, $999,999 Sales Price 88 Rentable Units 2 Office Areas 90 Total All Bills Paid Complex Managed by Minnix Property Management, Lubbock's premiere local management company. Hickory Tree is a unique property. The owners have spent the last year renovating and upgrading. mkwilley@kw.com Minnix Companies Phone: 806-798-7335 Fax: 806-722-3087 12302 Slide Road Lubbock, TX 79424 www.minnixcompanies.com
Table of Contents Real Estate Investment Details... 3 Property Description... 4 Property Photos... 5 Maps and Aerials... 6 Executive Summary... 7 Cash Flow Analysis... 8 Rent Comparables... 9 Equity vs. Debt... 10 Gross Income Vs. Operating Expenses... 11 Financial Report for 2008... Attachment
Real Estate Investment Details ANALYSIS Analysis Date: April 2009 Scenario: Hickory Tree Final PROPERTY Property: Property Address: Hickory Tree Apartments PURCHASE INFORMATION Property Type: Multi-Family Purchase Price: $999,999 Units: 90 Total Rentable Sq. Ft.: 40,898 Resale Valuation 9.5% (capitalization of noi) Resale Expenses: 8.0% FINANCIAL INFORMATION Down Payment: $390,000 Passive Loss Rules: No Closing Costs: $13,000 LT Capital Gain: 15.00% Federal Tax Rate: 25.0% Discount Rate: 8.00% LOANS Debt Term Rate Payment LO Costs Fixed $910,000 25 yrs 6.0% $5,863 INCOME & EXPENSES Gross Operating Income: $381,119 Monthly GOI: $31,760 Total Annual Expenses: ($231,540) Monthly Expenses: ($19,295) CONTACT INFORMATION mkwilley@kw.com 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
Property Description Hickory Tree Apartments Hickory Tree Apartments were built in 1958. There is a total of 4 buildings with 90 units. There is an on-site manager that offices out of one of the units and another small office used by the maintenance team. There are 88 rentable units. The subject property is located in the city of Lubbock, Lubbock County, TX. Lubbock County is located in northwest Texas. The county is influenced by its rural nature, cattle ranching, and agriculture. The 1,850-acre Texas Tech University campus is located minutes from the subject property. Texas Tech has a total enrollment of 28,000. Lubbock is a viable community that has experienced moderate growth over the past few years. The area's relatively low cost of living, quality of life, and the presence of Texas Tech University has been the catalyst for this growth. While most of the county has been experiencing rising unemployment, Lubbock has the stable and relatively low unemployment rate attributed to its education, health care and agriculture employment base. This property can also be packaged with another 9 unit complex directly to the east of it, 16th Street Plaza Apartments. That property is for sale for $175,000. It is 100% occupied. There are 3 houses to the south of Hickory Tree that can also be packaged for a buyer who would like to acquire the entire block. The total for this package is $1,596,000.00. Please call Listing Agent for more details at (806)790-5606. You can also go to my website at www.mirandawilley.com for more information on this property as well as an appraisal report. Thank you. page 4 of 11
Property Photos Hickory Tree Apartments page 5 of 11
Maps and Aerials Road Map Road Map page 6 of 11
Executive Summary ACQUISITION COSTS Purchase Price, Points and Closing Costs $1,012,999 Investment - Cash $403,000 First Loan $910,000 INVESTMENT INFORMATION Purchase Price $999,999 Price per Unit $11,111 Price per Sq. Ft. $24.45 Income per Unit $4,698 Expenses per Unit ($2,573) INCOME, EXPENSES & CASH FLOW Gross Scheduled Income $422,819 Total Vacancy and Credits ($41,700) Operating Expenses ($231,540) Net Operating Income $149,580 Debt Service ($70,358) Cash Flow Before Taxes $79,222 Total Interest (Debt Service) ($54,159) Depreciation and Amortization ($31,999) Taxable Income (Loss) $63,421 Tax Savings (Costs) ($15,855) Cash Flow After Taxes $63,367 FINANCIAL INDICATORS Cash on Cash Return Before Taxes 19.66% Optimal Internal Rate of Return (yr 1) 35.18% Debt Coverage Ratio 2.13 Capitalization Rate 14.96% Gross Rent Multiplier 2.37 Gross Income / Square Feet $10.34 Gross Expenses / Square Feet ($5.66) Operating Expense Ratio 60.75% page 7 of 11
Cash Flow Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 GROSS SCHEDULED INCOME $422,819 $435,504 $448,569 $462,026 $475,887 $490,163 $504,868 $520,014 $535,615 $551,683 Turnover Vacancy ($41,700) ($42,951) ($44,240) ($45,567) ($46,934) ($48,342) ($49,792) ($51,286) ($52,824) ($54,409) Total Operating Expenses ($231,540) ($238,486) ($245,640) ($253,010) ($260,600) ($268,418) ($276,470) ($284,764) ($293,307) ($302,107) NET OPERATING INCOME $149,580 $154,067 $158,689 $163,450 $168,353 $173,404 $178,606 $183,964 $189,483 $195,168 Loan Payment ($70,358) ($70,358) ($70,358) ($70,358) ($70,358) ($70,358) ($70,358) ($70,358) ($70,358) ($70,358) NET CASH FLOW (b/t) $79,222 $83,709 $88,331 $93,092 $97,996 $103,046 $108,248 $113,606 $119,125 $124,810 Cash On Cash Return b/t 19.66% 20.77% 21.92% 23.10% 24.32% 25.57% 26.86% 28.19% 29.56% 30.97% NET OPERATING INCOME $149,580 $154,067 $158,689 $163,450 $168,353 $173,404 $178,606 $183,964 $189,483 $195,168 Depreciation ($31,999) ($33,395) ($33,395) ($33,395) ($33,395) ($33,395) ($33,395) ($33,395) ($33,395) ($32,018) Loan Interest ($54,159) ($53,160) ($52,100) ($50,973) ($49,778) ($48,509) ($47,161) ($45,730) ($44,211) ($42,599) TAXABLE INCOME (LOSS) $63,421 $67,512 $73,194 $79,081 $85,180 $91,500 $98,050 $104,839 $111,877 $120,551 Income Taxes ($15,855) ($16,878) ($18,299) ($19,770) ($21,295) ($22,875) ($24,512) ($26,210) ($27,969) ($30,138) CASH FLOW (a/t) $63,367 $66,832 $70,033 $73,322 $76,701 $80,171 $83,736 $87,397 $91,156 $94,672 Cash On Cash Return a/t 15.72% 16.58% 17.38% 18.19% 19.03% 19.89% 20.78% 21.69% 22.62% 23.49% Footnotes: b/t = before taxes;a/t = after taxes page 8 of 11
Rent Comparables Legend Studio One Bedroom 2 Bedroom $560 $504 $448 $392 $336 $280 $224 $168 $112 $56 Comp 1 Comp 2 Comp 3 Average Subject Address Studio One Bedroom Poco Apartments 2 Bedroom Number of Units Square Feet $299 $379 NA 118 49,346 Woodscape Apartments $375 $425 $550 72 66,932 Shadow Ridge Apartments NA $450 NA 42 27,300 Average $337 $418 $550 77 47859 Subject $375 $400 $475 90 40,898 page 9 of 11
Equity vs. Debt $1,700,000 $1,530,000 $1,360,000 $1,190,000 $1,020,000 $850,000 $680,000 $510,000 $340,000 $170,000 Year 1 2 3 4 5 6 7 8 9 10 Legend Equity Loan Principal Balance page 10 of 11
Gross Income Vs. Operating Expenses $560,000 $504,000 $448,000 $392,000 $336,000 $280,000 $224,000 $168,000 $112,000 $56,000 Year 1 2 3 4 5 6 7 8 9 10 Legend GROSS SCHEDULED INCOME Total Operating Expenses page 11 of 11
Financial Report for 2008