All Forum Posts by: Robert Diaz

I'm looking to confirm some vacancy rate numbers for office buildings, retail, and industrial buildings in the Sarasota-bradenton-punta gorda combined statistical area. 

@J Scott thank you for that good feedback. We are almost exactly at what your range is. I'm glad to see that are assumptions are good. Thanks again.

@Greg Kasmer thank you for the feedback. I agree with your assumption. I'm trying to see the trend for an average annual CoC return. Assuming that most syndicators will want to return capital (sell/refi) by year 5. Due to renovation work or under-market rents at acquisition, the CoC will be lower in the first couple of years. But, the average annual CoC return will aggregate the return for each year. I think you're numbers are fairly accurate. Thank you.

I'd like to see what everyone sees for current CoC returns on syndicated deals. I'd like to understand current trends with this metric. Especially the average expected CoC returns for an investor in a multifamily property. The focus is on class C or low B-type multifamily properties under 100 units throughout the Midwest and the South. Thank you. I think this feedback will be helpful for everyone. - Robert

I found the best way to find the market cap rate is to contact several brokers/agents in that area. I recommend being specific as to the area, the building type, age, and condition. Keep in mind, a duplex is a residential and an appraiser/lender will use sales comps. If you can't find anything close to your property you will have to expand your radius - this is what appraisers do. 

The Midtown Apartments property is a 7-unit apartment complex located in the South Omaha market, 6 miles from Downtown, in the stable to a growing market of Midtown. The property has been self-managed for almost 10 years, that have created quick-turnaround inefficiencies for the new owner through professional management. The result is an asset that offers tremendous potential to purchase substantially below-market, do light renovations, bill back utilities, increase rents, and re-position the property in a thriving marketplace. The result can create an asset that provides solid cash flow, substantial growth in equity, and considerable tax benefits. The property will be purchased for $355,500 or $59,250 per door, an under-market value-buy in the South Omaha area.

The Property Value is based on two factors: 1) Recent comparable apartments sold in the immediate area and 2) current capitalization rates for apartments sold within the last 12 months. Based on comparable apartment sales, the “as-is” value of the project is conservatively between $420,750 and $514,284 upon acquisition. And once rehabbed and repositioned, the conservative value would be between $527,500 to $585,000

The property has a Walkscore of 61. There are about 108 restaurants, bars, and coffee shops in the area. The property is located across the street from a large park and recreation center. Omaha is currently growing at a rate of 1.5% annually and its population has increased 4.76% since the last census. The unemployment rate in Omaha (68105) is 3.4% (US avg

is 6%. The job market has increased by 1.9% over the last year. Future job growth over the next ten years is predicted to be 30.2%.

Attractive unit mix of one, two, and studio bedroom units. Current rents are $70-$165 below market rents based on a current market rent survey, giving potential to increase net operating income significantly. There is also the current ability to add a minimum of $55 in RUBS to increase profits and reduce expenses.

With high barriers of entry for new construction in the South Omaha area along with the high demand for affordable housing, and one of the nation’s strongest job market, the MidTown Apts property is poised for ultimate market success. Additionally, occupancy has been running at nearly 100% for the last 12 months. With the opportunity to acquire this property at such an excellent price per door at this time, the profit potential is exceptionally strong in the short and long term.

Exit Strategy: Hold as cash-flowing apartment rentals and sell when market cycle upturns – approximately 5 years.

The Midtown Apts is in a unique and very strong cash flow position with the ability to raise rents $70-$165 per unit plus an additional $55 per unit per month in RUBs while still maintaining a competitive advantage over local competition. At the time of purchase, the capitalization rate based on actual property financials is 7.95% with a property value of $471,235. After completing light upgrades, increasing rent, and adding a RUB program, the 5 year projected price based on NOI and 6% market cap rate is $681,030. That would be a potential profit of $325,530, not including fees and commissions.

I invite your feedback and interest regarding this brief summary of the plan to purchase the Midtown Apts. Call me or email to request the property’s financials, address, and additional details.