REI Wise Investment Analysis Software€¦ · Gross Rent Multiplier 13.07 Gross Income / Square Feet $39.34 Gross Expenses / Square Feet ($14.72) Operating Expense Ratio 39.33% page

2635 Camino del Rio S San Diego, CA 92108 www.acicommercial.com

Investment Highlights

Exclusive listing by:

For More Information The Courtney Gabhart Group619-725-3632

Royal Apartments2051-59 Bacon St, San Diego, CA 92107

Curtis Gabhart, PrincipalDRE# 01316761

Senior VP & PrincipalKeith CourtneySenior VP & Principal

Seller Financing 20% Down at5% interest only!

■

3 Parcels of Land■

Beautiful Courtyard■

Laundry Onsite■

Plenty of Parking Spaces■

Table of Contents

Real Estate Investment Details ..................................................................................... 3

Property Description .................................................................................................... 4

Property Photos ............................................................................................................. 5

Maps and Aerials ........................................................................................................... 6

Executive Summary ...................................................................................................... 7

Pro Forma Summary .................................................................................................... 8

Resale Report .................................................................................................................. 9

Internal Rate of Return Analysis .................................................................................. 10

Cumulative Analysis .................................................................................................... 11

Flyer ............................................................................................................... Attachment

Real Estate Investment Details

ANALYSIS

Analysis Date: August 2009

PROPERTY

Property: Royal Apartments

Property Address: 2051-59 Bacon StSan Diego, CA 92107

FINANCIAL INFORMATION

Down Payment: $725,000

Passive Loss Rules: No

Closing Costs: $0

LT Capital Gain: 15.00%

Federal Tax Rate: 35.0%

State Tax Rate: 10.0%

Discount Rate: 4.00%

PURCHASE INFORMATION

Property Type: Multi-Family

Purchase Price: $3,600,000

Fair Market Value: $3,600,000

Units: 22

Total Rentable Sq. Ft.: 7,000

Resale Valuation 3.0% (annual appreciation)

Resale Expenses: 5.0%

LOANS

Debt Term Rate Payment LO Costs

Interest Only $2,875,000 10 yrs 5.0% $11,979

INCOME & EXPENSES

Gross Operating Income: $261,870

Monthly GOI: $21,823

Total Annual Expenses: ($103,005)

Monthly Expenses: ($8,584)

CONTACT INFORMATION

Curtis Gabhart, Principal

DRE# 01316761

619-725-3632

[email protected]

Keith Courtney

DRE # 01028193

619-725-3635

DISCLAIMER: All information is believed to be accurate.

The calculations and data presented are deemed to be accurate, but not guaranteed. They are intended for the purpose of illustrative projectionsand analysis. The information provided is not intended to replace or serve as substitute for any legal, accounting, investment, real estate, tax orother professional advice, consultation or service. The user of this software should consult with a professional in the respective legal, accounting,tax or other professional area before making any decisions.

page 3 of 11

Property DescriptionRoyal Apartments

2051-59 Bacon StSan Diego, CA 92107

Curtis Gabhart, Principal619-725-3632

Property Description

Attractive SELLER FINANCING 80% LTV at 5%Interest only fixed for 10 years.

Beautiful multi-family apartment, rare findbecause of high density! Three buildings onthree parcels. A total of 16 parking spots,laundry on-site, bike storage, beautiful courtyard!Total square footage is 7,000 sf in 22 studiounits! Lot size is 10,348 square feet.

***All income information is based on pro formarents. The information contained herein is fromsources believed to be accurate, but ACICommercial makes no warranty(ies), expressed or implied, regarding same.

Area Description: OCEAN BEACH

Ocean Beach lies at the end of a busy highway known as Interstate 8. This little beach town hasgot a whole lot of everything for just about anyone who finds themselves in this tiny corner of SanDiego, just south of the Mission Bay channel entrance. Ocean Beach is home to rows of antiquestores, a pet shop, bookstores and surf shops, and you can enjoy handmade tamales, hamburgers,cold beer and frosty margaritas. The people of Ocean Beach are very open minded and friendly. Ifyou have a dog, it’s the perfect spot to be. Since 1972, pooches have run legally off their leasheshere on 38 acres of sand and water. It's located where the San Diego River meets the PacificOcean.

Newport Avenue is the main attraction in this ocean side community of over 28,000. Inland and tothe south near Sunset Cliffs the situation becomes a bit more conservative and family-oriented.

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Property PhotosRoyal Apartments



Property Photos

page 5 of 11

Maps and AerialsRoyal Apartments



Maps and Aerials

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Executive SummaryRoyal Apartments



ACQUISITION COSTS

Purchase Price, Points and Closing Costs $3,600,000

Investment - Cash $725,000

First Loan $2,875,000

INVESTMENT INFORMATION

Purchase Price $3,600,000

Price per Unit $163,636

Price per Sq. Ft. $514.29

Income per Unit $12,518

Expenses per Unit ($4,682)

INCOME, EXPENSES & CASH FLOW

Gross Scheduled Income $275,400

Total Vacancy and Credits ($13,530)

Operating Expenses ($103,005)

Net Operating Income $158,865

Debt Service ($143,750)

Cash Flow Before Taxes $15,115

Total Interest (Debt Service) ($143,750)

Depreciation and Amortization ($100,339)

Taxable Income (Loss) ($85,224)

Tax Savings (Costs) $38,351

Cash Flow After Taxes $53,466

FINANCIAL INDICATORS

Cash on Cash Return Before Taxes 2.08%

Optimal Internal Rate of Return (yr 10) 13.38%

Debt Coverage Ratio 1.11

Capitalization Rate 4.41%

Gross Rent Multiplier 13.07

Gross Income / Square Feet $39.34

Gross Expenses / Square Feet ($14.72)

Operating Expense Ratio 39.33%

page 7 of 11

Pro Forma SummaryRoyal Apartments



UNIT MIX & ANNUAL SCHEDULED INCOME

Type Units Actual Total Market Total

Studio 22 $12,300 $270,600 $12,300 $270,600

TOTALS 22 $270,600 $270,600

ANNUALIZED INCOME

Actual MarketGross Potential Rent $270,600 $270,600

Less: Vacancy ($13,530) ($13,530)

Misc. Income $4,800 $4,800

Effective Gross Income $261,870 $261,870

Less: Expenses ($103,005) ($102,765)

Net Operating Income $158,865 $159,105

Debt Service ($143,750) ($143,750)

Net Cash Flow after Debt Service $15,115 $15,355

Principal Reduction $0 $0

Total Return $15,115 $15,355

ANNUALIZED EXPENSES

Description Actual MarketProperty Management Fee $13,770 $13,530

Misc $48,555 $48,555

Taxes - Real Estate $40,680 $40,680

Total Expenses $103,005 $102,765

Expenses Per RSF $14.72 $14.68

Expenses Per Unit $4,682 $4,671

INVESTMENT SUMMARY

Price: $3,600,000

Units: 22

Price/Unit: $163,636

RSF: 7,000

Price/RSF: $514.29

Cap Rate: 4.41%

Pro Forma Cap Rate: 4.42%

GRM: 13.1

Pro Forma GRM: 13.1

FINANCING SUMMARY

Loan Amount: $2,875,000

Down Payment: $725,000

Loan Type: Interest Only

Interest Rate: 5.00000%

Term: 10 years

Monthly Payment: $11,979.17

page 8 of 11

Resale ReportRoyal Apartments



NET PROCEEEDS FROM SALE

Adjusted Basis

Basis At Acquisition $3,600,000

-Depreciation $1,038,413

Adjusted Basis at Sale $2,561,587

Capital Gain

Sale Price $4,838,099

-Sale Expenses $241,905

-Adjusted Basis at Sale $2,561,587

Gain or (Loss) $2,034,607

-Depreciation (limited to gain) $1,038,413

Capital Gain from Appreciation $996,194

Sales Proceeds After Tax

Sales Price $4,838,099

-Sale Expenses $241,905

-Balloon Payment $2,875,000

Sale Proceeds Before Tax $1,721,194

Sale Proceeds Before Tax $1,721,194

-Tax On Depreciation $259,603

-Tax On Capital Gain $149,429

Sale Proceeds After Tax $1,312,162

page 9 of 11

Internal Rate of Return AnalysisRoyal Apartments



BEFORE TAX IRR

Time Future Cash Flows

Initial Investment ($725,000)

End of Year 1 $15,115









End of Year 10* $1,789,189

IRR = 12.47% * ($67,995 + $1,721,194)

AFTER TAX IRR

Time Future Cash Flows

Initial Investment ($725,000)










End of Year 10* $1,394,711

IRR = 13.38% * ($82,550 + $1,312,162)

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Cumulative AnalysisRoyal Apartments



Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Equity (appreciation) $108,000 $219,240 $333,817 $451,832 $573,387 $698,588 $827,546 $960,372 $1,097,183 $1,238,099

Equity (loan reduction) $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,875,000

CASH FLOW (a/t) $53,466 $111,747 $172,962 $237,205 $304,572 $375,159 $449,069 $526,407 $607,280 $689,830

Totals - To Date $161,466 $330,987 $506,780 $689,037 $877,958 $1,073,747 $1,276,615 $1,486,779 $1,704,463 $4,802,929

Invested Capital ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ($725,000) ($725,000)

ROIC - To Date 22.27% 45.65% 69.90% 95.04% 121.10% 148.10% 176.08% 205.07% 235.10% 662.47%

Footnotes: a/t = after taxes; ROIC = Return On Invested Capital

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FlyerRoyal Apartments2051-59 Bacon StSan Diego, CA 92107

2051-59 Bacon St, San Diego, CA 92107

Investment Highlights

SELLER FINANCING 20% Down at 5%Interest Only!

■

Beautiful Courtyard■

Laundry Facilities■

22 Studio Units■

Plenty of Parking Spaces■

3 Buildings on 3 Parcels of Land■

Storage■


DRE# 01316761Senior VP & Principal619-725-3632(619) 299-8536 (fax)[email protected]

Keith Courtney

DRE # 01028193Senior VP & Principal619-725-3635(619) 299-8536 (fax)

Price $3,600,000

Units 22

Price per Unit $163,636

Year Built 1963

Lot Size 10,048

Current Cap Rate 4.56%

Market Cap Rate 4.56%

Current GRM 13.1

Market GRM 13.1

Current Total Return 2.8%

Market Total Return 2.8%

2051-59 Bacon St, San Diego, CA 92107


DRE# 01316761Senior VP & Principal619-725-3632(619) 299-8536 (fax)[email protected]

Keith Courtney

DRE # 01028193Senior VP & Principal619-725-3635(619) 299-8536 (fax)

UNIT MIX AND RENT SCHEDULE

Mix No. Units Current Rents Current Total Market Rents Market TotalStudio 22 $1,025 $22,550 $1,025 $22,55022 $22,550 $22,550

INCOME, EXPENSE AND CASHFLOW

Current Market Gross Potential Rent $270,600 $270,600 Less: Vacancy $8,118 $8,118 Plus: Misc. Income $4,800 $4,800 Effective Gross Income $267,282 $267,282 Less: Expenses $103,005 $103,005

Net Operating Income $164,277 $164,277 Debt Service ($143,750) ($143,750)

NCF After Debt Service $20,527 $20,527 Principal Reduction $0 $0 Total Return $20,527 $20,527

FINANCIAL SUMMARYDown Payment: $725,000Loan Amount: $2,875,000Loan to Value: 80%Interest Rate: 5.0Amortization: 10 YearsDebt Coverage Ratio: 1.143

EXPENSESProperty Management Fee $13,770Misc $48,555Taxes - Real Estate $40,680

Total Expenses $103,005Expenses Per RSF $14.72Expenses Per Unit $4,682

INVESTMENT OVERVIEWSELLER FINANCING 80% LTV AT 5% Interest Only fixed for 10 years. Three buildings on three parcels beautiful multi-family apartment. A total of 16 parking spots, laundry on-site, bike storage, beautiful courtyard! **The informationcontained is from sources believed to be accurate, ACI makes no warranty(ies), expressed or implied, regarding same.

Documents

REI Wise Investment Analysis Software€¦ · Gross Rent Multiplier 13.07 Gross Income / Square Feet $39.34 Gross Expenses / Square Feet ($14.72) Operating Expense Ratio 39.33% page