real estate finance package
DESCRIPTION
This is a Sample Real Estate Financing Package that I have done during my graduate studies at IITTRANSCRIPT
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Rosika Babakhanian Arch 563
2044 N. Albany Chicago, IL 60647
Financing package
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TABLE OF CONTECTS
THE ACQUISTION
MARKET ANALYSIS
ECONOMICS
1
2
3
Executive Summary
Location Maps
Aerial Photos
Photographs
Floor Plans
Description of Improvements
1.1
1.2
1.3
1.4
1.5
1.6
Logan Square Maket Overview
Comparable Leases & Sales
Community Profile
2.1
2.2
2.3
Estimated Acquisition Cost
As-Is Proforma
Stabalized Proforma
3.1
3.2
3.3
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THE ACQUISTION
Executive Summary1.1
1
1.1.2 Accessibility
1.1.1 Location
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R.B, LLC, whose managing member is Rosika Babakhanian, is requesting an acquisition loan to acquire a 18,712 SF multifamily building located at 2044 N. Albany Avenue in Chicago, IL.
The building is in the heart of Logan Square and is currently at 100% occuapncy.
This 16-unit multifamily building has had many recent improvements, including: roof,
electric, plumbing, windows in all units and new porches in one tier of the building. All
units have updated kitchens, bathrooms, and refinished hardwood floors. 10 units have
GFA/CA. the building consists of 13 large one bedrooms, 3 large two bedrooms.
Logan Square is a community area located on the near northwest side of the City of
Chicago. the building is located a walking distance (.3 mile) from Palmer Square Park. In
2005, Palmer Square Park received a grant from the Illinois Department of Natural
Resources to develop a playground,walking trails, soft surface jogging community input
and prolonged design and construction periods, the Chicago Park District (CPD)
recently finished construction of the park and opened it to the public in July 2009.
Executive Summary1.1
1.1.1 Location:
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Executive Summary1.1
1.1.2 Accessibility
The site is located directly west of Bucktown, north of Humboldt Park, and
northwest of Wicker Park, and places its residents within walking distance to a number
of shops, coffee houses, and restaurants. It also has easy access to the highways
and the public transportation system. the neighborhood is just west of the Kennedy
Expressway (routes 90/94) and near the California and Western stops of the CTA's
Blue Line for a quick ride to Chicago’s downtown and O'Hare International Airport. The
CTA's bus routes #52 (California), #56 (Milwaukee), #73 (Armitage), and #74 (Fullerton)
also run through this neighborhood.
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THE ACQUISTION 1
Location Maps 1.21.2.1 Illinois
1.2.2 Chicago
1.2.3 Logan Square
1.2.4 Proximity Map
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Location Maps 1.2
1.2.1 Illinois 1.2.2 Chicago
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Location Maps 1.2
1.2.3 Logan Square
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1 mile
.75 mile
.50 mile
.25 mile
Location Maps 1.2
1.2.4 Proximity Map
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THE ACQUISTION
Aerial Photos1.3
1
1.1.2 Bird’s Eyeview
1.1.1 Immidiate Location
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Aerial Photo1.3
1.3.1 Immidiate location
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Bird’s Eye View1.3
1.3.2 Bird’s Eye View
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THE ACQUISTION
Photographs1.4
1
1.1.2 Bird’s Eyeview
1.4.1 Fecade of the Building
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Photographs 1.4
1.4.1 Photos of the Fecade
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Photographs 1.4
1.4.2 Photos of the Neighborhood
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Photographs 1.4
1.4.2 Palmer Park
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THE ACQUISTION 1
Floor Plans1.51.5.1 Small One Bedroom Floorplan
1.5.2 Large One Bedroom Floorplan
1.5.3 Two Bedroom Floorplan
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1.5.1 Small One Bedroom Floor Plan (540 Sq Ft)
Floor Plans 1.5
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1.5.2 Large One Bedroom Floor Plan (645 Sq Ft)
Floor Plans 1.5
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1.5.3 Two Bedroom Floor Plan (940 Sq Ft)
Floor Plans 1.5
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Description of Improvements 1.3
1
1.1.2 Bird’s Eyeview
1.1.1 Immidiate Location
THE ACQUISTION
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Description of the Property1.6
An updated 16-unit multifamily building
Location: NW Armitage Ave and Kedzie Blvd. Chicago IL
Year: 1928
Building: 18,712 Sq Ft
Land: 7,405 Sq Ft
Type: Corridor-Interior Entrance
Parcel Access: City Street
Parking: Ample amount of parking
Façade: Face Brick
Electrical Service: Circuit Breakers
Air Conditioning: Central Air
Heat/Ventilation: Forced Air, Gas, Radiators
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MARKET ANALYSIS 2
Logan Square Maket Overview 2.1 2.1.1
2.1.2
2.1.2.1 Neighborhood Schools
About Logan Square
Logan Square Features Map
2.1.2.2 Neighborhood Public Transportation 2.1.2.3 Neighborhood Grocery2.1.2.4 Neighborhood Libraries
2.1.3 Logan Square Walk Score
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About Logan Square 2.1
The Chicago neighborhood of Logan Square is a large, densely populated community,
located 5 miles northwest of the Loop and is bounded by West Bloomingdale, Armitage,
and Diversey. Logan Square is known equally for its prosperous, mansion-lined residen
tial streets and its bustling, diverse commercial districts. Flowers and trees line the
streets, and homes are known for being well-kept. The neighborhood manages to pres
ent an air of old-world prosperity as well as a thoroughly modern and progressive at
titude.
2.1.1 About Logan Square
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About Logan Square 2.1
Starbucks
Health Club
Dog Park
Day Care
2.1.2 Logan Square Features Map
Major Grocery
Library
Hospital
Post office
Theater
Fire Station
School
CTA Station
Metra Station
City Park
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About Logan Square 2.1
2.1.2.1 Neighborhood Schools
Nearest Public High Schools:
• Ramirez Computer Hs, 2435 N Western Av, 1.0mi NE
• Clemente Achievement Academy Hs, 1147 N Western Ave, 1.5 mi SE
Nearest Private High Schools:
• Puerto Rican H S, 2739 W Division St, 1.2mi SE
• Josephinum Acd., 1501 N Oakley Blvd, 1.3mi SE
• Carc/sol, 4014 W Chicago Ave, 1.9mi SW
Nearest Public Elementary Schools:
• Darwin Elem., 3116 W Belden Av, 0.3mi N
• Logan Square: First Lutheran, 3500 Fullerton Ave, 0.6mi NW
Nearest Private Elementary Schools:
• St Sylvester, 3027 W Palmer Square, 0.2mi NE
• Salem Christian, 2845 W Mclean Ave, 0.3mi E
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About Logan Square 2.12.1.2.2 Neighborhood Public Transportation
Nearest CTA Station
• California, Blue Line (O'Hare), 0.5mi NE
Nearest Metra Station
• Healy, 1.2mi WHealy, 1.2mi W
2.1.2.3 Neighborhood Major Grocery
• Tony's Finer Foods, 3607 W Fullerton Ave, 0.7mi NW
• Aldi, 1767 N Milwaukee Ave, 1.3mi E
• Aldi, 4030 W Wrightwood Ave, 1.3mi NW
• Strack & Van Til, 2627 N Elston Ave, 1.3mi NE
• Aldi, 800 N Kedzie Ave, 1.6mi S
2.1.2.4 Neighborhood Libraries • Humboldt Park, 1605 N Troy St, 0.6mi S
• Logan Square, 3255 W Altgeld St, 0.6mi N
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About Logan Square 2.1
2.1.3 Logan Square Walk Score
Logan SquareWalk Score: 86
Logan Square is the #11 most walkable neighborhood
in Chicago. This neighborhood is Very Walkable with
an average Walk Score of 86. Logan Square has
82,582 people—or 3% of Chicago's population.
Logan Square is similar in walkability to Lincoln
Square and Hyde Park. Logan Square's Walk Score is
10 points higher than Chicago's Walk Score of 76.
Very Walkable
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MARKET ANALYSIS 2
Comparable Leases & Sales 2.22.2.1
2.2.2
Comparable Leases
Logan Square Features Map
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Comparable Leases & Sales 2.2
2.2.1 Comparable Leases
Average rent in Logan Square for a two-bedroom apartment is $1,190.
Average rent in Logan Square for a one-bedroom apartment is $997.00
Premises
2321 W. Fullerton Ave. Chicago, IL 60647
4209 N. Pulaski Rd. 2 Chicago, IL 60641
Humbolt at Shakespeare Chicago, IL 60647
4015 N Milwaukee Ave Chicago, IL 60641
Gross Rent
$1,100.00 $1,250.00 $ 1,180.00 $ 1,290.00
Unit Size
1,000 Sq. Ft. 1,200 Sq. Ft. 1,000 Sq Ft 1,150 Sq Ft
Number of Bedroom
2 Bedrooms 2 Bedrooms 2 Bedrooms 2 Bedrooms
Quality of Building
A A+ B A
Utilities Included
Water Water, Heat & Gas None Water
Premises
4015 N. Milwaukee Ave. Chicago, IL 60641
3560 W. Palmer GB Chicago, IL 60647
2734 W. Division Chicago, IL 60622
2141 W. Webster 1F Chicago, IL 60647
Gross Rent
$ 950.00 $ 895.00 $ 825.00 $ 925.00
Unit Size
650.00 Sq. Ft. 600 Sq. Ft.
600 Sq Ft. 650 Sq. Ft.
Number of Bedroom
1 Bedroom 1 Bedroom 1 Bedroom 1 Bedroom
Quality of Building
A B B A
Utilities Included
None None None None
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Comparable Leases & Sales 2.2
2.2.2 Comparable Sales
Premises
3519 N. Belden, Chicago, IL 60647
1850 N Humboldt, Chicago, IL 60647
2862 W Shakespeare Ave, Chicago, IL 60647
Sale Price (Price/ Sq Ft)
$ 129.50 $ 90.87 $ 110.75
Building Size
2,200 Sq Ft. 27,456 Sq Ft. 2,700 Sq Ft.
Year Built
1908 1932 Unknown
Number of units 2 45 3
Price $ 285,000 $ 2,495,000 $ 299,000
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Demographics2.32.3.1 Population
2.3.2 Age
2.3.3 Race
2.3.4 Population Change
2.3.5 Housing
2.3.6 Income
2.3.7 Crime
2.3.8 Employment
2.3.9 Relationship Status
2.3.10 Homes with Kids
2.3.11 Commute Time
MARKET ANALYSIS 2
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Demographics2.3
2.3.1 Population
Population 1-mi. 3-mi 5-mi.
2009 Male Population 40,758 253,844 654,333
2009 Female Population 39,429 251,720 661,520
% 2009 Male Population 50.83% 50.21% 49.73%
% 2009 Female Population 49.17% 49.79% 50.27%
2009 Total Adult Population 54,196 367,728 999,395
2009 Total Daytime Population 62,540 412,689 1,251,255
2009 Total Daytime Work Population 15,733 164,343 644,402
2009 Median Age Total Population 26 28 30
2009 Median Age Adult Population 35 35 36
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2.3.2 Age
Demographics2.3
PPopulation 1-mi. 3-mi 5-mi.
% 2009 Age 0-13 26.2% 21.82% 19.13%
% 2009 Age 14-17 6.22% 5.44% 4.92%
% 2009 Age 18-20 4.96% 4.74% 4.28%
% 2009 Age 21-24 7.70% 7.74% 7.78%
% 2009 Age 25-29 10.15% 11.72% 11.55%
% 2009 Age 30-34 9.23% 10.44% 10.46%
% 2009 Age 35-39 7.96% 8.02% 8.21%
% 2009 Age 40-44 6.51% 6.69% 6.96%
% 2009 Age 45-49 5.37% 5.68% 6.14%
% 2009 Age 50-54 4.35% 4.84% 5.32%
% 2009 Age 55-59 3.45% 3.71% 4.16%
% 2009 Age 60-74 5.76% 6.4% .7.48%
% 2009 Age 75-84 1.65% 2.06% 2.59% % 2009 Age 85+ 0.52% 0.70% 1.00%
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Demographics2.3
2.3.3 Race
Population 1-mi. 3-mi 5-mi.
% 2000 Non-Hispanic White 63.40% 58.34% 55.89%
% 2000 Non-Hispanic Black 25.07% 33.85% 33.59%
% 2000 Non-Hispanic Amer Indian/Alaska Native 0.91% 0.28% 0.24%
% 2000 Non-Hispanic Asian 4.08% 3.79% 7.16%
% 2000 Non-Hispanic Hawaiian/Pacific Islander 0.02% 0.02% 0.02%
% 2000 Non-Hispanic Some Other Race 0.71% 0.28% 0.28%
% 2000 Non-Hispanic Two or More Races 5.81% 3.44% 2.81%
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Demographics2.3
2.3.4 Population Change
1-mi. 3-mi 5-mi.
2009 Total Population 80,187 505,564 1,315,854
2009 Total Households 25,823 181,967 529,229
Population Change 1990-2009 -5,477 -4,779 24,764
Household Change 1990-2009 263 5,935 35,000
% Population Change 1990-2009 -6.39% -0.94% 1.92%
% Household Change 1990-2009 1.03% 3.37% 7.08%
Population Change 2000-2009 -6,555 -33,027 -51,554
Household Change 2000-2009 -1,672 -7,270 -281
% Population Change 2000-2009 -7.56% -6.13% -3.77%
% Households Change 2000-2009 -6.08% -3.84% -0.05%
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Demographics2.3
2.3.5 Housing
1-mi. 3-mi 5-mi.
% 2000 Occupied Housing Units 91.48% 92.22% 92.70%
% 2000 Owner Occupied Housing Units 26.86% 33.63% 34.85%
% 2000 Renter Occupied Housing Units 64.62% 58.59% 57.85%
% 2000 Vacant Housing Units 8.52% 7.78% 7.30%
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2.3.6 Income
1-mi. 3-mi 5-mi.
% 2009 Household Income < $10,000 9.78% 8.14% 8.10%
% 2009 Household Income $10,000-$19,999 11.76% 9.42% 9.27%
% 2009 Household Income $20,000-$29,999 11.86% 9.56% 9.2%
% 2009 Household Income $30,000-$39,999 14.29% 10.52% 10.24%
% 2009 Household Income $40,000-$49,999 15.06% 11.41% 10.91%
% 2009 Household Income $50,000-$59,999 10.58% 11.09% 11.11%
% 2009 Household Income $60,000-$99,999 20.61% 26.58% 27.41%
% 2009 Household Income $100,000-$149,999 4.5% 8.78% 8.83%
% 2009 Household Income $150,000-$199,999 0.83% 2.24% 2.38%
% 2009 Household Income $200,000-$499,999 0.72% 2.12% 2.62%
% 2009 Household Income $500,000+ 0.00% 0.05% 0.07%
Demographics2.3
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2.3.7 Crime
Demographics2.3
2.3.8 Employment
White Collar 26,984
Blue Collar 5909
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2.3.9 Relationship Status
Demographics2.3
2.3.10 Homes with Kids 2.3.11 Commute Time
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ECONOMICS 3
Estimated Acquistion Cost 3.1
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Estimated Acquisition Cost 3.1
Building Size (SF) Gross Building Area &,405 (SF) Rentable Area $ 18,712 (SF)
Estimated time to complete construction 6 months Estimated construction time to lease up 6 months Construction period interest rate 6.75% Permanent loan interest rate 6.75% Amortization on permanent loan 30 years Average outstanding balance of construction loan
50%
Acquisition Costs Property $ 1,620,000.00 Brokerage fee $ 32,400.00
Total $ 1,652,400 Hard costs Remodeling $ 30,000.00 Contingency $ 3,400.00 HVAC upgrade $ 40,000.00 Miscellaneous $ 5,000.00
Total $ 78,400.00 Soft Cost Contingency $ 2,000.00 Brokerage fees $ 36,000.00 Miscellaneous $ 5,000.00 Construction/loan fee $ 5,220.00
Total $ 48,220.00 Total Estimated Cost $ 1,779,020.00 Loan To value (70%)
$ 1,245,314.00
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ECONOMICS 3
As-Is Proforma 3.2
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As-Is Proforma 3.2
Expenses (2008) Peoples Energy $ 11,937.00 Water Department $ 1,435.42 Waste Management $ 1,502.38 Comed $ 703.30 Building Insurance $ 5,669.00 2008 taxes $ 16,809.00
Total (annual)
$ 38,056.10
Rent Roll (2008) Garden $ 800.00 44 1st Fl $ 800.00 44 2nd Fl $ 1,025.00 44 3rd FL $ 1,025.00 1/2 1E $ 800.00 1/2 2E $ 750.00 1/2 3E $ 825.00 1/2 1W $ 725.00 1/2 2W $ 800.00 1/2 3W $ 850.00 46 1S $ 875.00 46 2S $ 800.00 46 3S $ 875.00 46 1W $ 825.00 46 2W $ 825.00 46 3W $ 850.00
Total (monthly)
$ 13,450.00
Total (annual)
$ $161,400.00
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As-Is Proforma 3.2
NOI (2008) Rent Roll (2008) $161,400.00 Expenses (2008) $ ( 38,056.10) NOI $ 123,343.90
Cap Rate NOI/ VALUE $ 123,343.90/ 1,799,900 .069 (6.9%)
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ECONOMICS 3
Stabalized Proforma 3.3
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Stabalized Proforma 3.3
Overview Total project cost $ 1,779,020.00 Total loan (70% LTV) $ 1,245,314.00 Equity (30%) $ 533,706.00 Loan Interest rate 6.75% Loan Amortization 30 years Loan Constant .07783
Monthly Debt Service
$ 8,076.90
Annual Debt Service $ 96,922.78
Projected Expenses Peoples Energy $ 11,937.00 Water Department $ 1,435.42 Waste Management $ 1,502.38 Comed $ 703.30 Building Insurance $ 5,669.00 2008 taxes $ 16,809.00
Total $ 38,056.10
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Stabalized Proforma 3.3
Projected Rent Roll (Income)
Garden $ 950.00 44 1st Fl $ 985.00 44 2nd Fl $ 1,170.00 44 3rd FL $ 1,170.00 1/2 1E $ 1,100.00 1/2 2E $ 985.00 1/2 3E $ 950.00 1/2 1W $ 1,000.00 1/2 2W $ 800.00 1/2 3W $ 950.00 46 1S $ 975.00 46 2S $ 985.00 46 3S $ 975.00 46 1W $ 985.00 46 2W $ 975.00 46 3W $ 950.00
Total (monthly) $ 15,905.00 Annual $ 190,860.00
Projected NOI Gross income $ 190,860.00 Vacancy $ ( 5,725.80) Operating cost $ ( 38,056.10) NOI $ 147,078. 90
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Stabalized Proforma 3.3
Debt Service Coverage Ratio NOI/ Debt Service $ 147,078.90 / $96,922.78
DSCR 1.51
Cash Flow NOI $ 147,078.90 Debt service ($ 96,922.78)
Cash Flow $ 50,156.12
Break Even Ratio Total Expenses/Gross Operating income
$134,978.58/ $190,860.00
BER 70.7%
Return on Equity Cash Flow/Equity $50,156.12 / $533,706
ROE 9.3%
New CAP Rate NOI/Value $ 147,078.90/ $ 1,620,000.00
Cap Rate .09 (9%)
Leverage AMC .07783
Positive Leverage .09> .07783
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Conclusion
Asking Price $ 1,799,900.00 The asking price greater than the value
Value (offer) $ 1,620,000.00
The Projected Performa shows:
• A 18.25 % increase in the income from $161,400.00 to $ 190,860.00 ( after the improvements)
• A 30% increase in cap rate from 6.9% to 9%
• Positive leverage exist .09> .07783
Thus, this is a great investment
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