Deal Abstract

Off-Market

Off-market private Rhode Island portfolio for sale. Need to figure out more about the financials and quality of the units.

Part 1. The Basics

Question Notes
1. Property Name:
2. Property Full Address:
3. Property Listing URL: Off-Market
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/1ecVJYO3WMYpi9wWggVbP0AGynj_Rvh82uU6sNOsnkYk/edit?usp=sharing: UNDERWRITING COMMENT
2. Asking Price: $3000000: PRICE COMMENT
3. FFEIC Median Income: $59611: INCOME COMMENT
4. Last Year's Annual Rent: $259212: RENT COMMENT
5. Last Year's Annual Expense: $-90274: Not convinced given it's just a ratio percentage but for the sake of argument
6. Last Year's Net Operating Income (NOI): $168488: NOI COMMENT
7. 5 Year Internal Rate of Return (IRR): 3.03: IRR COMMENT
8. Yearly Cash on Cash (CoC) Rate of Return: 2.5: COC COMMENT
9. Debt Service Coverage Ratio (DSCR): 1.18: 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 TBD
2. Am I the right buyer for this deal? FIT SCORE 1. Like the market; 2.Came in through a relationship; 3. Four quads all at the same time
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. Finish renovations; 2. Raise rents; 3. Purchase at a good valuation

What the Risks Are

1. Overpriced; 2. No T12; 3. Renovations underestimated

Bonus Muhan's Notes

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.