8-unit syndication in Minneapolis!

BP community,

My business partner and I have an investment opportunity with an 8 unit apartment building in a suburb Minneapolis, Minnesota. The Twin cities (Minneapolis/St. Paul area)is a stable and growing economy. I am located in close proximity, and am able to work closely with our commercial broker, property management team, lender (Bank of the West), certified public accountant, real estate attorney, rehab contractor, and our insurance agent. We have this property under contract, underwriting for the loan is underway, and the inspection came back with only small repairs. The property is at 100% occupancy, each unit is 3 bedrooms, 2 bathrooms, and has its own washer and dryer in each unit.

Before we break down the numbers on this particular deal, we would like to share our real estate investment history thus far. After this deal closes, we will have done 53 units (doors) together in 5 states. We are both military pilots in the Air National Guard (ANG), and the ANG lifestyle provides more flexibility in our work schedule to be able to expand our real estate business and provide our partners (like you) a stable and reliable return on investment. We also take the time to show our partners, if they are interested, how to set up their own limited liability corporations (LLC), how to evaluate a property, which books to read (if they want to do real estate investing on their own, and haven’t had enough recommendations through BP), how we set up our team, and most importantly, how to solve daily problems within the business. A few of the people we've mentored have gone on to start their own portfolio and are working towards financial freedom. Being in the BP community, we assume many are well versed in real estate investing, but we are always there to show our lessons learned and processes for day to day operations.

For us, we have set goals for a specific amount of monthly cash flow that will allow us to have real estate investing as our primary source of income, allowing us to be home more with our spouses and kids and stop deploying to hostile areas. Once we have achieved financial freedom, we will then have the time and means to begin work on various philanthropy projects that we have always had a passion for, such as wildlife conservation. We hope we can help each of you get to your personal goals as well via successful real estate investing!

A breakdown of the property:
The 8-unit (2 buildings of 4 units next to each other): 4 of the 8 units are below market rent by $240/month each (the other 4 have been increased by this amount already), and will renew their leases this year. This means we will increase our revenue in the first year and provide more net profit to the investment team. The utilities are also paid by the "owners." We have a sub-metering team with our contractors in order to push the electricity, water, and sewer back to the tenants, as most rentals do in the area. These tactics are called "value-add" plays, and allow us to decrease expenses alongside the increase in rent. This new profit spread brings home more money for the investment team, and increases the value of the property.

The purchase price is $1,030,000 and the down payment with closing costs is $270,000. We do not expect any partner to have the entire amount, which is why we are going to work a syndication. We are offering a 33% equity play on the deal. Here is what 33% means on this property: cash on cash return (means monthly dividend compared to money put in) is 2.4-3% (initially, until the remaining 4 leases are raised to market rent like the first 4 units) in the 1st year and steadily increases through year 10 to 8.1%. However, our 10 year estimated Internal Rate of Return-IRR (upon sale or refinance) will be 15-18% annually, which doesn’t even include the benefit of depreciation which you are entitled to for every tax season!

We ran these numbers without sub metering the utilities and with a 3% raise in rents per year for inflation, which is standard for the industry. We always run conservative numbers to know we can hit a goal and then update progress each month with our investors to show how the plan to add value is going, and what our future projections are as we complete each project, such as sub metering utilities.

This is a quick synopsis on the property, and if you are interested please reply back with any questions or concerns that you have. We will be taking investors as they commit and will update everyone with how much is left to invest on as we get commitments. We will need final commitments by Friday 29 March, and we will be closing mid-April. For those that join the deal, we will be very detailed with emails and phone calls as we move towards closing. For those that want to pass, but want to be added to the list for future deals, please let us know.

We greatly appreciate you taking the time to read this short novel, and look forward to closing another good deal!

Please Direct Message me for questions and/or interest!

Respectfully,
Brad Jordan

Location:

Tyler St., Columbia Heights, MN 55421