Royal Apartments Bacon St, San Diego, CA 92107

Transcription

1 , Investment Highlights Seller Financing 20% Down at 5% interest only! 3 Parcels of Land Beautiful Courtyard Laundry Onsite Plenty of Parking Spaces For More Information The Courtney Gabhart Group DRE# Senior VP & Principal Keith Courtney Senior VP & Principal Exclusive listing by: 2635 Camino del Rio S San Diego, CA

2 Table of Contents Real Estate Investment Details... 3 Property Description... 4 Property Photos... 5 Maps and Aerials... 6 Executive Summary... 7 Pro Forma Summary... 8 Resale Report... 9 Internal Rate of Return Analysis Cumulative Analysis Flyer... Attachment

3 Real Estate Investment Details ANALYSIS Analysis Date: August 2009 PROPERTY Property: Property Address: Royal Apartments PURCHASE INFORMATION Property Type: Multi-Family Purchase Price: $3,600,000 Fair Market Value: $3,600,000 Units: 22 Total Rentable Sq. Ft.: 7,000 Resale Valuation 3.0% (annual appreciation) Resale Expenses: 5.0% FINANCIAL INFORMATION Down Payment: $725,000 Passive Loss Rules: No Closing Costs: $0 LT Capital Gain: 15.00% Federal Tax Rate: 35.0% State Tax Rate: 10.0% Discount Rate: 4.00% LOANS Debt Term Rate Payment LO Costs Interest Only $2,875, yrs 5.0% $11,979 INCOME & EXPENSES Gross Operating Income: $261,870 Monthly GOI: $21,823 Total Annual Expenses: ($103,005) Monthly Expenses: ($8,584) CONTACT INFORMATION DRE# Keith Courtney DRE # DISCLAIMER: All information is believed to be accurate. The calculations and data presented are deemed to be accurate, but not guaranteed. They are intended for the purpose of illustrative projections and analysis. The information provided is not intended to replace or serve as substitute for any legal, accounting, investment, real estate, tax or other professional advice, consultation or service. The user of this software should consult with a professional in the respective legal, accounting, tax or other professional area before making any decisions. page 3 of 11

4 Property Description Property Description Attractive SELLER FINANCING 80% LTV at 5% Interest only fixed for 10 years. Beautiful multi-family apartment, rare find because of high density! Three buildings on three parcels. A total of 16 parking spots, laundry on-site, bike storage, beautiful courtyard! Total square footage is 7,000 sf in 22 studio units! Lot size is 10,348 square feet. ***All income information is based on pro forma rents. The information contained herein is from sources believed to be accurate, but ACI Commercial makes no warranty(ies), expressed or implied, regarding same. Area Description: OCEAN BEACH Ocean Beach lies at the end of a busy highway known as Interstate 8. This little beach town has got a whole lot of everything for just about anyone who finds themselves in this tiny corner of San Diego, just south of the Mission Bay channel entrance. Ocean Beach is home to rows of antique stores, a pet shop, bookstores and surf shops, and you can enjoy handmade tamales, hamburgers, cold beer and frosty margaritas. The people of Ocean Beach are very open minded and friendly. If you have a dog, it s the perfect spot to be. Since 1972, pooches have run legally off their leashes here on 38 acres of sand and water. It's located where the San Diego River meets the Pacific Ocean. Newport Avenue is the main attraction in this ocean side community of over 28,000. Inland and to the south near Sunset Cliffs the situation becomes a bit more conservative and family-oriented. page 4 of 11

5 Property Photos Property Photos page 5 of 11

6 Maps and Aerials Maps and Aerials page 6 of 11

7 Executive Summary ACQUISITION COSTS Purchase Price, Points and Closing Costs $3,600,000 Investment - Cash $725,000 First Loan $2,875,000 INVESTMENT INFORMATION Purchase Price $3,600,000 Price per Unit $163,636 Price per Sq. Ft. $ Income per Unit $12,518 Expenses per Unit ($4,682) INCOME, EXPENSES & CASH FLOW Gross Scheduled Income $275,400 Total Vacancy and Credits ($13,530) Operating Expenses ($103,005) Net Operating Income $158,865 Debt Service ($143,750) Cash Flow Before Taxes $15,115 Total Interest (Debt Service) ($143,750) Depreciation and Amortization ($100,339) Taxable Income (Loss) ($85,224) Tax Savings (Costs) $38,351 Cash Flow After Taxes $53,466 FINANCIAL INDICATORS Cash on Cash Return Before Taxes 2.08% Optimal Internal Rate of Return (yr 10) 13.38% Debt Coverage Ratio 1.11 Capitalization Rate 4.41% Gross Rent Multiplier Gross Income / Square Feet $39.34 Gross Expenses / Square Feet ($14.72) Operating Expense Ratio 39.33% page 7 of 11

8 Pro Forma Summary UNIT MIX & ANNUAL SCHEDULED INCOME Type Units Actual Total Market Total Studio 22 $12,300 $270,600 $12,300 $270,600 TOTALS 22 $270,600 $270,600 ANNUALIZED INCOME INVESTMENT SUMMARY Price: $3,600,000 Units: 22 Price/Unit: $163,636 RSF: 7,000 Price/RSF: $ Cap Rate: 4.41% Actual Market Gross Potential Rent $270,600 $270,600 Less: Vacancy ($13,530) ($13,530) Misc. Income $4,800 $4,800 Effective Gross Income $261,870 $261,870 Less: Expenses ($103,005) ($102,765) Net Operating Income $158,865 $159,105 Debt Service ($143,750) ($143,750) Net Cash Flow after Debt Service $15,115 $15,355 Principal Reduction $0 $0 Total Return $15,115 $15,355 Pro Forma Cap Rate: 4.42% GRM: 13.1 Pro Forma GRM: 13.1 FINANCING SUMMARY Loan Amount: $2,875,000 Down Payment: $725,000 Loan Type: Interest Only ANNUALIZED EXPENSES Description Actual Market Property Management Fee $13,770 $13,530 Misc $48,555 $48,555 Taxes - Real Estate $40,680 $40,680 Total Expenses $103,005 $102,765 Expenses Per RSF $14.72 $14.68 Expenses Per Unit $4,682 $4,671 Interest Rate: % Term: 10 years Monthly Payment: $11, page 8 of 11

9 Resale Report NET PROCEEEDS FROM SALE Adjusted Basis Basis At Acquisition $3,600,000 - Depreciation $1,038,413 Adjusted Basis at Sale $2,561,587 Capital Gain Sale Price $4,838,099 -Sale Expenses $241,905 -Adjusted Basis at Sale $2,561,587 Gain or (Loss) $2,034,607 -Depreciation (limited to gain) $1,038,413 Capital Gain from Appreciation $996,194 Sales Proceeds After Tax Sales Price $4,838,099 -Sale Expenses $241,905 -Balloon Payment $2,875,000 Sale Proceeds Before Tax $1,721,194 Sale Proceeds Before Tax $1,721,194 -Tax On Depreciation $259,603 -Tax On Capital Gain $149,429 Sale Proceeds After Tax $1,312,162 page 9 of 11

10 Internal Rate of Return Analysis BEFORE TAX IRR Time Future Cash Flows Initial Investment ($725,000) End of Year 1 $15,115 End of Year 2 $20,288 End of Year 3 $25,624 End of Year 4 $31,128 End of Year 5 $36,806 End of Year 6 $42,663 End of Year 7 $48,705 End of Year 8 $54,937 End of Year 9 $61,365 End of Year 10* $1,789,189 IRR = 12.47% * ($67,995 + $1,721,194) AFTER TAX IRR Time Future Cash Flows Initial Investment ($725,000) End of Year 1 $53,466 End of Year 2 $58,281 End of Year 3 $61,216 End of Year 4 $64,243 End of Year 5 $67,366 End of Year 6 $70,587 End of Year 7 $73,910 End of Year 8 $77,338 End of Year 9 $80,873 End of Year 10* $1,394,711 IRR = 13.38% * ($82,550 + $1,312,162) page 10 of 11

11 Cumulative Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Equity (appreciation) $108,000 $219,240 $333,817 $451,832 $573,387 $698,588 $827,546 $960,372 $1,097,183 $1,238,099 Equity (loan reduction) $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,875,000 CASH FLOW (a/t) $53,466 $111,747 $172,962 $237,205 $304,572 $375,159 $449,069 $526,407 $607,280 $689,830 Totals - To Date $161,466 $330,987 $506,780 $689,037 $877,958 $1,073,747 $1,276,615 $1,486,779 $1,704,463 $4,802,929 Invested Capital ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ROIC - To Date 22.27% 45.65% 69.90% 95.04% % % % % % % Footnotes: a/t = after taxes; ROIC = Return On Invested Capital page 11 of 11

12 Flyer

13 , Price $3,600,000 Units 22 Price per Unit $163,636 Year Built 1963 Lot Size 10,048 Current Cap Rate 4.56% Market Cap Rate 4.56% Current GRM 13.1 Market GRM 13.1 Current Total Return 2.8% Market Total Return 2.8% Investment Highlights SELLER FINANCING 20% Down at 5% Interest Only! Beautiful Courtyard Laundry Facilities 22 Studio Units Plenty of Parking Spaces 3 Buildings on 3 Parcels of Land Storage DRE# Senior VP & Principal (619) (fax) curtisgabhart@aciapartments.com Keith Courtney DRE # Senior VP & Principal (619) (fax)

14 , UNIT MIX AND RENT SCHEDULE Mix No. Units Current Rents Current Total Market Rents Market Total Studio 22 $1,025 $22,550 $1,025 $22, $22,550 $22,550 INCOME, EXPENSE AND CASHFLOW Current Market Gross Potential Rent $270,600 $270,600 Less: Vacancy $8,118 $8,118 Plus: Misc. Income $4,800 $4,800 Effective Gross Income $267,282 $267,282 Less: Expenses $103,005 $103,005 Net Operating Income $164,277 $164,277 Debt Service ($143,750) ($143,750) EXPENSES Property Management Fee $13,770 Misc $48,555 Taxes - Real Estate $40,680 Total Expenses $103,005 Expenses Per RSF $14.72 Expenses Per Unit $4,682 NCF After Debt Service $20,527 $20,527 Principal Reduction $0 $0 Total Return $20,527 $20,527 FINANCIAL SUMMARY Down Payment: $725,000 Loan Amount: $2,875,000 Loan to Value: 80% Interest Rate: 5.0 Amortization: 10 Years Debt Coverage Ratio: INVESTMENT OVERVIEW SELLER FINANCING 80% LTV AT 5% Interest Only fixed for 10 years. Three buildings on three parcels beautiful multifamily apartment. A total of 16 parking spots, laundry on-site, bike storage, beautiful courtyard! **The information contained is from sources believed to be accurate, ACI makes no warranty(ies), expressed or implied, regarding same. DRE# Senior VP & Principal (619) (fax) curtisgabhart@aciapartments.com Keith Courtney DRE # Senior VP & Principal (619) (fax)