I am interested in this property, and will like to know more details on
location, and necessary details to calculate Cash flows.
Looking forward to hearing from you.
>From: "TLM Investments, Inc." <firstname.lastname@example.org
>Subject: [incomeproperties] Seeking Investors/Lenders 20 Lofts/2 properties
>Date: Mon, 13 May 2002 12:33:46 -0700 (PDT)
>Two Loft Buildings 20 Units Total
>Currently Under Exclusive Option
>10% Cap Rate as-is/12 – 15% Pro Forma
>New Transit station under construction nearby
>New Police Headquarters nearby
>Homeless Shelter and Day Labor building nearby will be
>Historical Landmark nearby involved in multi-million
>At least two large revitalization projects nearby
>Very close to downtown
>Owner is selling because of his age, current medical
>condition, and spousal pressure
>While there are many development, revitalization, and
>urban growth projects going on within a few blocks of
>these properties, the immediate surroundings are not
>very pleasant to look at. This, of course, has kept
>the price down. There are quite a few factors that
>play into the general unpleasantness of the
>surrounding area. A homeless shelter and day labor
>building not far from the properties is in heavy use.
>The city council is currently in the process of
>finding a new home for these purposes and when that
>happens, the surrounding area will quickly clean up.
>Also, with all of the projects that are going on
>around these properties in the early to mid phases of
>completion, from the outside, the whole area appears
>to be torn apart. This, again, plays into the favor of
>a low purchase price.
>The current cap rate is 10%. However, this is
>calculated based on the current owners figures. The
>current owner has a full time, onsite manager, who
>gets a salary and benefits, plus an external
>management company. As well, current leases must be
>renegotiated and brought to current market value. With
>some simple changes to these business practices, a cap
>rate of 13% or higher could be achieved with no
>capital expenditure whatsoever. The pro forma provided
>by the current owner is only 10.5% cap rate, based on
>his figures. Again, this would be substantially higher
>based on a change in the business practices.
>An example of changes that can be made to improve cap
>rate and cash flow that does require small capital
>expenditure is the reconfiguration of under performing
>space. There are a total of 20 units in the current
>configuration. A 6000 square foot unit is currently
>renting for $0.25 Sqft. This unit could easily be
>changed into 5 units, renting at $1.00 Sqft. This
>change results in a four-fold increase in cash flow,
>without a large investment.
>The cap rate and net income off of these properties is
>simply the tip of the iceberg. The fact that there
>are so many great projects happening just blocks away
>is sure to improve the values of these properties a
>great deal. Of course, no guarantees can be made in
>this sense, but simply looking at a map of the area
>and seeing what is happening will put all of this in
>If you are interested in this project, please let me
>know. I am seeking money partners, or lenders only.
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