15421 Southwest 39th Terrace, Miami, FL 33185, USA
Great Deal Alert
Hello Everyone,
Here is a Real Estate investment opportunity that requires nothing on your part but financial outlay and doing your due diligence. And the returns could be amazing. Let me explain:
I have a long-time client who recently purchased an 8 unit building in Los Feliz. Los Feliz, if you didn’t know, is arguably the most coveted neighborhood on the East Side. My client, who I have been doing business with for about 15 years, purchased the property for $2.1 mm and has put about $300K worth of upgrades into it.
For another approximately $550,000 these 8 units can all be vacated and renovated to the point where they can be made into TICs (Tenants In Common.) If you don’t know about TIC, this is a model that has become popular in L.A. over the last 7 or 8 years, and is a way for entry level buyers to be able to be a homeowner in Los Angeles at a price they can afford. In the case of this Los Feliz property, this would translate to a blended average (there are varying sizes and bed/bath counts of units) price of approximately $650,000. It could be more than that…. it will not be less. At $650,000 this adds up to $5.2mm overall.
If you add up what my client, the principal, purchased the property for ($2.1mm,) what he has since put into it for capital improvements ($300K,) and what additional funds are needed to complete the task ($550K) it all adds up to $2.95mm. And let’s round it up to exactly $3mm for good measure. What this all means is that, once the TICs are sold, if you deduct that $3mm figure from the $5.2mm figure that they will sell for, you end up with a profit of $2.2 mm, which will take place over a 12-18 month time period. Except that you do need to deduct about $300K from that figure for closing costs, so you are really looking at a net profit of about $1.9mm. But, that’s pretty darn good!
So, how do you get paid or, in other words, how much of that $1.9mm do you get to have? Well, if you put in the entire $550,000 (you don’t necessarily have to be the only investor at $550K, but for the purposes of this example, let’s say you were,) then you would have contributed right around 18.5% of all the monies that are into the deal. So, you would get 18.5% of the profits. So that would translate to about $350,000 for your $550,000 financial outlay. Let’s say there is an 18 month turnaround for all this to take place. That would mean an annualized cash on cash return of 42.4% which, of course, is quite good. Whatever is the amount you put in, that is the rate of return you should expect.
Bottom line, as real estate investments go, this one is equal parts highly lucrative and safe. That said, nothing is guaranteed in the world of investing, real estate investing or otherwise, so obviously you need to do your due diligence. All I can do is make you aware of what I believe, based on my observation and experience, to be a really really good investment opportunity. My client, the principal, would be finishing this off himself (and he eventually will if there are no takers,) but he is focused on some much larger projects requiring significant financial outlay, and that is where his liquidity is currently directed. So you get to have this amazing opportunity.
OK, over to you. And if you have any questions or want to know more, call me anytime and I will help you out.
