FOR SALE: 4,940 Sq. Ft. 5-Apartment Property 11 Paradise Avenue in Historic Catonsville, Baltimore County, Maryland 21228

Size: px

Start display at page:

Download "FOR SALE: 4,940 Sq. Ft. 5-Apartment Property 11 Paradise Avenue in Historic Catonsville, Baltimore County, Maryland 21228"

Christopher Lane
5 years ago
Views:

FOR SALE: 4,940 Sq. Ft. 5-Apartment Property 11 Paradise Avenue in Historic Catonsville, Baltimore County, Maryland 21228» Property BUILT 1924 ZONING DR-3.

1 FOR SALE: 4,940 Sq. Ft. 5-Apartment Property 11 Paradise Avenue in Historic Catonsville, Baltimore County, Maryland 21228» Property BUILT 1924 ZONING DR-3.5 Residential Zoning allowing 3 ½ units per acre. 5 Dwelling Units. LOT 1.26 acres. Approx. 220 road frontage by 250 deep. Tax account SIZE PARKING» Construction EXTERIOR BASEMENT INTERIOR LAUNDRY 4,940 Gross Building Area. 6 garage parking spaces. Circular driveway. Cedar shake shingles. Asphalt shingle roof. Wood frame and metal Garages. Wood double-hung windows. Full unimproved basement with utility room. Original hardwood floors, many covered with wall-to-wall carpet. Plaster walls and plaster ceilings, some with celotex ceiling tile. Typical kitchen has linoleum floor with metal or older wood cabinets. Some with wall-hung porcelain sinks, others with laminate counters and stainless sinks. Gas range and refrigerator in each kitchen. Typical bathroom has linoleum or 12x12 vinyl tile floor, cast iron tub, vinyl tub enclosure and wall hung sink or modern vanity. Washer-dryer in the basement is free for tenant use. MECHANICAL 375,000 BTU Burnham central oil-fired hot water radiator heating system. Oil-fired 2008 Bock 68-gallon, with 177- gallon-per- hour recovery, domestic water heater. 200-amp main electric service. Circuit break main disconnects for each separate electric meter. Fuse electric panels in each apartment. Separate gas meter for each apartment. Galvanized steel water main. Interior pipes are a combination of cvpvc plastic, copper, and galvanized steel.» Environmental MOLD LEAD PAINT ASBESTOS TANKS Mold may be present in some parts of the basement. Seller has no knowledge of lead-based paint. No lead-inspection certificates on file. Insulation on heating pipes in the basement and insulating boards above furnace appear to contain asbestos. 1,000 gallon underground oil storage tank reported in the yard behind the building. Call Ben Frederick, III, CCIM Seller s Exclusive Agent $350,000 in fee simple $70,000 per unit; $71 per sq. ft. No ground rent. This offering is made without regard to race, religion, color, creed, sex, marital & family status, and/or handicap. The information contained herein is believed accurate and from reliable sources; however, neither the owner nor Ben Frederick Realty, Inc. or any of their agents and/or sub-agents make any warranties or representations with regard to this information, the physical condition of the Property or any of its components, nor the financial performance of the Property. All information should be considered as observed by Broker. The Purchaser is hereby advised to verify all information to Purchaser s own satisfaction. This Property and this offering are subject to prior sale and withdrawal at any time as the owner may deem appropriate.

2 1 1 P A R A D I S E L A N E I N V E S T M E N T P R O P E R T Y I N C O M E A N D E X P E N S E B U D G E T S U G G E S T E D F I N A N C I N G: I N V E S T M E N T O F F E R I N G: 350,000 Loan-to-Value 75% S U G G E S T E D L O A N A M O U N T 262,500 Loan Amount 262,500 E S T I M A T E D C L O S I N G C O S T S 17,500 Interest Rate 5.00% T O T A L I N V E S T M E N T 105,000 Term 25 Price Per Unit 5 70,000 Monthly P & I $ 1, Price Per Sq.Ft. 4, Unit Size Lease Expires Sec Dep Sec Dep Date Current Actual Rent Market Rent A 2 BR 1 Ba monthly B 1 BR Den monthly nd Front 1 BR monthly 600 9/1/ D 1 BR monthly rd Flr 1 BR monthly /1/ Garage 3 are currently rented at $40 each on monthly leases 120 Garage If all 6 were rented for $60 per month 360 Total Monthly Rental Income 3,270 3,960 Gross Annual Income 39,240 47,520 GRM (actual) = 8.9 Vacancy / Credit Loss 5.0% (1,962) (2,376) GRM (market) = 7.4 Effective Annual Income 37,278 45,144 Real Estate Taxes actual 7/1/ ,100 3,992 Ground Rent none 0 Insurance budget 500 per unit 2,500 License - Baltimore County actual 25 per resid unit 35 Lead Paint Registration Fee actual 30 per resid unit 30 Repairs & Maintenance budget 1000 per unit 5,000 Oil Heat and Hot Water actual per Petro 1,748 Gas & Electric actual 455 per month 5,460 Water actual 28 per unit per mo 1,660 Expense/Unit= $4,090 45% TOTAL EXPENSES 20,424 Cap Rate= 7.06% NET OPERATING INCOME 24,720 DCR= 1.34 Less: Mortgage Payments: 18,415 ROI= 6.0% Monthly Cash Flow: $525 Annual Cash Flow: 6,305 C O M P A R A B L E S A L E S address date sold sales price # units Monthly Rent Price per Unit GRM 902 Arion Park Mar , ,493 58, Edmondson Jun , ,075 79, Winters La Feb , ,500 87, A Beaumont Ave Jan , , , Ingleside Ave Jan , , , Frederick Rd Sep , , ,

3 Illustration of the Four Components of "Return on Investment" 1 Cash Flow This first and perhaps most obvious component is "cash flow" - rental income minus expenses - or how much cash ends up in your pocket. 45,144 + Rental Income 20,424 - Operating Expenses 18,415 - Mortgage Payments 6,305 = Cash Flow 105,000 / Downpayment + Closing Costs 6.0% = Return on Investment from Cash Flow 2 Appreciation As the value of the property increases, your return on investment increases. 350,000 = Acquisiton Price 5% * First Year Appreciation 367,500 = Value at the end of Year 1. 17,500 = Amount of Value Increase 105,000 / Downpayment + Closing Costs 17% = Return on Investment from Appreciation 3 Equity Build-Up 5.00% 25 $ 1, Even if the property did not increase in value, Equity will increase solely from paying down the mortgage. 262,500 = Loan Amount at Closing 257,087 = Loan Amount at the end of Year 1 5,413 - Equity Build-Up in Year 1 105,000 / Downpayment + Closing Costs 5.2% = Return on Investment from Equity Build-Up 4 Tax Benefits One pays less income taxes on a real estate investment than on other investment vehicles. 24,720 = Cash Flow Before Loan Payments (rents less expenses) 10,818 - Depreciation (assumes 15% land, 27.5 year recovery) 13,002 - Mortgage Interest 899 = Taxable Income Year 1 33% * Marginal Tax Rate 297 = Federal Income Tax 297 Federal Income Tax 6,305 / Cash Flow 4.7% = Effective Tax Rate on This Investment 2,081 = Tax if Cash Flow came from a non-preferred investment vehicle Tax from this preferred investment vehicle. 1,784 = Income Tax Savings 1.7% Return on Investment from Tax Savings Total / Summary 1: 6,305 Cash Flow 2: 17,500 Appreciation Year 1 3: 5,413 Equity Build Up Year 1 4: 1,784 Tax Savings Year 1 31,001 Total Return from this Investment 105,000 Downpayment + Closing Costs 29.5% Total Return from this Investment For illustration purposes only. Though believed accurate reliable, information is not guaranteed.

4 Illustration of Internal Rate of Return over a 10-Year Holding Period 1 1 P A R A D I S E L A N E Purchase Price 350, Annual Rent 4.0% 47,520 49,421 51,398 53,454 55,592 57,815 60,128 62,533 65,034 67,636 Vacancy 3.0% 1,426 1,483 1,542 1,604 1,668 1,734 1,804 1,876 1,951 2,029 Effective Income 46,094 47,938 49,856 51,850 53,924 56,081 58,324 60,657 63,083 65,607 Expenses 4.0% 20,424 21,241 22,091 22,975 23,894 24,849 25,843 26,877 27,952 29,070 Exp as a percent of Annual Rent 44% 44% 44% 44% 44% 44% 44% 44% 44% 44% Exp per unit 5 4,085 4,248 4,418 4,595 4,779 4,970 5,169 5,375 5,590 5,814 NOI 0 25,670 26,697 27,765 28,875 30,030 31,232 32,481 33,780 35,131 36,536 Debt Service $ 1,535 18,415 18,415 18,415 18,415 18,415 18,415 18,415 18,415 18,415 18,415 Before Tax Cash Flow (105,000) 7,255 8,282 9,350 10,461 11,616 12,817 14,066 15,365 16, , % Internal Rate of Return NOI 25,670 26,697 27,765 28,875 30,030 31,232 32,481 33,780 35,131 36,536 Less Interest 13,002 12,725 12,434 12,128 11,806 11,468 11,113 10,739 10,347 9,934 Less Depreciation 10,182 10,182 10,182 10,182 10,182 10,182 10,182 10,182 10,182 10,182 Taxable Income 0 2,486 3,790 5,149 6,565 8,042 9,581 11,186 12,859 14,603 16,421 25% ,287 1,641 2,011 2,395 2,796 3,215 3,651 4,105 After Tax Cash Flow (105,000) 6,634 7,335 8,063 8,819 9,605 10,422 11,270 12,151 13, , % Internal Rate of Return Purchase 350,000 Assume a Sale at End of Year 10 L-V 75% Annual Rent Roll 67,636 Loan 262,500 GRM 7.4 Down Payment 87,500 annual appreciation 3.6% Price 498,159 Cap Improvement - Sale Costs 6% 29,890 Closing Costs 17,500 Less: Basis 248,182 Initial Investment 105,000 Gain 220,088 Rate 5.00% 20% 44,018 Term 25 Mortgage Balance 194,052 P&I $1, Sale Proceeds Before Tax 274,218 Sale Proceeds After Tax 230,200 Mortgage Amortization ,500 Beg Bal 262, , , , , , , , , , % Prin 5,413 5,689 5,981 6,286 6,608 6,946 7,302 7,675 8,068 8, Int 13,002 12,725 12,434 12,128 11,806 11,468 11,113 10,739 10,347 9,934 1,535 Bal EOY 257, , , , , , , , , ,052 Cost Recovery / Depreciation 350, ,000 Building 80% 280,000 Land 20% 70,000 Life ,182 10,182 10,182 10,182 10,182 10,182 10,182 10,182 10,182 10,182 Basis 339, , , , , , , , , ,182 Prepared by: Ben Frederick Realty Inc. For Illustration Purposes Only. Though believed accurate and reliable, information is not guaranteed.

t 2 Apartments 22 Cedarwood Road in Historic Catonsville, Baltimore County, 21228 2 Two-Bedroom Apartments 1 Garage» Property BUILT 1938 ZONING DR 3.

5 t 2 Apartments 22 Cedarwood Road in Historic Catonsville, Baltimore County, Two-Bedroom Apartments 1 Garage» Property BUILT 1938 ZONING DR 3.5 LOT 50 wide by 80 m/l tax account SIZE 1,542 Gross Building Area» Kitchens and Baths» Exterior CONSTRUCT ROOF WINDOWS PARKING Vinyl siding over frame construction, block foundation. Asphalt shingle roof. Single-pane. Wood double-hung. Attached garage in the basement. AMENITIES Easy access to I-695 FIRST FLOOR SECOND FLOOR Linoleum kitchen floor, metal cabinets with porcelain top and sink. 30 gas range. Bath has original ceramic tile floor and walls, cast iron tub and original pedestal sink. Original porcelain wall-hung sink with vintage gas range and vintage GE refrigerator. Bath has original ceramic tile floor, cast iron tub with plastic wall board and a vintage pedestal sink.» Environmental LEAD PAINT OIL ASBESTOS» Utilities HEAT HOT WATER ELECTRIC GAS PLUMBING TRASH House is vacant. Unknown. Oil heat. Tank buried in yard. Asbestos floor tile in basement. Oil fired hot water radiator heat Rheem 40-gallon gas-fired. 60 Amp total service. 2 meters. 1 Gas meter. Galvanized water main with a mix of galvanized & plastic water pipe. County pick-up included in property taxes.» Interior WALLS & CEILNGS Plaster walls and ceilings.. FLOORS BASEMENT Hardwood floors under wall-to-wall carpet in most living areas. Full basement. Improved club room with vintage knotty pine paneling. 2-car garage in the basement. Call Ben Frederick, III, CCIM Seller s Exclusive Agent $279,000 in fee simple $139,500 per unit. $181 per sq. ft. No ground rent. This offering is made without regard to race, religion, color, creed, sex, marital & family status, and/or handicap. The information contained herein is believed accurate and from reliable sources; however, neither the owner nor Ben Frederick Realty, Inc. or any of their agents and/or sub-agents make any warranties or representations with regard to this information, the physical condition of the Property or any of its components, nor the financial performance of the Property. All information should be considered as observed by Broker. The Purchaser is hereby advised to verify all information to Purchaser s own satisfaction. This Property and this offering are subject to prior sale and withdrawal at any time as the owner may deem appropriate.

6 2 2 C E D A R W O O D R O A D I N V E S T M E N T P R O P E R T Y I N C O M E A N D E X P E N S E B U D G E T S U G G E S T E D F I N A N C I N G: I N V E S T M E N T O F F E R I N G: 279,000 Loan-to-Value 75% S U G G E S T E D L O A N A M O U N T 209,250 Loan Amount 209,250 E S T I M A T E D C L O S I N G C O S T S 13,950 Interest Rate 4.75% T O T A L I N V E S T M E N T 83,700 Term 30 Price Per Unit 2 139,500 Monthly P & I $ 1, Price Per Sq.Ft. 1, Unit Size Lease Expires Sec Dep Sec Dep Date Current Actual Rent Market Rent 1st Floor 2 Bedroom vacant - 1,050 2nd Front 2 Bedroom vacant - 1,100 Garage 1 car vacant GRM (actual) = n/a Total Monthly Rental Income - 2,225 GRM (market) = 10.4 Effective Annual Income - 26,700 Real Estate Taxes actual 7/1/ ,900 4,600 Ground Rent none 0 Insurance budget 500 per unit 1,000 License - Baltimore County actual 25 per resid unit 50 Lead Paint Registration Fee actual 30 per resid unit 60 Repairs & Maintenance budget 1000 per unit 2,000 Oil Heat budget 1,500 Gas budget 50 per month 600 Electric tenants pay all per month 0 Water budget 20 per unit per mo 480 Expense/Unit= $5,150 39% TOTAL EXPENSES 10,290 Cap Rate= 5.88% NET OPERATING INCOME 16,410 DCR= 1.25 Less: Mortgage Payments: 13,099 ROI= 4.0% Monthly Cash Flow: $276 Annual Cash Flow: 3,312 C O M P A R A B L E S A L E S address date sold sales price # units Monthly Rent Price per Unit GRM 5004 Leeds Ave Apr , , , Winters La Feb , ,500 87, A Beaumont Ave Jan , , , Ridge Ave Nov , , , Frederick Rdcontract 315, , , Prospect Ave contract 349, , Cedarwood Jan ,000 4 Bedroom 2 bath remodeled brick colonial 25 Cedarwood Jan ,900 3 Bedroom 2 bath renovated tudor 13 Tanglewood Dec ,000 3 Bedroom 2 bath remodeled 1941 colonial 5 Paradise Rd S Jun ,000 3 Bedroom 2 bath remodeled 1937 brick colonial

7 Illustration of the Four Components of "Return on Investment" 1 Cash Flow This first and perhaps most obvious component is "cash flow" - rental income minus expenses - or how much cash ends up in your pocket. 26,700 + Rental Income 10,290 - Operating Expenses 13,099 - Mortgage Payments 3,312 = Cash Flow 83,700 / Downpayment + Closing Costs 4.0% = Return on Investment from Cash Flow 2 Appreciation As the value of the property increases, your return on investment increases. 279,000 = Acquisiton Price 5% * First Year Appreciation 292,950 = Value at the end of Year 1. 13,950 = Amount of Value Increase 83,700 / Downpayment + Closing Costs 17% = Return on Investment from Appreciation 3 Equity Build-Up 4.75% 30 $ 1, Even if the property did not increase in value, Equity will increase solely from paying down the mortgage. 209,250 = Loan Amount at Closing 206,021 = Loan Amount at the end of Year 1 3,229 - Equity Build-Up in Year 1 83,700 / Downpayment + Closing Costs 3.9% = Return on Investment from Equity Build-Up 4 Tax Benefits One pays less income taxes on a real estate investment than on other investment vehicles. 16,410 = Cash Flow Before Loan Payments (rents less expenses) 8,624 - Depreciation (assumes 15% land, 27.5 year recovery) 9,870 - Mortgage Interest (2,083) = Taxable Income Year 1 33% * Marginal Tax Rate (687) = Federal Income Tax (687) Federal Income Tax 3,312 / Cash Flow -20.8% = Effective Tax Rate on This Investment 1,093 = Tax if Cash Flow came from a non-preferred investment vehicle (687) - Tax from this preferred investment vehicle. 1,780 = Income Tax Savings 2.1% Return on Investment from Tax Savings Total / Summary 1: 3,312 Cash Flow 2: 13,950 Appreciation Year 1 3: 3,229 Equity Build Up Year 1 4: 1,780 Tax Savings Year 1 22,271 Total Return from this Investment 83,700 Downpayment + Closing Costs 26.6% Total Return from this Investment For illustration purposes only. Though believed accurate reliable, information is not guaranteed.

8 Illustration of Internal Rate of Return over a 10-Year Holding Period 2 2 C E D A R W O O D R O A D Purchase Price 279, Annual Rent 4.0% 26,700 27,768 28,879 30,034 31,235 32,485 33,784 35,135 36,541 38,002 Expenses 4.0% 10,290 10,701 11,129 11,574 12,037 12,519 13,020 13,540 14,082 14,645 Exp as a percent of Annual Rent 39% 39% 39% 39% 39% 39% 39% 39% 39% 39% Exp per unit 2 5,145 5,351 5,565 5,787 6,019 6,259 6,510 6,770 7,041 7,323 NOI 0 16,410 17,067 17,749 18,459 19,198 19,966 20,764 21,595 22,459 23,357 Debt Service $ 1,092 13,099 13,099 13,099 13,099 13,099 13,099 13,099 13,099 13,099 13,099 Before Tax Cash Flow (83,700) 3,312 3,968 4,651 5,361 6,099 6,867 7,666 8,496 9, , % Internal Rate of Return NOI 16,410 17,067 17,749 18,459 19,198 19,966 20,764 21,595 22,459 23,357 Less Interest 9,870 9,713 9,549 9,376 9,196 9,006 8,807 8,599 8,381 8,152 Less Depreciation 7,440 7,440 7,440 7,440 7,440 7,440 7,440 7,440 7,440 7,440 Taxable Income to Individuals (899) (86) 761 1,643 2,562 3,520 4,517 5,556 6,638 7,766 Pass Thru Entity Deduct 20% (152) (329) (512) (704) (903) (1,111) (1,328) (1,553) Taxable Income 0 (719) (69) 609 1,315 2,050 2,816 3,614 4,445 5,311 6,212 * 35% (252) (24) ,265 1,556 1,859 2,174 After Tax Cash Flow (83,700) 3,564 3,992 4,438 4,901 5,382 5,882 6,401 6,941 7, , % Internal Rate of Return Purchase 279,000 Assume a Sale at End of Year 10 L-V 75% Annual Rent Roll 38,002 Loan 209,250 GRM 10.4 Down Payment 69,750 annual appreciation 3.6% Price 397,104 Cap Improvement - Sale Costs 6% 23,826 Closing Costs 13,950 Less: Basis 204,600 Initial Investment 83,700 Gain 168,678 Rate 4.75% 20% 33,736 Term 30 Mortgage Balance 168,912 P&I $1, Sale Proceeds Before Tax 204,366 Sale Proceeds After Tax 170,631 Mortgage Amortization ,250 Beg Bal 209, , , , , , , , , , % Prin 3,229 3,386 3,550 3,722 3,903 4,093 4,291 4,500 4,718 4, Int 9,870 9,713 9,549 9,376 9,196 9,006 8,807 8,599 8,381 8,152 1,092 Bal EOY 206, , , , , , , , , ,912 Cost Recovery / Depreciation 279, ,000 Building 80% 223,200 Land 20% 55,800 Life 30 7,440 7,440 7,440 7,440 7,440 7,440 7,440 7,440 7,440 7,440 Basis 271, , , , , , , , , ,600 * Tax rate of 35% applies to income of $200,001 to $500,000 for singles; $400,001 to $600,000 for married filing jointly. Marginal rate above $500k/$600k is 37%. Prepared by: Ben Frederick Realty Inc. For Illustration Purposes Only. Though believed accurate and reliable, information is not guaranteed.

FOR SALE $ LEVASSEUR, PRÉVOST 6 units. REMARKS: Asking price

FOR SALE $ LEVASSEUR, PRÉVOST 6 units. REMARKS: Asking price Mtl: 514 603-2010 Qc: 418 476-0186 info@patricemenard.com www.patricemenard.com FOR SALE 880-890 LEVASSEUR, PRÉVOST 479 000 $ Asking price REMARKS: located in Prévost : 2x4.5 + 4x3.5. Built in 1965, wood