Brick Fourplex in the Path of Progress

The Deal

Value Add Opportunity

We bought this one in a package of multifamily, and we are offering it as a single property. Right now, three of the four units are rented and performing at $400 a month, the fourth is occupied, but not-performing. The value add opportunity is to transition these large 2 bedroom units which are currently leased through September and well below market, to full market rent leases. Since tenants pay all utilities except water, the expense ratio is low. These units will rent for upwards of $650 per month, see this comparable rent report for data. 

The Property

8768 Mackinaw Street, Detroit, MI 48204, USA

  • Value add play - below market rents
  • Strong rental market
  • In the direct path of progress 

The Market

Here is a link to a property value report, and a link to nearby, recent, and comparable sales of four unit multifamily buildings

The Numbers

Executive Summary

Our projections based on past projects of similar properties and current project data, while not guaranteed, are presented for your consideration.

  • Initial investment: $100,000
  • Additional capital for transition: $20,000
  • After transition value: $160,000 or more
  • Conservative capital gains projection in twelve months of 33% on the initial investment for a flip
  • Long term hold cap rates in the teens 

Detailed Performance Estimates

PROFORMA Mackinaw Current Mackinaw Projected
Asking Price 100,000 100,000
Rehab Required 0 20,000
Total Invesmtent 100,000 120,000
Monthly Gross Rent 1,600 2,400
Annual Gross Rent 19,200 28,800
GRM 5.21 3.47
Vacancy/Performance 1,920 2,880
Taxes 1,100 2,000
Management 1,920 2,880
Insurance 1,800 1,800
Maintenance 960 1,440
Operating Expenses 4,680 6,120
Total Expenses 7,700 11,000
NOI 11,500 17,800
ROI 11.50% 14.83%