Asset Case Studies
Off-Market Acquisition | March 2024
Fund 4 Acquisition
Our latest venture in Central Ohio, the Lakeridge mobile home community is delivering an immediate $1.5 million in instant equity, equivalent to an impressive 29% return on equity to Fund 4 investors from the outset. This exceptional opportunity underscores our commitment to identifying and capitalizing on undervalued assets to generate immediate value for our investors.
Our strategy for Lake Ridge includes a light value-add approach, focusing on two main areas: recapturing lost lease by adjusting below-market rents to current rates, and improving operational efficiencies, such as implementing utility billing. These steps are anticipated to significantly increase the community’s value without relying on the more challenging infill process. We aim to implement reasonable 5% rent increases, yearly – to boost your bottom line and ensure residents are happy.
Additionally, we’ve secured a favorable loan with a 3.3% interest rate for the next eight years, enhancing the deal’s attractiveness by ensuring strong cash flow. This loan, combined with our planned improvements, positions Lake Ridge as a highly lucrative investment, promising both immediate returns and long-term growth.
Off-Market Acquisition | December 2023
Fund 4 Acquisition
The Ridgebrook Hills mobile home community in Fort Wayne, Indiana, stands out as a prime investment for several compelling reasons. Upon acquisition, Sunrise Capital Investors (SCI) created an impressive $5.4 million in instant equity, translating to an immediate 20% return on equity for investors. This significant financial uplift showcases SCI’s ability to identify and capitalize on undervalued assets, ensuring immediate value creation.
Positioned in Indiana’s second-largest city, Ridgebrook Hills is an institutional-grade property that benefits from being in a highly desirable and expanding housing market. As the largest community in the area with 738 spaces, it meets a substantial demand for affordable housing, evidenced by the near 90% occupancy rates in the region (what’s more, the park itself boasts ~95% occupancy). The economic dynamism of Fort Wayne, fueled by diverse industries and significant corporate investments, further bolsters the investment’s appeal. The combination of strategic location, high current occupancy, and potential for rent and amenity enhancements, along with the substantial instant equity generated by SCI, makes Ridgebrook Hills a particularly attractive opportunity for robust and sustained investor returns for years to come.
Previous Funds' Assets Case Studies
Fund 3 Acquisition
Luhrs Parking Garage is institutional grade, Class A property located within a 3-minute walk from the Phoenix Suns and Arizona Diamondbacks stadiums. Sunrise negotiated and purchased a high-quality, stabilized asset, at well-below replacement cost, in one of the hottest markets in the nation.
We intend to buy, improve, and hold the Luhrs Parking Garage for decades to come. After optimizing rates and improving operational efficiency, we expect to significantly increase the NOI and overall value of the property. It’s a historical, generational asset in Downtown Phoenix that will provide stable, recurring income for many years into the future. This visibility of income provides safe, predictable cash flow (and clarity) for our Fund 3 partners.
Fund 3 Acquisition
This off-market acquisition is an institutional grade, Class A property where visitors park to enjoy the #1 beach in the country. With lack of parking supply and massive demand, the City built North Beach Parking Plaza brand new in 2017. It’s a generational asset on Clearwater Beach with a long-term lease that provides stable, recurring income for many years into the future. This visibility of income over the next decade provides safe, predictable cash flow (and clarity) for our Fund 3 partners.
Fund 3 Acquisition
With no broker involved, this mobile home park is a true off-market deal being purchased from a long-time, legacy owner who has overseen the asset for over 40 years. Currently charging 32% below market rent, this property epitomizes our traditional light value-add transaction, Based on the appraisal of $10.82mm, we are able to achieve a 30% return on equity on day one.
Fund 3 Acquisition
Sunrise negotiated a $695k purchase price, which pencils out to a 9.3 capitalization rate at acquisition. Based on the purchase appraisal of $1mm, we were able to achieve a 43% return on equity on day one. Our long-term lease provides stable, recurring income for many years into the future. This visibility of income over the next decade provides safe, predictable cash flow (and clarity) for our Fund 3 partners.
Previous Fund Acquistion
Sunrise negotiated a $3.77mm purchase price and began working to improve the community. Capital was infused to fix water leaks and make necessary road repairs.
Prior to sweeping rent control being enacted in NY, Sunrise recaptured a portion of the loss-to-lease. Over three years, lot rents moved to $370. With physical occupancy abutting 100% and strict rent control in place, Sunrise maximized the value of the asset and decided to sell the property. All told, Sunrise created over $1mm of sweat equity in three years.
Previous Fund Acquisition
Sunrise received a tip from a podcast listener about a community bank that was interested in selling a non-performing MHP note. Sunrise purchased the note for less than $1mm and began renovations, repairing damaged roads, rectifying deferred maintenance, replacing on-site management, stabilizing poor collections, and installing water meters to promote conservation.
Sunrise increased the NOI, boosting revenue and lowering the expense ratio to 48%. Within three years, the property value increased by 126%. Having created significant sweat equity, Sunrise decided to sell the asset for $2.25mm, providing investors with an exceptional risk-adjusted return.
Previous Fund Acquisition
Sunrise negotiated a $1.4mm purchase price and began the turnaround by power washing all homes, repaving the roads, replacing the leach field, and installing water meters to promote conservation. With a significantly improved quality of life, residents were happy to increase their lot rents from $315 to $425 over a three year period, demonstrated by an increase in both physical and economic occupancy.
Sunrise maximized the value of the asset, and ultimately disposed of the asset for $2.3mm in August 2020. We created nearly $1mm of sweat equity in three years.
Previous Fund Acquisition
Sunrise negotiated a combined $2.6mm purchase price for the properties. Upon acquisition, Sunrise replaced on-site management, pumped septic tanks, demolished unsalvageable abandoned homes, renovated salvageable park-owned-homes, and power washed units. Once aesthetics improved, Sunrise set about recapturing the loss-to-lease.
Sunrise has created over $3.5mm in sweat equity on an original investment of $1.1mm. By 2022, the real estate was worth well over $10mm, more than quadruple the value at acquisition.
Previous Fund Acquisition
Sunrise negotiated a $1.4mm purchase price and began the turnaround by power washing all homes, repaving the roads, replacing the leach field, and installing water meters to promote conservation. With a significantly improved quality of life, residents were happy to increase their lot rents from $315 to $425 over a three year period, demonstrated by an increase in both physical and economic occupancy.
Sunrise maximized the value of the asset, and ultimately disposed of the asset for $2.3mm in August 2020. We created nearly $1mm of sweat equity in three years.
Previous Fund Acquisition
Sunrise negotiated a $700,000 purchase price and favorable seller-financing with a 25% down payment. Upon acquisition, Sunrise replaced on-site management, power washed all mobile homes, added skirting and shutters to all homes, pumped all septic tanks, and increased curb appeal with improved landscaping.
Once cosmetics improved, Sunrise brought in ten new mobile homes and used lease-option transactions to increase economic occupancy.
Previous Fund Acquisition
Sunrise negotiated a $650,000 purchase price, and the previous owner carried financing with the following terms: 25% down payment, 7% interest, with 25-year amortization. We felt confident in our ability to increase NOI to $120,000 shortly after acquisition by instituting more professional property management.
Upon acquisition, we put proper leasing practices in place, instituted a large scale marketing effort, scrutinized repair & maintenance, cut payroll, and trimmed unnecessary expenses.
Previous Fund Acquisition
Green Level MHP was identified through our internal marketing efforts. Green Level was sourced via cold call, and our lead principal Kevin Bupp began negotiations to purchase the property in a direct-to-owner transaction.
When Sunrise took over the property, the park had numerous infrastructure problems, inferior on-site management, below market rents and poor collections. Sunrise doubled the property’s NOI within the first three years of ownership and returned all investor capital along the way.
Sunrise negotiated a $200k purchase price and began the top-to-bottom renovation. We brought in a qualified onsite manager to establish law and order. Within twelve months, every home in the community had undergone a complete renovation and the park transformed from 100% vacant to 100% occupied.
Sunrise subsequently executed a cash-out refinance on the property, returning all investor capital in the process. Investors now have an infinite cash-on-cash return while retaining equity in a $1.3mm asset.
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