Concept: Assemble a collection of single family fixers in the Studio City area and hold them for two to three years, then fix and flip and renew the portfolio. A valuable social service is provided at the same time an excellent profit is generated.
The key to this strategy is holding the properties at a positive cash flow while the market rises. The holding mechanism is to set the properties up as Sober living houses. The economics work very nicely up to 600/650k with the houses covering all expenses, taxes and mortgage costs. Assuming a portfolio of 10 houses with a starting value of 6,000,000 a 20% market increase and a 10% rehab increase, there is a chance of making 1,600,000 on an equity investment of 1,500,000 in two years.
Team is qualified and experienced and will contribute 200,000 in equity.
We are looking for two things:
1. Equity of 1.5 million and
2. debt of 5 million
Investor Return $4,358,572 on the 1,500,000 investment over two years
Equity Cash Flow (IRR) 90.60%