Asking: $14,100,000 

Cap Rate, COC and Total Return: At our whisper price you are looking at over 5% cap rate, over a 7% tax adjusted proforma cash on cash return with over a 2x equity multiple on a 5-year hold and a 6-reversion cap.

Here is the play on the property:

1. Cut the loss to lease- This has been proven over the last 10 leases with new and renewal leases they are seeing a 15.9% increase of lease trade out in addition to fully implementing the amenity fee
   
2. 98% Classic Units - Every unit besides 2 are classics. On those two upgrades they are receiving over $100 premium on top of the loss to lease. The one upgraded unit they just leased was a 2 bed 1 bathroom at $1420.
   

Exit:

We have a model that has a reversion cap of 6 at the end of 5 years. With the business plan that we have laid out in our OM with the debt in the deal room you are looking at least a 2x equity multiple on a 5-year hold.

Debt:

We have several debt options in the deal room. Depending on whether you go with the bridge option or a fixed rate option like the Freddie Floater. Bridge/debt funds will give you more proceeds but Freddie is predictable and able to still offer a consistent and aggressive quote.

There is always an option to assume the current non-recourse Fannie Mae at $7,150,000. 5.2% interest rate with 8.5 years of terms left that is amortizing; loan is in the deal room and price would be about $750,000 off the $14,100,000.

A couple other notes to the deal as well:

While underwriting ensure you consider the following:

• Excellent Physical Condition with Significant Recent CAPEX: Current ownership has recently put over $700,000 in capex…mostly exterior capex and replaced one of the two chillers
  
• HUGE Upside Potential: There is significant remaining upside by renovating the two- and three-bedroom floor plans. Between loss to lease and unit enhancement you will be able to achieve a rental increase between $120-220 per unit.
  
• Additional Other Income Opportunities: There is potential to increase revenue by implementing an amenity fee program for $30 a month, which would include Wi-Fi, pest control and trash. They are doing this on every new lease and renewal.
  
• There are 3 laundry rooms on the property as well that the property owns so 100% of the income goes to you. Right now they are not collecting on this but will have it set up by close. Another $15,000 in income a year.