Quote from @V.G Jason:
The 4.19% sounds great, but did you overpay to achieve that? Also, 200k @ 14% quarterly for 5 years is devastating. I get looks like this, and when I see deals like this I want to charge the 14% but realize I likely won't see it.
The cost cuttings reductions of water usage(particularly in AZ) and central fire arms don't seem like real value plays.
This looks like a Brandon Turner play, for sure, but I say that unfortunately. His way of looking at this is all wrong, and has been for 2023 forward. I wish you the best of luck, but this looks like you're going to bite off more than you can chew. You mention you have a great W2, that may be your savior.
I should have been more clear in my post but was limited in characters for some.
The property is in Sioux Falls, SD. Had been being watered every day. Even during storms. The water reduction and alarm savings are secondary to the forced increase in rents.
14% is APR, not quarterly, I expect to refinance at three years, not the full five.
I ran my underwriting by multiple associates, including full time Asset Managers with over 14MM AUM and experienced RE syndicators. They had actually run a nearly identical offer by the seller, but seller wasn't ready at that time. I didn't provide gross rents or Cap Rate, so I'm not certain how you're coming to your conclusions.
I view "The Stack" as more of a mindset framework than an operational plan, so I'm not certain why it wouldn't work at the moment.
I appreciate the feedback. Always growing.
