Timberview MHP
Valdosta, GA | Off-Market Acquisition | Jun 2021
Overview
Timberview MHP is an all-ages, affordable community consisting of 60 spaces located roughly 20 minutes north of the Florida-Georgia line. This three-star asset consists primarily of double-wide units with vinyl siding. The property was acquired in a direct-to-owner, off-market transaction.
About the Project
In addition to direct mail campaigns, our acquisition team makes several thousand cold calls each and every week to create consistent off-market deal flow. Timberview was sourced via cold call. While the owner didn’t need to sell, he simply decided it was time to slow things down in his life. With significant experience closing off-market transactions, Sunrise was his preferred buyer.
The Challenge
Featuring double-wide homes with large lots, wide roads and private yards, Timberview has good bones and below market rents. But the owner wasn’t maximizing the property’s value. With oversized payroll and hefty repair & maintenance expenses, there were numerous operational inefficiencies. The poorly managed asset had various cosmetic issues with park-owned-homes, and was in need of general cleanup.
The Plan:
Sunrise negotiated a $1.65mm purchase price for the mobile home park and park-owned-home inventory. We will begin the turnaround by trimming overgrown trees, repairing damaged roads, rectifying deferred maintenance, and cutting unnecessary expenses. Once renovations have been completed, Sunrise will begin to recapture the loss-to-lease and bring lot rents to just beneath the market rate. We have implemented this same value-add business plan on numerous occasions.
The Outlook
Acquired with a nice margin of safety, this asset appraised for $680k above the purchase price at acquisition. Based on the appraisal of $2.33mm, we were able to achieve a 41% return on equity on day one. Once the business plan has been executed, we project this asset will significantly outpace the metrics necessary to exceed investors’ Fund 3 projections.