Contact:    Andrew Shook e: andrew@brightlightcre.com  p: 919.659.5CRE (5273)

Subject Property

126 Door multifamily Value-Add

2 Cross Collateralized Properties

2700 Eastway Dr
Charlotte NC 28205

1635 Gleen St
Charlotte NC 28205


Property Type: Multifamily

Transaction:  Value-Add

Occupancy:  95% Physical

Property Class:  Class B As Stabilized

Metro Area: Charlotte-Concord-Gastonia, NC-SC Metropolitan Statistical Area

MSA Rank: Charlotte NC - #22

Population:  ~2.4 million | +9.40%
 

 
 

Business plan

acquisition -> rehab -> Long Term Hold

Expected Hold Period: 5 - 10 years

Overview

  • $1,019,000 current EGI
  • 110,000 total square feet
  • 126 doors total
    • 2700 Eastway - 96 doors
    • 1635 Gleen - 30 doors
  • Currently owned, operated and accounted for as a single property
  • Original construction in mid 1970s
  • The current owner built the property in the seventies and has operated it for its entire life. He is elderly now and the property is not being run efficiently. The on-site property manager has been in place for 30+ years. 

Improvement Timeline

  • Immediate:
    • Replace current management and maintenance personnel
    • Replace roof
    • Sub-Meter electricity
    • Cable TV cost passthrough
    • New property management company: Sperry Van Ness
  • All units currently on month-to-month leases
  • Target stabilized rents of $1.10 psf - $1.20 psf
    • Q4 2016 &Q1 2017 lease renewals are supporting $1.19 psf

 

Sponsor

Olson Capital Investments

Olson Capital Investments is a family business.

  • Amariah Olson
  • Larry Olson
  • Obin Olson

 

Sponsor Experience

  • Owns and operates ~104 properties
  • 114 units under management
  • Total value of holdings - $9.4 million

Sponsor will use loan proceeds to acquire, improve the subject property.

 

Supporting Documentation AVAILABLE:

  • Rent Roll
  • Operating Statements
  • Schedule of Real Estate Owned

 

Loan Structure

Requested Senior Loan Amount

Initial Proceeds 80% $5,040,000
CapEx 0% $0
Total Senior Loan
$5,040,000



Preferred Equity
$0
Sponsor Equity 20% $1,260,000



Property Value
$8,049,778
LTV
63%
Cap Rate
6.75%



Stabilized NOI
$574,860
Debt Yield
11.41%



Recourse
Yes






IO Period
Yes
Term
3 yrs or 5 yrs
Rate Structure
Floating Rate
Amortization
NA
Release Pricing
NA

Operating Summary





No. of Units NRSF




126 110,000


Amount
$ / Door $ PSF
Gross Potential Rent
$1,109,000
$733 $0.84
Vacancy Expense
$90,000 8% $60
Loss to Lease
$0 0% $0
Effective Gross Income - Rent
$1,019,000
$674 $0.77
Other Income





Parking $0



Storage $0



Signage $0



Misc $30,453


Total Other Income
$30,453 3%







Effective Gross Income - Total
$1,049,453
$694 $0.80






Expenses




Mgt Fee
$71,330 7% $566
G&A
$10,000 1% $79
Insurance
$32,648 3% $259
Labor
$50,000 5% $397
Repairs & Maint.
$100,000 10% $794
Taxes
$60,615 6% $481
Utilities
$150,000 14% $1,190
Total Expenses
$474,593 45% $3,767 $0.36






Net Operating Income
$574,860 55% $4,562 $5.23






Capital Reserves
$31,500 3% $250
Net Cash Flow
$543,360 52% $4,312 $4.94













Cap Rate: 6.50% 6.75% 7.00%
Stabilized Metrics




Valuation on NCF
$8,359,385 $8,049,778 $7,762,286
Valuation per Door
$66,344 $63,887 $61,605
Valuation PSF
$76 $73 $71






LTV – Senior loan at 80% PP
71% 74% 76%

Sheet 3: Sources and Uses

Sources


Initial Loan Proceeds

$5,040,000
Funded Closing Costs

$47,200
CapEx Future Funding

$0
Pref Equity

$0
Sponsor Equity

$1,260,000




Total Sources

$6,347,200




Uses


Purchase Price

$6,300,000
CapEx

$0
Cash Out

$0
Equity - Cash

$0
Equity - Collateral Value

$0




3rd Party Reports



Appraisal
$4,000

PCR
$1,500

Environmental
$1,500
3rd Party Report Total

$7,000




Lender Fees



Origination Fee 0.00% $0

U/W Fee 0.15% $7,500

Agency Fee 0.00% $0

Lender Legal 0.15% $7,500

Other 0.00% $0
Lender Fee Total
0.30% $15,000




Borrower Fees



RE Commission 0.00% $0

Mtg Banking 0.50% $25,200

Acquisition Fee 0.00% $0

Development Fee 0.00% $0

Other 0.00% $0


0.50% $25,200




Miscellaneous

$0




Total Uses

$6,347,200