4324 Ventura Canyon Ave Pro Forma and IRR
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Transcript of 4324 Ventura Canyon Ave Pro Forma and IRR
Why Sherman Oaks, California?
- Occupancy rates in Sherman Oaks are consistently above 95%. 59% of tenants are renters.
- The cities in the surrounding area are very nice as well, Encino, Tarzana, and Studio City are all great
locations
- Short commute to downtown Los Angeles, 20-40 minutes to downtown dependent on traffic conditions
- Access to big city amenities with the luxury of suburban privacy
Why 4324 Ventura Canyon AvenueBuilding
● 12 spacious garden style
apartments
○ Ten Units 2 Bed 1 Bath
○ Two Single Units
● Beautiful Courtyard with
swimming pool
● Gates and secure parking lot on
site
● Renovated Laundry Room
Location
● Close to Ventura Boulevard
● Relative proximity to Coast and
Downtown Los Angeles
● Very walkable area - most errands
can be done on foot
● Quality Public/Private Schools
○ Notre Dame HS
○ The Buckley School
○ Robert A. Millikan Middle
Why Invest in Multi Unit Properties?- More rent coming in means a greater cash flow than single unit properties
- Less risk upon losing a tenant
- One property to manage for multiple renters
- Large pool of tenants to choose from who can afford multi unit housing
Why Multi Unit Residential Property in Sherman Oaks?- The percentages of divorced females, divorced males and widowed females are
among the countries highest
- Most of the houses/homes in this area are tenanted by 1 to 2 people
- 59% of tenants are renters
Understanding the market- The Sherman Oaks sub-market is bordered by Burbank to the East, Van Nuys to
the North, Encino to the West, and Universal City to the South
- Access to the area via:
- Ventura Freeway (101)
- Hollywood Freeway (134)
- San Diego Freeway (405)
- Sherman Oaks Trade Market
- Westfield Fashion Square
- Sherman Oaks Galleria
- Sherman Oaks Shopping Center
Transportation
This property is within proximity of
plenty of public transportation,
within walkable distance of most
essential shops, and offers parking
The details:
● Metro bus and rail lines
● Grocery stores, schools, and
shops accessible by foot
● Gated parking for residents
ExternalitiesPositive
Near Property:
● Great Private and Public Schools
● Plenty of shops in walking distance
● Variety of restaurants of all cuisine
● Close to Downtown Los Angeles and
the coastal beaches
● Easy access to public transportation
Negative
Near Property:
● Very Close to the busy Ventura
Boulevard
● Pub at street corner of Ventura
Boulevard and Ventura Canyon
● Traffic can be dense during rush hours
Maximum Supportable DebtThe effective cost of $2,139,146 with a 1% origination fee and 5 year holding period is 6.63%.
Resulting leverage is -0.80%
Payoff amount at disposition is $1763214.55
Acquisition
The projected IRR of 16.16% does not meet the Investor required minimum of 20%,
therefore the deal is a no go.
Conclusion...How to make this deal work?In order to achieve an IRR of at least 20%, the asking price would have to be
negotiated down to $2,100,000.00
Since the majority of tenants in Sherman Oaks consist of renters looking for
apartments for 1 to 2 people, we believe that this property is a valuable investment.
Vacancy rates are consistently low in Sherman Oaks while GPR is increasing.
The Team
Joseph Nelson, CEO
Visionary who enjoys high
cap rates and long walks on
the beach
Mark Ruff, CFO
A professional in the
industry and the chief
advisor to the day to day
operations
Max Nikias, CTO
A key to the financial
element of this group,
Nikias enjoys watching his
investments flourish
Andrew Mow, CPO
Entrepreneur and financial
advisor specializing in long
term investments