Deal Abstract
https://www.loopnet.com/Listing/41-Yale-Ave-Providence-RI/35922499/
Turnkey 6-plex for sale in Providence, RI. I have two buildings that I believe are larger with more bedrooms than this property, so I'd love to understand where they're getting their numbers from.
Part 1. The Basics
| Question | Notes |
|---|---|
| 1. Property Name: | 41 Yale |
| 2. Property Full Address: | 41 Yale Ave, Providence RI, 02908 |
| 3. Property Listing URL: | https://www.loopnet.com/Listing/41-Yale-Ave-Providence-RI/35922499/ |
| 4. Property Year Built: | 1900 |
| 5. Property Number of Units/Doors: | 6 |
Part 2. Quantitative, Numbers, and Financials ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
| Criteria | Amount/Comment |
|---|---|
| 1. Link to Underwriting Google Sheet: | https://docs.google.com/spreadsheets/d/1eIo5_waf4OplX0Z0lxwOfabVxxXFnZZdb18I1kVoUEU/edit?usp=sharing: UNDERWRITING COMMENT |
| 2. Asking Price: | $949000: PRICE COMMENT |
| 3. FFEIC Median Income: | $86043: INCOME COMMENT |
| 4. Last Year's Annual Rent: | $101400: RENT COMMENT |
| 5. Last Year's Annual Expense: | $-30605.56: EXPENSE COMMENT |
| 6. Last Year's Net Operating Income (NOI): | $70794.44: NOI COMMENT |
| 7. 5 Year Internal Rate of Return (IRR): | -8.32: IRR COMMENT |
| 8. Yearly Cash on Cash (CoC) Rate of Return: | 2: COC COMMENT |
| 9. Debt Service Coverage Ratio (DSCR): | 1.23: DSCR COMMENT |
Part 3. Qualitative, Pre-Mortem, and Investor Fit (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Why is the seller now? | TIMING SCORE | Uncertain |
| 2. Am I the right buyer for this deal? | FIT SCORE | I own a property identical to it, except larger |
| 3. What has to go right for this deal to work out? | Right Rating | |
| 4. People? | ||
| 5. Distribution? | ||
| 6. Durability? | ||
| 7. Secret? |
What has to go right for the startup to return money on investment:
Very expensive
What the Risks Are
It's six 1BD1BA's, not much room to grow
Bonus Muhan's Notes
This is hysterical
Updates
This is where I’ll post updates about the company. This way all my notes from offering to post-offering updates will be on one page.
Review these deal memos every time the startup raises a new round
Test if original thesis still applies
Notice trends in how you think
So, did I invest?
Click here to find out.Other thoughts, questions, comments, or concerns? Write me at mail@muhanzhang.com and let me know.