AIA 3 14 12 -Final Slides - dyersheehan.com · Title: Microsoft PowerPoint - AIA 3 14 12 -Final...

Apartment

Investor AcademySUCCEED in 2012! Capitalize on Today’s Market Trends

Dawn Dyer, PresidentDyer Sheehan Group, Inc.

CA DRE License #01231389Ventura, CA

(805) [email protected]

March 14, 2012

All information provided above is from sources deemed reliable, but no guarantee or warranty is stated or implied herein.

Apartments Outperform

Other Assets

� Strong Fundamentals

� Demographic Trends

� Barriers to Home-Ownership

� Economic Issues

� Lifestyle Choices

� Supply Constraints

Apartment Investor Academy | Ventura County Apartment MarketMarch 14, 2012

Apartments Provide Safe Harbor

with Upside Potential

� Basic Commodity Item

� Short-Term Leases

� Low Vacancy During Recession

� Strong Demand Factors

� Rent Appreciation Anticipated

� Leverage


Demographic Trends

� Generation Y

� Aging Boomers

� Single Person Households

� New Americans

� Alternative Family Structures


Housing Crisis & Mortgage Meltdown

� New Demand from those who Lost or Bailed

� Changes in Consumer Psyche

� Tougher Mortgage Requirements

� Affordability and Flexibility

� Homeownership -vs- Rent & Invest


Lifestyle Choices

� Live/Work/Play

� Eco-Friendly

� Lock and Leave

� Freedom

� Mobility


Source: Construction Industry Research Board

Apartment Investor Academy | Ventura County Apartment Market

March 14, 2012

Ventura County Building Permits

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Tota

l Pe

rmit

ted

Un

its

Single Family Permits Multi-Family Permits


Does Your Property Portfolio

need a Tune-Up?

� Optimize Performance

� Conduct Annual Review � Leases

� Operating Statements

� Taxation Issues

� Insurance & Risk Management

� Maintenance & Capital Improvements

� Debt to Equity Position

� Consult with key Investment Team Members

� Make Adjustments at Property or Portfolio level


The Value of Investment Property

is based on the

QUANTITY &

QUALITY

of the Income Stream it produces!


Valuation Methods for

Multi-Family Property

� Price per Unit (market comp)

� Price per Square Foot (market comp)

� Gross Rent Multiplier (GRM)

� Capitalization Rate Analysis (Cap Rate)


CAPITALIZATION RATE

CAP RATE = Annual Net Operating Income (NOI)

Purchase Price (or Market Value)

MARKET VALUE = Annual NOI (excl. mortgage pmt.)

Market Capitalization Rate


NET OPERATING INCOME

NOI = Gross Scheduled Income

- Vacancy & Credit Loss

- Total Operating Expenses

(Excluding Mortgage Payment)


Key Elements of

Net Operating Income

� Income (Rents & Other Income)

� Vacancy Reserve

� Operating Expenses

� Replacement Reserves


Operating Expenses

(Normalized)

� Property Taxes (Prop. 13 + Assessment Districts)

� Insurance (Adequate Coverage)

� Property Management (Professional & On-Site)

� Maintenance & Repairs (even if DIY)

� Gardening /Pest Control

� Licences/Legal/Accounting

� Utilities (Separate Meters?)

� Replacement Reserves ($250/unit)



Property Name: XYZ APARTMENTS # OF UNITS BED + BATH SQ. FT. MO. RENT $/SQ FT Purchase Price: $ 3,240,000

Property Address: 1234 Main Street 12 1 + 1 650 $900 $1.38 Percent Down: 30.00%

Anytown, USA 12 2 + 2 950 $1,200 $1.26 Cash Down: $ 972,000

Cross Street: 1st Street Current Cap: 6.85% No. of Units: 24 Projected Cap: 5.41%

Lot Size: 0.68 acres Current GRM: 10.66

Year Built: 1988 Projected GRM: 10.66

Net Rentable Area: 38,958 sq. ft. Price per Unit: $ 135,000

Thomas Page/Grid: 999 XY Price per sq ft: $ 83.17

E S T I M A T E D A N N U A L E X P E N S E SCURRENT PROJECTED CURRENT PROJECTED 1st 2nd

Property Taxes*: $ 22,000 $ 35,640 Tax & License: $ 950 $ 950 Loan Balance:

Insurance: 9,840 13,635 Electricity: $ 1,500 $ 1,500 Loan Type:

Advertising & Promo: 0 1,200 Water/Sewer: $ 9,480 $ 9,480 Interest Rate:

Property Mgmt: 12,153 18,144 Trash: $ 2,700 $ 2,700 Remaining Term:

Office Expense & Bkpg: 0 900 Gas: $ 1,390 $ 1,390 Monthly Payment:

Maint. & Repairs: 12,153 18,230 Legal/Accounting $ 1,250 $ 1,250 Name of Lender:

Gardener: 2,400 2,400 Reserves: $ 6,000 Assumable:Total of Estimated Annual Expenses: $75,816 $113,419 Comment: Informational only; does not affect analysis

* Based upon Purchase Price. Estimated Annual Expenses per Unit: $3,159 $4,726 calculations.

S C H E D U L E D G R O S S I N C O M EC U R R E N T P R O J E C T E D 1st 2nd

Total Monthly Rent: $ 25,200 • • • $ 25,200 • • • Loan Amount: $ 2,268,000 $ 0

Monthly Laundry Income: 120 • • • 120 • • • Loan Type: Conv./Variable Conv./Variable

Other Monthly Income: • • • • • • Interest Rate: 5.00% 5.00%

Total Monthly Gross Income: 25,320 • • • 25,320 • • • Loan Term: 30.00 Years 30.00 Years

Annual Gross Income: 303,840 • • • 303,840 • • • Monthly Payment: $ 12,175.11 $ 0.00

Less Annual Vacancy Reserve: 6,077 2.00% 15,192 5.00% Name of Lender: XYZ Bank XYZ Bank

Gross Annual Operating Income: 297,763 • • • 288,648 • • • Balloon Payment: $ 0 $ 0

Less Annual Expenses: 75,816 24.95% 113,419 37.33% Comment: Net Annual Operating Income: 221,947 • • • 175,229 • • •

Less Annual Loan Payments: 146,101 • • • 146,101 • • • Annual Pre-Tax Cash Flow: 75,846 7.80% 29,128 3.00%

Plus Annual Principal Reduction: 0 • • • 0 • • • Note: All information provided herein is from sources deemed to

Total Annual Pre-Tax Return: $75,846 7.80% $29,128 3.00% be reliable, but no guarantee or warranty is stated or implied.

Comments: For additional information, please contact:D Y E R S H E E H A N G R O U P , I N C .

808 E. Santa Clara Street, Suite A Ventura, CA 93001(805) 653-8100 • Fax: (805) 653-8105

E X I S T I N G F I N A N C I N G

N E W F I N A N C I N G

M U L T I - F A M I L Y I N V E S T M E N T P R O P E R T Y I N F O R M A T I O N

G E N E R A L I N F O R M A T I O N A N A L Y S I SU N I T M I X & C U R R E N T R E N T D A T A

Optimize Performance of Your

Investment Real Estate Portfolio

� Update Market Valuation Regularly

� Depreciation Schedule

� Debt to Equity Ratio

� 1031 Exchange as Wealth-Building Tool


2011 Multi-Family

Sales

Parker ShawCA DRE License # 01740891

Multi-Family Investments

Dyer Sheehan Group, Inc.March 14, 2012All information provided above is from sources deemed reliable, but no guarantee or warranty is stated or implied herein.

2011 Multi-Family Transactions

2011 National Data 2011 Ventura County

Data

Total Sale Volume $57,000,000,000 $181,375,500

YOY Change 27% 25%

Average Cap Rate 6.5% 6.27%

Average Price/Unit $102,000 $132,802

Average Monthly Rent $1,064 $1,435

YOY Change 2.4% 2.9%

Vacancy Rate 5.2% 3.4%

YOY Change 1.4% .73%



Ventura County Total Transactions(5+ units)

0

10

20

30

40

50

60

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 2011

Yearly Transactions 10-Year Average




Ventura County Transactions by City


2011 Ventura County Multi-Family Transactions(5+ Units)

All 2011 Sales

2011 Sales

w/o Alara & Parc Rose

Total Transactions 21 19

Total Sale Volume $181,375,500 $51,275,500

Average Sale Price $8,639,929 $2,698,711

Average Cap Rate 6.27% 6.5%

Average Price/ SF $168 $162

Average Price/Unit $132,802 $121,647

Total Units 919 381

Average # of Units 44 20

Apartment Investor Academy | Ventura County Apartment MarketMarch 14, 2012All information provided above is from sources deemed reliable, but no guarantee or warranty is stated or implied herein.

Ventura County Average Cap Rate

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 2011



Parker ShawMulti-Family Investments

Dyer Sheehan Group, Inc.

[email protected]

March 14, 2012

January 2012

Ventura County Rent Survey

Dawn DyerPresident

Dyer Sheehan Group, Inc.

March 14, 2012

Apartment Investor Academy | Ventura County Apartment MarketMarch 14, 2012February 23,

2011

Ventura County Vacancies

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Jan

ua

ry C

ou

nty

wid

e V

aca

ncy

Ra

te



Average Ventura County Rents

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mo

nth

ly R

en

t in

Do

lla

rs

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

Re

nt

in $

oe

r S

F

Average Monthly Rent Average Rent in $ per SF


Apartment Investor Academy | Ventura County Apartment MarketMarch 14, 2012February 23,

2011

Average Two Bedroom Apartment Rents

Ventura County, January 2012

Ca

ma

rill

o

Fil

lmo

re

Mo

orp

ark

Oja

i V

all

ey

Ox

na

rd/P

ort

Hu

en

em

e

Sa

nta

Pa

ula

Sim

i V

all

ey

Ve

ntu

ra

Th

ou

san

d O

ak

s/W

est

lak

e V

illa

ge

Co

mb

ine

d A

rea

s

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

Av

era

ge

Mo

nth

ly R

en

t in

Do

lla

rs


Supply Constraints

� Access to Development Capital

� Land and Production Costs

� Entitlement Hurdles, Delays, and Litigation

� Fees, Infrastructure, and Offsite Improvements

� Parking Standards

� Limited land zoned for Multi Family

� SOAR, GOD and MS4

� NIMBYs and BANANAs


Multi-Family Investment Outlook

� Strong Market Fundamentals

� Supply/Demand Imbalance

� Most Affordable Housing Type

� Low Vacancy Rates

� Changing Demographics

� Market Elasticity

� Opportunities to Add Value


Questions?

Dawn DyerDyer Sheehan Group, Inc.

[email protected]

March 14, 2012Apartment Investor Academy | Ventura

County Apartment Market

AIA 3 14 12 -Final Slides - dyersheehan.com · Title: Microsoft PowerPoint - AIA 3 14 12 -Final...

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