62 Properties Priced at $19k each for quick sale in St Louis, MO. $500k price drop due to buyer falling through day of closing.
Must have the ability to close quickly or have a buyer who can close quickly.
Purchase Price $1,178,000
Repairs $501k
Monthly Gross $48k
Estimated ARV $3,000,000
17% Cash on Cash Return after expenses and potential vacancy, maintenance, repairs.
Net Yearly Cash flow $334k
This started out as a package of 67 but management didn't like 5 properties. I have attached a link to the photos but five of the properties included in the photos are no longer part of the package bc of either the condition or the area. Also included in the link are the estimates, address list, rental proforma, management info, etc.
https://1drv.ms/f/s!An_-7RiLhU5hpTocPCF0HujL_aoT
The majority of the properties in this package are in the zip code of 63137. This is where we focus our efforts right now because of the market potential. These are C class properties and the portfolio is a value add opportunity with massive rental returns.
We like this area for a few reasons:
-Most of the properties were constructed after 1950, they are typically single story, similar floor plans, similar sq. ft, simple rehabs.
-Very close proximity to the downtown and interstate.
-The city department is really on top of things. The area looks nice, the parks look nice. Whenever I take out of area investors on tours of St Louis they are always impressed by the price point and quality of the area.
*The school district had lost its accreditation several years ago. They have since hired new administrators and restructured the district. The test scores are now higher than neighboring districts and they have their initial approval. This is going to really change the housing market in that area. This is the main reason we focus on this area right now.
*Section 8 in St Louis county is one of the best section 8 programs I have encountered. They pay more than market rate in a lot of areas. For a 3 bed in 63137 they are paying $800+.
This portfolio was a bank owned portfolio and they did not place new tenants in the properties after foreclosure. Amoso Property Management has viewed each property and gathered repair estimates on each. A lot of properties need new HVAC so the package will be freshly rehabbed with new systems. This will make the properties easier to lease, higher quality tenants, less maintenance calls. Amoso is a full service management company and handle all repairs, tenant placement, monthly reporting. They went through and gave Section 8 rent projections on each property to come up with the proforma projections. They estimate around a 6 month construction timeframe for 100% completion but would complete the smaller projects first so that they would cash flow. These are small projects and can be completed quickly.
The St Louis market is one of the top cash flow markets in the country. The price to rent ratio along with the fantastic market outlook makes it one of the most attractive markets to invest in cash flow properties. The prices are still on the low end and because of the extremely high returns, investor activity in St Louis is extremely busy. Historically in markets with low purchase prices and high rents there is appreciation.
