Blackburn MHP

Athens, AL | Off-Market Acquisition | Oct 2016

Overview

Blackburn Mobile Home Park is an all-ages, affordable community consisting of 68 spaces located in the booming Huntsville MSA. The community was acquired in a direct-to-owner, off-market transaction.

About the Project

Blackburn MHP was identified through our internal marketing efforts. Over time, we’ve built a proprietary database of MHP owners throughout the country, and have been fostering relationships with them for years. This property was not zoned properly, so it was not being solicited by most brokers who rely on broader MHP lists. A handwritten letter drew the attention of the seller, and ultimately led to the acquisition of the deal.

The Challenge

When Sunrise took over the property, park expenses totaled an egregious 88% of revenue generated. The previous owner had a large multifamily portfolio, but was inexperienced in manufactured housing. The poorly managed asset had deferred septic maintenance and was in need of a general cleanup. The community consisted entirely of park-owned-homes in need of constant maintenance which dragged down financials.

What We Did

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 began selling park-owned-homes to the residents through the CASH Program with 21st Mortgage. In addition, ten brand new mobile homes were brought in and sold to increase economic occupancy.

The Outcome

Sunrise lowered the expense ratio to 48%, boosting the property’s NOI precipitously and doubling the value of the asset. With multiple anxious bidders in a hot sellers market, we decided to dispose of the asset in October 2020 for $1.45mm, generating a 44% IRR and 4.2x equity multiple for investors.