For more information contact: Vice President kaufman@scc1031.com BRE# 01816761 Seth R Watje Vice President 619-358-3748 watje@scc1031.com BRE# 01805453 Historically Low Vacancy Rate Gated and Secured Property Community Patio and BBQ 3 Two Car Garages and a Single Car Garage Phone: (619) 226-6011 Fax: (866) 861-7803 3405 Kenyon St #411 San Diego, CA 92110 www.scc1031.com
Real Estate Investment Details Analysis Analysis Date June 2017 Property Property Property Address Year Built 1975 E Washington Apartments Purchase Information Property Type MultiFamily Purchase Price $1,579,000 Fair Market Value $1,579,000 Units 9 Total Rentable Sq. Ft. 6,765 Resale Valuation 5.0% (annual appreciation) Resale Expenses 1.0% Financial Information Down Payment $550,000 Closing Costs $15,790 LT Capital Gain 15.00% Federal Tax Rate 35.0% State Tax Rate 10.0% Discount Rate 5.00% Loans Type Debt Term Amortization Rate Payment LO Costs Fixed $1,029,000 30 years 30 years 4.0% $4,913 $10,290 Income & Expenses Gross Operating Income $123,863 Monthly GOI $10,322 Total Annual Expenses ($49,361) Monthly Expenses ($4,113) Contact Information kaufman@scc1031.com BRE# 01816761 Seth R Watje 619-358-3748 watje@scc1031.com BRE# 01805453 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 2 of 10
Executive Summary ACQUISITION COSTS Purchase Price, Points and Closing Costs $1,605,080 Investment - Cash $576,080 First Loan $1,029,000 INVESTMENT INFORMATION Purchase Price $1,579,000 Price per Unit $175,444 Price per Sq. Ft. $233.41 Income per Unit $14,167 Expenses per Unit ($5,485) INCOME, EXPENSES & CASH FLOW Gross Scheduled Income $127,500 Total Vacancy and Credits ($3,637) Operating Expenses ($49,361) Net Operating Income $74,502 Debt Service ($58,951) Cash Flow Before Taxes $15,551 Total Interest (Debt Service) ($40,830) Depreciation and Amortization ($42,015) Taxable Income (Loss) ($8,343) Tax Savings (Costs) $3,754 Cash Flow After Taxes $19,305 FINANCIAL INDICATORS Cash on Cash Return Before Taxes 2.70% Optimal Internal Rate of Return (yr 4) 14.10% Debt Coverage Ratio 1.26 Capitalization Rate 4.72% Gross Rent Multiplier 12.38 Gross Income / Square Feet $18.85 Gross Expenses / Square Feet ($7.30) Operating Expense Ratio 39.85% page 3 of 10
Property Description Property Description South Coast Commercial, INC is pleased to present this 9 unit apartment community situated in the city of Escondido. The unit mix is comprised of six 1BR/1BA units, two 2BR/1BA units, and one very spacious 2BR/2BA unit. The property features include 3 two car garages,1 single car garage, 8 carports, and several additional off-street parking spaces. The tenants have additional storage for use in each carport. The property includes a community patio with a BBQ, shared grass area, and an On-site laundry facility which produces additional monthly income. The current ownership has upgraded several unit interiors and renovated the exterior with new windows, paint, and landscape. Potential upside in rental income! Area Description More and more people are making Escondido their "City of Choice." As the heart of San Diego North, it is one of the few remaining communities where people of all income levels can enjoy the Southern California lifestyle. We offer attractive homes in a wide range of prices, two lakes, several parks, a sports center, golf courses, restaurants, wineries, shopping centers, comprehensive healthcare and the nearby San Diego Zoo Safari Park. In addition, the California Center for the Arts, Escondido, brings world class entertainment to the area along with Queen Califia's Magical Circle, a sculpture garden in Kit Carson Park donated by late internationally renowned artist Niki de Saint Phalle. page 4 of 10
E Washington Apartments Property Photos page 5 of 10
Location Map page 6 of 10
Aerial Map page 7 of 10
Unit Mix Report UNIT MIXES Units Type Approx. SqFt Avg. Rents Monthly Mkt Rents Monthly 6 1Br/1Ba 0 $1,067 $6,402 $1,200 $7,200 2 2Br/1Ba 0 $1,175 $2,350 $1,395 $2,790 1 2Br/2Ba 0 $1,350 $1,350 $1,495 $1,495 9 0 $10,102 $11,485 UNIT MIX UNIT MIX SQUARE FEET 1Br/1Ba 2Br/1Ba 2Br/2Ba 1Br/1Ba 2Br/1Ba 2Br/2Ba UNIT MIX INCOME UNIT MIX MARKET INCOME 1Br/1Ba 2Br/1Ba 2Br/2Ba 1Br/1Ba 2Br/1Ba 2Br/2Ba page 8 of 10
Pro Forma Summary UNIT MIX & ANNUAL SCHEDULED INCOME Type Units Actual Total Market Total 1Br/1Ba 6 $12,804 $76,824 $14,400 $86,400 2Br/1Ba 2 $14,100 $28,200 $16,740 $33,480 2Br/2Ba 1 $16,200 $16,200 $17,940 $17,940 TOTALS 9 $121,224 $137,820 INVESTMENT SUMMARY Price: $1,579,000 Year Built: 1975 Units: 9 Price/Unit: $175,444 RSF: 6,765 Price/RSF: $233.41 Lot Size: 18,731 sf Floors: 2 ANNUALIZED INCOME Actual Market Gross Potential Rent $121,224 $137,820 Less: Vacancy ($3,637) ($4,135) Misc. Income $6,276 $8,400 Effective Gross Income $123,863 $142,085 Less: Expenses ($49,361) ($49,362) Net Operating Income $74,502 $92,723 Debt Service ($58,951) ($58,951) Net Cash Flow after Debt Service $15,551 $33,772 Principal Reduction $18,121 $18,121 Total Return $33,672 $51,893 Parking Spaces: 1.33 Cap Rate: 4.72% Market Cap Rate: 5.87% GRM: 12.38 Market GRM: 10.8 FINANCING SUMMARY Loan Amount: $1,029,000 Down Payment: $550,000 Loan Type: Fixed Interest Rate: 4% Term: 30 years Monthly Payment: $4,913 DCR: 1.26 ANNUALIZED EXPENSES Actual Market Gas & Electric $3,120 $3,120 Water & Sewer $8,640 $8,640 Landscaping $1,800 $1,800 Trash Removal $2,088 $2,088 Misc $1,000 $1,000 Maintenance $6,060 $6,060 Management $6,182 $6,183 Insurance $2,628 $2,628 Taxes $17,843 $17,843 Total Expenses $49,361 $49,362 Expenses Per RSF $7.30 $7.30 Expenses Per Unit $5,485 $5,485 page 9 of 10
Demographics Population Characteristic 1 Mile 3 Mile 5 Mile AGES 0-4 2,896 10,474 13,163 AGES 5-9 3,367 12,161 15,418 AGES 10-14 2,965 10,803 13,787 AGES 15-19 2,703 10,142 13,091 AGES 20-24 2,712 10,264 13,261 AGES 25-29 2,725 10,350 13,261 AGES 30-34 2,750 10,100 12,841 AGES 35-39 2,787 9,948 12,602 AGES 40-44 2,689 9,845 12,645 AGES 45-49 2,482 9,743 12,901 AGES 50-54 2,046 8,976 12,346 AGES 55-59 1,611 7,927 11,446 AGES 60-64 1,163 6,448 9,868 AGES 65-69 785 4,924 7,937 AGES 70-74 490 3,561 6,022 AGES 75-79 334 2,609 4,486 AGES 80-84 234 1,881 3,202 AGES 85+ 630 3,541 5,585 Race Characteristic 1 Mile 3 Mile 5 Mile Non Hispanic White 16,777 82,200 119,932 Population Black 600 2,354 2,966 Population Am In/AK Nat 288 630 731 Household Income 1 Mile 3 Mile 5 Mile Median Household Income $39,646 $49,488 $55,832 < $10000 768 2,302 3,324 $10000-$14999 705 2,331 2,696 $15000-$19999 807 2,500 2,995 $20000-$24999 574 2,558 3,083 $25000-$29999 608 2,570 3,391 $30000-$34999 727 2,881 3,572 $35000-$39999 608 2,638 3,242 $40000-$44999 589 2,433 3,224 $45000-$49999 623 2,380 2,895 $50000-$60000 858 4,208 5,244 $60000-$74000 804 4,730 6,711 $75000-$99999 903 4,795 7,284 $100000-$124999 498 3,345 5,334 $125000-$149999 240 1,901 3,311 $150000-$199999 236 1,863 3,212 > $200000 64 1,078 2,662 Characteristic Housing 1 Mile 3 Mile 5 Mile Housing Units 9,832 46,171 64,902 Occupied Housing Units 9,168 43,667 61,435 Owner Occupied Housing Units 2,494 21,371 34,964 Renter Occupied Housing Units 6,674 22,296 26,471 Vacant Housing Units 664 2,504 3,467 page 10 of 10