Anderson management LLC

  

1.0 Executive Summary 2

1.1 Business overview 4

1.1.1 Mission Statement 4

1.1.2 Vision Statement 5

1.1.3 Business Objectives 5

2.0 Investment Description 6

2.1 Investment Summary 6

2.2 Property Overview 7

2.3 Property Location 8

2.4 Investment Opportunities 11

3.0 Market Overview- Fairfield, Waterville, Winslow 11

3.1.1 Fairfield Demographics 13

3.1.2 Investment Environment Analysis 13

3.1.3 Income and Rent Overburden in Fairfield 14

3.1.4 Area Median Income in Fairfield 14

3.1.5 Rental Assistance in Fairfield 15

4.0 Financing/ Cost Analysis 16

5.0 Management and funding Partners 17

This proposal outlines series of action-oriented plan and strategies about how Anderson Management, LLC intends to revolutionized the real estate and property industry by acquiring Sunrise mobile home park community in Fairfield, Maine. Described as 48-pad mobile home park community with 86% occupancy and annual gross operating income of 249, it is expected that an annual expense of $111,308 will yield a NOI of roughly $135k annually.  However, the park is valued at $1.2M.

In the same vein, this proposal is prepared to provide roadmap for fundraising for down or full payment of $300k or $1.2M from potential investors with a promising value benefit which includes 

Paying a 7% return on the borrowed $260k will yield a 20k annual p/I return.  

A portion of the funds raised will be used to create 40,000 line of credit into the described commercial loans and all bills and debt services, as well as repairs to keep maintenance up to date. All gross income will replenish this LOC monthly. This process will repeat excluding the $35k additional payment until LOC is fully replenished. 

Utilizing this method, it will allow for a principle payment every 7 months of $35k towards the commercial loan or the Investors portion, leaving an options to keep collecting the same recurring payment for an extended period or request a balloon payoff of initial investment based on market conditions, evaluation and ability to refinance.

Moreover, If the investor chooses to take the monthly dividend for a longer duration, in return a negotiated equity share could be built in as an incentive. Taking monthly dividend for the longer term would effectively yield an additional 10% in equity into the commercial loan by month 18. This would be when the consideration for a refinance could be made in order to pay back the initial down payment or pay out an equity split of the 120k of equity paid in from the prior 18 months.

In addition, A year to year break down or ROI on of 260k@7% 

However, the investor is guaranteed full transparency of the business. They will be carried around in all processes and operations in a bid to ensure smooth transparency. A weekly financial report will also be sent via email as well as a monthly meeting so as to discuss updates and progress of the investment property.

Anderson Management, LLC is delighted at acquiring and offering comprehensive suite of apartments, building and real-estate properties for commercial or residential housing. we take pride in providing safe and verified properties for investment purpose, create affordable and convenient apartment that meet client’s housing needs. 

Our vision is to be become one of the most successful captains in the real estate and properties industry whose operation and services meet highest level of professional standard. Our vision reflects some of our core values which includes professional integrity, innovation, excellence and service.

Anderson Management, LLC is expected to be become a competitive player in the real estate and properties industry. Leveraging our robust industry experience and depth of intellectual property, we intend to achieve the stated goal and objectives.

 The Proposed building - Sunrise mobile home park community is located at Fairfield, Maine. Its a 49-pad mobile home park community with an 86% occupancy and 249k in annual gross operating income.

Sunrise is being offered at an asking price of $1,200,000 ($24,490/unit). At this price the cap rate is 7.2%, including a $200,000 value for the 21 POH and RTO homes ($9,525/home). The $200,000 value for the homes assumes a 12% annual return on invested capital during the remaining term of the RTO contracts and a 27% discount on the face value. A 50% expense ratio is assumed for the one park-owned home. Sunrise is currently 80% occupied with average lot rents of $290 (market is $300) and average apartment rents of $500. Occupancy could be increased to 90% within a few months of new ownership by improving management and spending the minimal amount of capital needed to lease the 5 currently vacant units.

Short-Term:

There are 4 vacant sites and 1 tear down home where used/new homes can be brought in to increase lot rent by $18,000 annually.

Located in the town of Fairfield, Sunrise MHC consists of 44 mobile home pads and 5 apartment units. Sunrise offers residents an affordable housing alternative in Somerset County, Maine. Sunrise is served by public water and sewer, thus providing consistent expenses and low capital maintenance costs to ownership. The community has one park-owned home, 19 homes on rent-to-own contract, and two vacant homes. Average remaining RTO balance of $13,252/home with a monthly payment of $305/ month on the 19 RTO homes. There is an average of 3.3 years remaining.

Located just north of downtown Fairfield, Maine, less than one mile from IH-95, which connects Boston, New York City and other major east coast cities. Sunrise MHC offers residents a peaceful setting near several employment opportunities that include:

 

The Somerset County boasts a population of 50,994, a work force of 22,217 a median wage of $41,549, and a 4.5% unemployment rate. Mean travel time to work for Somerset County is 23.4 minutes and, therefore these employment opportunities are within an easy commute given the property’s location off IH-95.

 Project location

 Property photos

There are several noted improvement possibilities consisting of an upgrade/repaired paved road with in the community, adding homes to the existing vacant lots, and turning over and filling 4 vacant apartment in a 5 family building owned by the park (located at the parks entrance). The current rental rate is $500/month for 1 unit and $700/month is the average for a RTO (Rent To Own). Filling these vacancies could yield a potential $64k annual increase in income. Increasing the utility recapture from 72% to 90% would yield an additional $7k annually.

Spanning fifty-five square miles and home to roughly 6,700 residents, Fairfield has a good mix of commercial and rural spaces with plenty of opportunity for continued growth. The intersection of U.S. Route 201 and Interstate 95 places Fairfield at a key crossroads for state commerce. The town also has a bustling agricultural industry, and is home to Maine’s first charter school, Maine Academy of Natural Sciences, and Kennebec Valley Community College. 

Just to the south, Waterville is the heart of economic growth in the central Maine region. With a population of about 16,000, Waterville combines tradition and rich heritage with the makings of a bustling urban community. Earning the nickname “the Elm City,” Waterville’s impact towards the development of the Kennebec Valley region has been deemed widely accepted and historically important. The city of Waterville is currently home to the Waterville Opera House, Colby College Museum of Art and puts great pride in the scholastic excellence provided by Thomas College and Colby College. 

Located west of Waterville, Oakland is the gateway to the well-known Belgrade Lakes. It is a beautiful place to reside and raise a family as the town has a reputation for some of the finest schools in the entire state and for its fiscally conservative municipal government. Given its proximity to Interstate 95 and prime development areas, Oakland was selected as the site for FirstPark – Maine’s Premier Technology Center. Billed as the first of its kind in Maine, this high-tech park provides suitable locations for the emerging businesses of the 21st century.

Fairfield is a city in Somerset County, Maine with a population of 3,105. There are 1,256 households in the city with an average household size of 2.47 persons. 42.68% of households in Fairfield are renters.

Fairfield features 39 income-based apartments. Tenants of income-based apartments typically pay no more than 30% of their income towards rent and utilities.

There are 28 rent subsidized apartments that do not provide direct rental assistance but remain affordable to low income households in Fairfield.

On average, Section 8 Housing Choice vouchers pay Fairfield landlords $1,200 per month towards rent. The average voucher holder contributes $300 towards rent in Fairfield.

The maximum amount a voucher would pay on behalf of a low-income tenant in Fairfield, Maine for a two-bedroom apartment is between $703 and $859.

The median gross income for households in Fairfield is $42,037 a year, or $3,503 a month. The median rent for the city is $683 a month.

Households who pay more than thirty percent of their gross income are considered to be Rent Overburdened. In Fairfield, a household making less than $2,277 a month would be considered overburdened when renting an apartment at or above the median rent. 61.94% of households who rent are overburdened in Fairfield. Sourced from federal housing data and AffordableHousingOnline.com

Affordable housing program eligibility is always determined by one's income. Each household's income is compared to the incomes of all other households in the area. This is accomplished through a statistic established by the government called the Area Median Income, most often referred to as AMI. The AMI is calculated and published each year by HUD.

HUD often uses an area larger than a city to determine the AMI because HUD anticipates those searching for housing will look beyond individual cities during their housing search. For Fairfield, the AMI is calculated from all households within Somerset County.

In Fairfield, HUD calculates the Area Median Income for a family of four as $57,500. Most affordable housing programs determine eligibility based on the percent of AMI a given household's income is. Among the programs that determine eligibility based on the AMI are Section 8, HOME, LIHTC, Section 515, 202 and 811. 

  Rental assistance is a type of housing subsidy that pays for a portion of a renter’s monthly housing costs, including rent and tenant paid utilities. This housing assistance can come in the form of Section 8 Housing Choice Vouchers, project-based Section 8 contracts, public housing, USDA Rental Assistance (in Section 515 properties) as well as HUD Section 202 and 811 properties for elderly and disabled households.

  

The financing strategy for this acquisition is 80/20 -25 year commercial loan. The funds requested will only be accepted based on an accepted offer on this deal. The structure we have set up for an interested investor will be a Limited Partnership where the investor would not need to participate in any of the day to day operations. 

The return will be purely on the 20% loaned out for the down payment acquisition (unless full purchase price is offered). The repayment terms may be defined later, but we are offering an interest rate of 7% amortized with the initial investment payment being paid off first or last; meaning an investor may collect a higher return of interest for a longer period or define shorter terms to recapture remaining balance starting month 18. 

Utilization of funds based on an estimated Purchase price of $1,100,000: 

Funding for this venture will channel through a newly created entity filed as Limited partnership. Partners will include Anderson Management, LLC and Kyle Dutra whom will form KC holdings as the general partner leaving the investor being a limited partner. 

Anderson Management, LLC currently operates $2.125,000 of commercial real estate in Fall River, MA totaling 26 residential units and bringing in a total of $256k in gross revenue. Over the last 2 years we have bought and stabilized these buildings successfully. We increased our pay rate from 80% to 100% in less than a year through efficient evictions and raising our applicant’s qualification criteria. 

Dutra has over 10 years of professional experience in corporate management. He has successfully operated stores with revenues of $100 million and higher. He has turned underperforming stores into highly profitable markets by increasing his store’s revenue by 10-15% during his first year at each store. He excels in knowing his community and adjusting to market changes.

 He is currently the acting Walmart store manager of Scarborough Maine, which is less than an hour from Sunrise communities. By combining his expertise in hiring, being a high performer in daily operations and budgeting with Anderson Management, LLC’s property management experience. We believe KC holdings brings the experience needed to run a profitable business in all market conditions.