Property Type: 50 unit multifamily
Purchase Price: $1,150,000
Loan/Investment: $1,300,000 ($1,000,000 to buy the property + $250k for renovations + $50k for operating expenses +$150k will be carried back in 2nd lien position)
Lien Position: 1st
Assessed Value AS-IS: $1,300,000+
I have a currently performing 50-unit multifamily complex available to me and I'm looking for a money partner or two to fund it. The idea would be to have a JV partnership. It's a solid cash flow deal that's located in a tertiary market in KY. I have a few other projects in the area which are going to increase the value and desirability of the market in the next few years with bringing jobs etc...
Purchase Price: $1,150,000
Gross Income: $25,000 / month
EBTIDA: ~$12,000 / month
CAP RATE: ~12%
Seller Carry back: $150k in 2nd lien position at 4% negotiated already for 5 years
There are some upgrades we can do which will reduce the monthly costs by about $3k - $4k per month and will increase the overall value of the property by about $400,000 for a $250,000 cost. Those savings will grow over time.
I found the deal and am glad to be the asset manager for it to make sure that it performs. I'm in need of money partner(s) to get it closed. Please reach out if this piques your interest and you want to discuss it further.
There are also ways to include it within the opportunity fund as well and or if someone has the full amount to bring for the deal we can securitize the JV money brought in with the 1st trust deed position. It's a safe secure deal. Let's talk.
The largest expense on the balance sheet is about $6,000 in utilities on average per month. By installing a central air-conditioning system, in addition to a robust solar power system, complete with Tesla power walls, we can offset that $6,000 utility fee by about $3k - $4k per month or $40,000 in savings per year. We also want to complete some other small upgrades with landscaping, a swing set and sit down area for the tenants. All in all these improvements will approximately cost $250,000 but with the improvement we will be able to increase rent by $50 per unit, resulting in an additional income of $2500 per month or $30,000 per year.
This will increase the current Net Yearly Income of $144,000 to approximately $214,000.
$214,000 / $1,400,000 = 15.2% Capitalization Rate
If valuated at the going rate of a 10% Capitalization rate, it would put the new value of the property at $2,140,000.
So not only will the improvements pay for themselves in about 3.5 years, we will also increase the value of the property by $1,000,000 for the $250,000 in upgrades.
WHAT WE’RE OFFERING:
In exchange for the $1,300,000 in capital we will offer a 4% Note Rate to be paid monthly + 50% of the profits to be paid semi-annually.
We project this to be in accordance with the below calculations:
$1.3M @ 4% = $52,000 per year
EBTIDA is projected at $18,000 per month
$500 a month for the 2nd mortgage
$1,000 a month to be held in company reserves
$4,333 a month for the 1st trust deed (your trust deed of $1.3M
$2,000 a month management fee to our company for overseeing the entire project and operations
$7,833 / month of additional expenses
$18,000 - $7,833 = $10,167 true NET Monthly Profit
From there we will do a 50/50 split of the profits. Resulting in approximately $5083.5 per party.
This results in a projected ~$61,000 from the JV split plus ~$52,000 from the earned interest on the NOTE for a total approximate yearly income of $113,000 or a 8.69% yearly ROI to you.
As time goes on we will look to be slowly increasing rents by incremental margins as well as being able to charge for additional amenities which will increase the ROI over time.
Ascend Opportunity Fund LLC
What we are usually working on: hard money, private money, BRRRR, investments, investing, gap financing, gap money, fix and flip, wholesale, mechanic special, handyman special, fixer upper, fixer, financing, buy and hold, California, los Angeles, Orange County,