Income property showcase august 2012

August 2012

Income Property Showcase

If you have interest in acquiring a property like the one presented here, please send an email to

[email protected]

and we’ll send you access to the due diligence information for that property.

mailto:[email protected]


TODAY’S AGENDAEvaluate propertyEvaluate markets

Take notesSolicit feedback through polls

Acquisition follow up procedureExit Survey

DisclaimersInformation may not be accurate

High reliance on 3rd parties for infoAll forecasts are inherently inaccurate

DO YOUR OWN DUE DILIGENCE before making an investment decision

Real Estate Profit CentersCash throw off (aka cashflow)Tax savings from depreciation

Equity growth from loan amortizationEquity growth from price appreciation

Forced Equity from change of use /development

All numbers in this presentation show annualized profits solely using Cash Throw Off. Your returns could be potentially much higher when factoring all of the ways you can make money in real estate.

Atlanta, GeorgiaAtlanta is the primary transportation hub of the Southeastern United States

The Atlanta Metro is the 9th largest metro area in the nation with over 5.3 million residentsIts economy ranks 15th among world cities and 6th in the nation

Clydesdale - Atlanta

Top Economic Drivers in Atlanta, GA1.Logistics and Transportation

Norfolk Southern and CSX railroad companies Hartsfield-Jackson Atlanta International Airport Delta Airlines UPS

2.Media Operations Cable News Network Turner Broadcasting System Cox Enterprises

3.Government Administration State capital functions Federal judiciary court systems Atlanta Police Deparment

4.Higher Education More than 30 colleges and universities located in Atlanta Georgia Institute of Technology / Georgia State University / Clark Atlanta University

5.Other Coca-Cola The Home Depot AT&T Mobility


Top Local Employers

Norfolk Southern RailroadsCSX Railroads

Hartsfield-Jackson Atlanta Intl AirportUPS

Cable News NetworkTurner Broadcast Systems

COX EnterprisesCoca Cola

Home DepotAT&T

Georgia Institute of TechnologyGeorgia State University


“Bread and butter”Atlanta, Georgia

Single family home Built in ~2002 3 bed / 2 bath 1,118 Sq Ft

Property Information


Purchase Price: $70,000

Gross Rent: $850

Vacancy -$75

Management -$77

Property Taxes -$85

Insurance -$50

Maintenance -$45

Net Operating Income $518

CAP Rate 8.9%

Financial Information


Purchase Price $70000

Down Payment 20%

Down Payment $14000

Loan $56000

Closing Costs $5,000

Total Cash Invested $19,000Interest Rate 4.5%

Loan Term 30 years

Monthly Payment -$284

NOI $605

Cashflow $321

Cash Throw Off 20.3%

Financing Information


Mableton, GA is a part of the 5 county Atlanta Metropolitan Area.

Location Information


How can I make money with this property ?

• Rental income: creates monthly spendable cashflow

• High leverage: 80% LTV at historically low fixed rates

• Loan Amortization: tenant’s pay down mortgage

• Tax Benefits: depreciation over 27.5 years

• Resell to owner occupant when market strengthens

• Potential Rent Increases from housing shortage:

• population growth + restricted land supply + lack of new construction


Kansas City, MO29th largest metro in the US

In 2010 Forbes.com ranked Kansas City as the third most dangerous city in the country2010, Money Magazine rated Overland Park, Kansas, the 7th best city to live in the United States

Kansas City, MO

http://en.wikipedia.org/wiki/Overland_Park,_Kansas

http://en.wikipedia.org/wiki/Overland_Park,_Kansas

Over 2 million people live in the metro


Kansas City, MO

Top Economic Drivers in Kansas City, MO1. US Federal Government

Over 146 federal agencies make it the largest employer in the metro IRS has 4,000 employees Federal Reserve Bank GSA has 800 employees Social Security Administration employs 1,700

2.Company Headquarters Sprint Nextel - Fortune 500 H&R Block - Fortune 500 AMC Theaters - Fortune 1000 Applebees - Fortune 1000 Garmin Internation - Fortune 1000 Russell Stover’s Candies - Fortune 1000

3.Agriculture Dairy Farmers of America Kansas City Board of Trade (principal commodity exchange for wheat)

4.Manufacturing Ford and General Motors assembly plant Smith Electric Vehicles Honeywell nuclear weapons manufacturing Marion Laboratories is one of nations largest drug manufacturers Kansas City, MO

Bite Sized RentalKansas City, MO

Currently being rehabbed

3 bed / 1 bath each 1,197 Sq Ft 1912


Kansas City, MO

Purchase Price: $39000

Gross Rent: $650

7% Vacancy -$46

10% Management -$60

Property Taxes -$24

Insurance -$42

Maintenance -$30

Replacement -$50


CAP Rate 12.3%


Kansas City, MO


Down Payment 35%

Down Payment $13650

Loan $25350



Loan Term 30 years

Monthly Payment -$160.23

NOI $399

Cashflow $238.77



Non-Recourse IRA Loan

Kansas City, MO



• Non-recourse IRA loans / commercial blanket loans available



• Resell to owner occupant with seller financing

Kansas City, MO

Tulsa, OK2nd largest city in Oklahoma.

Tulsa County is the most densely populated county in OK.

Claremore, OK

Tulsa Metro Area boasts ~1 million people

Population Information

Claremore, OK

Top Economic Drivers in Tulsa, OK1.Aerospace

American Airlines Tulsa International Airport FlightSafety International

2.Oil / Natural Gas Baker Hughes Williams Companies SemGroup Syntroleum WindStream Communciations

3.Shipping and Cargo Tulsa International Airport Tulsa Port of Catoosa

4.Higher Education University of Tulsa / Oral Roberts University

5.Other QuikTrip BOK Financial Corporation Dollar Thrifty Automotive Group

Claremore, OK

Top Local Employers

AMERICAN LEATHERARMY & AIR FORCE EXCHANGE

SERVICESOLO CUP COMPANY

SWIFT TRANSPORTATIONTEXWOOD INDUSTRIES INC

US POSTAL SERVICE DISTRIBUTION CENTER

VA NORTH TEXAS HEALTH CARE SYSTEM

American AirlinesTulsa Intl. Airport

Williams Gas Pipeline TranscoSEMGroup Corp.Syntroleum Corp.

Tulsa Port of CatoosaUniversity of Tulsa

Oral Roberts UniversityQuikTrip Corp.

BOK Financial Corp.Dollar Thrifty Automotive Group

FlightSafety Intl

Baker HughesWindstream Communications

Claremore, OK

Claremore is a Suburb of Tulsa, OKAdjacent to Rogers State University and Claremore Hospital


Claremore, OK

Singly Family ResidenceClaremore, OK (Tulsa)

Claremore, OK

Single family home Built in ~1950 4 bed / 2 bath Detached 1 car garage 1,587 sq ft Can be leased as a 4/2 SFR or as a non-conforming duplex 3/1 + 1/1


Claremore, OK


Gross Rent: $700

7% Vacancy -$49

Management -$65.10

Property Taxes -$32

Insurance -$35

Maintenance -$60

HOA / Misc $0

Net Operating Income $458.90

CAP Rate 10.01%


Claremore, OK

Purchase Price $55,000

Down Payment 20%

Down Payment $11,000

Loan $44,000



Loan Term 30 years


NOI $458.90

Cashflow $235.96



Claremore, OK


• SUPER CASHFLOW of 20%?!?!?!?!?!?





Claremore, OK

Fiesta Apartments12 unit apartments - Tulsa, OK

12 Unit Apartment Complex 2 Buildings. 2 Stories Built in ~1959 4 bed / 2 bath 8,212 Sq Ft 2 blocks from the University of Tulsa


Fiesta - Tulsa


Gross Rent: $51,808

Vacancy -$2,590

Management -$1,727

Property Taxes -$4,632

Insurance -$2,780

Maintenance -$4,106

Utilities / Misc -$14,151Laundry/Electrical Reimbursement $7,206

Net Operating Income $29,028

CAP Rate 8.80%


Fiesta - Tulsa


Down Payment 25%


Loan $247,500



Loan Term 25 years


NOI $2,419

Cashflow $899

Cash Throw Off 12%


Fiesta - Tulsa

Fiesta - Tulsa


• High CASHFLOW from Rental income

• Ability to raise rents = forced equity

• 25 Year Loan Amortization: tenant’s pay down mortgage

• Tax Benefits: depreciation

• Capital gains potential from future CAP Rate compression

Fiesta - Tulsa

“Double Fourplex”Class C - Income Property in Path of Progress

Midtown - Tulsa, OK walk to Hillcrest Hospital, Drillers Stadium, BOK Center

2 Fourplexes Fully Leased 2 bed / 1 bath x 4 1 bed / 1 bath x 4 1 car garage each 5,478 Sq Ft 0.31Acres Built in 1955 $38/sf Separate electric meters


Oaks Apartments - Tulsa

walk to hospital and 1 mile to downtown




Gross Rent: $34,800

8% Vacancy -$2,784

8% Management -$2,561


Insurance -$1,600

Maintenance -$6,500


CAP Rate 9.83%




Down Payment 25%

Down Payment $50000

Loan $150000



Loan Term 30 years


NOI $1,638

Cashflow $878






• 75% LTV at historically low fixed rates



• Efficiency of management if purchasing both properties, but dual exit strategy

• Potential appreciation from CAP rate compression


“Double Duplex”Pride of Ownership Property

Broken Bow OK (Tulsa)

2 Duplexes Fully Leased 3 bed / 2 bath each 1 car garage each 2,232 Sq Ft 0.67 Acres 1981


Duplexes - Broken Arrow


Gross Rent: $1,600

Vacancy -$112

Management -$149

Property Taxes -$150

Insurance -$67

Maintenance -$60

HOA / Misc $0


CAP Rate 8.50%




Down Payment 20%

Down Payment $30000

Loan $120000



Loan Term 30 years


NOI $1063

Cashflow $455









• Resell to owner occupant when market strengthens (strong schools)

• Efficiency of management if purchasing both properties, but dual exit strategy


Chattanooga, TNThe future of the southeast.

Multifamily - Chattanooga

Chattanooga is located in the heart of the southeast, centrally located between other major cities suchas Nashville, Huntsville, Birmingham, Atlanta, Knoxville, Ashville, Columbia, and Charlotte.

Geographic Information


Top Economic Drivers in Chattanooga, TN

1. Warehousing & Distribution• Amazon• Kenco Group

2. Manufacturing• Auto: Volkswagen / Miller Industries• Food: Mckee Foods Corporation/ Chattanooga Coca-Cola Bottling Co. • Construction Equipment: Astec Industries, Komatsu America Corp.

3. Insurance Services• Blue Cross BlueShield Of Tennessee/ UNOM

4.Healthcare • Erlanger Health System/ Memorial Health Care/ CIGNA Health Care/ Parkridge Medical Center

5. Higher Education • University of Tennessee at Chattanooga/ Chattanooga State/ Southern Adventist University

6. Utilities• Tennessee Valley Authority/ Electric Power Board of Chattanooga


Top Local Employers

BlueCross BlueShield of TennesseeTennessee Valley Authority

Erlanger Heath SystemMemorial Health Care System

McKee Foods CorporationUnum Group

Volkswagen Chattanooga


“Easy Multifamily”Chattanooga, TN

11 Unit Multifamily Complex Totally Renovated in 2011 90.9% Occupancy 10 minutes to downtown. State-funded tenants. Additional lot for potential construction of more units.




Gross Rent: $87,000

Vacancy -$8700

Management -$7830


Insurance -$2815

Maintenance -$7200

Utilities / Misc. -$1800


CAP Rate 9.50%




Down Payment 25%


Loan $423,750



Loan Term 20 years


NOI $4471.25/Monthly

Cash flow $1498.03/Monthly

Cash Throw Off 12%




• Rental income: creates monthly spendable cash flow




• Resell in future for profit if CAP rates are compressed and/or if rents increase

• Increased Occupancy/Potential Rent Increases(current rents are 5-10% less than market rents).

• Construction of more units on additional 0.28 acres of land or split and sell-off for immediate equity.


“Net Leased Family Dollar”Chattanooga, TN

High Visibility Location Strong Traffic Counts Net Leased Asset - Minimal Owner Responsibility

Investment Grade Tenant Built In Rental Increases Lease Expiration - 1/31/2020


Family Dollar - Chattanooga

Chattanooga is located in the heart of the southeast, centrally located between other major cities suchas Nashville, Huntsville, Birmingham, Atlanta, Knoxville, Ashville, Columbia, and Charlotte.




Top Local Employers

AmazonErlanger Medical CenterParkridge Valley Hospital

Chattanooga Metropolitan AirportChattanooga School for the Liberal Arts

Hickory Valley Golf Course

Hilton Garden Inn



Gross Rent: $56,000

Vacancy $0

Management $0

Property Taxes $0

Insurance $0

Maintenance -$1000

HOA / Misc $0


CAP Rate 8.11%



Family Dollar Stock Price


Down Payment 15%


Loan $576,300



Loan Term 25 years


NOI $4,583.33

Cashflow $717.93

Cash Throw Off 7.9%






• Commercial Loan Amortization: tenant’s pay down mortgage


• Built in rent increases force equity

• CAP Rate compression

• SIMPLICITY!!!

• Resume builder / syndication opportunity


Bite Sized- single tenant retailChattanooga, TN

Proven Location / At this location since 2001

National Investment Grade Credit Tenant

Lease expires 4/30/15 Rental Increase in 2015 at 3 yr renewal option

Built in 1983, Remodeled in 2001

2,200 Sq Ft.


H&R Block - Chattanooga


Gross Rent: $24000

Vacancy $0

Management $0


Insurance -$1000

Maintenance -$1500

HOA / Misc $0


CAP Rate 8.25%




Down Payment 25%

Down Payment $49897

Loan $149691


Total Cash Invested $53,897Interest Rate 5%

Loan Term 25 years


NOI $1,372

Cashflow $497







• Tax Benefits: depreciation over 39 years

• Resell to owner occupant (potential owner user property)

• Rent Increase at renewal period

• CAP Rate compression would increase the value of property


NN Lease Post Office“mail box money”

Leased till 1/31/17 Highest producing post office in county

Located in central business area of Columbus, NC

Leased with USPS since 1987 Built in 1987 - Build to Suit 4182 sf building on 1.11 acres 36 Parking Spaces Landlord pay roof & insurance New roof in 2009 with warranty


Post Office - Columbus

The USPS employs over 574,000 workers and operates over 218,000 vehicles.

The USPS is the operator of the largest vehicle fleet in the world.

The USPS traces its roots to 1775 during the Second Continental Congress, where Benjamin Franklin was appointed the first postmaster general.

The USPS is legally obligated to serve all Americans, regardless of geography, at uniform price and quality.

Will the post office go out of business?



Gross Rent: $51000

Vacancy $0

Management $0

Property Taxes $0

Insurance -$1,059

Maintenance -$300

HOA / Misc $0


CAP Rate 9.46%


$12.21 /sf NN



Down Payment 25%

Down Payment $131250

Loan $393750



Loan Term 25 years


NOI $4,137

Cashflow $1719




Columbus, NC is located off Interstate 26 which connects to the greater Southeast region It is the county seat of Polk County



County Seat - Center of Town




• Commercial Financing: 75% LTV at historically low fixed rates



• Re-use as medical, professional office, local government, etc.

• Substantial CAP Rate compression upon renewal of lease or stability of USPS

• Syndication opportunityPost Office - Columbus

Louisville, Kentucky

Louisville’s strategic location makes it the hub of America’s shipping and cargo industries

Office - Louisville

Louisville, KY is the 17th largest city in the nationThe Louisville Metro includes over 1.3 million residents


Office - Louisville

Top Economic Drivers in Louisville, KY1.Shipping

Worldport global air-freight hub for UPS Louisville International Airport Louisville and Portland Canal

2.Cargo Louisville and Nashville Railroad Crossroads of major interstate highways

3.Healthcare / Medicine Humana PharMerica Norton Healthcare Inc.

4.Manufacturing Ford production plants General Electric appliance factory

5.Higher Education University of Louisville Bellarmine University Spalding University Sullivan University

Office - Louisville

Submarket Description


Office - Louisville

Top Local Employers

UPSFORD

HUMANAPHARMERICA

GENERAL ELECTRICUNIVERSITY OF LOUISVILLE

NORTON HEALTHCARE INC.LOUISVILLE AND PORTLAND CANAL

LOUISVILLE INTERNATIONAL AIRPORT

Office - Louisville

“NNN Single Tenant Office”in Louisville, KY

ENORMOUS CASHFLOW

Office - Louisville

Office - Louisville

Office - Louisville

Office - Louisville

Office - Louisville

Business Park - Office Built in 1996 Recently remodeled Class B Office Space Roof replaced in 2009 100% Occupied 6,000 SF 0.36 Acres 100% Leased NNN


Office - Louisville


Gross Rent: $84,000

Vacancy $0

Management -$4200

Property Taxes $0

Insurance $0

Maintenance -$1200

HOA / Misc $0


CAP Rate 12.6%


Office - Louisville


Down Payment 20%


Loan $500,000



Loan Term 25 years


NOI $6,550

Cashflow $3,627



Office - Louisville


• Rental income: creates HUGE monthly spendable cashflow

• High Commercial leverage: 80% LTV at historically low rates



• Four diverse tenants + one master tenant

• Syndication opportunity

• Arbitrage opportunity

Office - Louisville

Denver, ColoradoBeing the largest city within 500 miles, it is a hub of storage and distribution of goods and services to both the Mountain States and Western United States.

The Denver Metropolitan Area boasts a population of nearly 3 million

Brook Forrest - Colorado

Evergreen, CO is only 35 minutes from downtown DenverIt offers all season recreational activities



Top Economic Drivers in Denver, CO

1.Trade Denver International Airport

2.Telecommunications Mountain States Telephone and Telegraph Company (now Qwest) Dish Network Comcast

3.Engineering EnCana Haliburton Smith International

4.Tourism Rocky Mountains

5.Food Corporations Chipotle headquarters Quizno’s headquarters

6.Higher Education University of Denver / University of Colorado, Denver / University of Colorado, Boulder

Multi-Family - Denver

The Denver Metropolitan Area boasts a population of nearly 3 millionIt is the 21st most populous US metropolitan area



“Swiss Chalet”Long term rental with vacation rental potential

Evergreen, CO (Denver)



Nestled in Ideal Vacation Setting

6 Unit Complex Three Studios Two 1 bed / 1 bath One 2 bed / 1 bath Built 1924 Remodeled 2010




Gross Rent: $4,185

6% Vacancy -$251

10% Management -$419


Insurance -$170

Maintenance -$120

Utilities -$869


CAP Rate 8.0%

Financial Information as long term rental



Down Payment 25%


Loan $232,500



Loan Term 25 years


NOI $2072

Cashflow $533

Cash Throw Off 7.5%




Subject

Brook Forrest Inn



Evergreen Colorado Vacation Cabins$100-250/night


Rental Rates$85-225/night


Purchase Price: $410,000 (includes $100k furnishings)

Gross Rent: $273,750 $125 / night x 6 units

35% Vacancy -$95,813

24% Management -$42,705


Insurance -$3,600

Maintenance / Replacement -$21,600

Utilities -$17,628


CAP Rate 21.7%

Financial Information as vacation rental



Down Payment 25%


Loan $232,500

Closing Costs including furnishings $108,000


Loan Term 25 years


NOI $7,416

Cashflow $5877


Financing Information as Vacation Rental







• Hold as long term rental or convert vacation rental (run as B&B at retirement)

• Syndication as a fractional ownership / lifestyle property


Multi-Family HomeSandy from Denver, CO

Top Local Employers

HaliburtonDenver International Airport

EnCanaSmith International

Chipotle HeadquartersUniversity of Denver

University of Colorado, Denver


Non-conforming triplex Built in ~1962 Remodeled 2009 3bed 2 bath 2bed 2 bath 2 bed 2 bath ~3,640 sq ft





Gross Rent: $2095

6% Vacancy -$126

10% Management -$210


Insurance -$70

Maintenance -$100

Utilities -$120


CAP Rate 8.18%




Down Payment 25%

Down Payment $47500

Loan $142500



Loan Term 30 years


NOI $1295

Cashflow $573









• Potential appreciation from rent increases and CAP rate compression


Dallas, TexasIf Texas were a country, it would be the 11th largest economy in the world

McKinney Apartments

Top Economic Drivers in Dallas, TX1.Aerospace

Southwest Airlines / American Airlines DFW Airport

2.Oil / Natural Gas Exon / Mobile / Ambit Energy

3.Distribution Centers Trucking / NAFTA Highway Inland Port of Dallas / Heavy Rail: BNSF

4.Manufacturing Auto: General Motors / Toyota Aerospace: Vought / Boeing / Bell Helicopter Food: Frito Lay / Dr. Pepper / Snapple / Dean Foods

5.Information Technology ATT / Texas Instruments / Verizon / Radioshack / Affiliated Computer Services Data storage

6.Healthcare Triad Hospitals / Baylor Health Care / Kimberly Clark

7.Higher Education University of North Texas / University of Texas Arlington / Southern Methodist

McKinney Apartments

Dallas-Fort worth is the 4th largest metro area in the nation with almost 7 million residents


McKinney Apartments

McKinney, TX ranked as 5th best places to live in America by CNN.It is one in one of the fastest growing counties in the country.


McKinney Apartments

“C Apartments in a B+ Area”Mckinney, TX

McKinney Apartments

38 Units Five parcels of duplexes, fourplexes, and sixplexes

15,000 SF Diverse Unit Mix Consistent High Occupancy

Redevelopment Potential


McKinney Apartments

Purchase Price: $1,200,000

Gross Rent: $264,480

7% Vacancy -$18,514

Management -$13,200


Insurance -$3,421

Maintenance -$35,850

Utilities / Misc -$44,378


CAP Rate 11.1%

Financial Information - Annualized

McKinney Apartments

Purchase Price $1,200,000

Down Payment 35%


Loan $780,000



Loan Term 25 years


NOI $11,406

Cashflow $6,732



Seller financing available

McKinney Apartments


• Rental income: HUGE monthly spendable cashflow



• Sell off each property separately for gain or reduce cash basis

• Potential Rent Increases from housing shortage

• Syndication opportunity

• Redevelopment / expansion opportunity

• Class C+ property in B+ area

McKinney Apartments

Dallas, TexasIf Texas were a country, it would be the 11th largest economy in the world

McKinney Apartments

Dallas-Fort worth is the 4th largest metro area in the nation with almost 7 million residents


Paraiso Escondido - Dallas

Duncanville boasts highly desirable schools.Tens of thousands of jobs within 10 minutes.



Top Local Employers

AMERICAN LEATHERARMY & AIR FORCE EXCHANGE

SERVICESOLO CUP COMPANY

SWIFT TRANSPORTATIONTEXWOOD INDUSTRIES INC

US POSTAL SERVICE DISTRIBUTION CENTER

VA NORTH TEXAS HEALTH CARE SYSTEM


“Bread and butter”David from Benicia, CA

Single family home Built in ~2012 4 bed / 2 bath 1 car garage ~1,457 sq ft 10 yr builder warranty 6,000 sf lot




Gross Rent: $1150

Vacancy -$69

Management -$108.10

Property Taxes -$239.58

Insurance -$55

Maintenance -$40

HOA / Misc $0

Net Operating Income $638.32

CAP Rate 6.66%




Down Payment 20%


Loan $92,000



Loan Term 30 years


NOI $638.32

Cashflow $172.17

Cash Throw Off 7.4%




Down Payment 5%

Down Payment $5,750

Loan $109,250



Loan Term 30 years


NOI $638.32

Cashflow $84.77

Cash Throw Off 9.5%

SPECIAL Financing Information

5% DOW

N!!!




• SUPER High leverage: 95% LTV at historically low fixed rates




• Potential Rent Increases from housing shortage:

• population growth + restricted land supply + lack of new construction


August 2012

Income Property Showcase

If you have interest in acquiring a property like the one presented here, please send an email to

[email protected]

and we’ll send you access to the due diligence information for that property.

