The Detroit West Side 2 Portfolio consists of 83 units in Detroit, Michigan. Two of the properties are 87% + occupied grossing over $686k per year. The next owner will have the ability to step into two, cash flowing assets that have had moderate renovations over the past 3 years, along with an asset that will be ready for new tenants, at an attractive CAP rate.

The properties all received new roofs in 2018. Heat is provided by a boiler in Pickford Place and Stacey Ann, which the landlord pays for (water and gas). All of the properties are individually metered for electric - which is billed directly to the tenant. The properties are managed by a 3rd party - there are three, full time employees that are on site. One is a property manager, and the other two are maintenance techs.

The properties have strong cash flow - but are under-rented by about 15%. This leaves some meat on the bone for the new owner to increase rents, achieve a nice cash on cash return, or refinance and pull equity out. About 28% or 32 of the units have been renovated at an average of $4,000 per unit. Renovating the rest of the units would increase the gross potential rent by around $112,000 which is a 35% return on investment based on the $4,000 per unit turn.

The property is currently 87% occupied in a market that should be closer to 92% to 95% occupied. Bringing up occupancy would increase the collectable rents by over $100,000. Currently management costs are around 23% of net rents. Management has done a great job in maintaining the property - however with a unit count of this size it makes more sense to self manage or hire an employee, in order to get the expense ratio down.

The owners are currently inquiring about a PILOT program (payment in lieu of taxes) which would take the property taxes from around $50k a year to $7,500 per year. This requires keeping the tenants at or below 60% of the average median income ($48k in Wayne county) in exchange for paying 1% property tax on the collected rents.

Stacey Ann as a Freddie loan on the property of about $1,250,000 that can be assumed. The term is for 9 more years, at 4.9% interest on a 30 year amortization. Pickford Place has a Freddie loan of about $950,000 that can be assumed. The term is 9 more years at 4.9% on a 30 year amortization. It is not a requirement to assume the loans but an option.