Summary of the Deal:
1. Solid, well maintained, 48-unit complex north of Greensboro in Reidsville, NC.
2. Below market rents - approximately $50 below market, and the ability to raise will be enhanced after some upfit is done.
3. Budget includes $175,000 at closing towards upfit that will include the conversion of 24 units into "premium units" which will command higher rents, as well as new roofing and parking lot work.
4. The current manager is going to continue after the transaction, but a better tenant billing system, which will allow for more fee-based income, will be put into place.
6. Lock in a very low interest rate for 10-years, with one year of interest-only.
7. Purchase cap-rate approximately 7.80% , which makes the cash-on-cash returns (10-11%) - very attractive for multi-family.
This is a solid B-class property, located in the small town of Reidsville, NC, about 25 minutes north of rapidly growing Greensboro, which was recently ranked as the 9th fastest growing city in the US since the 2008 recession. Very strong rental history, and high occupancy.