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3511 42nd Street
3511 42nd StreetSan Diego, CA 92105
OFFERING MEMORANDUM | 10 APARTMENT UNITS ON 42ND STREET
3511 42nd StreetCONTENTS
Exclusively Marketed by:
Kevin HemstreetSenior Vice President/Principal
619-309-9296
License # BRE# 01490629
We obtained the following information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions,change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent the current or future performance of theproperty. You and your tax and legal advisors should conduct your own investigation of the property and transaction.
01 Executive Summary Executive Summary 5
Unit Mix Summary 6
Location Summary 7
02 Property Description Property Features 9
Aerial Map 10
Outline Overview 11
Common Amenities 12
Unit Amenities 13
Property Images 14
03 Rent Roll
04 Financial Analysis Income & Expense Analysis 18
Multiyear Cash Flow Assumptions 19
Cash Flow Analysis 20
Disposition Sensitivity Analysis 22
05 Demographics Demographics 24
Demographic Charts 25
06 Additional Information
The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to bereviewed only by the party receiving it from South Coast Commercial Inc. and it should not be made available to any other personor entity without the written consent of South Coast Commercial Inc.. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such informationin the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offeringmemorandum. If you have no interest in the subject property, please promptly return this offering memorandum to South CoastCommercial Inc.. This offering memorandum has been prepared to provide summary, unverified financial and physical informationto prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. South Coast Commercial Inc. hasnot made any investigation, and makes no warranty or representation with respect to the income or expenses for the subjectproperty, the future projected financial performance of the property, the size and square footage of the property andimprovements, the presence of absence of contaminating substances, PCBs or asbestos, the compliance with local, state andfederal regulations, the physical condition of the improvements thereon, or financial condition or business prospects of any tenant,or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this offering memorandum has been obtained from sources we believe reliable; however, SouthCoast Commercial Inc. has not verified, and will not verify, any of the information contained herein, nor has South CoastCommercial Inc. conducted any investigation regarding these matters and makes no warranty or representation whatsoeverregarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verifyall of the information set forth herein. Prospective buyers shall be responsible for their costs and expenses of investigating thesubject property.
3511 42nd Street Confidentiality and Disclaimer | 03
CONFIDENTIALITY AND DISCLAIMER:
PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.
PLEASE CONTACT SOUTH COAST COMMERCIAL INC. FOR MORE DETAILS.
Copyright © 2018 CREOP, LLC. All Rights Reserved.
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Executive Summary
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Unit Mix Summary
Location Summary
3511 42nd Street Executive Summary | 05
OFFERING SUMMARY
ADDRESS 3511 42nd Street San Diego CA 92105
COUNTY San DIego
MARKET San Diego
SUBMARKET City Heights
BUILDING SF 6,761
LAND SF 7,059
NUMBER OF UNITS 10
YEAR BUILT 1972
APN 4760121500
OWNERSHIP TYPE Fee Simple
FINANCIAL SUMMARY
OFFERING PRICE $2,100,000
PRICE PSF $310.60
PRICE PER UNIT $210,000
OCCUPANCY 97.00 %
NOI (CURRENT) $89,928
NOI (Pro Forma) $107,456
CAP RATE (CURRENT) 4.28 %
CAP RATE (Pro Forma) 5.11 %
GRM (CURRENT) 13.58
GRM (Pro Forma) 12.28
PROPOSED FINANCING
LOAN TYPE Interest Only
DOWN PAYMENT $903,000
LOAN AMOUNT $1,197,000
INTEREST RATE 4.35 %
ANNUAL DEBT SERVICE $52,070
LOAN TO VALUE 57 %
DEMOGRAPHICS 1 MILE 3 MILE 5 MILE
2017 Population 55,108 278,533 652,035
2017 Median HH Income $36,378 $48,025 $54,079
2017 Average HH Income $50,873 $68,072 $77,466
The 42nd Street Apartments are a well-maintained 10 unitcomplex constructed in 1972. The unit mix consists of seven 1Bedroom / 1 Bath units, two 2 Bedroom / 1 Bath units and one 2Bedroom/ 1 Bath with 10 on-site parking spots, upgradedkitchens, new flooring, , and open concept living spaces, andlarge closets. Additional features include on-site laundry, fullygated/secure premises, great exterior lighting, and accessibilityto shopping, transportation.
DO NOT WALK ON THE PROPERTY OR DISTURB TENANTS.
Actual MarketUnit Mix # Units Square Feet Current Rent Rent PSF Monthly
IncomeMarket Rent Market Rent
PSFMarket Income
1 bd / 1 ba 7 0 $1,205 $8,435 $1,350 $0 $9,450
2 bd / 1 ba 2 0 $1,350 $2,700 $1,450 $0 $2,900
2 bd / 1.5 ba 1 0 $1,450 $1,450 $1,600 $0 $1,600
Totals/Averages 10 0 $1,259 $12,585 $1,395 $13,950
3511 42nd Street Unit Mix Summary | 06
3511 42nd Street Location Summary | 07
3511 42nd street, is a multi-family home in SanDiego’s City Heights district. This newly updated 10unit investment opportunity was built in 1972 andprovides on-site parking and laundry! Accompaniedby the numerous grocery stores and weekly farmersmarket on Whightman Street, which is just stepsfrom the City Heights Weingart Library. The area ofCity Heights is known for it’s ethnically diverserestaurants on the main streets of University Ave, ElCajon Blvd, and Fairmont Ave, which are withinwalking distance of this multi-family home. WithManzanita Canyon less than a 10-minute bike rideaway, this area is great for families with young kids,Lulu’s Montessori Bilingual Preschool and JoynerElementary school are also within walking distance.Easy access to freeways, shops and restaurants, andschools; this updated multi-family property is aninvestment you cannot miss!
City View
Locator Map
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Property Description
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Aerial Map
Parcel Map
Additional Maps
Amenities
Property Images
3511 42nd Street Property Features | 09
Site Description
NUMBER OF UNITS 10
BUILDING SF 6,761
LAND SF 7,059
YEAR BUILT 1972
# OF PARCELS 1
NUMBER OF STORIES 2
NUMBER OF BUILDINGS 1
LOT DIMENSION 50 X 143 X 49 X 143
NUMBER OF PARKING SPACES 10
PARKING RATIO 1:1
CONSTRUCTION
FOUNDATION Slab
FRAMING Wood
EXTERIOR Stucco/Wood
ROOF Composition
3511 42nd Street Aerial Map | 10
3511 42nd Street Outline Overview | 11
3511 42nd Street Property Images | 14
Centrally Located Gated Courtyard
Renovated Kitchen Island Countertop
3511 42nd Street Property Images | 15
Closed Kitchen Unit Open Kitchen Unit
Room With Closet 10 Parking Spots
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Rent Roll
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Financial Analysis
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Multiyear Cash Flow Assumptions
Multiyear Cash Flow Projections
Disposition Sensitivity Analysis
(10)42nd st 3511
3511 42nd Street Income & Expense Analysis | 18
INCOME CURRENT PRO FORMA
Gross Potential Rent $154,320 $170,700
Other Income (Laundry) $300 $300
Gross Potential Income $154,620 $171,000
Less: General Vacancy $4,630 $5,121
Effective Gross Income $149,990 $165,879
Less: Expenses $60,062 $58,423
Net Operating Income $89,928 $107,456
Annual Debt Service $52,070 $52,070
Debt Coverage Ratio 1.73 2.06
Cash Flow After Debt Service $37,859 $55,387
EXPENSES CURRENT PROFORMA
Repairs/ Maintenance $1,000 $10,000 $1,000 $10,000
Gas & Electric $240 $2,400 $240 $2,400
Water & Sewer $420 $4,200 $256 $2,561
Landscaping $120 $1,200 $120 $1,200
Trash Removal/ Pest Control $288 $2,880 $288 $2,880
Insurance $355 $3,550 $355 $3,550
Taxes $2,373 $23,730 $2,373 $23,730
Management (Off Site) $928 $9,277 $928 $9,277
License & Fees $8 $75 $8 $75
Miscellaneous/ Reserves $275 $2,750 $275 $2,750
Total Operating Expense $6,006 $60,062 $5,842 $58,423
Expense / SF $8.88 $8.64
% of EGI 40.04 % 35.22 %
Per Unit Per Unit
REVENUE ALLOCATION
DISTRIBUTION OF EXPENSES
3511 42nd Street Multiyear Cash Flow Assumptions | 19
GLOBAL
Sale Price $2,100,000
Analysis Period 10 year(s)
Commencement Date Apr. 29, 2018
Consumer Price Index (growth rate) 2.75 %
Millage Rate 1.13000 %
Exit CAP Rate 7.00 %
INCOME
Gross Potential Rent 3.00 %
EXPENSES
Repairs/ Maintenance 3.00 %
Gas & Electric 3.00 %
Landscaping 3.00 %
Trash Removal/ Pest Control 3.00 %
Insurance 3.00 %
Taxes 3.00 %
Management (Off Site) 3.00 %
License & Fees 3.00 %
PROPOSED FINANCING
Loan Type Interest Only
Down Payment $903,000
Loan Amount $1,197,000
Interest Rate 4.35 %
Annual Debt Service $52,070
Loan to Value 57 %
3511 42nd Street Cash Flow Analysis | 20
CASH FLOW
Calendar Year CURRENT Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10Gross Potential RevenueGross Rental Income $154,320 $170,700 $175,821 $181,096 $186,528 $192,124 $197,888 $203,825 $209,939 $216,238
Other Income (Laundry) $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Gross Potential Income $154,620 $171,000 $176,121 $181,396 $186,828 $192,424 $198,188 $204,125 $210,239 $216,538
General Vacancy $4,630 $5,121 $5,275 $5,433 $5,596 $5,764 $5,937 $6,115 $6,298 $6,487
Effective Gross Income $149,990 $165,879 $170,846 $175,963 $181,233 $186,661 $192,251 $198,010 $203,941 $210,051
Operating ExpensesRepairs/ Maintenance $10,000 $10,000 $10,300 $10,609 $10,927 $11,255 $11,593 $11,941 $12,299 $12,668
Gas & Electric $2,400 $2,400 $2,472 $2,546 $2,623 $2,701 $2,782 $2,866 $2,952 $3,040
Water & Sewer $4,200 $2,561 $2,561 $2,561 $2,561 $2,561 $2,561 $2,561 $2,561 $2,561
Landscaping $1,200 $1,200 $1,236 $1,273 $1,311 $1,351 $1,391 $1,433 $1,476 $1,520
Trash Removal/ Pest Control $2,880 $2,880 $2,966 $3,055 $3,147 $3,241 $3,339 $3,439 $3,542 $3,648
Insurance $3,550 $3,550 $3,657 $3,766 $3,879 $3,996 $4,115 $4,239 $4,366 $4,497
Taxes $23,730 $23,730 $24,442 $25,175 $25,930 $26,708 $27,510 $28,335 $29,185 $30,060
Management (Off Site) $9,277 $9,277 $9,555 $9,842 $10,137 $10,441 $10,755 $11,077 $11,410 $11,752
License & Fees $75 $75 $77 $80 $82 $84 $87 $90 $92 $95
Miscellaneous/ Reserves $2,750 $2,750 $2,750 $2,750 $2,750 $2,750 $2,750 $2,750 $2,750 $2,750
Total Operating Expense $60,062 $58,423 $60,016 $61,658 $63,348 $65,089 $66,882 $68,730 $70,632 $72,592
Net Operating Income $89,928 $107,456 $110,830 $114,305 $117,885 $121,572 $125,369 $129,280 $133,309 $137,459Annual Debt Service $52,070 $52,070 $52,070 $52,070 $52,070 $52,070 $52,070 $52,070 $52,070 $52,070
Cash Flow $37,859 $55,387 $58,761 $62,236 $65,815 $69,502 $73,300 $77,211 $81,240 $85,389
Effective Gross Income vs Operating Expenses Cash Flow
3511 42nd Street Cash Flow Analysis | 21
Calendar Year CURRENT Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10Financial MetricsCash on Cash Return b/t 4.19 % 6.13 % 6.51 % 6.89 % 7.29 % 7.70 % 8.12 % 8.55 % 9.00 % 9.46 %
CAP Rate 4.28 % 5.12 % 5.28 % 5.44 % 5.61 % 5.79 % 5.97 % 6.16 % 6.35 % 6.55 %
Debt Coverage Ratio 1.73 2.06 2.13 2.20 2.26 2.33 2.41 2.48 2.56 2.64
Operating Expense Ratio 40.04 % 35.22 % 35.12 % 35.04 % 34.95 % 34.87 % 34.78 % 34.71 % 34.63 % 34.55 %
Gross Multiplier (GRM) 13.58 12.28 11.92 11.58 11.24 10.91 10.60 10.29 9.99 9.70
Loan to Value 57.00 % 57.00 % 57.00 % 57.00 % 57.00 % 57.00 % 57.00 % 57.00 % 57.00 % 57.00 %
Breakeven Ratio 74.76 % 66.61 % 65.61 % 64.63 % 63.68 % 62.77 % 61.87 % 61.01 % 60.17 % 59.35 %
Price / SF $311 $311 $311 $311 $311 $311 $311 $311 $311 $311
Price / Unit $210,000 $210,000 $210,000 $210,000 $210,000 $210,000 $210,000 $210,000 $210,000 $210,000
Expense / SF $9 $9 $9 $9 $9 $10 $10 $10 $10 $11
Income / SF $22 $25 $25 $26 $27 $28 $28 $29 $30 $31
3511 42nd Street Disposition Sensitivity Analysis | 22
5 YEAR SENSITIVITY ANALYSISEXIT CAP RATE PROJECTED
SALES PRICESALES
PRICE/UNITSALES PRICE PSF PROCEEDS
AFTER LOANPAYOFF
IRR
6.00% $1,964,745 $196,475 $291 $767,745 3.36%
6.25% $1,886,156 $188,616 $279 $689,156 1.59%
6.50% $1,813,611 $181,361 $268 $616,611 -0.16%
6.75% $1,746,440 $174,644 $258 $549,440 -1.91%
7.00% $1,684,068 $168,407 $249 $487,068 -3.66%
7.25% $1,625,996 $162,600 $240 $428,996 -5.42%
7.50% $1,571,796 $157,180 $232 $374,796 -7.21%
7.75% $1,521,093 $152,109 $225 $324,093 -9.02%
8.00% $1,473,559 $147,356 $218 $276,559 -10.88%
10 YEAR SENSITIVITY ANALYSISEXIT CAP RATE PROJECTED
SALES PRICESALES
PRICE/UNITSALES PRICE PSF PROCEEDS
AFTER LOANPAYOFF
IRR
6.00% $2,290,981 $229,098 $339 $1,093,981 8.48%
6.25% $2,199,341 $219,934 $325 $1,002,341 7.84%
6.50% $2,114,751 $211,475 $313 $917,751 7.21%
6.75% $2,036,427 $203,643 $301 $839,427 6.60%
7.00% $1,963,698 $196,370 $290 $766,698 6.00%
7.25% $1,895,984 $189,598 $280 $698,984 5.40%
7.50% $1,832,784 $183,278 $271 $635,784 4.82%
7.75% $1,773,662 $177,366 $262 $576,662 4.24%
8.00% $1,718,235 $171,824 $254 $521,235 3.66%
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Demographics
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Demographic Charts
3511 42nd Street Demographics | 24
POPULATION 1 MILE 3 MILE 5 MILE
2000 Population 54,542 273,423 591,516
2010 Population 52,854 264,842 608,102
2017 Population 55,108 278,533 652,035
2022 Population 56,768 289,033 684,488
2017 African American 5,705 32,496 69,657
2017 American Indian 470 2,191 5,006
2017 Asian 8,706 31,647 80,583
2017 Hispanic 34,126 127,317 268,324
2017 White 18,390 130,674 326,802
2017 Other Race 19,015 64,945 129,166
2017 Multiracial 2,641 15,375 37,173
2017-2022: Population: Growth Rate 3.00 % 3.70 % 4.90 %
2017 HOUSEHOLD INCOME 1 MILE 3 MILE 5 MILE
less than $15,000 3,065 15,126 32,833
$15,000-$24,999 2,668 12,819 25,424
$25,000-$34,999 2,176 10,947 22,561
$35,000-$49,999 2,751 15,184 32,137
$50,000-$74,999 2,558 18,476 41,776
$75,000-$99,999 1,398 12,006 29,418
$100,000-$149,999 1,194 11,831 33,376
$150,000-$199,999 403 4,277 13,126
$200,000 or greater 308 4,437 13,998
Median HH Income $36,378 $48,025 $54,079
Average HH Income $50,873 $68,072 $77,466
HOUSEHOLDS 1 MILE 3 MILE 5 MILE
2000 Total Housing 16,645 104,729 222,631
2010 Total Households 15,859 100,127 226,602
2017 Total Households 16,520 105,103 244,649
2022 Total Households 16,980 109,065 258,550
2017 Average Household Size 3.32 2.60 2.57
2000 Owner Occupied Housing 3,688 31,879 82,103
2000 Renter Occupied Housing 12,261 69,196 131,780
2017 Owner Occupied Housing 3,659 31,974 88,489
2017 Renter Occupied Housing 12,862 73,129 156,159
2017 Vacant Housing 922 6,207 17,274
2017 Total Housing 17,442 111,310 261,923
2022 Owner Occupied Housing 4,244 36,069 98,975
2022 Renter Occupied Housing 12,736 72,995 159,575
2022 Vacant Housing 947 6,410 17,136
2022 Total Housing 17,927 115,475 275,686
2017-2022: Households: Growth Rate 2.75 % 3.70 % 5.55 %
Source: esri
3511 42nd Street Demographic Charts | 25
1 Mile Radius 3 Mile Radius 5 Mile Radius
2017 Household Income
1 Mile Radius 3 Mile Radius 5 Mile Radius
2017 Population by Race
3511 42nd Street Demographic Charts | 26
2017 Household Occupancy - 1 Mile Radius
Average Income Median Income
2017 Household Income Average and Median
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Additional Information
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3511 42nd Street
Exclusively Marketed by:
Kevin HemstreetSenior Vice President/Principal
619-309-9296
License # BRE# 01490629
powered by CREOP
