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NoLendingFees
3 Posts |
 Posted - 05/22/2008 : 12:25:38 PM
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$2.3 mil - Purchase Price
$500k - Held by current owner
$200k - Renovations & Tenant Buy-Outs
$347,400 - Projected Gross Income (Market Rents)
$65,822 - Projected Operating Expenses
23 Unit Apartment Building in Washington DC. Borrower looking for financing or joint venture financing. Here is the overview and let me know if anyone can assist.
Property is currently at 60% occupancy with below market rent tenants. 13 of 23 units occupied. Property common area needs painting, crown molding, lighting upgrade. Roof needs to be replaced. Borrower wants to buyout current tenants at $5k-7.5k each and get the condo conversion process started immediately. Borrower has local experienced attorney and title company that can complete for $15k total and complete within 120 days once property is vacant.
After completing condo version process and due to sluggish condo market, borrower intends to lease-up the property immediately using a local experienced property management company at market rents and using some creative incentives. New tenants will be required to sign lease agreements in one-year increments with additional agreement stating at end of each year lease, owner has option to not renew lease due to condo conversion.
Exit for borrower will be to sale all 23 units to developer at $175k-$200k per unit netting borrower 4,025,000-$4,600,000. Note, condos in this area retail for $350k+ and the new purchaser will be able to spend $25k-$35k per unit and sale units at min. of $350k.
Within 18-24 months a profit of $1,525,000-$2,100,000. Borrower proposes a return of initial investment to the JV partner and 50% share of net profit.
Let me know if you can help me.
With Best Regards,
Tony Taylor
ttaylor@nolendingfees.com
M. 202-904-0079
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KHufford
5998 Posts |
Posted - 05/22/2008 : 12:30:40 PM
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This exit strategy is not going to fly. Keep it as apts for now...
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mortgagemessiah
8003 Posts |
Posted - 05/22/2008 : 12:40:17 PM
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| That would be my thinking as well. |
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KHufford
5998 Posts |
Posted - 05/22/2008 : 12:45:03 PM
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quote:
Originally posted by mortgagemessiah
That would be my thinking as well.
If they are truely priced that far under market, maybe it can fly? You would need a solid market analysis/ feasiblity study done by a reputable Commercial firm I would think..but maybe..just sellign condos is not easy right now.
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NoLendingFees
3 Posts |
Posted - 05/22/2008 : 1:17:16 PM
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| Due to Tenants Rights, it is best to complete condo conversion with property being vacant. |
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EMScommercial
5138 Posts |
Posted - 05/27/2008 : 1:45:12 PM
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i don't see this one being very doable in today's market... especially in the dc market... totally flooded with properties.... sorry....
but THAT's a well written post..... good job.... |
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