Buy and Hold Opportunity in Dorchester MA

[Taylor Johnson]

Looking for private financing on a buy and hold project that we currently have under agreement. It is a three unit building located on 20 Corona Street. For this building, we are looking to raise $140K for a 35% equity position.

Here are the details of the building:

1. Building specs: each unit is 4 bed/1 bath with about ~1,400 sq feet of livable space (4,200 livable total). There is also off street tandem parking that can fit about 3 cars.

2. Building condition:

Unit 1: Condition of unit 1 is actually more or less rental ready, with just a few very minor upgrades needed to get a tenant in there. It is currently owner occupied and will be vacant.

Unit 2/3: These units will also be delivered vacant, and are in similar condition but need a bit more attention. They will both need cosmetic work, including putting in new kitchens, baths, flooring, carpentry improvements etc. They are both laid out well for rents, so it's really just a matter of getting the cosmetics on there.

Building systems/exterior: We will need to do some deck work to stabilize a couple of the exterior decks. We also plan to upgrade plumbing (put new furnaces in) as well as upgrade the electrical.

Strategy

The strategy on this is pretty clear cut. The building will be delivered vacant, so we plan on jumping into the work right after closing for units 2 and 3. Since we are not doing any major renovations (i.e no re-framing/breaking down walls), these renovations should not take very long (~3 months). We then stabilize the building with leased tenants at 2400/2500 per unit rent. We believe the work should total to about $150K.

Numbers and Returns

In terms of ARV for the building, we believe an upgraded building such as this with 4/1 units with parking will be worth conservatively about $940K, with some comps showing even more. If you are considering an equity position, with a 35% stake you can achieve an IRR of over 16% over a 3 year hold. Comps and our numbers can be sent via email if you are interested in this project.

Synergy

We bought 6 units earlier this summer very close by in Dorchester. We had a very similar situation and strategy there, and with the acquisition of this building, we will be looking to streamline into our management system.

Capital Raise

The $140K would be the entire equity capital we are looking to raise. For our debt, we will be looking to use the same structure as we received from our lender on our 6 unit deal in Dorchester earlier this summer, which was 80% LTV, I/O first year, 5.5% fixed rate for the first 5 years.

Please reach out to me directly if you have any questions or would like to discuss further. [email protected] 617-820-8964