Vintage’s principals purchased a 112-lot mobile home park 30 minutes from downtown Charlotte with our operating partner five years ago for $3.4MM.
 
Since then net operating income increased substantially (via the addition of new homes and reasonable rent increases), which enabled consistent and growing distributions.
 
The debt was refinanced last year based on a valuation of $6.6MM, enabling a near full return of investors’ capital.
 
At this point the property is a great long-term hold, but also has less upside moving forward. Considering this our investors were given the option to stay in the deal or exit based on that same appraised $6.6MM valuation.
 
This represents a net IRR to our investors of 22.1% and a 2.33x multiple on invested capital over the five-year life of the deal, and a value that the initial pro forma had not projected achieving until 2029. Some investors were thrilled to take this offer and be bought out; others elected to remain in the deal for a possible lifetime hold of growing distributions (with no real risk given the previous capital return). Either way, a great decision to be faced with. The buyout closed earlier this month.
 
This deal is a prime example of why we love this asset class (stable and growing cash flow, which is ideal for long-term holds with periodic refinances), and why focusing on higher-quality markets and partners is so critical.