300 unit multifamily for sale - Commercial Real Estate Professionals ...

Atlanta, GA Apartment complex Executive Summary
Arain Property Group
Tel: 918-282-2324 Fax: 918-398-6615
Arainproperties@cox.netThe Apartments are 341units community walkup garden style multifamily Class ?C? property built in the 1970/1972 located in Atlanta, GA.
Property is situated on approximately 20 acres consisting of 43 two story garden style apartment buildings over poured-in- place concrete slabs with pitched roofs and concrete drives and parking. The property?s full scale amenity package includes; Swimming pool, fitness center, clubhouse/leasing office, playground, laundry facility, sports court, and picnic area with grills. Exterior construction is brick and vinyl siding. The rentable square footage is approximately 343,000 square feet making the average unit size 1,000 square feet with walk in closets and private patio / balcony, ?property has individual HVAC and is being run as ?all bills paid;? however it is sub metered for the option of tenant responsibility.
The property has an outstanding mix of units including one, two and three bedroom floor plans with an average rent per unit of $699 per month. Due to no ownership or management property was ordered to close and is vacant now; the occupancy for the area in the Third quarter of 2011 was about 89% to 95%. The property was sold in 2006 for $13million; the property had an absentee out of state owner. Due to lack of funds deferred maintenance and repairs were not completed after purchase of the property that caused court litigation between borrower and lender, Borrower basically ignored and abandoned the property to further deterioration of the property.
The business plan would be as follows:
The property will require approximately $17K per unit in full renovations to make them ready to be leased. ?Once renovated and a concerted marketing and leasing effort the property should represent itself in the Atlanta rental market as well as the ?possibility to lease the property to higher income tenants thus bringing the property to 95% or higher occupancy within18 months.
Once leased and stabilized to approximately 95% or higher occupancy (which is the average for Atlanta Market for properties of this type) also taking into consideration 5% non collectable rents means at 90% gross collectable rental income the property should produce an NOI of over $1 million per year after calculated operating expenses of approximately $4,800 per unit (including a $250 per unit capital reserve allowance.
This property was purchased in 2006 for more than $13 million. The property?s as is appraising value is $14k per unit $ 4.77 million; Property has an existing mortgage note over $13 million. ?Once renovated and leased to 95% occupancy and stabilized the asset value will be at $40K per unit $13.64 million. Property?s purchase price is $ 2.55 million with renovation costs of approximately $5.8 million as well as closing costs and related expenses around $450,000.00. ?The total funding needed is $8.9 million. This is 65% ?ARV? (after repair Value). Upon stabilization property will have approximately $ 4.59 million added equity.
Upon renovation and stabilization assuming the property is refinanced and has a first mortgage of $8.9 million at 5% on a 30 year amortization the NOI will be $1,008,000 debit service will be $573,132 and the cash flow after debt service will be around $506,884 annually plus a mortgage principal pay down of approximately $132,000 in year one.
Seeking funding at 65% ?ARV? OR ?JV/ investor equity partner
I am seeking funding at 65% ?ARV? (after repair value) or JV / equity partnership type funding where JV/ equity partner, Upon property stabilization within 24 months property can be refinanced and cash out investor or be maintained as a portfolio cash flowing asset or sold in a 1031 exchange. Please see following property Performa;
341 unit apartment complex purchase & renovation Performa
1. Purchase price? ? ? ? ? $2,550,000
2. Renovation and management cost $17,000 per unit ? ? ? ? ?$5,797,000
3. Closing cost? ? ? ? ? $150,000
4. Holding cost ? ? ? ? ?$400,000
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Purchase price, renovations and closing cost ? ? ? ? ? ? ? ? ? ? ?$8,897,000
ARV (after repair & stabilization value) $ 40K per unit ? ? ? ? ? $13,640,000
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Gross equity ? ? ? ? ? ? ? ? ? ? ?$4, 743,000
Refinance cost? ? ? ? ? ?? ? ? ? ? $150,000
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Net equity? ? ? ? ? $4,593,000
?1st Year Annual rental income
Annual gross rent, Average rent $699 per month? ? ? ? ? $2,860,308
Annual vacancy rate 65%? ? ? ? ?? ? ? ? - $1,859,200
Other income? ? ? ? ? $28,644
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Annual gross rental income? ? ? ? ? ?$1,029,752
Annual operating expenses for 200 units ? ? ? ? ? ? ? ? ? ? ? ? ? ?- $960,000
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Annual rental income (NOI)? ? ? ? ? $69,752
Annual debt service paid from holding account? ? ? ? ? ? ? ? ? ? $00.00
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1st year Annual cash flow? ? ? ? ? ? ? ? ? ? ?$69,752
?2nd year annual rental income
Annual Gross rent average rent $699 per month? ? ? ? ? $2,860,308
Annual vacancy rate 20%? ? ? ? -$572,062
Other income? ? ? ? ? $61,440
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Annual gross rental income? ? ? ? ? $2,349,686
Annual operating expenses $4,800 per unit? ? ? ? ?-$1,636,800
Annual rental income (NOI)? ? ? ? ? $712,886
Annual debit service? ? ? ? -$624,000
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2nd year annual cash flow? ? ? ? ? $88,886
?3rd year annual rental income 5% rent increase
Annual Gross rent average rent $734 per month? ? ? ? ?$3,003,528
Annual vacancy rate 5%? ? ? ? -$150,176
Annual rent loss 5% (non collectable rents)? ? ? ? ?-$150,176
Other income ? ? ? ? ? $81,840
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Annual gross rental income? ? ? ? ? $2,785,016
Annual operating expenses $5,000 per unit? ? ? ? ?-$1,705,000
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Annual rental income (NOI)? ? ? ? ? $1, 080,016
Annual debit service $8.9M @5% 30 year amortization ? ? ?-$573,132
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3rd year annual cash flow? ? ? ? ? ?? ? ? ? ?$506,884
4th year annual cash flow? ? ? ? ? ? ? ? ? ? $506,884
5th year annual cash flow 5% rent increase? ? ? ? ? ? ? ? ? ? $532,228
Comments: I am seeking funding at 65% ?ARV? (after repair value) after repairs at the end of 24 months property is refinanced with permanent.

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