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- Dealsletter Issue #32: Strategic Multi-Family Investments and Value-Add Opportunities Across the U.S.
Dealsletter Issue #32: Strategic Multi-Family Investments and Value-Add Opportunities Across the U.S.
Explore High-Return Properties in San Diego, Berkeley, and Kansas City with Diverse Investment Strategies
Kevin
September 09, 2024
In partnership with
Hello Investors,
Welcome to Dealsletter Issue #32! This week, we're featuring three unique investment opportunities that cater to a variety of strategies, from house hacking in San Diego to value-add investments in Berkeley, and BRRRR in Kansas City. Whether you're looking to maximize cash flow, leverage long-term appreciation, or quickly refinance for additional capital, we’ve got you covered. Dive in to explore this week’s top picks and elevate your portfolio!
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🚨 Note on Numbers: All calculations for investment properties are based on a 25% down payment and a current interest rate of 6.4%, unless otherwise stated. For house hacks, we assume a 5% down payment with PMI at 0.4% and a 6.44% interest rate. We do the math so you can focus on what matters – the deals!
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📈 The Stats: Each listing comes with detailed investment metrics like cap rates, GRM, and special financing options where available.
This Weeks Deals 🏘️
House Hack or Multi-Family in San Diego, CA
Property: 36th St, 4 Units
Cap Rate: 4.29%
Multi-Family in Berkeley, CA
Property: Walnut St, 4 Units
Cap Rate: 5.32%
BRRRR SFH in Kansas City, MO
Property: Michigan Ave
Cap Rate: 12.1%
House Hack or Multi-Family
Property: 4410-16 36th St, San Diego, CA
Price: $1,659,000
Units: 4 (1 x 2 Bed/2 Bath, 1 x 2 Bed/1 Bath, 2 x 1 Bed/1 Bath)
Cap Rate: 4.29%
Why this is a good investment 👉🏼 : Located in the desirable Normal Heights neighborhood, this charming 4-unit property offers a unique opportunity to house hack by living in one unit and renting out the others or use it as a long-term investment with all units rented. With newer roof and sewer, remodeled units, private laundry hookups, and patios, this property is well-positioned to attract quality tenants in a rapidly appreciating rental market.
The Stats (House Hack, 5% Down) 📝
Gross Rent: $8,850/mo (for 3 units rented)
Total Operating Expenses: Estimated at $1,664/mo
Effective Mortgage Payment after all expenses: Approx. $3,197/mo
Cash Flow: None. Significant mortgage coverage through rental income
The Stats (Fully Rented, 25% Down) 📝
Gross Rent: $10,800/mo
Total Operating Expenses: Estimated at $3,000/mo
Net Operating Income (NOI): $91,200/year
Cash Flow: Strong, with low vacancy risk
Cash on Cash Return: 4.29%
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Multi-Family
Property: 1334 Walnut St, Berkeley, CA
Price: $1,850,000
Units: 5 (4 x 1 Bed/1 Bath, 1 x 5 Bed/2 Bath)
Cap Rate: 5.32%
Why this is a good investment 👉🏼 : A rare opportunity to acquire a 5-unit value-add property in the heart of Berkeley's Gourmet Ghetto district, walking distance from UC Berkeley. With substantial rental upside and the potential to add detached ADUs, this property is ideal for investors looking to reposition the asset and capitalize on the high demand for student housing in a supply-constrained market. The current rents are approximately 40% below market, providing immediate upside.
The Stats 📝
Gross Rent: $12,200/month
Total Annual Expenses: $52,549
Net Operating Income (NOI): $98,371/year
Cash Flow: Moderate, with significant potential for rental increases
Cash on Cash Return: 5.32%
BRRRR Single Family Home
Property: 3524 Michigan Ave, Kansas City, MO
Price: $140,000
Units: 1 (4 Bed/1 Bath House)
Cap Rate: 12.1% (Post-Refinance)
Why this is a good investment 👉🏼 : This property presents an excellent BRRRR (Buy, Rehab, Rent, Refinance, Repeat) opportunity. With a purchase price of $140,000 and an ARV of $245,000, investors can leverage a hard money loan at 10% down and 11.5% interest for the initial purchase and rehab, then refinance after 90 days with favorable terms. The property is expected to generate a cash flow of $250/mo post-refinance, making it an attractive option for investors looking to quickly build equity and expand their portfolio.
The Stats 📝
Purchase Price: $140,000
Rehab Costs: $27,500
ARV: $245,000
Total Cash Needed: $18,200
Monthly Cash Flow After Refinance: Moderate
Refinance Cash Out: $18,039
Total Cash Invested: $161
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Until next time,
The Dealsletter Team