50 Common Underwriting & Deal Memo (Closing Date: 5/31/2025)

Muhan Zhang -

Deal Abstract

https://www.loopnet.com/Listing/50-Common-St-Providence-RI/35675619/

Super efficient studio building in good old Providence is for sale. Units look good, limited value add, but the units are small, we need financials, and tbd on if there is enough meat on the bones.

Part 1. The Basics

Question Notes
1. Property Name: 50 Common
2. Property Full Address: 50 Common St, Providence RI, 02908
3. Property Listing URL: https://www.loopnet.com/Listing/50-Common-St-Providence-RI/35675619/
4. Property Year Built: 1900
5. Property Number of Units/Doors: 12

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/1Rh_DL1T9-aHRn6rVl01DTIzSxxYurDboDEKDJ_pDGlU/edit?usp=sharing: UNDERWRITING COMMENT
2. Asking Price: $1400000: PRICE COMMENT
3. FFEIC Median Income: $77417: INCOME COMMENT
4. Last Year's Annual Rent: $104860: RENT COMMENT
5. Last Year's Annual Expense: $: EXPENSE COMMENT
6. Last Year's Net Operating Income (NOI): $: NOI COMMENT
7. 5 Year Internal Rate of Return (IRR): ****: IRR COMMENT
8. Yearly Cash on Cash (CoC) Rate of Return: ****: COC COMMENT
9. Debt Service Coverage Ratio (DSCR): ****: 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 Don't know! Want to figure out
2. Am I the right buyer for this deal? FIT SCORE 1. Close to Osborn, know the neighborhood; 2. Twelve studios feels like solid workforce housing; 3. Broker might have access to other deals in the area
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:

1. Figure out expenses; 2. Figure out maximum rental income; 3. Boston/Providence keeps appreciation

What the Risks Are

1. Limited upside; 2. Asking price a bit high; 3. Units are small

Bonus Muhan's Notes

Honestly, if the price was right, would love to add something like this to the portfolio

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

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.