old trail duplexes - cityfeet€¦ · birmingham al 35215 county jefferson market birmingham...

Old Trail Duplexes828 Old Trail Rd, Birmingham AL 35215

O F F E R I N G M E M O R A N D U M

Old Trail DuplexesCONTENTS

Exclusively Marketed by:

Logan Waller

(214) [email protected]

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 otherconditions, 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 the property. You and your tax and legal advisors should conduct yourown investigation of the property and transaction.

01 Executive Summary Investment Summary 4 Unit Mix Summary 5 Location Summary 6

02 Property Description Property Features 7 Aerial Map 8 Property Images 9

03 Rent Comps Rent Comparables Map 12 Rent Comparables Summary 13

04 Sale Comps Sale Comparables Map 16 Sale Comparables Summary 17 Sale Comparables Charts 19

05 Financial Analysis Income & Expense Analysis 20 Financials 21 Cash Flow 22

06 Demographics Demographics 23 Demographic Charts 24

07 Additional Information offering procedures updated 26

Old Trail Duplexes Confidentiality and Disclaimer | 03

Copyright © 2019 CREOP, LLC. All Rights Reserved.

Old Trail Duplexes Investment Summary | 04

OFFERING SUMMARYADDRESS 828 Old Trail Rd

Birmingham AL 35215

COUNTY Jefferson

MARKET Birmingham

BUILDING SF 18,600

NUMBER OF UNITS 20

YEAR BUILT 1973

FINANCIAL SUMMARYOFFERING PRICE $700,000

PRICE PSF $37.63

PRICE PER UNIT $35,000

OCCUPANCY 100.00 %

NOI (CURRENT) $70,296

NOI (Pro Forma) $76,173

CAP RATE (CURRENT) 10.04 %

CAP RATE (Pro Forma) 10.88 %

GRM (CURRENT) 5.05

GRM (Pro Forma) 4.78

DEMOGRAPHICS 1 MILE 3 MILE 5 MILE2019 Population 5,757 45,306 100,596

2019 Median HH Income $45,836 $42,497 $40,960

2019 Average HH Income $58,150 $57,743 $56,656

Built in 1973, this 20 unit duplex property is currently operating at an NOI of $70,296. 19 of 20 units have been renovated, which includes new carpet, Armstrong linoleum in kitchens, repairs to flooring as needed, updated bathroom fixtures and lights, electrical plugs replaced, and kitchen appliances brought up to date (electric dishwashers). Total renovation cost comes out to around $3,500/unit. The owner is raising new move-in rates to $595 in order to match market potential, and is planning to have all units at that rate within the next 12 months.Average rates at this property are $0.62/sf while the average rent of comparable units in the market is $0.68. Electricity is individually metered and paid for by the tenant. There is no gas on the property.

7 of 10 roofs have been replaced in the last 8 years, while 12 of 20 condenser units have been replaced during that time. The parking lots are original concrete and are 45 years old. Each unit contains a 38-gallon low-boy electric water heater as well as central A/C and a condensing unit on the side of the building. All units have washer/dryer connections. The current owner manages the property, completing minor repairs himself and contracting out more complex repairs.

Best and final offers up to 8/21/2019

INVESTMENT SUMMARY

Unit Mix

Effective Market Pro FormaUnit Type # of Units SF Effective Rent Market Rent Pro Forma Rent $/SF $/SF $/SF

2/1.5 20 930 100% $560 $575 $575 $0.60 $0.62 $0.62

Totals 20 18,600 $11,200 $11,500 $11,500

Averages 930 $560 $575 $575 $0.60 $0.62 $0.62

Annual Rent $134,400 $138,000 $138,000

% of Total Units

Old Trail Duplexes Unit Mix Summary | 05

Old Trail Duplexes Location Summary | 06

Old Trail Duplexes Property Features | 07

PROPERTY FEATURESNUMBER OF UNITS 20

BUILDING SF 18,600

YEAR BUILT 1973

BUILDING CLASS C

NUMBER OF STORIES 1

NUMBER OF BUILDINGS 10

WASHER/DRYER Connections In each unit

MECHANICALHVAC Central A/C with air-handler inside.

Condensing unit on the side of eachunit

WIRING Copper

UTILITIESWATER 38-gallon low-boy hot water heater in

each unit

TRASH Picked up by the city

ELECTRIC Individually Metered

RUBS None

CONSTRUCTIONPARKING SURFACE Original Concrete

With a population of over 210,000 and a growing local economy, Birmingham has become an increasingly attractive market for Class-C multifamily projects. Downtown Birmingham is being renovated in its aging core and incomes in the metro have risen by more than 20% since 2010. Job growth is increasing due to major companies building and expanding offices in Birmingham or its surrounding areas. Amazon and Mercedes-Benz are bringing in over 2,000 jobs to the Metro, while Birmingham-based Shipt recently announced a headquarter expansion, which will add over 880 office-using jobs to the market. Additionally, The University of Alabama at Birmingham employs over 23,000 people.

The Effective Rent Growth (YOY) in Birmingham is 5.1% while vacancies are hovering at an all-time low of 6.9%. Rent growth is outperforming the National Average. Much of this is due to increased demand combined with a decrease in multifamily construction and a growing downtown area.

The duplexes are about a 15-minute drive from Birmingham-Shuttlesworth International Airport (BHM), and a 20-minute drive to the heart of Downtown Birmingham

LOCATION OVERVIEW

Old Trail Duplexes Aerial Map | 08

Old Trail Duplexes Property Images | 09

Old Trail Duplexes Rent Comparables Map | 12

# Property Name Address City

S Old Trail Duplexes 828 Old Trail Rd Birmingham1 Serenity Apartments at Sterling 107 Sterling Ct NW Birmingham2 Highland Park Townhomes 344 20th Ave NE Birmingham

Old Trail Duplexes Rent Comparables Summary | 13

1

Serenity Apartments at Sterling107 Sterling Ct NW, Birmingham , AL 35215

Property SummaryUNITS 140

YEAR BUILT 1972

Unit Mix and Rent ScheduleUnit Mix # of Units Square Feet Rent Rent per SF

1 bd + 1 ba 32 684 $589 $0.86

2 bd + 1 ba 24 982 $663 $0.67

2 bd + 1.5 ba 56 960 $722 $0.75

2 bd + 2 ba 20 1,092 $722 $0.66

3 bd + 2 ba 8 1,216 $873 $0.71

Total/Avg 140 987 $714 $0.73

Unit Mix Breakdown

Comparables Rent Analysis

2 bd / 1.5 ba $560 - $722

LOW HIGH


2

Highland Park Townhomes344 20th Ave NE, Birmingham, AL 35215


YEAR BUILT 1973

Unit Mix and Rent ScheduleUnit Mix # of Units Square Feet Rent Rent per SF

2 bd + 1.5 ba 46 990 $621 $0.62

3 bd + 2.5 ba 10 1,391 $879 $0.63

Total/Avg 56 1,191 $750 $0.63

Unit Mix Breakdown


2 bd / 1.5 ba $560 - $722

LOW HIGH


S

Old Trail Duplexes828 Old Trail Rd, Birmingham, AL 35215


YEAR BUILT 1973

OCCUPANCY 100.00 %

Unit Mix and Rent ScheduleUnit Mix # of Units Square Feet Rent Summary Rent per SF

2 bd / 1.5 ba 20 930 $560 $0.60

Totals/Averages 20 930 $560 $0.60

Unit Mix Breakdown


2 bd / 1.5 ba $560 - $722

LOW HIGH

Old Trail Duplexes Sale Comparables Map | 16

# Property Name Address City

S Old Trail Duplexes 828 Old Trail Rd Birmingham1 Carson Crest Apartments 1401 Carson Rd Birmingham2 Highland Park Townhomes 344 20th Ave NE Birmingham

Old Trail Duplexes Sale Comparables Summary | 17

1

Carson Crest Apartments1401 Carson RdBirmingham , AL 35215

TOTAL UNITS 97

YEAR BUILT 1974

SALE PRICE $3,266,224

PRICE/UNIT $33,672

PRICE/SF $31.06

OCCUPANCY 89.00 %

CLOSING DATE 11/1/2018

Cap Rate Range

LOW HIGH

Price/Unit Range $33,672 - $37,500

LOW HIGH

2

Highland Park Townhomes344 20th Ave NEBirmingham, AL 35215

TOTAL UNITS 56

YEAR BUILT 1973

SALE PRICE $2,100,000

PRICE/UNIT $37,500

PRICE/SF $34.88

OCCUPANCY 92.00 %

CLOSING DATE 5/1/2018

Cap Rate Range

LOW HIGH


LOW HIGH

Old Trail Duplexes Sale Comparables Summary | 18

S

Old Trail Duplexes828 Old Trail RdBirmingham, AL 35215

TOTAL UNITS 20

YEAR BUILT 1973

ASKING PRICE $700,000

PRICE/UNIT $35,000

PRICE/SF $37.63

CAP RATE 10.04 %

GRM 5.05

OCCUPANCY 100.00 %

Cap Rate Range 10.04 % - 10.04 %

LOW HIGH


LOW HIGH

Old Trail Duplexes Sale Comparables Charts | 19

Old Trail Duplexes Income & Expense Analysis | 20

INCOME CURRENT PRO FORMA

Effective Gross Income $138,480 $146,304

Less: Expenses $68,184 $70,131

Net Operating Income $70,296 $76,173

EXPENSES CURRENT PRO FORMA

Real Estate Taxes $440 $8,809 $507 $10,130

Insurance $686 $13,728 $686 $13,728

Management Fee $554 $11,078 $585 $11,704

Marketing $50 $1,000 $50 $1,000

Repairs & Maintenance $646 $12,914 $646 $12,914

Utilities $88 $1,759 $88 $1,759

Payroll $676 $13,526 $676 $13,526

Administration $269 $5,370 $269 $5,370

Total Operating Expense $3,409 $68,184 $3,507 $70,131

Expense / SF $3.66 $3.77

% of EGI 49.24 % 47.94 %

Per Unit Per Unit

REVENUE ALLOCATION

DISTRIBUTION OF EXPENSES

$/Unit $/Ft $/Unit $/FtPotential Gross Income $142,800 7,140 $7.68 $152,400 7,620 $8.19

Economic Vacancy 0 0.0% -6,096 4%Loss to Lease -4,320 3.0% 0 0%

Total Rental Income 138,480 6,924 $7.45 146,304 7,315 $7.87

Administrative $5,369.71 $268.49 $0.29 $5,369.71 $268.49 $0.29Advertising $1,000.00 $50.00 $0.05 $1,000.00 $50.00 $0.05Repairs & Maintenance $12,914.12 $645.71 $0.69 $12,914.12 $645.71 $0.69Payroll $13,526.16 $676.31 $0.73 $13,526.16 $676.31 $0.73Utilities $1,759.32 $87.97 $0.09 $1,759.32 $87.97 $0.09Total Variable Expenses $34,569.31 $1,728.47 $1.86 $34,569.31 $1,728.47 $1.86Real Estate Taxes $8,808.56 $440.43 $0.47 $10,129.84 $506.49 $0.54Insurance $13,727.72 $686.39 $0.74 $13,727.72 $686.39 $0.74Management Fee - 8% $11,078.40 $553.92 $0.60 $11,704.32 $585.22 $0.63Total Fixed Expenses $33,614.68 $1,680.73 $1.81 $35,561.88 $1,778.09 $1.91

$70,296 10.04% $76,173 10.88%Debt Service ($34,789) ($34,789)

Net Cash Flow $35,507 20.09% $41,384 23.41%Principal Reduction ($7,403) ($7,403)

Return On Equity $39,728 22.48% $42,818 24.22%

1 1

2

1 12

Effective Gross Income $138,480 6,924 $7.45

Total Expenses $68,184

Income

All Expenses taken from Trailing 12 month P&L dated August 2019 Increased Management Fee to 8% of EGIIncreased Taxes 15%

Income

$7.87

Economic Vacancy calculated using T-12 Effective Income dated August 2019

Expenses Expenses

Increased Pro Forma Rents based on survey of comparables

Increased Economic Vacancy to 4% based on Market Survey

Cap Rate

3,507

Net Operating Income

EXPENSES

Cap Rate

$70,131

Valuation Analysis

Pro Forma

August 2019T-12 Pro Forma

3,409 $3.77$3.67

$7,315$146,304

Proposed Loan at 75% LTV, 5.25% Interest, 10 Yr Term, 30 Yr AmortExplanation of Financial Analysis

Current

INCOME

Old Trail Duplexes Financials | 21

Unlevered IRR 15.79%Levered IRR 34.12%

Y1 $/Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Potential Gross Income $7,380 $147,600 $152,400 $156,972 $161,681 $166,532 $171,528 $176,673 $181,974

Vacancy/Loss to Lease/Concessions 2.0% -2,952 -9,144 -9,418 -9,701 -9,992 -10,292 -10,600 -10,918

Other Revenue $0 0 0 0 0 0 0 0 0

Effective Gross Income $7,232 $144,648 $143,256 $147,554 $151,980 $156,540 $161,236 $166,073 $171,055

Total Variable Expenses $1,728 34,569 35,606 36,675 37,775 38,908 40,075 41,278 42,516

Total Fixed Expenses $1,778 35,562 36,629 37,728 38,859 40,025 41,226 42,463 43,737

Total Operating Expenses $3,507 $70,131 $72,235 $74,402 $76,634 $78,933 $81,301 $83,740 $86,253

Net Operating Income $3,726 $74,517 $71,021 $73,151 $75,346 $77,606 $79,935 $82,333 $84,803

Debt Service ($34,789) ($34,789) ($34,789) ($34,789) ($34,789) ($34,789) ($34,789) ($34,789)

Net Cash Flow $39,728 $36,232 $38,363 $40,557 $42,818 $45,146 $47,544 $50,014

Return on Equity (Cash-on-Cash) 22.48% 20.50% 21.70% 22.95% 24.22% 25.54% 26.90% 28.30%

Debt Service Coverage 2.14 2.04 2.10 2.17 2.23 2.30 2.37 2.44

Unleveraged IRR 59.7% 28.8% 22.8% 19.9% 18.3% 17.1% 16.4% 15.8%

Leveraged IRR 219.9% 83.2% 59.7% 49.0% 42.9% 38.9% 36.2% 34.1%

Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8Rental Inflation 3.36% 3.25% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Vacancy Rate 2.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%

Other Income Inflation 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Expense Inflation 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

$700,000Purchase Price

Old Trail Duplexes Cash Flow | 22

Old Trail Duplexes Demographics | 23

POPULATION 1 MILE 3 MILE 5 MILE

2000 Population 6,100 48,973 106,861

2010 Population 5,920 45,761 100,425

2019 Population 5,757 45,306 100,596

2024 Population 5,712 45,228 100,962

2019 African American 4,622 33,469 66,864

2019 American Indian 9 90 236

2019 Asian 12 225 612

2019 Hispanic 126 1,585 4,354

2019 White 947 9,851 28,606

2019 Other Race 84 1,002 2,627

2019 Multiracial 78 646 1,546

2019-2024: Population: Growth Rate -0.80 % -0.15 % 0.35 %

2019 HOUSEHOLD INCOME 1 MILE 3 MILE 5 MILE

less than $15,000 294 2,623 6,197

$15,000-$24,999 189 2,346 5,516

$25,000-$34,999 260 2,053 4,473

$35,000-$49,999 430 2,997 6,118

$50,000-$74,999 470 3,312 6,915

$75,000-$99,999 268 1,991 4,212

$100,000-$149,999 137 1,353 3,111

$150,000-$199,999 93 492 851

$200,000 or greater 23 386 865

Median HH Income $45,836 $42,497 $40,960

Average HH Income $58,150 $57,743 $56,656

HOUSEHOLDS 1 MILE 3 MILE 5 MILE

2000 Total Housing 2,428 21,195 44,802

2010 Total Households 2,228 17,834 38,367



2019 Average Household Size 2.66 2.56 2.60

2000 Owner Occupied Housing 2,046 14,288 28,773

2000 Renter Occupied Housing 282 5,387 12,674



2019 Vacant Housing 296 2,982 7,082

2019 Total Housing 2,460 20,535 45,340



2024 Vacant Housing 316 3,108 7,359

2024 Total Housing 2,460 20,603 45,718

2019-2024: Households: Growth Rate -0.95 % -0.35 % 0.25 %

Source: esri

Old Trail Duplexes Demographic Charts | 24

1 Mile Radius 3 Mile Radius 5 Mile Radius

2019 Household Income

1 Mile Radius 3 Mile Radius 5 Mile Radius

2019 Population by Race

Old Trail Duplexes Demographic Charts | 25

2019 Household Occupancy - 1 Mile Radius

Average Income Median Income

2019 Household Income Average and Median

OFFERING(PROCEDURES(((

Purchasers(wishing(to(make(an(offer(and(tour(the(property(are(requested(to(submit:((

•! Letter!of!Intent!to!purchase(•! Resume!indicating!assets!owned!and!previous!12!months!of!acquisitions(•! Transaction!References(•! Banking!Reference(

((

Upon!receipt!of!an!acceptable!Letter!of!Intent,!the!successful!offeror!will!be!will!be!!supplied!with!a!Purchase!and!Sale!Agreement!

!!

!PLEASE!DO!NOT!CONTACT!THE!PROPERTY!DIRECTLY.!

ALL!COMMUNICATION,!INQUIRIES,!AND!TOUR!REQUESTS!SHOULD!BE!ADDRESSED!TO:!!!

!!!!!!!!!

!Texas(Real(Estate(Commission(–(Broker(License(#0479147(

Logan(Waller(President!

Waller!Group!Properties!5115!McKinney!Ave.!Dallas,!TX!75205!(214)!704Z5001!

[email protected]!

Old Trail Duplexes offering procedures updated | 26

old trail duplexes - cityfeet€¦ · birmingham al 35215 county jefferson market birmingham...

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