My experience with Sunrise Capital (Mobile Home Fund)

Buying & Selling Real Estate
8yFollow

My experience with Sunrise Capital (Mobile Home Fund)

Sophie Sawyer
Coppell, TX · Member since 2017 · 22 posts · 19 votes

I am an accredited investor looking to deploy capital. Recently we had a not-so-pleasant experience with Sunrise Capital. I am sharing my experience as I believe that TIME is the ultimate currency in life. I am simply hoping to prevent folks on BP from having their time wasted.

Three weeks ago, I heard a podcast about Kevin Bupp's Mobile Home Park Fund, by Sunrise Capital Partners. I went to the company website and signed up as a potential investor.

Got an automated welcome email from Sunrise partner, Brian Spear, which asked me to read the fund's PPM and schedule a phone call with him. The PPM was long but very well written. Great job there! 

I spent hours and hours reading through the PPM, doing due diligence, and typed up questions for the scheduled investor call with Brian Spear. Later I got an email confirmation of my upcoming meeting with Brian. I shuffled some of my other meetings around in order to accommodate this call with Brian. However, when the time came, I never received that phone call from Brian, all day, all week!

I thought maybe the fund is full, or maybe Brian simply forgot about it. So I emailed Brian to check. No response. 

I later called Brian's office number. No response. 

Then I texted his cell phone, using the phone numbers displayed in the email Brian sent me. No response. 

At this point, due to all the mixed messages I have received from Sunrise, I started to wonder if they are still in business. I pulled out the latest podcast from Kevin Bupp. They are still advertising for Sunrise Capital in the podcast, and broadcasted a new phone number in that show. I called the new number, spoke to their answering service lady. She informed me that they are still in business and recommended me to schedule another call with Brian Spear. She schedule a call for the next day. Later I got an email confirmation about the upcoming meeting. Again, I moved some of my personal meetings to accommodate the second call with Brian Spear.  Re-read the PPM to refresh my memories. 

Again, he never called, all day, all week!

At this point, I am so fed-up with the lack of professionalism from Sunrise Capital, and fed-up with all the time Sunrise has wasted me. If this is how they are treating a potential investor/customer who will bring them money, I wonder how they are going to treat existing investors who already have their capital tied up with Sunrise.

Hope I am the last one!  

Sunrise Capital, please fix your system!

10Reply
1,059 views

Most Popular Reply

Ryan MurdockPro Member
Rental Property Investor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
7y

@Account Closed

If there are maintenance concerns that's an entirely different issue. Address them with the management company. 

Nothing is forcing you to stay in that park. If the rents and upkeep are really as unreasonable as you claim there should be other cheaper and better solutions nearby. 

Podcast Guest on Show #355
14Reply
See this reply in the discussion

70 Replies

Jump to latestLatest
  • Account Closed
    Member since 2018 · 15 posts · 2 votes
    7y

    We've done our homework on corporations like this. We are not just some dumb hicks living in a MHP. GET THAT STRAIGHT!!!!!

    0Reply
  • Lauren B.
    Asheville, NC · Member since 2017 · 170 posts · 242 votes
    7y

    @Shawn Sheedy

    Nice work on bringing attention to your cause via the article. It’s a worthwhile read;

    http://time.com/longform/affordable-housing-mobile-homes/

    As an investor, here’s my opinion;

    Yes, for profit companies are entitled to charge fair market rents. I do charge market rate for my rental.

    But It’s bad business to try to raise them 40% at one go on a captive tenant, I’m glad you pushed back and got a more modest increase instead. A 40% increase to someone on disability or social security or who is 85 years old is egregious in my opinion.

    Now they are dealing with residents protesting by planning to pay rent into escrow at court and let the courts sort it out. I see lawyers fees cancelling out this years rent increases quickly.

    this is a business, and I would always expect unhappy customers to push back - a good business worth

    Investing In will satisfy customers while still making a profit.

    1Reply
  • Account Closed
    Member since 2018 · 15 posts · 2 votes
    7y

    That is what we are doing now is a rent strike and have over 60 tenants in on it. In our opinion it is not worth the price to evict that many tenants as SCI will lose a lot of money in the process. I wish they would just negotiate with us (as they did in Maryland (Cedarhurst MHP). We are fighting for laws in NYS so that owners of MHP will have to abide by the CPI to increase rents (as apartment owners have to do in NYS) and not by fair market values. Again our MHP is in a small, rural village. We cannot grow (land locked) and we have only garbage included in our rent. Other parks our size have about the same rent but have water included or basic cable, have rec centers or nice playground / pools, have multiple works on site. We have none of that. We have ONE manager on site. One thing we cannot figure out is why SCI has to hire "management companies to run their parks. Are they not good enough business people to run it themselves and not have to pay another company to run them???? That's the problem as we have this middle man we have to go through, when we have complaints, and they have to escalate it to the owner. This all takes time to do and the issues take longer to fix. We believe most of these corporate owners / management companies know nothing about running a MHP. Look at SCI, we had a lot rent increase in Nov. 2017, SCI came in an purchased it in Dec. 2017 and increased the rent again. This is against the NYS law RPL-233. See they did not do their homework. Just just buy to make a quick buck. We also have other issue with a lot of invoice that tenants are getting and you just cannot make them out to what they are charging for.

    0Reply
  • Account Closed
    Member since 2018 · 15 posts · 2 votes
    7y

    One other thing, if SCI is so willing to buy MHP's and be the owners of them, why that every piece of paper we get (rules / regulation, leases, notices of rent increases, etc) do not have one ounce of SCI's name or signature from anyone at Sunrise Capital Investors. Seeing as they are the owners I would think their name would be on those documents. They are kind of important documents I would think. Again I ask, are they hiding from us???? You start to wonder what kind of company they really are. We barely even see the management companies name on them either. The only time we know it is from the "management" company is that then have a phone number and email address on some of the documents.

    0Reply
  • Account Closed
    Member since 2018 · 15 posts · 2 votes
    7y

    @Laurn B - I appriciate you insite. Like I have said before companies have the right to make money but be human about it. I disagree a little about what you said about companies are entitled to fair market rents, I believe that depends on where they are located. To all the others on here that have had back lash towards me they do not know the area we live in and how our park is and the people that live in it. The "fair market value" parks they compare us to is not even close.

    Regarding our park, in NYS, the owner is responsible for moving the home off the lot in cases where we are evicted (to somewhere it can be put - the company then could charge storage fees if the owner wanted the home moved to another site) i, that is state law as we own our home and rent the lot. Another costly item for them to evict us.

    0Reply
  • J Chad Davis
    Rental Property Investor · Galveston, TX · Member since 2018 · 49 posts · 29 votes
    7y

    @Andrey Y.It says his account is closed

    0Reply
  • J Chad Davis
    Rental Property Investor · Galveston, TX · Member since 2018 · 49 posts · 29 votes
    7y

    @Andrey Y. I was mistaken, his account is open; he was replying to an account that is now closed and I misread it.

    0Reply
  • Brian Spear
    Rental Property Investor · Clearwater, FL · Member since 2013 · 49 posts · 68 votes
    7y

    Just wanted to provide the BP community with some context on this thread...

    Our team provides affordable housing for residents in multiple states, and unfortunately sometimes we run into unruly residents.

    One such resident is Shawn Sheedy. He is currently protesting a rent increase, and travelled from NY to FL to personally harass my family and I last week. He was part of a group of six of our residents looking to drum up trouble at their landlord's corporate office. They not only went to our office, but also the personal residences of myself and Kevin Bupp. We were forced to call police & provide them with a 'Cease & Desist' in an effort to stop the harassment.

    Our attorney has advised that we do not engage with them in any manner. So in lieu of responding directly to the resident(s), I figured I'd touch base with the BP community to provide some insight.

    6Reply
  • Brian Spear
    Rental Property Investor · Clearwater, FL · Member since 2013 · 49 posts · 68 votes
    7y

    Shedding more light on the topic of affordable housing in general... 

    Our team was recently introduced to an enlightening “Ted Talk” on Mobile Home Parks, given by Dr. Esther Sullivan. While the speech was neither pro nor anti manufactured housing industry, it did share some phenomenal insights.

    Early in the speech, Dr. Sullivan shares data on America’s Affordable Housing Crisis. The country simply does not have enough affordable housing units, and the new supply of affordable housing units is not keeping up with new demand. As such, we need to place an emphasis on preserving the current stock of affordable housing that is already on the market. Unfortunately, more mobile home parks are redeveloped into a higher-and-better use every year than are newly constructed. Both sides of the aisle want the same thing – affordable housing. However, one side fails to realize that by artificially constraining the lot rent of a community, the owner is perpetuating the community’s eventual demise. Those landlords that choose to artificially subsidize communities via suppressed lot rents do not generate sufficient reserves to set aside for inevitable capital improvements to the community’s infrastructure and aesthetics. Eventually, the community begins a downward spiral, and becomes an opportunity in the eyes of a redeveloper intent on maximizing the value of that parcel. Typically, this results in the loss of hundreds of affordable housing units. This cycle has played out numerous times:

    In an effort to preserve our country’s affordable housing, it is our duty as community operators to keep Lot Rents in line with the market rate. This approach ensures that we have the ability to appropriately maintain a community, ensuring its long-term viability.

    8Reply
  • Account Closed
    Member since 2018 · 15 posts · 2 votes
    7y

    Here is the link to a Ch.4 WIVB news article about the company Sunrise Capital Investors (Clearwater Fla.) that bought the Akron Mobile Home Park in Akron NY. These companies, run by Kevin Bupp, Brian Spears, and Joanna Bupp, and how they buy up "mom & pop" mobile home parks, jack the rents up immediately to gain the most profit in the shortest amount of time with no care of the low income, fixed income, and elderly that were living in the mobile home parks comfortably.

    https://www.wivb.com/news/investigates/akron-mobile-home-residents-fight-back-against-out-of-town-owner/1779504663 

    0Reply
  • Andrey Y.
    Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Account Closed:

    Here is the link to a Ch.4 WIVB news article about the company Sunrise Capital Investors (Clearwater Fla.) that bought the Akron Mobile Home Park in Akron NY. These companies, run by Kevin Bupp, Brian Spears, and Joanna Bupp, and how they buy up "mom & pop" mobile home parks, jack the rents up immediately to gain the most profit in the shortest amount of time with no care of the low income, fixed income, and elderly that were living in the mobile home parks comfortably.

    https://www.wivb.com/news/investigates/akron-mobile-home-residents-fight-back-against-out-of-town-owner/1779504663 

     That's how life works. When investors invest their hard-earned money into a project, we expect the highest possible return. There's nothing honorable about making a smaller profit. Most people would rather spend or save their money, so someone who is willing to invest it should be compensated appropriately.

    2Reply
  • Steven Segal
    Rental Property Investor · Leucadia, CA · Member since 2015 · 153 posts · 53 votes
    7y

    I think this business plan exists in all types of real estate and non-real estate businesses. I don't think its fair for you to say they are making money without it as I doubt you have access to their books. 

    If your park was the cheapest around (under market) then any new owner is going to bring up rents. The tenants have the option of something like a rent strike but they should know they could be evicted and then will be forced to move - if there is cheaper rent, then that seems doable. It kind of seems like you are looking to call their bluff but that only works if they are raising rents above market and you have an alternative. 

    In regards to talking with then, you don't really have that right. To echo Ryan, you can't call the Apple CEO about the new headphone jack. I understand that it is less than ideal, but it is reality. 

    Rents for all types of properties have gone up tremendously in the last 5 years. We manage houses and we have seen rents go up from $1000 to $1500. Do you think we shouldn't charge that? Is it fair that the county can raise property taxes due to a strong market?

    3Reply
  • Account Closed
    Member since 2018 · 15 posts · 2 votes
    7y

    Yeah I guess there is no arguing with most of you on here as I guess you just don't care about the lower / fixed income families that are living comfortable in their manufactured homes. I bet if it were your grandmother or relative in that situation you would think differently. Ohh but wait most of you on here all probably well off and can afford to help out a relative.

    The other issue with SCI is that when they first took over their maintenance of the park was poor at best (snow plowing, grass mowing). It has of recent just gotten a tad bit better. Plus now they are trying to pass the buck with regards to the the STAR rebate we get here in NY state (if eligible and applied for). Most residents that are eligible sign up for this rebate. Most of the rebates go directly to the MHP owner. Others either have a check sent right to them or have another piece of property the get this STAR rebate for. For those ones SCI and M. Shapiro are tacking on the STAR credit (that they did not get directly) onto invoices for those residents. This is illegal in NYS, we have looked this up and did  significant research on this and we have a law suit against them in regarding this. 

    So this is how most of the "Investor", of MHP's treat residents.

    Why I bother to reply to most of you on here is beyond me LOL. Most of you are all money hungry and don't care about your fellow man. Sad country we live in at times.

    0Reply
  • Andrey Y.
    Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Account Closed:

    Yeah I guess there is no arguing with most of you on here as I guess you just don't care about the lower / fixed income families that are living comfortable in their manufactured homes. I bet if it were your grandmother or relative in that situation you would think differently. Ohh but wait most of you on here all probably well off and can afford to help out a relative.

    The other issue with SCI is that when they first took over their maintenance of the park was poor at best (snow plowing, grass mowing). It has of recent just gotten a tad bit better. Plus now they are trying to pass the buck with regards to the the STAR rebate we get here in NY state (if eligible and applied for). Most residents that are eligible sign up for this rebate. Most of the rebates go directly to the MHP owner. Others either have a check sent right to them or have another piece of property the get this STAR rebate for. For those ones SCI and M. Shapiro are tacking on the STAR credit (that they did not get directly) onto invoices for those residents. This is illegal in NYS, we have looked this up and did  significant research on this and we have a law suit against them in regarding this. 

    So this is how most of the "Investor", of MHP's treat residents.

    Why I bother to reply to most of you on here is beyond me LOL. Most of you are all money hungry and don't care about your fellow man. Sad country we live in at times.

     No one's income is fixed. YOU can raise it. You live in America, not WWII Russia. Everyone wants to provide for their family, not just you.

    One day if you earn more money, you will have extra to help others in need. Instead of keeping what little you have clutched to your chest. I have faith in you. All that time you spent trying to sue a for-profit real estate investor, you could have been at the gym or reading a book to better yourself. I wish you well in any case.

    6Reply
  • Gail Travers
    Member since 2019 · 42 posts · 48 votes
    7y

    Mr. Spear,

    I suggest you actually read Dr. Esther Sullivan's 10 year ethnographic study on Mobile Homes, Manufactured Insecurity.  She told me personally that you cannot reduce 10 years of research into a 12 minute  TED talk!  Her research does not support your statements.  While it is true that the need for affordable housing exceeds the supply, she does not accept that predatory investors use mobile home parks as a source of passive income.  Indeed, she goes into great depth describing the negative impact on both the residents of parks and the community at large.  Please understand, you have done absolutely NOTHING to develop any kind of relationship between the residents of Akron Mobile Home Park and your opportunistic company, SCI.  In fact, you have used threats and fear to  intimidate us to get out.  While I agree that redevelopment has hurt mobile home parks, ours is not the case.  

    Our downward spiral started when SCI purchased us.  

    Please stop using bits and pieces of research that you spin to justify your actions.  These are transparent and ineffective towards making your point.  We and many others see right through you.

    Gail Travers

    Akron Mobile Home Park

    0Reply
  • Charlene McNamara
    Rental Property Investor · Nevada City, CA · Member since 2017 · 74 posts · 70 votes
    7y

    Do the park residents really think the owner should have a personal relationship with them? This is getting weird. I'm a super small time investor. I live out of the area and have hired a property manager to handle the day to day business of my OOS rental because I have other work to do, because I don't live in the area, because I'm busy raising my family. I'm pretty sure that's why the shop down the street also hired a manager to sell their tee shirts. Does that mean I don't care about my renter? Of course not!! But I pay my property manager to handle it so I would be really upset and feel totally threatened if a random renter who I didn't know came knocking on my door.

    Yes, this is a business. Does that mean we are evil for for running a business? Just as some people are tired of feeling their landlord doesn't care, others are tired of being made out to be evil simply for running a business. It goes both ways....let's carry on talking about RE investing and keep the personal conversations elsewhere. MHPark residents- your park owner is just a guy running a business, no he doesn't have the bandwidth to deal with each resident personally, that's why he hired a management company. Talk to the management company and if you're not feeling things are right or legal, then take legal action. Your dirty laundry and petty complaints should be handled elsewhere. I don't know the first thing about Mr. Spears or his company and am not defending any actions, just seems that maybe a reminder of how businesses run was in order.

    2Reply
  • Bill F.
    Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
    7y

    @Gail Travers

    Would you mind telling us who are not involved with Sunrise and their operations what statements of theirs run contrary to the sociological research of Dr. Sullivan?

    Also what do you define as predatory investment?

    How would you have preferred Sunrise to have developed at relationship with the residents?

    1Reply
  • Gail Travers
    Member since 2019 · 42 posts · 48 votes
    7y

    I would be glad to address your questions.  The statements that run counter to the research of Dr. Sullivan appear on this forum above by Brian Spear.  He makes the point that SCI did not buy this park for redevelopment but instead is buying it to help conserve the available stock of mobile homes (the largest group of unsubsidized low income housing the US) for the future while making a nice profit for investors.  He argues that the lot rents charged by previous owners (a Mom and Pop operation) are artificially constrained and not up to market value.  As such, they are not able to set aside sufficient funds for inevitable capital improvements as the community ages.  Thus, the park falls into a spiral of neglect, eventually leading to the loss of affordable housing units.  He suggests that this has happened numerous times.  Dr. Sullivan devotes an entire chapter to this situation in her book.  The chapter, entitled Communities as  Currency within the Mobile Home Empire, makes the case that mobile home owners in parks are essentially a captive audience.  In addition, much of the "trailer trash" image that many people have of park residents is untrue. For example, per Dr. Sullivan's research, transience is not an issue in most parks.  In fact, the residents are deeply rooted - "mobile home residents are less likely to move than residents of site built houses.  The average period of home ownership is 10 years vs. 6 years for site built.  Annual turnover for rental mobile home parks is only 5% compared to 60% for apartments."  Pervasive negative ideas about mobile home parks and the residents in them allow marginalization.  Some of the comments from others here demonstrate that lack of regard for the hard work and sacrifice most of us have made to live in this formerly lovely and secure park.  The rent does not need to increase by 40% for future capital investment.  It was profitable before and modest increases are to be expected by all of us.  I recommend this book by Dr. Sullivan, Manufactured Insecurity to any investor who cares what type of industry their money supports.  

    By predatory investment, I mean to imply that there is a power issue at work here.  Many of our residents are elderly (we have some who have lived here 40 years!!) and are not at a point in their lives to increase their income.  Others are disabled vets, some are young families.  All of us consciously positioned ourselves here to find a stable community at an affordable price.  This is NOT subsidized housing.  A rent increase of almost 40% is unconscionable.  We are low hanging fruit, sitting ducks, vulnerable.  Our power comes in sticking together despite efforts to scare us apart.

    Lastly, by relationship I mean this:  All we asked for was an opportunity to meet with the owners to discuss our concerns.  So far, our overtures have been rejected.  Our communication is dysfunctional at best.  Seems that there could have been a better way.

    0Reply
  • Courtney Johnson
    Goldsboro, NC · Member since 2018 · 42 posts · 19 votes
    7y

    @Account Closed

    Rent strike?! I’m crying laughing right now. I’m going on a mortgage strike next month. I’ll let y’all know how it goes. I just can’t with people sometimes!

    3Reply
  • Chad S.
    Bozeman, MT · Member since 2012 · 12 posts · 17 votes
    7y

    @Gail Travers

    One thing you may be overlooking is the fact that mom and pop (who everyone in the park seems to adore) sold the park for MILLIONS to SCI. Mom and pop somehow have a pass while Kevin, Brian, etc are greedy and only looking out for themselves. Do you think SCI can possibly pay a mortgage for ? million in addition to their investors (who expect a reasonable rate of return) by keeping the rental rates at a fraction of the market rate? The answer is no. Mom and pop sold the park for a price that the market would tolerate. SCI has to raise the rent to meet their obligations. I’m sorry it’s putting some residents in a bind, but this is how capitalism works. In order to keep rents the same, mom and pop would’ve had to sell the park for ~50%? of the price they sold it for. So the only scenarios that would allow this would be 1. Mom and pop selling for a fraction of the property’s real value or 2. Mom and pop keeping the MHP forever and passing it onto their heirs who keep rents artificially low forever. Neither seems likely.

    3Reply
  • Gail Travers
    Member since 2019 · 42 posts · 48 votes
    7y

    I don't believe anyone expects the rent to stay the same.  Periodic increases are expected.  We all own our homes here.  Our homes are paid for.  It is nothing like not paying a mortgage.  A closer analogy would be property taxes going up 40%.  I believe most homeowners would do what they could to fight that type of increase.  This happened to another park near here - we have seen it all play out before us. Occupancy is down.  The value of the mobile homes has an inverse relationship to the rent - as the rent rises, the value of the home goes down.  The children of the people who have passed on don't want to be bothered and some homes have been sold for very small amounts.  The park is dying.  So much for saving affordable housing. 

    0Reply
  • Gail Travers
    Member since 2019 · 42 posts · 48 votes
    7y

    Also, SCI paid more than what this park is worth.  It is public information.  Maybe it was a bad business decision or maybe they misunderstood that Akron is a modest community with a modest average household income.  In Dr. Sullivan's book she quotes one investor who states, "there is a lot of money to be made off the poor." As high rent drives people out of homes, the community at large pays the price for homelessness and the resultant problems that accompany that experience.   Always, someone is paying the price and it is not the private equity firms who serve as owners.  The model that Dr. Sullivan advocates is cooperative ownership of mobile home parks.  That saves the homes that are already in existence and provides residents with the ability to remain independent in their own homes, free from the stress and resultant health and mental problems that accompany the constant threat of eviction.  Again, read the book based on 10 years of research!  It has been said by SCI that if we think we can get a better "deal" we can go somewhere else.  This is not about the "deal".   This is about breaking up communities that are functional and affordable and serve a very high purpose - safe, independent, non-subsidized housing for seniors, veterans and young families. 

    0Reply
  • Chad S.
    Bozeman, MT · Member since 2012 · 12 posts · 17 votes
    7y

    There is no public database for property values. Also, in order to get financing the lender wouldn’t allow SCI to dramatically overpay or they wouldn’t meet the debt service requirements. Although I’m sure the bank made it clear that rents would have to go up quite a bit in order to meet the monthly mortgage obligation.

    0Reply
  • Gail Travers
    Member since 2019 · 42 posts · 48 votes
    7y

    The purchase price was found on our county website.  To be sure, I do not know how SCI financed this purchase except I do know the previous owner is being paid over time.  I don't even really care how they did it.  We are living through the aftermath of the purchase.  My purpose in posting on this site is to provide insight into what happens to people when parks become currency.  Oh, and also to call Brian Spear out on his use of Dr. Sullivan's extensive research to justify SCI's actions.  In some twisted way, I guess he thinks we should be grateful to them for "saving" our park!  I know life is not fair and there are winners and losers.  The losers here are the tenants, the greater Akron community, and New York State who will end up having to deal with our homelessness on some level.  We are currently working hard with legislators to provide protections for parks both locally and in NYS. We have become mobilized in the face of losing our community.  It is sad and emotional and scary.  But mostly, it is unnecessary. 

    0Reply
  • Bill F.
    Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
    7y

    @Gail Travers thank you for taking the time to respond and for the book suggestion. 

    Forgive my confusion, but I don't quite see the connection between Mr. Spear's comments about required capital improvements as they relate to rent increases and a captive audience/ trailer trash mentality. 

    Given your comments "A rent increase of almost 40% is unconscionable" and "Also, SCI paid more than what this park is worth" I am forced to conclude that you have inside knowledge of the parks financial operations. Given that knowledge what is a fair rent increase and the true value of the park?

    If Dr. Sullivan recommends the cooperative ownership model as the ideal structure for MHPs what is stopping you from forming either a high or low equity co-op and purchasing the park from SCI?

    Finally, who have you interacted with from management and what, in your mind, would make communication, functional?

    2Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free