128-sp Happy Day MHP/RV Park

Transcription

1 30-acre 128-space MHP/RV Park Plus 18 Residential Homes Currently 60% Occupied - Gross Revenue = $385,000 NOI $265,000 Current Zoning - Commercial & Industrial Hwy 92 Frontage Possible Seller Financing Offered to Qualified Purchaser Possible Storage Business Opportunity - Indoor & Boat/RV Presented by benny@crescorpllc.com CRES Corp International, LLC 1228 E 7th Ave Tampa, Fl 33605

2 CRES Corp International, LLC 128-sp Happy Day MHP/RV Park Income, Expenses & Cash Flow Property Overview Potential Rental Income $ 405,250 Purchase/Asking Price $ 4,500,000 Property Type Mobile Home Parks Other Income - Improvements - No. of Units 146 Total Vacancy and Credits (20,263) Other - Price Per Unit $ 30,822 Operating Expenses $ (165,000) Closing Costs - Total Sq Ft 1,000 Annual Reserves: $ Finance Points - Price Per Sq Ft $ 4,500 Net Operating Income (NOI) $ 219,988 Income per Unit $ 2,776 MIP Payments $ Total Acquisition Cost $ 4,500,000 Expenses per Unit $ (1,130) Annual Reserves: $ Debt Service: $ Mortgage (s) $ Cash Flow Before Taxes $ 219,988 Income Taxes: Benefit 0% - Down Payment / Investment $ 4,500,000 Cash Flow After Taxes $ 219,988 Assumptions Loan Information % of Asking % of Cost Rental Growth Rate: 64.10% Down Payment: $ 4,500, % % Expense Growth Rate: 3.00% Initial Loan Balance: $ 0.00% 0.00% Capitalization Rate (Resale): 8.00% Marginal Tax Rate: 0.00% Loan Amount Interest Rate Term Payment Capital Gain Tax Rate: 0.00% $ 5.00% 25 $0 $ 8.00% 30 $0 $ 8.00% 30 $0 Financial Measurements Year 1 Year 3 Year 7 Notes / Discussion Debt Coverage Ratio (DCR) Loan-to-Value Ratio (LVR) 0.0% 0.0% 0.0% Capitalization Rate Based on Cost 4.89% 11.15% 12.93% Capitalization Rate Based on Resale Price 8.00% 8.00% 8.00% Gross Rent Multiplier Net Present Value (NPV) - B/ Taxes Net Present Value (NPV) - A/Taxes 13.50% (766,971) 569, , % (648,193) 1,047,046 1,375,878 Cash on Cash Return - Before Taxes 4.89% 11.15% 12.93% Cash on Cash Return - After Taxes 4.89% 11.15% 12.93% Internal Rate of Return - Before Taxes 18.31% 15.11% Internal Rate of Return - After Taxes 18.31% 15.11% Modified Internal Rate of Return - Before Taxes Modified Internal Rate of Return - After Taxes 17.52% 12.87% 17.52% 12.87% Disclaimer: All information presented is believed to be accurate. The information, calculations and data presented in this report are believed to be accurate but are not guaranteed. The information contained in this report shall not be considered as a substitution for legal, accounting or other professional advice. Please seek proper legal and tax advice as appropriate before making investments.

3 Property Description 128-sp Happy Day MHP/RV Park The Happy Day MHP/RV park is comprised of approximately 30 acres of land which occupies 128 mobile home/rv lots, and 18- houses. The property has about 1320 on US Hwy 92 West in Auburndale. HIGHLIGHTS 128-spaces - 41 Park Owned Units 18- Residential Homes 30-acres Zoned Commercial & Industrial Possible Storage-Boat-RV Seller Financing Qualified Buyer -128-MH/RV spaces (zoning permits both) - 41 POM -18 Residential Homes -30-acres MOL -Office Building -Laundry Room -Restrooms for Tenants -2 Storage Buildings The current owners have inherited the property and are too busy with other obligations to effectively operate the business of the park. Currently the business operation is producing: -Occupancy: 60% (combined MHP/RV/Homes -Gross Revenue: $385,852 (annualized 2017@ 60% Occupancy) -NOI: $263,000 (approximate) Under new and experienced ownership, the park is expected to reach over 90% occupancy and obtain the following revenue: -Projected Gross Revenue: $901,000 -NOI: $501,000 Current zoning is Commercial, Industrial and Multifamily, which offers a multitude of opportunities: -Assisted Living/ Independent Living (Zone change may be required) -Storage Facility PLus Boat&RV -Medical Office -Hotel/Motel/Restaurant -Manufacturing/ Warehouse/Distribution CRES Corp International, LLC benny@crescorpllc.com 1228 E 7th Ave 0 Tampa, Fl 33605

4 128-sp Happy Day MHP/RV Park Rental Home Interior Bathroom Rental Home Interior Kitchen Rental Home Rental Home Rental Home

5 128-sp Happy Day MHP/RV Par Residential Lot with 14 Houses Front Property acres 128-sp MHP/RV Vacant 8.6-acres

6 Rental Activity Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Potential Rental Income $ 405,250 $ 665,000 $ 949,000 $ 977,470 $ 1,006,794 Less: Vacancy & Credit Losses (20,263) (33,250) (47,450) (48,874) (50,340) Effective Gross Income $ 384,988 $ 631,750 $ 901,550 $ 928,597 $ 956,454 Less: Operating Expenses (165,000) (297,000) (400,000) (408,000) (416,160) Net Operating Income (NOI) $ 219,988 $ 334,750 $ 501,550 $ 520,597 $ 540,294 Less: Annual Debt Service CASH FLOW Before Taxes $ 219,988 $ 334,750 $ 501,550 $ 520,597 $ 540,294 Property Resale Analysis Projected Sales Price $ 4,184,375 $ 6,269,375 $ 6,507,456 $ 6,753,680 $ 7,008,310 Less: Selling Expenses (167,375) (250,775) (260,298) (270,147) (280,332) Adjusted Projected Sales Price $ 4,017,000 $ 6,018,600 $ 6,247,158 $ 6,483,533 $ 6,727,978 Less: Mortgage(s) Balance Payoff SALE PROCEEDS Before Taxes $ 4,017,000 $ 6,018,600 $ 6,247,158 $ 6,483,533 $ 6,727,978 Cash Position Cash Generated in Current Year $ 219,988 $ 334,750 $ 501,550 $ 520,597 $ 540,294 Cash Generated in Previous Years n/a 219, ,738 1,056,288 1,576,884 Cash Generated from Property Sale 4,017,000 6,018,600 6,247,158 6,483,533 6,727,978 Original Initial Investment (4,500,000) (4,500,000) (4,500,000) (4,500,000) (4,500,000) Total Potential CASH Generated $ (263,013) $ 2,073,338 $ 2,803,446 $ 3,560,417 $ 4,345,156 Financial Measurements Capitalization Rate Based on Cost 4.89% 7.44% 11.15% 11.57% 12.01% Capitalization Rate Based on Resale Price 8.00% 8.00% 8.00% 8.00% 8.00% Gross Rent Monthly Multiplier (GRM) Gross Rent Yearly Multiplier (GRM) Value of Property Using this GRM ,431,500 3,990,000 5,694,000 5,864,820 6,040,765 Break-Even Ratio 40.72% 44.66% 42.15% 41.74% 41.34% Operating Expense Ratio 42.86% 47.01% 44.37% 43.94% 43.51% Cash-on-Cash Return with Equity -5.84% 58.16% 12.13% 12.12% 12.10% Cash-on-Cash Return - Before Taxes 4.89% 7.44% 11.15% 11.57% 12.01% 4/28/2017 1:27 PM Cash Flow Analyzer

7 Rental Activity Analysis Potential Rental Income Less: Vacancy & Credit Losses Effective Gross Income Less: Operating Expenses Net Operating Income (NOI) Year 6 Year 7 Year 8 Year 9 Year 10 $ 1,036,998 $ 1,068,108 $ 1,100,151 $ 1,133,156 $ 1,167,150 (51,850) (53,405) (55,008) (56,658) (58,358) $ 985,148 $ 1,014,702 $ 1,045,144 $ 1,076,498 $ 1,108,793 (424,483) (432,973) (441,632) (450,465) (459,474) $ 560,665 $ 581,730 $ 603,511 $ 626,033 $ 649,319 Less: Annual Debt Service CASH FLOW Before Taxes $ 560,665 $ 581,730 $ 603,511 $ 626,033 $ 649,319 Property Resale Analysis Projected Sales Price Less: Selling Expenses Adjusted Projected Sales Price $ 7,271,620 $ 7,543,890 $ 7,825,411 $ 8,116,481 $ 8,417,410 (290,865) (301,756) (313,016) (324,659) (336,696) $ 6,980,755 $ 7,242,135 $ 7,512,395 $ 7,791,822 $ 8,080,714 Less: Mortgage(s) Balance Payoff SALE PROCEEDS Before Taxes $ 6,980,755 $ 7,242,135 $ 7,512,395 $ 7,791,822 $ 8,080,714 Cash Position Cash Generated in Current Year Cash Generated in Previous Years Cash Generated from Property Sale Original Initial Investment Total Potential CASH Generated $ 560,665 $ 581,730 $ 603,511 $ 626,033 $ 649,319 2,117,178 2,677,843 3,259,573 3,863,084 4,489,117 6,980,755 7,242,135 7,512,395 7,791,822 8,080,714 (4,500,000) (4,500,000) (4,500,000) (4,500,000) (4,500,000) $ 5,158,598 $ 6,001,707 $ 6,875,479 $ 7,780,939 $ 8,719,149 Financial Measurements Capitalization Rate Based on Cost Capitalization Rate Based on Resale Price 12.46% 12.93% 13.41% 13.91% 14.43% 8.00% 8.00% 8.00% 8.00% 8.00% Gross Rent Monthly Multiplier (GRM) Gross Rent Yearly Multiplier (GRM) Value of Property Using this GRM 6.00 Break-Even Ratio Operating Expense Ratio ,221,988 6,408,647 6,600,907 6,798,934 7,002, % 40.54% 40.14% 39.75% 39.37% 43.09% 42.67% 42.26% 41.85% 41.44% Cash-on-Cash Return with Equity Cash-on-Cash Return - Before Taxes 12.09% 12.08% 12.07% 12.05% 12.04% 12.46% 12.93% 13.41% 13.91% 14.43% 4/28/2017 1:27 PM Cash Flow Analyzer

8 Annual Property Operating Data 1 2 Year 1 Sq Ft Per Unit Year 2 Sq Ft Per Unit Year 3 Sq Ft Per Unit Year 4 Sq Ft Per Unit Year 5 Sq Ft Per Unit Potential Rental Income $ 405, $ 665, $ 949, $ 977, $ 1,006, Less: Vacancy & Credit Losses (20,263) (33,250) (47,450) (48,874) (50,340) Effective Gross Income $ 384, $ 631, $ 901, $ 928, $ 956, Operating Expenses Total Operating Expenses $ 165, $ 416, $ 450, $ 487, $ 527, Net Operating Income (NOI) $ 219, $ 215, $ 451, $ 440, $ 428, Cash Flow Before Taxes $ 219, $ 215, $ 451, $ 440, $ 428, Cash Flow Analyzer

9 Annual Property Operating Data 1 2 Year 6 Sq Ft Per Unit Year 7 Sq Ft Per Unit Year 8 Sq Ft Per Unit Year 9 Sq Ft Per Unit Year 10 Sq Ft Per Unit Potential Rental Income Less: Vacancy & Credit Losses Effective Gross Income $ 1,036, $ 1,068, $ 1,100, $ 1,133, $ 1,167, (51,850) (53,405) (55,008) (56,658) (58,358) $ 985, $ 1,014, $ 1,045, $ 1,076, $ 1,108, Operating Expenses Total Operating Expenses $ $ $ $ $ Net Operating Income (NOI) $ 985, $ 1,014, $ 1,045, $ 1,076, $ 1,108, Cash Flow Before Taxes $ 985, $ 1,014, $ 1,045, $ 1,076, $ 1,108, Cash Flow Analyzer

10 Cash Flow After Taxes Cash Flow Before Taxes $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ Time Net Operating MIP Payments Debt Cash Flow Incomes Cash Flow Period Income Service Before Tax Taxes After Tax Int Investment $ (4,500,000) $ (4,500,000) Year 1 219, , ,988 Year 2 334, , ,750 Year 3 501, , ,550 Year 4 520, , ,597 Year 5 540, , ,294 Year 6 560, , ,665 Year 7 581, , ,730 Year 8 603, , ,511 Year 9 626, , ,033 Year , , , Cash Flow Analyzer

11 After Taxes Before Taxes 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Time Initial Investment Cash Flow Cash on Cash Income Cash Flow Cash on Cash Period Adj for Refinance Before Taxes Before Taxes Taxes After Taxes After Taxes Year 1 $ 4,500,000 $ 219, % $ $ 219, % Year 2 4,500, , % - 334, % Year 3 4,500, , % - 501, % Year 4 4,500, , % - 520, % Year 5 4,500, , % - 540, % Year 6 4,500, , % - 560, % Year 7 4,500, , % - 581, % Year 8 4,500, , % - 603, % Year 9 4,500, , % - 626, % Year 10 4,500, , % - 649, % Cash Flow Analyzer

12 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Time Net Operating Cap Rate on Cost Resale Period Income (NOI) $ 4,500,000 Value Year 1 $ 219, % $ 4,184,375 Year 2 334, % 6,269,375 Year 3 501, % 6,507,456 Year 4 520, % 6,753,680 Year 5 540, % 7,008,310 Year 6 560, % 7,271,620 Year 7 581, % 7,543,890 Year 8 603, % 7,825,411 Year 9 626, % 8,116,481 Year , % 8,417, Cash Flow Analyzer

13 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $ Time Projected Adj Projected Refi Proceeds Mortgage(s) Sale Proceeds Income Taxes Sale Proceeds Property Year / Year Period Resale Value Increase (if any) Balance Payoff Before Taxes From Sale After Taxes Equity Equity Increase Year 1 $ 4,017, % $ $ $ 4,017,000 $ $ 4,017,000 $ 4,017,000 $ (483,000) Year 2 6,018, % - - 6,018,600-6,018,600 6,018,600 2,001,600 Year 3 6,247, % - - 6,247,158-6,247,158 6,247, ,558 Year 4 6,483, % - - 6,483,533-6,483,533 6,483, ,375 Year 5 6,727, % - - 6,727,978-6,727,978 6,727, ,445 Year 6 6,980, % - - 6,980,755-6,980,755 6,980, ,777 Year 7 7,242, % - - 7,242,135-7,242,135 7,242, ,379 Year 8 7,512, % - - 7,512,395-7,512,395 7,512, ,260 Year 9 7,791, % - - 7,791,822-7,791,822 7,791, ,428 Year 10 8,080, % - - 8,080,714-8,080,714 8,080, , Cash Flow Analyzer

14 Return on Equity (ROE) 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% % Required Return on Equity Time Period Rental Annual Change Annual Change Trapped Return on Hold Cash Flow in Equity in Net Worth Equity Equity (ROE) Sell 6.00% A B (A + B) Year 1 219,988 (483,000) (263,013) 4,500, % Hold After Year Year 2 334,750 2,001,600 2,336,350 4,017, % Hold 5 Year 3 501, , ,108 6,018, % Hold Year 4 520, , ,971 6,247, % Hold Year 5 540, , ,740 6,483, % Hold Year 6 560, , ,442 6,727, % Hold Year 7 581, , ,109 6,980, % Hold Year 8 603, , ,771 7,242, % Hold Year 9 626, , ,461 7,512, % Hold Year , , ,210 7,791, % Hold Cash Flow Analyzer

15 BreakEven Occupancy BreakEven Occupancy with Cash on Cash Requirment % % 80.00% 60.00% 40.00% 20.00% 0.00% Cash on Cash Time Period Potential Operating, Debt, Occupancy BreakEven Max Vacancy BreakEven Max Vacancy Requirement Rental Income Reserve Expenses Rate (Existing) Occupancy Rate BreakEven Rate Occupancy Rate BreakEven Rate 6.00% w/ Cash on Cash w/ Cash on Cash Year 1 405,250 (165,000) 95.00% 40.72% 59.28% % -7.34% Year 2 665,000 (297,000) 95.00% 44.66% 55.34% 85.26% 14.74% Year 3 949,000 (400,000) 95.00% 42.15% 57.85% 70.60% 29.40% Year 4 977,470 (408,000) 95.00% 41.74% 58.26% 69.36% 30.64% Year 5 1,006,794 (416,160) 95.00% 41.34% 58.66% 68.15% 31.85% Year 6 1,036,998 (424,483) 95.00% 40.93% 59.07% 66.97% 33.03% Year 7 1,068,108 (432,973) 95.00% 40.54% 59.46% 65.81% 34.19% Year 8 1,100,151 (441,632) 95.00% 40.14% 59.86% 64.68% 35.32% Year 9 1,133,156 (450,465) 95.00% 39.75% 60.25% 63.58% 36.42% Year 10 1,167,150 (459,474) 95.00% 39.37% 60.63% 62.50% 37.50% Cash Flow Analyzer

16 CRES Corp International, LLC CRES Corp International, LLC 1228 E 7th Ave 0 Tampa, Fl benny@crescorpllc.com Commercial Real Estate Services - Development - Management - Financial Services CRES Corp International, LLC (CCI) is a Commercial Real Estate company offering development, finance and brokerage services. Our Development Teamspecializes in health care construction and offers the latest and most cost effective construction technology. Our Development specializes in health care, medical, Multi-Family & Hospitality operations and development: Construction & Development Project Planning Property Acquisitions Investment Structuring Property Conversion and Repositioning Joint Venture Structuring Medical/Health Care Property Management Financial Arrangement & Consulting To assist our Clients with their development projects and acquisitions we offer affordable financing alternatives to conventional financing methods: Variable Rate Demand Bonds Industrial Revenue & Municipal Bonds Build-to Lease Program Foreign Investment Funds Joint Venture/Equity Partnership Arrangements Our goal is to bring our Clients the lowest interest rates and best leverage on their purchases and projects. We will consider the following properties and projects: Health Care/Medical Offices Multi-Family Schools/Universities Hospitality For further information contact or benny@crescorpllc.com

17 Terms & Definitions Net Operating Income (NOI) is a property s gross rental income reduced by all expenses except for loan payments, income taxes, mortgage insurance premium (MIP) payments and sometimes funded reserves. Debt Coverage Ratio (DCR) is a property s net operating income divided by the amount of debt payments. Lenders use this calculation to determine the remaining operating cash flow after the debt payments. Loan-to-Value Ratio (LTV) is the outstanding debt divided by the value of the property. This ratio is used to determine the amount of leverage and property equity. The debt balance can be the beginning or end-of-year balance. The property value used can be the contract price or the fair market value at the end of the year. Capitalization Rate (Cap Rate) is the net operating income (NOI) divided by either the property s contract purchase price or its fair market value. Cash-on-Cash Return is the net cash flow divided it by the initial investment (down payment). The calculation does not take into account the time value of money or change in the property s equity. Cash-on-Cash Return with Equity Build-up modifies the cash-on-cash return calculation by adding the property s net change in equity for that year to the numerator and adding all previously generated equity to the denominator of the cash-on-cash return ratio. The calculation calculates the return on the property equity, i.e. the return on the cash that is tied up in the property. Net Present Value (NPV) converts future dollars into present-day dollars by discounting (reducing) the future cash flow of a property by a given rate or percentage. The initial investment (down payment) is subtracted from the discounted dollars to derive the NPV. A positive NPV means that the property will generate a higher return than the given rate or percentage used to calculate the NPV amount. Gross Rent Multiplier (GRM) is a property s fair market value divided by its gross rental income. Mortgage Insurance Premium (MIP) Payments are insurance premiums charged by a lender to protect that lender against loss from a mortgager's default. The rates are charged on the balance of the loan and may be paid annually, monthly, or in some combination of the two (split premiums). Internal Rate-of-Return (IRR) is the most widely used method of valuing a property s annual cash flow stream. Since a property s cash flow is earned in the future, those future dollars must be converted to present-day dollars. The IRR calculation discounts (reduces) the property s future cash flow at a rate (i.e. percentage) so that the sum of all cash flow for a specified time period is equal to the initial investment. The rate or percentage needed to do that is the IRR. In other words, IRR is the discount rate at which Net Present Value (NPV) is zero. Modified Internal Rate-of-Return (MIRR) modifies the IRR to avoid the drawbacks of the traditional IRR. The IRR implicitly assumes that all cash flow is either reinvested or discounted at the computed IRR rate. In reality, a property s cash flow probably will not be reinvested at the computed IRR rate, but rather earn zero or a small amount of interest. The MIRR eliminates the reinvestment assumption by utilizing user stipulated reinvestment and borrowing rates. benny@crescorpllc.com CRES Corp International, LLC 1228 E 7th Ave 0 Tampa, Fl 33605