Executive Summary: 268-Wheeler Street Akron OH: 24 Unit Apartment Building
We are proposing to build a new 3 story, wood framed, 24-unit apartment building within walking distance of the University of Akron. We have been working with the City of Akron, who owns the parcels, since October of 2019. We have approvals from Akron City Council and both the Planning and Urban Design Committees for the project to proceed. The area is a mix of single-family homes converted into student housing and apartment buildings of varying ages. The apartment building will be approximately 16,845 SF and consist of (3) one-BR units and 21 (2) two BR units.
We have purchased the 3 vacant home lots for $38,550 with the anticipated closing on the properties in early May.
We will be seeking a 15-year tax abatement per the Community Reinvestment Area Tax Abatement program. The tax abatement application can be submitted after the construction permit is granted. This program allows for the tax rate to remain “as is” on the current valuation and not on the new improved building value. Current valuation of the properties is approximately $5,000 each, but we will be seeking a lower valuation to match the adjacent, occupied structures of approximately $1,500 each.
Construction Specifications
· Parking lot will have a board on board fence erected along the adjoining properties to the east and south to shield the lot from view.
· Asphalt parking lot will be provided for 24 individual parking spaces. A small car designation will be provided to maximize the space.
· A main utility room will be provided for electrical distribution, sprinkler/water line entrance and metering facilities.
· Wood framed construction with low slope flat roof.
· Operable, double hung vinyl windows will be provided.
· Exterior sidings will vary with veneer stone, Hardie Plank Siding, vertical vinyl siding all being utilized as upscale finishes.
· Interior finishes will include carpet tile in corridors and LVT plank flooring in each apartment.
· Full sprinkler system and fire alarm systems are to be incorporated into the design.
· Galley style kitchen will be provided with stainless steel electric appliances. Range hoods will be vented to the exterior.
· Each unit will have a stand-alone heating and cooling system provided. AC condenser units will be located on the roof and not visible from the ground.
· All lighting fixture to be installed will be LED style lighting. Lighting will be provided in the parking area and at each exit door for resident security.
· Security systems (cameras, electronic door lock systems) will be installed.
Economic Considerations
1. Utilities will be included in the monthly rent.
2. The building will have a 1st floor laundry room for resident use. Machines will be coin operated to generate additional income.
3. Additional fees will be charged to park on site to match other parking lot pricing.
At full occupancy, we expect that our revenues will be $ 28,000 to $29,000 per month. This is based on the following assumptions:
Revenue:
Rents- 21 (2) BR units at $1,500/mo., 3 (1) BR HC units at $ 750mo. $ 33,750
Parking- 24 spaces at $40.00 /mo. $ 960.00
Laundry - $6.00/ week at 50% utilization $ 720.00
Vending Machine – lease revenues from vendor $ 250.00
Expected revenue total per month: $ 28,735.00
Expenses:
Debt Service – Long term finance based on $2.3 M, 30 yrs. at 5.75% $ 13,500.00
Taxes- Abated rate of worst-case scenario, $15,000/12 mo. $ 1,250.00
Insurance: $ 850.00
Staff Salary (Part time) $ 1,500.00
Utilities- Gas, electric, water, sewer, trash, lawncare, snow removal $ 4,283.00
Maintenance Reserve- $ 250.00
Expected expenses total per month: $ 21,630.00
Projected Monthly Cash Flow $ 7,100.00
Management Experience
Anthony Messina is the Owner of CICC LLC and has more than 30 years in construction management, completing both residential and commercial projects.
In particular, Anthony managed the construction of a 16-unit Townhouse community in downtown Cleveland 3 years ago with a total construction budget of $3.5 M. Anthony’s responsibilities included subcontractor bid solicitation, bid evaluation, contract development, scheduling, coordination with City building department and supervision of a field staff of 3.
Anthony has also managed the construction of approximately 75 single family and condominium style homes and “flipped” 8 other residential properties in his career. A complete resume can be provided on request.
Construction Funding for 268-Wheeler Street
The construction budget is approximately $2.2M dollars based on actual subcontractor pricing. A line item breakout can be provided in greater detail upon request.
We currently have a hard money offer for $1.75 M at 5.75%, interest only. This is a non-secured loan offer. We have not accepted this offer, waiting until we are able to secure the balance of the funds.
We have approximately $170,000 to hand now, held in self-directed IRA accounts, which is to be used to cover property purchase, architectural and civil design fees, permit cost and sitework expenses.
We are seeking the difference between the $2.2 M and the $1.75 and $170,000 to complete the financing package. This amounts to approximately $300,000.
Construction Cost $ 2,200,000.00
Hard Money Loan 1 $ -1,750,000.00
Anthony/CICC contribution $ - 170,000.00
Balance needed to complete $ 280,000.00 / $300,000.00
The $300,000 will be used to cover interest payments during construction and early construction work activities.
Upon completion of the project in October of 2020, we will begin leasing the units. We anticipate that in January of 2021, we will be able to have approximately 60% of the units rented and then seek long term financing in the amount of $2.3 M. At this time, we will close out all investors with principal and return on their investment.
Contacts:
Anthony Messina: www.ciccneollc.com