OFFERING SUMMARY 5919 W. 19TH LITTLE ROCK, AR 72204

Transcription

1 OFFERING SUMMARY 5919 W. 19TH LITTLE ROCK, AR 72204

2 Product Offering Tables of Contents I. Intro Letter II. Project & Area Overview III. Pictures IV. Pro Forma & Rent Roll V. Renovation Scope of Work VI. Property Warranty VII. Insurance Information VIII. Property Management Overview IX. Client Testimonial

3 1060 Brookfield Road, Suite 100 Memphis, TN PHONE: FAX: TurnkeyInvestProperties.com November To our current and prospective clients: Enclosed in this packet you will find various pieces of information about our latest multi-family offering in Little Rock, AR. Our goal as a turnkey provider is to provide an asset that will maximize your cash flow. We accomplish this by doing a thorough renovation that will reduce maintenance and vacancy. We also address deferred maintenance items and add upgrades such as vinyl plank flooring and ceramic tile that are not only more durable, they also make the property stand out above competing rentals in the area. As landlords ourselves, we know through personal experience maximizing profits starts with the renovation and continues with a strong management team, which we bring to you through our inhouse property management companies. If you have any questions, please feel free to reach out to us at We would be happy to provide you any amount of information we can to make you feel comfortable with your investment decision. Thanks, Alex Craig President Turnkey Properties TWO STRATEGIC MARKETS. ONE PROVEN TEAM.

4 Little Rock Turnkey (LRT) acquired this property in February, Prior to acquisition, the property had been mismanaged for many years. As a result, there was considerable physical deterioration and an undesirable tenant population. Since the acquisition, we at LRT have repositioned the property by removing undesirable tenants and performing extensive renovations (For the complete list of repairs and updates, please see the Scope of Work later in this Property Offering). Upon taking ownership, rents were in the $550 to $575 rent range. The rents were in line with the condition, but were under market rent. The LRT strategy was to immediately renovate the property to market standards. We/LRT believed that our improvements would allow us to attract and retain higher-quality tenants, along with obtaining above average rents. The renovations began with addressing the building s exterior and enhancing the overall appearance and feel of the grounds. This included painting the existing orange brick, coordinating trim and door colors, adding storm doors and upgrading hardware. We hired a landscape architect to plan sustainable plantings for the entry way and front façade of building. A massive covered breezeway was added to the rear of building. The breezeway area provides a shaded patio for the tenants, as well as protecting HVAC condensers from weather. We added fencing and gates to the rear of property for added sense of security. Additionally, we added steel bollards to the second entrance of the parking lot, creating one way in and out. We felt that closing off access would eliminate unwanted/unnecessary traffic, thus adding to sense of security. Our strategy also called for renovating each of the 12 interiors. We carefully analyzed each of the 12 unit s interiors and planned renovations and updates accordingly. We feel that our interior upgrades are what the tenants value most and what justifies the higher rents. Therefore, to accomplish this, we pay special attention to items such as coordinating paint colors and adding new flooring. As well as upgrading door and cabinet hardware, lighting, ceiling fans, countertop surfaces, plumbing fixtures and appliances. We believe our upgrades give us a competitive advantage against other properties in the area. In addition to addressing immediate needs, our renovation strategy positioned the units to be more cost efficient with regards to future tenant turnover-cost. For example, each unit received vinyl plank flooring that will reduce the maintenance and capital expense cost of having to replace carpet every few years. We know that carpet in high traffic and living areas can have a very short lifespan. The vinyl plank is both attractive and long-lasting. The final part of our strategy is property management. Property management not only includes attracting tenants at the market rent of $650, but qualifying and placing higher quality tenants. We feel that this effort will be made easier, not only by our physical upgrades, but also by property s strategic location. In fact, we were initially attracted to this property due to it's strategic location in mid-town and that the property borders the University of Arkansas at Little Rock (UALR). In fact, the University s lighted walking and bike path begins at the parking lot of this property. UALR, with it's over 13,000 students and faculty is an anchor for the general area. 2 STRATEGIC MARKETS. ONE STRATEGIC TEAM

5 Pictures More Pictures At:

6 Properties Under Management in the Area Area Overview: Located at the end of the Greenway bike trail of the University of Arkansas at Little Rock, a campus with 13,000 students and faculty. The 12 Plex is located near the Broodmoor neighborhood and close to the Midtown area, which features easy access to major interstate and freeways. Broodmoor has an active neighborhood association (no HOA fees) and high percentage of home owners. To the North, is considered the Midtown area which consist of desirable places to shop & dine. Then a little further North is one of the most desirable neighborhoods in Little Rock, which is Hillcrest. To the SW and about a 15 minute drive is major development of shopping which includes the Outlets of Little Rock and Bass Pro. 2 STRATEGIC MARKETS. ONE STRATEGIC TEAM

7 1 Year Performance Projection Little Rock 12 Plex Little Rock, AR Massive Overhaul 12 Plex. 2 Bed/1.5 Bath Square Feet 12,200 Initial Market Value $ 734,500 Purchase Price $ 734,500 Downpayment $ 183,625 Loan Origination Fees $ 5,508 Depreciable Closing Costs $ 7,345 Other Closing Costs and Fixup $ 0 Initial Cash Invested $ 196,478 Cost per Square Foot $ 60 Monthly Rent per Square Foot $ 0.64 Income Monthly Annual Gross Rent $ 7,800 $ 93,600 Vacancy Losses $ -624 $ -7,488 Operating Income $ 7,176 $ 86,112 Expenses Monthly Annual Property Taxes $ -483 $ -5,802 Insurance $ -636 $ -7,638 Management Fees $ -574 $ -6,888 Leasing/Advertising Fees $ 0 $ 0 Association Fees $ 0 $ 0 Maintenance $ -468 $ -5,616 Other $ -205 $ -2,460 Operating Expenses $ -2,367 $ -28,406 Net Performance Monthly Annual Net Operating Income $ 4,808 $ 57,705 - Mortgage Payments $ -3,635 $ -43,626 = Cash Flow $ 1,173 $ 14,079 + Principal Reduction $ 1,371 $ 16,456 + First-Year Appreciation $ 612 $ 7,345 = Gross Equity Income $ 3,156 $ 37,880 + Tax Savings $ 0 $ 0 = GEI w/tax Savings $ 3,156 $ 37,880 Mortgage Info First Second Loan-to-Value Ratio 75% 0% Loan Amount $ 550,875 $ 0 Monthly Payment $ 3, $ 0.00 Loan Type Term Amortizing Fixed 20 Years Interest Rate 5.000% 0.000% Monthly PMI $ 0 Financial Indicators Debt Coverage Ratio 1.32 Annual Gross Rent Multiplier 8 Monthly Gross Rent Multiplier 94 Capitalization Rate 7.9% Cash on Cash Return 7% Total Return on Investment 19% Total ROI with Tax Savings 19% Assumptions Real Estate Appreciation Rate 1% Vacancy Rate 8% Management Fee 8% Maintenance Percentage 6% Comments Massive overhaul and repositioning. Commercial financing at 20 yr Amortization, 25% Down, 5%. 5 yr fixed rate. Rents $625. Rates may vary depending on strength of buyer. 6 Month No Maintenance Warranty. Ask for Scope of Work. *Information is not guaranteed and investors should do their own research, get professional advice and conduct due diligence prior to investing. This report was generated using the tools available at

8 5919 W. 19 th Rent Rolls Unit Lease Start Lease Rent Deposit Notes End A $650 $500 B $650 $400 7 Year Tenant C $650 $400 D E F $650 $ Year Tenant G H I J K L Applications currently be reviewed for other units. TWO STRATEGIC MARKETS. ONE PROVEN TEAM.

9 Scope of Work Overview: 10 of 12 units underwent interior rehab. 2 units with a 20 year and 7 year tenant underwent a partial rehab of repairs. Kitchen, bath and flooring updates would need to be done upon vacancy for the entire building to be uniform. Exterior: Paint exterior siding and brick Entrance landscaping Designer exterior lighting Parking lot restripe New exterior doors Metal Awning across the back of the entire unit Gutters added Foundation Need details Interior Units Vinyl plank flooring in kitchen, living room and upstairs bedrooms Ceramic tile floors in bathrooms Ceiling fans in living rooms Brush nickel lighting in all other rooms All finished plumbing updated Plumbing Check all valves, P-traps and DWV pipe for leaks (replace supply lines, valves and p-traps as necessary). Check shower drains and area drains for proper installation and drainage Check Washer Box for property function and drain fall and venting Check DWV system for plumbing back up Check exterior hose bibs Electrical All outlets work and verified through tester GFCI receptacles installed No open grounds/all new outlets and switches Weather heads checked Open junction boxes closed All interior/exterior lights working Proper Breaker Amps in box for reciprocating item HVAC Several updated See Link for HVAC Roster:

10 OUR MAINTENANCE GUARANTEE Property inspections are not always successful in finding all the flaws with a property as our home inspections are sometimes done while the unit is vacant or soon after a tenant moves into the unit. Such flaws that are present may only surface when a tenant has been living in a unit cycling and running simultaneous items within the major systems of the house. To protect our clients cash flow and give them piece of mind with their purchase, Turnkey Properties will cover maintenance cost on our Multi-Family Units for a period of 6 Months after the purchase date listed on the closing settlement statement. This warranty covers items within the 4 walls of each individual unit. Between our renovation, the client s property inspection and this warranty, we are successful in substantially reducing the maintenance cost well below our maintenance projections during the first few years of ownership, especially during the 1 st tenant lease. This warranty is our commitment that we stand by the work we performed during the renovation of the property and from the inspector s punch list; however, there are a few items that can happen completely out of our control, which are listed in the exclusions below. CERTAIN ITEMS ARE EXCLUDED FROM THE 6 MONTH WARRANTY Damage done due to tenant negligence Vandalism/Theft Acts of God Force Majeure Power Surges Appliances not installed by Memphis Turnkey Pilot lighting of Furnace Vermin Products that fall under Manufactures warranty THESE ITEMS INCLUDE: Property Address: 5919 W. 19 th, Little Rock, AR Buyer: Seller: Date: TWO STRATEGIC MARKETS. ONE PROVEN TEAM.

11 1060 Brookfield Road, Suite 100 Memphis, TN PHONE: FAX: TurnkeyInvestProperties.com Property & Liability Carrier: JTS Financial Premium: $5,876 Building Coverage Amount: $750,000 Insurance Overview Flood Plan Flood Plan: 100 Year flood plan / 1% chance of flooding in any given year Coverage Amount: $440,000 Premium: $1, Policy Link: Insurance Link TWO STRATEGIC MARKETS. ONE PROVEN TEAM.

12 Hoffman Team Overview Principal Owner & In House Realtor, Jamie Hoffman Brokerage: Adkins, McNeil, Smith and Assoc. Associates belong to: NARPM and Little Rock Realtors Assoc Properties under management: 141 Multi-Family Doors, 240 Single Family Homes Property Management System Run: Property Boss with owner portal feature Years in business as manager & investor: 15 Management Philosophy: Investment for Investors by Investors Website: Fee Structure 8% of collected rent amount First tenant placement fee waived after purchase; 75% of first month rent 15% maintenance over vendor invoice and materials purchased $150 lease renewal fee. This will be returned to the owner if the tenant moves out before fulfilling half of the renewal

13 Click on the Image Below to Hear What our Clients are Saying About Us! Turnkey Client of the Month Also Check Out the Rest of Our You Tube Page for Interesting Videos about our Company, Real Estate Tips and Past Renovations. Click on The You Tube Logo Below to Get There! 2 STRATEGIC MARKETS. ONE STRATEGIC TEAM