Investment Memorandum

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OFFERING MEMORANDUM

12080 Pattern Drive
St. Louis, MO 63138

1




Table of Contents
I. Executive Summary
• Investment and Property Overview ........................................................ 3
• Terms of Investment............................................................................... 4
• Maps .................................................................................................... 5-6
II. Financial Analysis
• Cash Flow Projections ............................................................................ 7
III. Market Overview
• St. Louis County Data ............................................................................ 8
IV. Contact Information











• Contact ................................................................................................... 9

2

Executive Summary

Investment and Property Overview


This property is in an area with high demand for a childcare facility. It was
originally built as a roller skating rink managed by a family run operation. As
the owners became older and unable to maintain the rink, they had to shut
down the business.
Several months ago, vandals broke in and stole the copper leaving the interior
of the building severely destroyed. This does not affect us because we are
going to renovate the interior and it gives us a strategic advantage to acquire
the property for less than the asking price.
The building was bought for $450,000 in July of 2009 as a foreclosure. The
price of acquisition has dropped tremendously to $125,000 after the break in.
Property
12080 Pattern Drive
St. Louis, MO 63138
Size
Land – 155,509 square feet
Building – 22,440 square feet
Acres – 3.57
Type
Industrial/Retail
Year Built
1974
Zoning
C-3 (allows childcare centers, nursery schools, and adult day care centers)
Taxes
2015 – $10,168


3

Executive Summary

Terms of Investment


Sale Price
$125,000
Renovation
The roof is the responsibility of the landlord, which will cost us $200,000 –
$250,000.
Tenant
The tenant will be responsible for obtaining grants from the state because
childcare is a state funded operation in Missouri. The tenant also has over 20
years of experience in the childcare industry.
Finances
The terms of leasing will include that rent be paid with a fixed monthly cost
and 20% of the gross revenue.
Partnership
The partnership will be split 50-50 between the investor(s) and the managers.
Risk
The only risk associated with this investment is the timing till the investment
becomes profitable.
We have no timeline on how long it will take given that we cannot start
renovations until the weather is warmer.
Total Investment Needed
Acquisition
$125,000
Closing Costs $5,000
Renovation
$250,000
Total
$380,000

4

Executive Summary

Maps

Site Map on Satellite Imagery - 0.8 Miles Wide

Local Aerial

12080 Pattern Dr, Saint Louis, Missouri, 63138
Rings: 1, 3, 5 mile radii




Prepared by Esri
Latitude: 38.79411
Longitude: -90.21751











Source: ArcGIS Online World Imagery Basemap
January 17, 2016
©2015 Esri

Page 1 of 1



5

Executive Summary
Custom Map

Local Aerial & Street Aerial




Source: ©2015 Esri.



Custom Map
©2015 Esri

January 17, 2016

Street & Highway Map

Page 1 of 1

Source: ©2015 Esri.

January 17, 2016
©2015 Esri



Page 1 of 1

6

Financial Analysis

Cash Flow Projections


The numbers below are expected after the investment begins to produce cash
flow, which will be anywhere from 6 months to 1 year.
The “20% Gross Revenue” figure was calculated using the financials of the
perspective tenant who has over 20 years of experience in the childcare
industry.
The figures below were calculated using the financials of an 8,000 square foot
facility. The facility we are looking to acquire is 22,440 square feet.
Potential Gross Income (PGI) Annualized
Square Feet
22,440
$ / Square Foot
$0.30
Annual Rent
$80,784
+ 20% Gross Revenue
$79,116
Total PGI

$159,900

Net Operating Income Statement
Potential Gross Income
$159,900
- Vacancy & Collection Loss
= Effective Gross Income
$159,900
- Operating Expenses
- Capital Expenditures
= Net Operating Income
$159,000
There are no Vacancy & Collection Loss, and Operating Expenses because we will
assign a triple net lease with the tenant.

7

Market Overview

St. Louis County Data


According to the 2010 Census, there are over 16,000 kids in a 5-mile radius.
Note that the population has drastically increased 6 years later.





The government will fund the majority of kids who will attend the childcare
facility, which means that this business is recession proof, and will always
produce payment.
This is the only data that needs review. As long as there are kids present in the
area, there will be business for our tenant, which means that we will get paid on
time.

8

Contact Information

For more information, contact:
Mohammad R. Ihmoud
(630) 379-2884
[email protected]

9

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