General
What is the Fund structure and how does it work?
The Funds are structured as limited liability companies (LLCs). Individuals will make their investment into the Fund LLC which will purchase properties via subsidiary entities. In this way, properties are owned by the Fund and cash flow passes from the property to the Fund, which then makes distributions to investors based on the number of Units they own.
Why did you launch the Fund?
The Fund was created to deliver both current income and capital appreciation in a tax-efficient manner. The Fund’s strategy is to invest in niche market segments which are currently out of favor, inefficient, under-appreciated, and in which there is less competition. We currently see opportunities in mobile home parks and parking assets. Our strategy is to acquire properties, create efficient operations, cash flow, and provide distributions to our partners.
What is the Fund’s target return?
The Funds are targeting net returns between 14% and 18%, inclusive of an average 6-8% cash-on-cash return, paid quarterly.
How Do I Invest?
How do I invest?
You can request access to the full investor presentation on this page. This will take you to a webpage where you can review the Private Placement Memorandum and watch the Fund webinar. When you are ready to invest, simply complete the form on that page. This begins the online investment process, which should take less than 5 minutes. If you have questions or need assistance, please email [email protected]
Who can I contact with questions about an investment offering?
Feel free to schedule a call with a member or our team. Furthermore, you are always welcome to email the investor relations team at [email protected]
Can I invest in the Funds through my solo 401k, self-directed IRA, or other retirement account?
Yes, you can invest as an individual, jointly with your spouse or other related person, through several different types of retirement accounts, or through an LLC, Corporation, Trust, and many other types of entities.
Is the Sunrise platform secure?
Sunrise takes the security of our users’ data seriously and we consciously take steps to ensure all information remains secure. All components of the platform are held to industry standard compliance for cyber security and data redundancy. Where necessary, Sunrise works with third-party services in an effort to provide our customers with the most efficient and secure experience possible.
Will my commitment be invested at one time or in multiple tranches?
You will fund 100% of your commitment at once.
Can I add to my initial investment later?
Yes. You can increase your commitment to a Fund at any time.
What is the duration of this Fund?
An investment in a Fund should be considered long-term in nature. Investors should be in a financial position to hold membership units for the duration of the Fund, which is projected as up to ten (10) years, or longer.
Distributions
Where will my distributions come from?
Distributions will come from cash flow generated by the Funds’ properties.
When are distributions made?
Distributions may occur on a quarterly basis. Direct deposits are provided to investors on the 15th of the month following the end of a given quarter.
When do I begin to accrue a return?
An Investor’s account begins to accrue immediately upon acceptance into the fund. An investor is formally accepted into the fund on the date the investor’s capital is drawn down from the segregated account by the company. In the interest of fairness, capital will be accepted into the fund in the order in which commitments are received by investors.
Taxes
Are my distributions taxed at the ordinary income rate? Do I receive the benefit of depreciation?
In short, yes. Investors will receive the benefit of depreciation. The Funds are structured as a partnership for tax purposes. In a partnership, the investors are taxed based on their share of taxable income or loss from the Funds, rather than on actual cash distributions. The nature of income at the Fund-level determines whether the income will be taxed as ordinary income or capital gains. Distributions from the Funds will be treated as either ordinary income, return of capital or capital gains. Distributions, to the extent that they are from current or accumulated earnings and profits, will generally be taxed as ordinary income. However, we anticipate that the depreciation available to the Funds will reduce the amount of its taxable income and profit, and that this reduction will enable the Funds to make distributions that will be treated as a return of capital. Any portion of the distribution that is in excess of current and accumulated earnings and profits is considered a return of capital for U.S. federal income tax purposes and will reduce the tax basis of the investment. Once the investor’s tax basis has been reduced to zero, any further distributions will result in capital gains. Because each investor’s tax considerations are different, we recommend that you consult with your tax advisor.
Do I receive the benefit of the long-term capital gains rate?
Yes. Investors in the Funds for more than one year will generally be eligible for a long-term capital gains tax rate on the capital gains achieved by the Funds.
Are the Funds eligible for a 1031 Exchange?
If you are considering a 1031 exchange when selling real estate you own in order to mitigate capital gains tax, we may be able to provide you with a suitable replacement property to help accommodate your tax and cashflow needs. We request that you review this short video In addition, if you own a comparable asset that fits within our investment guidelines, we may be willing to acquire your property in a Section 721 exchange where you receive equity in our Fund. If any of this may apply to you, please schedule a call. We would welcome the opportunity to speak with you about your situation.
What tax forms will I receive?
The Funds will issue federal K1s to all investors on an annual basis.
When can I expect to receive my annual tax forms?
We make every effort to provide K1s to investors in early April.
Fund Assets
Will the Funds acquire assets solely or in joint ventures?
The Funds target sole ownership of the properties it acquires. However, the Funds may also enter into joint ventures or other co-investment opportunities with third parties for the acquisition and management of properties. Joint ventures and co-investments may allow the Funds to access unique resources and expertise of partners, gain access to projects and assets that it would not otherwise have, acquire assets at prices lower than they would transact in a marketed process, and share the risk of an investment with such partners. In situations in which the Funds enter into a joint venture, Sunrise will conduct an extensive analysis of each prospective partner’s management organization, performance in prior or existing transactions, and its current and past borrowing relationships. The Funds will retain substantive management and control rights in any joint venture vehicle.
What is the target loan-to-value ratio for your investments?
The Funds target a 40%-60% loan-to-value ratio for investments in the Fund.
Are you a REIT?
No.
Do I need to be accredited to invest in the Fund(s)?
Yes. The Fund(s) are available only to accredited investors. An accredited investor is a term used by the U.S. Securities and Exchange Commission (SEC) under Rule 501 of Regulation D.
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-3
Will I be asked to verify my status as an accredited investor?
Yes. Once you decide to invest in a Fund, your accreditation status will be verified.
How will I be updated on the progress of my investment?
Investors can access updated account information 24/7 by logging in to the investor portal. Investors also receive detailed asset management updates on a quarterly basis. In addition, Sunrise provides investment partners with a private monthly podcast to keep them abreast of their investment.