skepticism is useful to identify opportunities but not enough to merit an investment

Seek properties that are cheap on an absolute basis… not interested in relative value

Accumulate diversified recession-resilient revenues backed by hard assets… demand for product increases during a contractionary environment

Identify catalysts to unlock value of mismanaged and overlooked assets… compelling upside with mitigated downside

Investment Epiphany

Don’t try to guess what will be different in 10 years…Identify what will remain the same and invest accordingly.

Case for MHC

Stable recurring cash flow diversified across numerous tenants

Massive growing demand for low-cost housing (increases during recession)

Intriguing amalgamation opportunity due to the highly fragmented sector, unsophisticated and non-institutional ownership, and inefficient markets

Zero risk that innovation eliminates fundamental “human” need for shelter

Unique window of opportunity to take advantage of significant tax deduction

Favorable Macro Trends

50% of Americans have net compensation less than or equal to $30,533.31*… 16.1M households in poverty (federal poverty level $20,160 average household)

… 34.7M households deemed ALICE (Asset Limited, Income Constrained, Employed)

The current housing crisis is a vast shortage of residential homes … fewer homes being built per US household than nearly any time in history^

… the new homes that are being built target the higher end of the market

Congress mandates Freddie & Fanny provide financing for manufactured housing… new products created to help lenders originate real property loans on manufactured housing

Warren Buffett, the “Oracle of Omaha”, all-in on manufactured housing… Berkshire Hathaway owns the largest US producer of manufactured homes, Clayton Homes, and the two largest manufactured home lenders, 21st Mortgage Corporation and Vanderbilt Mortgage and Finance Company

* Social Security Administration 2016 data^ Federal Reserve Bank of Kansas City

Fragmented Market Offers Amalgamation Opportunity

There are approximately 55,000 MHCs in North America… the vast majority of these assets are owned privately by “mom and pops”

… institutional ownership only accounts for about 3% of total supply

This creates a significant opportunity for sophisticated well capitalized buyers to consolidate the market, providing management efficiencies, capital, and economies of scale.

Institutions are noticing… Aug 2016 - Singapore Sovereign Wealth Fund purchases majority stake in YES Communities (one of

largest MHC Operators). “The MHC sector is a unique and highly attractive niche in US residential

real estate” said the Regional Head of The Americas.

… May 2016 – NorthStar Realty Finance Corp. has agreed to sell its 135 manufactured housing

communities to an affiliate of a real estate fund managed by Brookfield Asset Management Inc. for

$2.04 billion or about $61,800/pad site.

ARA Newmark Manufactured Housing Group

Steady Growth of Lower Income Tier

PEW ResearchCenter

Lower income segment continues to grow year after year

Value proposition fueling consumer demand

Purchase

Rent

Graphic by ValuePenguin Inc – data from Manufactured Housing Institute

MHCs Outperform (during economic expansion and recession)

Same-Site NOI Indexed Growth 2000-2015 by Asset Class

170

160

150

140

130

120

110

100

90

2000 2001 2002 2003 2004

Apartments

2005 2006 2007 2008

Office

2009 2010 2011 2012 2013 2014 2015

Industrial Self Storage MHC

SNL Financial. Report: Indexed Same Store NOI Growth for Publicly Traded REITs

MHC MultifamilyFragmented market with unsophisticated

operators; great buying opportunities Highly consolidated market; fierce buying competition

High cap rate opportunities with strong stable cash flows Low cap rate environment with thin in-place yields

Low turnover due to high switching costs and limited competition

High turnover due to low switching costs and intense competition

Operating expenses are 15-30% of revenue Operating expenses are 50-60%+ of revenue

Favorable tax deduction opportunity(approx. 50-75% deducted in 1st year)

Less favorable depreciation schedule (Usually depreciated over 27.5 years)

MHC vs Multifamily

High switching costs create a highly stable tenant base

Apartments Commercial MHC

1.5

Average Switching Cost (MonthsRent)

*Home Guides Research

3.5

20.0

Moving costs for mobile homeMoving $3,000 - $5,000

Set up $3,000 - $6,000

Additional $1,000+

Total $7,000 - $12,000+

Manufactured home turnover <15% vs multifamily turnover >50%

Runner Value-Add Process

*Purchase Month: Triple Overlook November 2017; Sherwood October 2017; Sleepy Hollow September 2017.

August 2018 is a projected number.

Non-institutional (“mom and pop”) ownership provides significant value-add

opportunities

Monthly Revenue Purchase* Apr 2018 Aug 2018*

Triple Overlook 11,695 15,567 16,200 39%

Sherwood 10,521 11,866 14,500 38%

Sleep Hollow 6,775 8,990 13,025 92%

Total 28,991 36,423 43,725 51%

Identify and execute operational improvements:

Raise Rents Fill Vacancies Evict Tenants

Request HACA Adj Purchase Homes Transition to R2O

Significant Tax Deduction (limited window of opportunity)

There are generally 3 tax basis components when purchasing a MHC: land, land improvements, and mobile homes. Land improvements were previously expensed straight line for 15 years.

On Dec 22, 2017, the "Tax Cuts and Jobs Act" passed which contained an enormous tax benefit for MHC. Under the new law, there is a provision that allows for a 100% first-year deduction for qualifying property (land improvements) acquired and placed in service after Sept. 27, 2017, and before Jan. 1, 2023.

Tax advisors have indicated that this deduction can be rolled forward indefinitely or used to offset other types of income.*

*to be vetted by investor’s accounting firm

Tax Deduction Example

Triple Overlook (purchased 11.1.17)

old new

Basis component Amount Depreciation Deduction

Land 165,000 - -

Land Improvements 495,000 (5,500) (495,000)

Mobile Homes 120,000 (545) (545)

Total 780,000 (6,045) (495,545) 64%

Tax Deduction Example

Sherwood (purchased 10.6.17)

old new

Basis component Amount Depreciation Deduction

Land 153,750 - -

Land Improvements 461,250 (7,688) (461,250)

Mobile Homes 100,000 (758) (758)

Total 715,000 (8,446) (462,008) 65%

Tax Deduction

K-1 excerpt from $250,000 investment during 2017.

Note: Deduction would be higher vs investment, however one of the MHC’s was purchased prior to Sept. 27, 2017