Breakdown of First Deal done with an Investor! RBTR in TN

[Alexander M Dant]

Hello BP community! 

I(with my business partner Fernando) just completed and am currently leasing up my first deal that was done with an investor. Currently we are doing rent by the room houses in Clarksville, TN, which is a growing market an hour away from Nashville. 

I've posted the breakdown of the last deal that we did and it seemed to get a positive reaction from the forums so I figured I'd put this one out as well to show how we structured it. If you want to see the complete breakdown of our last deal feel free to check out this link; https://www.biggerpockets.com/... 

Below I've copied and pasted from the document we brought our investor to show him the deal. 

The numbers that you see on this one are purposely conservatively very low to what we are actually leasing it out as. We follow the motto that I'm sure you've all heard before, "under promise, over deliver".

We are actually leasing it out as;
-$645/bedroom x 3

-$745/master bedroom plus an additional flat 

     -plus $45 utility fee per room

It was a very nerve racking and big step for us and I hope that this will help some other's out there! The only thing that this does not cover is how refinance/selling will work which if you are curious of how we structured that, feel free to reach out. 

Redacted Address, Clarksville, TN 37040

4 Bed, 2 Bath: 1420 Sqr/Ft

Estimated Completion by March 15, 2022

Purchase Price: $244,900

Total Upfront Capital Needed: $56,980.00

Investment and Return

We are looking for 70% of upfront costs of the project($39,886.00) in return for 12% Cash on Cash Return($4,786.32) annually.

The Property and Loan will be held by KDP Real Estate, LLC.

You can receive quarterly payments of $1,196.58 or monthly payments of $398.86.00.

The Deal

Cap Rate - 7.63%

• NOI - $18,681.24
• Acquisition Price- $244,900.00

Cash Flow- $677.00

• Monthly Income - $2,420.00
• Monthly Expenses - $1,743.00

The Loan- 80% LTV

• Down Payment of 20% - $48,980.00
• Loan Amount of 80% - $195.920.00

Reserves

• Estimated 1 month of vacancy per unit per year
• 8% of Monthly income will be kept for reserves by KDP Real Estate
• $7,000.00 of Upfront cost will be kept for CapEx and Reserves by KDP Real Estate
• All other costs pertaining to 318 Glenn St. will be covered by KDP Real Estate

Debt Service Coverage Ratio- 1.77

• NOI - $18,681.00
• Annual P&I Payback - $10,557.24

Upfront Cost- $56,980.00

• 20% Down Payment - $48,980.00
• Reserves - $7,000.00
• Title Closing Costs - $1,000.00

    **We had the seller covering closing and had the $1,000 as attorney fee's for writing up our documents for the partnership**

Portfolio

Redacted Address

Purchase Price - $230,000.00

Monthly Income - $2,450.00

Monthly Expenses - $1,518.00

MonthlyCash Flow - $931.00

Redacted Address

Purchase Price - $192,500.00

Monthly Income - $2,340.00

Monthly Expenses - $1,388.00

MonthlyCash Flow - $951.00