Property Description

358 Yates Ave is being offered at $300,000, presenting investors with a value-add multifamily opportunity in Calumet City, Illinois. The 7-unit property is currently positioned for repositioning due to available units, limited dependable in-place income, and the need for targeted capital improvements to achieve stabilization. The property consists of six 2-bedroom / 1-bathroom units and one 3-bedroom / 1-bathroom unit. The stabilized pro forma assumes the 2-bedroom units achieve market rents of $1,525 per month and the 3-bedroom unit achieves $1,800 per month, resulting in total gross scheduled income of $131,400 annually. After applying a 5% vacancy factor, the property is projected to generate effective gross income of $124,830. Total operating expenses, including property taxes, are estimated at $65,270.20, resulting in a stabilized pro forma net operating income of $59,559.80. At the offering price of $300,000, the property is valued at $42,857 per unit. Based on the stabilized pro forma NOI, the property reflects a pro forma cap rate of 19.85%. This elevated return profile reflects the current value-add nature of the asset, including vacancy and collection risk, required renovations, and execution risk associated with lease-up and stabilization. A renovation budget of $105,000, or $15,000 per unit, has been estimated to address turnover, unit repairs, and stabilization needs. Including the offering price and estimated renovation budget, a buyer's projected all-in basis would be $405,000, or $57,857 per unit. Based on the stabilized pro forma NOI of $59,559.80, this equates to a projected yield on cost of 14.71%. From a financing perspective, assuming an 80% loan-to-value acquisition loan, a 6.50% interest rate, a 5-year term, and a 30-year amortization schedule, the estimated loan amount would be $240,000, with an estimated equity requirement of $60,000 at acquisition. Estimated annual debt service would be $18,203.56. After debt service, the property is projected to generate annual net cash flow of $41,356.24. When factoring in the estimated down payment and renovation budget, total cash invested would be $165,000, resulting in a projected cash-on-cash return of 25.06% upon stabilization. At a total projected all-in basis of $405,000, 358 Yates Ave offers investors the opportunity to acquire a 7-unit multifamily asset at an attractive basis with meaningful upside through renovation, lease-up, improved collections, and operational stabilization. The investment thesis is centered on acquiring below stabilized value, executing a targeted renovation program, and driving income growth through market-rate rents and improved property performance.

Property Features