Professional Documents
Culture Documents
Link
LoopNet
LoopNet
Description
Fantastic opportunity to own in prime downtown location! Timeless building offering 5 office and 2 ret
spaces. Spacious units with long term tenants in place! Great long term investment or office location!
Prime downtown location convenient to all major highways. 13,166 sqft, 5 story office building
Built in 1912, this vintage NW Pettygrove, 13 unit complex is a classic among the housing choices in N
Portland. The property is comprised of 13 studio apartments providing an average of 343 square feet
living space. Many units feature hardwood floors, exposed brick walls and other vintage finishes.
Approximately 40% (5 units) of the units have undergone significant upgrades in the past year.
Upgraded units feature stainless steel appliances, new countertops with glass tile backsplash, tiled
showers, and gorgeous modern accents. Common Areas include a beautifully updated and landscaped
back yard area and onsite laundry. This building is brick construction with flat roof & vinyl windows. Th
property is located on a bus line and near MAX light rail. This location provides quick and easy access
schools, parks, shopping, and entertainment. This NW Pettygrove address is located on the west side
the city just minutes from downtown Portland and steps from the trendy NW 23rd neighborhood. The
property is located on multiple bus lines as well as the nationally recognized light rail system (MAX)
providing an easy and quick commute to downtown Portland as well as the rest of the city. This
convenient location provides access to all that downtown Portland has to offer right at your fingertips!
average of 343 sq/ft of living space each.
4,464 sqft
Price
$
2,095,000 13 Units
145,393 Multifamily
Mid/High-Rise
Assumptions
Home Value
Actual Paid
Rent Increase
All Cash Discount
Tax Rate
$
$
1,700,000
1,572,500
5%
7.5%
30%
$
$
$
$
$
Cashflows
Buy/Sell
Acquisition Fees
Finders Fee
Legal
Broker
NOI
Depreciation
EBIT
Taxes (30%)
Net Income
$
$
$
Cashflow
Discounted Cashflow
0
(1,572,500)
(10,000)
(15,725.00)
$
$
$
$
$
100,162.00
50,737.30
49,424.70
14,827.41
34,597.29
$
$
(1,572,500) $
(1,572,500) $
85,334.59
79,013.51
$
$
(1,572,500) $
(1,572,500) $
Tools
Payback
Discounted Payback
Payback Period
Discounted Payback Period
NPV
10.26 years
10.999 years
584.16
(1,487,165.41)
(1,493,486.49)
Assumptions
Home Value
Actual Paid
Rent Increase
All Cash Discount
Tax Rate
Appreciation Since 1990
Appreciation Last 10 Years
$
$
2,095,000
1,937,875
5%
7.5%
30%
284.15% Avg. Annual Rate
43.59% Avg. Annual Rate
Cashflows
Buy/Sell
Acquisition Fees
Finders Fee
Legal
Broker
NOI
Depreciation
EBIT
Taxes (30%)
Net Income
$
$
$
Cashflow
Discounted Cashflow
0
(1,937,875)
(10,000)
(19,378.75)
$
$
$
$
$
145,393.00
71,536.50
73,856.50
22,156.95
51,699.55
$
$
(1,937,875) $
(1,937,875) $
123,236.05
114,107.45
$
$
(1,937,875) $
(1,937,875) $
10.11 years
10.55 years
792,350.86
Tools
Payback
Discounted Payback
Payback Period
Discounted Payback Period
NPV
(1,814,638.95)
(1,823,767.55)
2.67%
-0.90%
0.92%
4.74%
$
$
$
$
$
105,170.10
50,737.30
54,432.80
16,329.84
38,102.96
$
$
$
$
$
110,428.61
50,737.30
59,691.30
17,907.39
41,783.91
$
$
$
$
$
115,950.04
50,737.30
65,212.73
19,563.82
45,648.91
$
$
$
$
$
121,747.54
50,737.30
71,010.24
21,303.07
49,707.16
$
$
88,840.26
76,166.20
$
$
92,521.21
73,446.32
$
$
96,386.22
70,846.75
$
$
100,444.47
68,360.82
$
$
(1,398,325.15) $
(1,417,320.29) $
(1,305,803.94) $
(1,343,873.96) $
(1,209,417.72) $
(1,273,027.22) $
(1,108,973.25)
(1,204,666.40)
5.37%
3.68%
7.49%
14.94%
$
$
$
$
$
152,662.65
71,536.50
81,126.15
24,337.85
56,788.31
$
$
$
$
$
160,295.78
71,536.50
88,759.28
26,627.78
62,131.50
$
$
$
$
$
168,310.57
71,536.50
96,774.07
29,032.22
67,741.85
$
$
$
$
$
176,726.10
71,536.50
105,189.60
31,556.88
73,632.72
$
$
128,324.81
110,017.84
$
$
133,668.00
106,109.97
$
$
139,278.35
102,373.75
$
$
145,169.22
98,799.73
$
$
(1,686,314.15) $
(1,713,749.71) $
(1,552,646.15) $
(1,607,639.74) $
(1,413,367.80) $
(1,505,266.00) $
(1,268,198.58)
(1,406,466.27)
90 because we think it most accurately reflects the local market. This is the average through the financial crisis
of the area. The annual rate is high enough to prove growth but could be considered a low estimate based on
ng towards Providence. The area is due for growth especially with existing firms nearby and a large college
$
$
$
$
$
127,834.91
50,737.30
77,097.61
23,129.28
53,968.33
$
$
$
$
$
134,226.66
50,737.30
83,489.36
25,046.81
58,442.55
$
$
$
$
$
140,937.99
50,737.30
90,200.69
27,060.21
63,140.48
$
$
$
$
$
147,984.89
50,737.30
97,247.59
29,174.28
68,073.31
$
$
104,705.63
65,982.31
$
$
109,179.85
63,705.40
$
$
113,877.79
61,524.62
$
$
118,810.61
59,434.89
$
$
(1,004,267.62) $
(1,138,684.09) $
(895,087.77) $
(1,074,978.70) $
(781,209.99) $
(1,013,454.07) $
(662,399.37)
(954,019.19)
5 years because with the state of the city, we believe it to be most accurate. The influx of start-up, large
aduates presents a great opportunity to buy low, sell high. In addition to the demographics, the property is also
eable locations such as shopping, bars and restaurants. Rent is suitable to working profesionals roughly 5-10 ye
eflects the cities demographic as well.
$
$
$
$
$
185,562.41
71,536.50
114,025.91
34,207.77
79,818.13
$
$
$
$
$
194,840.53
71,536.50
123,304.03
36,991.21
86,312.82
$
$
$
$
$
204,582.55
71,536.50
133,046.05
39,913.82
93,132.24
$
$
$
$
$
214,811.68
71,536.50
143,275.18
42,982.55
100,292.63
$
$
151,354.63
95,379.09
$
$
157,849.32
92,103.56
$
$
164,668.74
88,965.39
$
$
171,829.13
85,957.34
$
$
(1,116,843.94) $
(1,311,087.17) $
(958,994.63) $
(1,218,983.61) $
(794,325.89) $
(1,130,018.22) $
(622,496.76)
(1,044,060.88)
10
$
$
$
$
$
155,384.14
50,737.30
104,646.84
31,394.05
73,252.78
$
$
123,990.09
57,431.40
$
$
11
2,212,506.43
$
$
(10,000.00)
(110,625.32)
$
$
2,091,881.11
897,171.95
(538,409.28) $
(896,587.79) $
1,553,471.82
584.16
ux of start-up, large
aphics, the property is also
rofesionals roughly 5-10 years
10
$
$
$
$
$
225,552.26
71,536.50
154,015.76
46,204.73
107,811.03
$
$
179,347.53
83,072.61
$
$
11
4,313,846.19
$
$
(10,000.00)
(215,692.31)
$
$
4,088,153.88
1,753,339.13
(443,149.23) $
(960,988.27) $
3,645,004.65
792,350.86
NPV
Payback
Discounted Payback
Providence appreciation rates are above average compared to the rest of the United
boasting:
97.18% Since 1990
4.69% In The Last 5 Years
9.88% In The Last 2 Years
4.74% In The Last 12 Months
Providence is a riacially diverse city bringing the need for jobs and companies from
cultures.
The historic city, while on the ocean, brings many tourists.
Providence has many college students, where many stay after graduation looking fo
opportunities. 16.89% of the cities residents are ages 25-34.
Relatively low home prices city wide
Our Thoughts...
Accounting for appreciation, in 10 years we forecast this property selling for $2,212
a 40.70% return on the sale alone!
Income included, the Payback on this project is 10.26 years with Discounted Paybac
years.
The appreciation on the property is also a plus as well, it is somewhat higher than th
the United States, and the city shows evidence of new and existing companies trans
locations.
While not as profitable as the other property, this investment is still a surefire way t
generate returns.
Web sources:
http://www.loopnet.com/Listing/19780533/45-Weybosset-Street-Providence-RI/
https://www.neighborhoodscout.com/ri/providence/
Web sources:
http://www.loopnet.com/Listing/19780533/45-Weybosset-Street-Providence-RI/
https://www.neighborhoodscout.com/ri/providence/
$
$
$
104,052.43
1,553,471.82 10.26 yrs
584.16 10.99 yrs
ovidence-RI/
ovidence-RI/
1942 N
4,464 Squ
$
This Portland
apartments,
the units hav
Stainless ste
them a mode
At an averag
right outside
current and
both young p
looking for a
Our Thoughts...
Accounting for appreciation and with realistic fo
$4,313,846.19, a 122.61% gain!
With NOI and costs included, we forecast the pa
payback at 10.55 years.
With the statistics to back the appreciation, we
property.
This is the better of the two properties, not buy
Web sources:
http://www.loopnet.com/Listing/19862557/1942-NW
https://www.neighborhoodscout.com/or/portland/
Web sources:
http://www.loopnet.com/Listing/19862557/1942-NW
https://www.neighborhoodscout.com/or/portland/
NPV
Payback
Discounted Payback
792,350.86
ciation rates are far above average compared to the rest of the United
:
ince 1990
The Last 10 Years
The Last 5 Years
The Last 12 Months
Portland's residents are employed in white collar jobs, bringing the median
very high $1,820/month
ery popular with 48.64% of residences inhabited by renters
en a popular location for young singles looking to start a career, making up
pulation (19.50% of the population is 25-34)
reciation and with realistic forecasting, we see this home selling for
22.61% gain!
included, we forecast the payback at 10.11 years, with the discounted
ears.
o back the appreciation, we see this as a highly profitable and desirable
the two properties, not buying this now would be an investment mistake
om/Listing/19862557/1942-NW-Pettygrove-Portland-OR/
rhoodscout.com/or/portland/
om/Listing/19862557/1942-NW-Pettygrove-Portland-OR/
rhoodscout.com/or/portland/
1942 NW Pettygrove
Total Square Footage
Actual Renovated Area
4464 sq/ft
2744 sq/ft
We believe renovating the remaining 8 units would be a sound investment for both increasing future v
major remodel costs from $35 to $50 sq/ft. We are choosing an estimate of $47 sq/ft because it would
while also creating upper end apartments in the area. This would leave desireable exposed brick and
amenities as the other units. It would also replace the flooring in the current unchanged units.
Cost per Sq/Ft
Cost to Purchase
Depreciation
Salvage Value
Price Source
Taxes
Required Return
$
$
$
47.00
128,968.00
2,579.36
0
Renovation
30%
8%
50 Years
$
$
20.00%
20.00% Rent Increase
0%
71% ROI
91,567.28
9,156.73
We believe a kitchen renovation to each of the 8 unchanged units will create great resale value, as we
shows kitchen renovations usually cost $12,000 to $30,000, and new appliances are desireable. This i
apartment while also giving it a greater rental value. We see $13,000 as being an Ideal price to pay, a
feel, while not creating too large of a capital investment and dramatically changing rent prices.
Cost per apartment
Cost to Purchase
Depreciation
Salvage Value
Price Source
Taxes
Required Return
$
$
$
13,000.00
104,000.00
5,200.00
20 Years
Kitchen Cost
30%
8%
17.00%
17.00% Rent Increase
0%
67% ROI
$
$
69,680.00
6,968.00
Useful Life
Useful Life
Cash Flows
Discounted Cash Flows
$
$
Tools
Payback
Discounted Payback
$
$
Payback Period
Discounted Payback Period
NPV
IRR
0
(128,968.00)
$
$
$
$
$
29,078.60
2,579.36
26,499.24
7,949.77
18,549.47
$
$
$
$
$
30,532.53
2,579.36
27,953.17
8,385.95
19,567.22
(128,968.00) $
(128,968.00) $
21,128.83 $
19,563.73 $
22,146.58
18,987.12
(128,968.00) $
(128,968.00) $
(107,839.17) $
(109,404.27) $
5.47 Years
7.21 Years
82,072.35 $
17.51%
(85,692.59)
(90,417.15)
Cash Flows
Discounted Cash Flows
$
$
Tools
Payback
Discounted Payback
$
$
Payback Period
Discounted Payback Period
NPV
IRR
0
(104,000.00)
$
$
$
$
$
$
$
$
$
$
25,952.65
5,200.00
20,752.65
6,225.80
14,526.86
(104,000.00) $
(104,000.00) $
18,861.77 $
17,464.60 $
19,726.86
16,912.60
(104,000.00) $
(104,000.00) $
(85,138.23) $
(86,535.40) $
5.03 Years
6.49 Years
77,942.23 $
19.29%
24,716.81
5,200.00
19,516.81
5,855.04
13,661.77
(65,411.38)
(69,622.80)
$
$
$
$
$
32,059.16
2,579.36
29,479.80
8,843.94
20,635.86
$
$
$
$
$
$
$
23,215.22 $
18,428.99 $
$
$
(62,477.38) $
(71,988.16) $
33,662.11
2,579.36
31,082.75
9,324.83
21,757.93
$
$
$
$
$
35,345.22
2,579.36
32,765.86
9,829.76
22,936.10
$
$
$
$
$
37,112.48
2,579.36
34,533.12
10,359.94
24,173.18
24,337.29 $
17,888.63 $
25,515.46 $
17,365.39 $
26,752.54
16,858.64
(38,140.09) $
(54,099.53) $
(12,624.63) $
(36,734.13) $
14,127.92
(19,875.49)
$
$
$
$
$
27,250.28
5,200.00
22,050.28
6,615.08
15,435.20
$
$
$
$
$
$
$
20,635.20 $
16,380.89 $
$
$
(44,776.18) $
(53,241.92) $
28,612.80
5,200.00
23,412.80
7,023.84
16,388.96
$
$
$
$
$
30,043.44
5,200.00
24,843.44
7,453.03
17,390.41
$
$
$
$
$
31,545.61
5,200.00
26,345.61
7,903.68
18,441.93
21,588.96 $
15,868.53 $
22,590.41 $
15,374.65 $
23,641.93
14,898.42
(23,187.22) $
(37,373.39) $
(596.82) $
(21,998.74) $
23,045.11
(7,100.31)
$
$
$
$
$
38,968.11
2,579.36
36,388.75
10,916.62
25,472.12
$
$
$
$
$
$
$
28,051.48 $
16,367.77 $
$
$
42,179.40 $
(3,507.72) $
40,916.51
2,579.36
38,337.15
11,501.15
26,836.01
$
$
$
$
$
$
$
$
$
$
45,110.45
2,579.36
42,531.09
12,759.33
29,771.76
29,415.37 $
15,892.21 $
30,847.44 $
15,431.40 $
32,351.12
14,984.83
71,594.77 $
12,384.49 $
102,442.21 $
27,815.89 $
134,793.33
42,800.72
$
$
$
$
$
33,122.89
5,200.00
27,922.89
8,376.87
19,546.02
$
$
$
$
$
$
$
24,746.02 $
14,439.07 $
$
$
47,791.13 $
7,338.75 $
34,779.03
5,200.00
29,579.03
8,873.71
20,705.32
42,962.34
2,579.36
40,382.98
12,114.89
28,268.08
10
$
$
$
$
$
36,517.99
5,200.00
31,317.99
9,395.40
21,922.59
10
$
$
$
$
$
38,343.88
5,200.00
33,143.88
9,943.17
23,200.72
25,905.32 $
13,995.84 $
27,122.59 $
13,568.05 $
28,400.72
13,155.03
73,696.46 $
21,334.59 $
100,819.05 $
34,902.64 $
129,219.77
48,057.67
11
$
91,567.28
91,567.28
$
$
91,567.28
39,271.64
$
$
226,360.61
82,072.35
11
$
69,680.00
69,680.00
$
$
69,680.00
29,884.56
$
$
198,899.77
77,942.23
NPV
$82,072.35
Payback Period
5.47 years
Discounted Payback Period
7.21 years
o Portland is a young, wealthy city, people are looking for nice places to stay and renovating
gives them the opportunity to live here
o This property boasts a higher NPV than renovating just the kitchen. It also pays off to have the
next owner buy an already renovated property
o Renovating gives the best of both worlds, the exposed brick of a 100 year old building plus the
modern feel of new floors and a shiny kitchen.
o This is no doubt the better investment for just slightly more capital.
vation
y and renovating
NPV
$77,942.23
Payback Period
5.03 years
Discounted Payback Period
6.49 years
o Although this renovation pays back quicker than a full restoration, the ben
renovated building keeps this NPV at less than our other option.
o You should not overlook this option though, if less capital is desirable, then
renovation offers increased rent and resale value and roughly $25,000 les
renovation.
o Kitchens are where people spend a majority of their time at home. Cookin
neat space, so if you decide a full renovation is too expensive, the kitchen
to meet your needs