ABSOLUTE AUCTION Maple Grove Mobile Home Park For more information contact: Commercial Broker Associate ccraig@ccim.net Jim Halfhill, Sr. Halfhill Auction Group Principal Auctioneer +18593385764 halfhill@rhr.com Mobile Home Park is approved for 100 pads. Single Family property that adjoins the park on the south side is also included as a package. Total land area is 10.64 +/- acres. Zoned B-3, Highway Service Business. Park has a private sewer plant that meets all State regulations. Phone: (859) 245-1179 Fax: (859) 245-0512 3609 Walden Drive Lexington, KY 40517 http://www.milestoneky.com
Table of Contents Property Description... 3 Real Estate Investment Details... 4 Property Photos... 5 Cash Flow Analysis... 6 Financial Indicators... 7 Loan Analysis... 8 Cash In Cash Out... 9 Property Resale Analysis... 11 Investment Return Analysis... 12 Maple Grove P&L 1999-2015... 13 MG Rent Roll December 2015... 18
Property Description Maple Grove Mobile Home Park This offering consists of two parcels - Maple Grove MHP () and a single-family residence, vacant and uninhabitable (4110 Georgetown Road). Both must be purchased as a package. The property does not currently cash flow due to no on-site management and absentee ownership but has been very profitable in past years as evidenced by the profit/loss statements included at the end of this report. Zoning is B-3, Highway Service Business, which is the most desirable commercial zoning available in Fayette County and permits a wide variety of potential uses. The property is not currently served by public sewer but the park has its own private sewer plant. page 3 of 19
Real Estate Investment Details Analysis Analysis Date October 2016 Property Property Property Address Maple Grove Mobile Home Park Purchase Information Property Type MultiFamily Purchase Price $650,000 Fair Market Value $650,000 Units 1 Total Rentable Sq. Ft. 0 Resale Valuation 2.0% (annual appreciation) Resale Expenses 6.5% Financial Information Down Payment $162,500 Closing Costs $10,000 LT Capital Gain 20.00% Federal Tax Rate 28.0% State Tax Rate 6.0% Discount Rate 5.00% Loans Type Debt Term Amortization Rate Payment LO Costs Fixed $487,500 25 years 25 years 5.0% $2,850 Income & Expenses Gross Operating Income $104,880 Monthly GOI $8,740 Total Annual Expenses ($145,668) Monthly Expenses ($12,139) Contact Information ccraig@ccim.net 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 4 of 19
Property Photos Maple Grove Mobile Home Park MHP office building, includes one rear apartment Single-family residence at 4110 Georgetown Road page 5 of 19
Cash Flow Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 GROSS SCHEDULED INCOME $276,000 $278,760 $281,548 $284,363 $287,207 Turnover Vacancy ($171,120) ($172,831) ($174,560) ($176,305) ($178,068) Total Operating Expenses ($145,668) ($147,125) ($148,596) ($150,082) ($151,583) NET OPERATING INCOME ($40,788) ($41,196) ($41,608) ($42,024) ($42,444) Loan Payment ($34,199) ($34,199) ($34,199) ($34,199) ($34,199) NET CASH FLOW (b/t) ($74,987) ($75,394) ($75,806) ($76,222) ($76,643) Cash On Cash Return b/t -43.47% -43.71% -43.95% -44.19% -44.43% NET OPERATING INCOME ($40,788) ($41,196) ($41,608) ($42,024) ($42,444) Depreciation ($11,497) ($11,999) ($11,999) ($11,999) ($11,505) Loan Interest ($24,147) ($23,632) ($23,092) ($22,524) ($21,926) TAXABLE INCOME (LOSS) ($76,432) ($76,827) ($76,699) ($76,546) ($75,875) Income Taxes $25,987 $26,121 $26,077 $26,026 $25,798 CASH FLOW (a/t) ($49,000) ($49,273) ($49,729) ($50,197) ($50,845) Cash On Cash Return a/t -28.41% -28.56% -28.83% -29.10% -29.48% Footnotes: b/t = before taxes;a/t = after taxes page 6 of 19
Financial Indicators Description Year 1 Year 2 Year 3 Year 4 Year 5 Gross Rent Multiplier 2.40 2.43 2.45 2.47 2.50 Capitalization Rate -6.28% -6.34% -6.40% -6.47% -6.53% Cash On Cash Return b/t -43.47% -43.71% -43.95% -44.19% -44.43% Cash On Cash Return a/t -28.41% -28.56% -28.83% -29.10% -29.48% Debt Coverage Ratio -1.19-1.20-1.22-1.23-1.24 Gross Income per Sq. Ft. $0.00 $0.00 $0.00 $0.00 $0.00 Expenses per Sq. Ft. $0.00 $0.00 $0.00 $0.00 $0.00 Net Income Multiplier -16.25-16.42-16.58-16.74-16.91 Operating Expense Ratio 138.89% 138.89% 138.89% 138.89% 138.89% Loan To Value Ratio 72.01% 69.04% 66.07% 63.12% 60.17% Footnotes: b/t = before taxes; a/t = after taxes page 7 of 19
Loan Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 LOAN 1 Debt Service Analysis Principal Payments $10,052 $10,566 $11,107 $11,675 $12,272 Interest Payments $24,147 $23,632 $23,092 $22,524 $21,926 Total Debt Service $34,199 $34,199 $34,199 $34,199 $34,199 Principal Balance Analysis Beginning Principal Balance $487,500 $477,448 $466,882 $455,775 $444,101 Principal Reductions $10,052 $10,566 $11,107 $11,675 $12,272 Ending Principal Balance $477,448 $466,882 $455,775 $444,101 $431,828 page 8 of 19
Cash In Cash Out Description Year 1 Year 2 Year 3 Year 4 Year 5 Rental Income $276,000 $278,760 $281,548 $284,363 $287,207 GROSS SCHEDULED INCOME $276,000 $278,760 $281,548 $284,363 $287,207 Turnover Vacancy ($171,120) ($172,831) ($174,560) ($176,305) ($178,068) GROSS OPERATING INCOME $104,880 $105,929 $106,988 $108,058 $109,139 Expenses Speed Analysis Expenses ($145,668) ($147,125) ($148,596) ($150,082) ($151,583) TOTAL OPERATING EXPENSES ($145,668) ($147,125) ($148,596) ($150,082) ($151,583) NET OPERATING INCOME ($40,788) ($41,196) ($41,608) ($42,024) ($42,444) Debt Service Loan Interest ($24,147) ($23,632) ($23,092) ($22,524) ($21,926) Principal Payments ($10,052) ($10,566) ($11,107) ($11,675) ($12,272) NET CASH FLOW (b/t) ($74,987) ($75,394) ($75,806) ($76,222) ($76,643) Cash Flow IRR N/A N/A N/A N/A N/A Projected Property Value $663,000 $676,260 $689,785 $703,581 $717,653 Resale Expenses ($43,095) ($43,957) ($44,836) ($45,733) ($46,647) Footnotes: Cash Flow IRR based upon net cash flow and principal payments page 9 of 19
Cash In Cash Out Description Year 1 Year 2 Year 3 Year 4 Year 5 Proceeds b/f Debt Payoff $619,905 $632,303 $644,949 $657,848 $671,005 Loan Principal Balance ($477,448) ($466,882) ($455,775) ($444,101) ($431,828) Net Proceeds From Sale $142,457 $165,421 $189,174 $213,748 $239,177 Net Resale IRR N/A N/A N/A N/A N/A Footnotes: Cash Flow IRR based upon net cash flow and principal payments page 10 of 19
Property Resale Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Projected Property Value $663,000 $676,260 $689,785 $703,581 $717,653 Resale Expenses ($43,095) ($43,957) ($44,836) ($45,733) ($46,647) Proceeds b/f Debt Payoff $619,905 $632,303 $644,949 $657,848 $671,005 Basis at Acquisition $660,000 $660,000 $660,000 $660,000 $660,000 Depreciation ($11,497) ($23,496) ($35,495) ($47,494) ($58,998) Adjusted Tax Basis $648,503 $636,504 $624,505 $612,506 $601,002 Resale Tax Gain (Loss) ($28,598) ($4,201) $20,444 $45,342 $70,004 Resale Tax Benefit (Cost) $0 $0 ($5,111) ($11,335) ($16,951) Loan Principal Balance ($477,448) ($466,882) ($455,775) ($444,101) ($431,828) Net Resale Proceeds $142,457 $165,421 $184,063 $202,412 $222,226 Footnotes: b/f = before page 11 of 19
Investment Return Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Cash Flow - To Date ($49,000) ($98,273) ($148,002) ($198,198) ($249,043) Net Resale Proceeds $142,457 $165,421 $184,063 $202,412 $222,226 Invested Capital ($172,500) ($172,500) ($172,500) ($172,500) ($172,500) Net Return on Investment ($79,043) ($105,352) ($136,439) ($168,286) ($199,317) Internal Rate of Return N/A N/A N/A N/A N/A Modified IRR -35.00% -20.82% -15.66% -12.68% -10.55% NPV (cash flow + reversion) ($108,243) ($162,259) ($214,370) ($264,643) ($313,144) PV (NOI + reversion) $551,540 $497,306 $444,977 $394,486 $345,767 Footnotes: a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating Income Reversion = Amount received from the resale; Net Return on Investment = Cash Flow (a/t To Date) + Net Proceeds from Resale - Invested Capital. page 12 of 19