Investing Opportunity: 3 Family Brownstone Boston (Buy&Hold)

[Taylor Johnson]

Background on the property:

This is a 3 unit brownstone, row-end building that is in the South End/Lower Roxbury. It's a small building (1,900 sq feet livable) that will need to be gut-rehabbed. The building is right next to Ruggles T Stop and Northeastern, right of Tremont Street. That area in particular is experiencing a lot of revitalization. In addition to Northeastern University expanding every year, Roxbury Community College recently announced and began a major overhaul of its campus. Also, the famous Slades Bar and Grill (once owned by Bill Russell), was acquired by a real estate developer and celebrity promoter this summer. All this goes to show that this area is changing as we speak.

Our Plan:

Our plan right now is to buy the property using a commercial loan with a supplemental construction loan, gut rehab the place, and keep the property as high-end 2-bedroom rental units. For the refinance, we are looking to refi out of our initial loan at 80% ARV once the units are complete and rented.

Condo Comps:

For condo comps, we used a radius of 0.28 miles and looked up to 24 months back. *Note that I specifically excluded all comps that were past (i.e closer to the south end) Northhampton Street; once you start getting to Mass Ave values are judged differently.

Please reach out via email for a more detailed analysis and comps package.

Overall Numbers:

Based on the numbers in our pro forma, what we are expecting is once we stabilize the building and get market-rate tenants in there, we will be cash flowing about $200 per unit per month. Though this is not an eye-popping number, most of the return will be driven through our refinance/built equity. Based on our more conservative comps and building ARV, we will be able to cash-out ~$250K in the refinance, which is almost the entire amount we are looking to raise. If looking at the project as a whole, we are projecting about a ~18% IRR overall.

Our Proposition:

To get into this project, we are looking to raise about ~$270K as the down-payment for the initial commercial loan. Though we are happy to hear your thoughts on structure (assuming you are interested), we are thinking the private investor could either join in as an equity or debt investor. In the latter scenario, one scenario we had mapped was a 15% interest-only loan that would be paid off within 2-3 years, with the option of converting into an equity stake if we, as the operators, cannot pay the full sum back by the time (as additional protection to your investment). 

Please call or email Taylor at (617) 820-8964 , [email protected] for more information.