Massive Deal On McDonough St!!
We're looking to raise up to $750,000 to complete the purchase+upgrades at 887 S McDonough St, Montgomery, AL 36104.
Purchase price: $650,000
Purchase Date: 5/16/22
Reno/Upgrade Budget: $100,000
Existing Net Cashflow: $64,137
Current Annual Rent: $101,852
Total Building SQFT: 15,354sqft
The attached OM has not been updated since the leases were updated with higher rents per unit.
Post acquisition, we plan to not only lease out the remaining vacant space for a total of $2,740/mo adding $32,880/year in income. We already have that company ready to sign the lease and move in immediately after the purchase date. From there, we plan to build 6 storage units that will be 10'x20' each. These will be rented at the market rate of $325/mo each bringing in an additional $1,950/mo or $23,400/year. Two of these units already have tenants ready to sign year long leases as soon as the build-out is completed.
We're expecting for this acquisition to be a 3-5 year hold before selling. Lease increases for the current tenants in the main building are expected after the first year of ownership. Once this property is fully leased and stabilized, we will be looking at a total annual rent of $158,132 and a net operating income of roughly $115,000/year. When it comes time to sell, if we sell at a very conservative capitalization rate of 10%, we will be looking at a sale price of $1,150,000.
This leaves us with $400,000 of immediate equity after the 6-8 month stabilization period after the purchase.
Interest Payments – We are willing to offer a 12% return to an investor over a 12 month period in interest only payments. This will yield $7,500/mo or $90,000/year to an investor for helping us close the deal and we will use bank financing for the exit within the 12 month period.
Equity Position – Due to the need for a fast closing, we are willing to give up a 50% equity position to someone to come in and cover the deal and partner with us. This will leave you with receiving 50% of all of the monthly net cashflow as well as half of the expected $400,000 in profit at the end of the deal. We suggest that you use your LLC as you will need to sign for 50% ownership on all of the closing documents when we close.
If you're interested, we will provide you with all copies of the warranties, deeds, lease agreements, blueprints, security system manuals, and surveys on the property.
A proof of funds verification letter will be required up front to ensure the safety of all parties and ensure a smooth closing.