Real Estate Finance Package

Rosika Babakhanian Arch 563

2044 N. Albany Chicago, IL 60647

Financing package

TABLE OF CONTECTS

THE ACQUISTION

MARKET ANALYSIS

ECONOMICS

1

2

3

Executive Summary

Location Maps

Aerial Photos

Photographs

Floor Plans

Description of Improvements

1.1

1.2

1.3

1.4

1.5

1.6

Logan Square Maket Overview

Comparable Leases & Sales

Community Profile

2.1

2.2

2.3

Estimated Acquisition Cost

As-Is Proforma

Stabalized Proforma

3.1

3.2

3.3

THE ACQUISTION

Executive Summary1.1

1

1.1.2 Accessibility

1.1.1 Location

R.B, LLC, whose managing member is Rosika Babakhanian, is requesting an acquisition loan to acquire a 18,712 SF multifamily building located at 2044 N. Albany Avenue in Chicago, IL.

The building is in the heart of Logan Square and is currently at 100% occuapncy.

This 16-unit multifamily building has had many recent improvements, including: roof,

electric, plumbing, windows in all units and new porches in one tier of the building. All

units have updated kitchens, bathrooms, and refinished hardwood floors. 10 units have

GFA/CA. the building consists of 13 large one bedrooms, 3 large two bedrooms.

Logan Square is a community area located on the near northwest side of the City of

Chicago. the building is located a walking distance (.3 mile) from Palmer Square Park. In

2005, Palmer Square Park received a grant from the Illinois Department of Natural

Resources to develop a playground,walking trails, soft surface jogging community input

and prolonged design and construction periods, the Chicago Park District (CPD)

recently finished construction of the park and opened it to the public in July 2009.


1.1.1 Location:


1.1.2 Accessibility

The site is located directly west of Bucktown, north of Humboldt Park, and

northwest of Wicker Park, and places its residents within walking distance to a number

of shops, coffee houses, and restaurants. It also has easy access to the highways

and the public transportation system. the neighborhood is just west of the Kennedy

Expressway (routes 90/94) and near the California and Western stops of the CTA's

Blue Line for a quick ride to Chicago’s downtown and O'Hare International Airport. The

CTA's bus routes #52 (California), #56 (Milwaukee), #73 (Armitage), and #74 (Fullerton)

also run through this neighborhood.

THE ACQUISTION 1

Location Maps 1.21.2.1 Illinois

1.2.2 Chicago

1.2.3 Logan Square

1.2.4 Proximity Map

Location Maps 1.2

1.2.1 Illinois 1.2.2 Chicago

Location Maps 1.2

1.2.3 Logan Square

1 mile

.75 mile

.50 mile

.25 mile

Location Maps 1.2

1.2.4 Proximity Map

THE ACQUISTION

Aerial Photos1.3

1

1.1.2 Bird’s Eyeview

1.1.1 Immidiate Location

Aerial Photo1.3

1.3.1 Immidiate location

Bird’s Eye View1.3

1.3.2 Bird’s Eye View

THE ACQUISTION

Photographs1.4

1


1.4.1 Fecade of the Building

Photographs 1.4

1.4.1 Photos of the Fecade

Photographs 1.4

1.4.2 Photos of the Neighborhood

Photographs 1.4

1.4.2 Palmer Park

THE ACQUISTION 1

Floor Plans1.51.5.1 Small One Bedroom Floorplan

1.5.2 Large One Bedroom Floorplan

1.5.3 Two Bedroom Floorplan

1.5.1 Small One Bedroom Floor Plan (540 Sq Ft)

Floor Plans 1.5

1.5.2 Large One Bedroom Floor Plan (645 Sq Ft)

Floor Plans 1.5

1.5.3 Two Bedroom Floor Plan (940 Sq Ft)

Floor Plans 1.5

Description of Improvements 1.3

1


1.1.1 Immidiate Location

THE ACQUISTION

Description of the Property1.6

An updated 16-unit multifamily building

Location: NW Armitage Ave and Kedzie Blvd. Chicago IL

Year: 1928

Building: 18,712 Sq Ft

Land: 7,405 Sq Ft

Type: Corridor-Interior Entrance

Parcel Access: City Street

Parking: Ample amount of parking

Façade: Face Brick

Electrical Service: Circuit Breakers

Air Conditioning: Central Air

Heat/Ventilation: Forced Air, Gas, Radiators

MARKET ANALYSIS 2

Logan Square Maket Overview 2.1 2.1.1

2.1.2

2.1.2.1 Neighborhood Schools

About Logan Square

Logan Square Features Map

2.1.2.2 Neighborhood Public Transportation 2.1.2.3 Neighborhood Grocery2.1.2.4 Neighborhood Libraries

2.1.3 Logan Square Walk Score

About Logan Square 2.1

The Chicago neighborhood of Logan Square is a large, densely populated community,

located 5 miles northwest of the Loop and is bounded by West Bloomingdale, Armitage,

and Diversey. Logan Square is known equally for its prosperous, mansion-lined residen

tial streets and its bustling, diverse commercial districts. Flowers and trees line the

streets, and homes are known for being well-kept. The neighborhood manages to pres

ent an air of old-world prosperity as well as a thoroughly modern and progressive at

titude.

2.1.1 About Logan Square


Starbucks

Health Club

Dog Park

Day Care

2.1.2 Logan Square Features Map

Major Grocery

Library

Hospital

Post office

Theater

Fire Station

School

CTA Station

Metra Station

City Park


2.1.2.1 Neighborhood Schools

Nearest Public High Schools:

• Ramirez Computer Hs, 2435 N Western Av, 1.0mi NE

• Clemente Achievement Academy Hs, 1147 N Western Ave, 1.5 mi SE

Nearest Private High Schools:

• Puerto Rican H S, 2739 W Division St, 1.2mi SE

• Josephinum Acd., 1501 N Oakley Blvd, 1.3mi SE

• Carc/sol, 4014 W Chicago Ave, 1.9mi SW

Nearest Public Elementary Schools:

• Darwin Elem., 3116 W Belden Av, 0.3mi N

• Logan Square: First Lutheran, 3500 Fullerton Ave, 0.6mi NW

Nearest Private Elementary Schools:

• St Sylvester, 3027 W Palmer Square, 0.2mi NE

• Salem Christian, 2845 W Mclean Ave, 0.3mi E

About Logan Square 2.12.1.2.2 Neighborhood Public Transportation

Nearest CTA Station

• California, Blue Line (O'Hare), 0.5mi NE

Nearest Metra Station

• Healy, 1.2mi WHealy, 1.2mi W

2.1.2.3 Neighborhood Major Grocery

• Tony's Finer Foods, 3607 W Fullerton Ave, 0.7mi NW

• Aldi, 1767 N Milwaukee Ave, 1.3mi E

• Aldi, 4030 W Wrightwood Ave, 1.3mi NW

• Strack & Van Til, 2627 N Elston Ave, 1.3mi NE

• Aldi, 800 N Kedzie Ave, 1.6mi S

2.1.2.4 Neighborhood Libraries • Humboldt Park, 1605 N Troy St, 0.6mi S

• Logan Square, 3255 W Altgeld St, 0.6mi N


2.1.3 Logan Square Walk Score

Logan SquareWalk Score: 86

Logan Square is the #11 most walkable neighborhood

in Chicago. This neighborhood is Very Walkable with

an average Walk Score of 86. Logan Square has

82,582 people—or 3% of Chicago's population.

Logan Square is similar in walkability to Lincoln

Square and Hyde Park. Logan Square's Walk Score is

10 points higher than Chicago's Walk Score of 76.

Very Walkable

MARKET ANALYSIS 2

Comparable Leases & Sales 2.22.2.1

2.2.2

Comparable Leases

Logan Square Features Map

Comparable Leases & Sales 2.2

2.2.1 Comparable Leases

Average rent in Logan Square for a two-bedroom apartment is $1,190.

Average rent in Logan Square for a one-bedroom apartment is $997.00

Premises

2321 W. Fullerton Ave. Chicago, IL 60647

4209 N. Pulaski Rd. 2 Chicago, IL 60641

Humbolt at Shakespeare Chicago, IL 60647

4015 N Milwaukee Ave Chicago, IL 60641

Gross Rent

$1,100.00 $1,250.00 $ 1,180.00 $ 1,290.00

Unit Size

1,000 Sq. Ft. 1,200 Sq. Ft. 1,000 Sq Ft 1,150 Sq Ft

Number of Bedroom

2 Bedrooms 2 Bedrooms 2 Bedrooms 2 Bedrooms

Quality of Building

A A+ B A

Utilities Included

Water Water, Heat & Gas None Water

Premises

4015 N. Milwaukee Ave. Chicago, IL 60641

3560 W. Palmer GB Chicago, IL 60647

2734 W. Division Chicago, IL 60622

2141 W. Webster 1F Chicago, IL 60647

Gross Rent

$ 950.00 $ 895.00 $ 825.00 $ 925.00

Unit Size

650.00 Sq. Ft. 600 Sq. Ft.

600 Sq Ft. 650 Sq. Ft.

Number of Bedroom

1 Bedroom 1 Bedroom 1 Bedroom 1 Bedroom

Quality of Building

A B B A

Utilities Included

None None None None

Comparable Leases & Sales 2.2

2.2.2 Comparable Sales

Premises

3519 N. Belden, Chicago, IL 60647

1850 N Humboldt, Chicago, IL 60647

2862 W Shakespeare Ave, Chicago, IL 60647

Sale Price (Price/ Sq Ft)

$ 129.50 $ 90.87 $ 110.75

Building Size

2,200 Sq Ft. 27,456 Sq Ft. 2,700 Sq Ft.

Year Built

1908 1932 Unknown

Number of units 2 45 3

Price $ 285,000 $ 2,495,000 $ 299,000

Demographics2.32.3.1 Population

2.3.2 Age

2.3.3 Race

2.3.4 Population Change

2.3.5 Housing

2.3.6 Income

2.3.7 Crime

2.3.8 Employment

2.3.9 Relationship Status

2.3.10 Homes with Kids

2.3.11 Commute Time

MARKET ANALYSIS 2

Demographics2.3

2.3.1 Population

Population 1-mi. 3-mi 5-mi.

2009 Male Population 40,758 253,844 654,333

2009 Female Population 39,429 251,720 661,520

% 2009 Male Population 50.83% 50.21% 49.73%

% 2009 Female Population 49.17% 49.79% 50.27%

2009 Total Adult Population 54,196 367,728 999,395

2009 Total Daytime Population 62,540 412,689 1,251,255

2009 Total Daytime Work Population 15,733 164,343 644,402

2009 Median Age Total Population 26 28 30

2009 Median Age Adult Population 35 35 36

2.3.2 Age

Demographics2.3

PPopulation 1-mi. 3-mi 5-mi.

% 2009 Age 0-13 26.2% 21.82% 19.13%

% 2009 Age 14-17 6.22% 5.44% 4.92%

% 2009 Age 18-20 4.96% 4.74% 4.28%

% 2009 Age 21-24 7.70% 7.74% 7.78%

% 2009 Age 25-29 10.15% 11.72% 11.55%

% 2009 Age 30-34 9.23% 10.44% 10.46%

% 2009 Age 35-39 7.96% 8.02% 8.21%

% 2009 Age 40-44 6.51% 6.69% 6.96%

% 2009 Age 45-49 5.37% 5.68% 6.14%

% 2009 Age 50-54 4.35% 4.84% 5.32%

% 2009 Age 55-59 3.45% 3.71% 4.16%

% 2009 Age 60-74 5.76% 6.4% .7.48%

% 2009 Age 75-84 1.65% 2.06% 2.59% % 2009 Age 85+ 0.52% 0.70% 1.00%

Demographics2.3

2.3.3 Race

Population 1-mi. 3-mi 5-mi.

% 2000 Non-Hispanic White 63.40% 58.34% 55.89%

% 2000 Non-Hispanic Black 25.07% 33.85% 33.59%

% 2000 Non-Hispanic Amer Indian/Alaska Native 0.91% 0.28% 0.24%

% 2000 Non-Hispanic Asian 4.08% 3.79% 7.16%

% 2000 Non-Hispanic Hawaiian/Pacific Islander 0.02% 0.02% 0.02%

% 2000 Non-Hispanic Some Other Race 0.71% 0.28% 0.28%

% 2000 Non-Hispanic Two or More Races 5.81% 3.44% 2.81%

Demographics2.3

2.3.4 Population Change

1-mi. 3-mi 5-mi.

2009 Total Population 80,187 505,564 1,315,854

2009 Total Households 25,823 181,967 529,229

Population Change 1990-2009 -5,477 -4,779 24,764

Household Change 1990-2009 263 5,935 35,000

% Population Change 1990-2009 -6.39% -0.94% 1.92%

% Household Change 1990-2009 1.03% 3.37% 7.08%

Population Change 2000-2009 -6,555 -33,027 -51,554

Household Change 2000-2009 -1,672 -7,270 -281

% Population Change 2000-2009 -7.56% -6.13% -3.77%

% Households Change 2000-2009 -6.08% -3.84% -0.05%

Demographics2.3

2.3.5 Housing

1-mi. 3-mi 5-mi.

% 2000 Occupied Housing Units 91.48% 92.22% 92.70%

% 2000 Owner Occupied Housing Units 26.86% 33.63% 34.85%

% 2000 Renter Occupied Housing Units 64.62% 58.59% 57.85%

% 2000 Vacant Housing Units 8.52% 7.78% 7.30%

2.3.6 Income

1-mi. 3-mi 5-mi.

% 2009 Household Income < $10,000 9.78% 8.14% 8.10%

% 2009 Household Income $10,000-$19,999 11.76% 9.42% 9.27%









% 2009 Household Income $500,000+ 0.00% 0.05% 0.07%

Demographics2.3

2.3.7 Crime

Demographics2.3

2.3.8 Employment

White Collar 26,984

Blue Collar 5909

2.3.9 Relationship Status

Demographics2.3

2.3.10 Homes with Kids 2.3.11 Commute Time

ECONOMICS 3

Estimated Acquistion Cost 3.1

Estimated Acquisition Cost 3.1

Building Size (SF) Gross Building Area &,405 (SF) Rentable Area $ 18,712 (SF)

Estimated time to complete construction 6 months Estimated construction time to lease up 6 months Construction period interest rate 6.75% Permanent loan interest rate 6.75% Amortization on permanent loan 30 years Average outstanding balance of construction loan

50%

Acquisition Costs Property $ 1,620,000.00 Brokerage fee $ 32,400.00

Total $ 1,652,400 Hard costs Remodeling $ 30,000.00 Contingency $ 3,400.00 HVAC upgrade $ 40,000.00 Miscellaneous $ 5,000.00

Total $ 78,400.00 Soft Cost Contingency $ 2,000.00 Brokerage fees $ 36,000.00 Miscellaneous $ 5,000.00 Construction/loan fee $ 5,220.00

Total $ 48,220.00 Total Estimated Cost $ 1,779,020.00 Loan To value (70%)

$ 1,245,314.00

ECONOMICS 3

As-Is Proforma 3.2

As-Is Proforma 3.2

Expenses (2008) Peoples Energy $ 11,937.00 Water Department $ 1,435.42 Waste Management $ 1,502.38 Comed $ 703.30 Building Insurance $ 5,669.00 2008 taxes $ 16,809.00

Total (annual)

$ 38,056.10

Rent Roll (2008) Garden $ 800.00 44 1st Fl $ 800.00 44 2nd Fl $ 1,025.00 44 3rd FL $ 1,025.00 1/2 1E $ 800.00 1/2 2E $ 750.00 1/2 3E $ 825.00 1/2 1W $ 725.00 1/2 2W $ 800.00 1/2 3W $ 850.00 46 1S $ 875.00 46 2S $ 800.00 46 3S $ 875.00 46 1W $ 825.00 46 2W $ 825.00 46 3W $ 850.00

Total (monthly)

$ 13,450.00

Total (annual)

$ $161,400.00

As-Is Proforma 3.2

NOI (2008) Rent Roll (2008) $161,400.00 Expenses (2008) $ ( 38,056.10) NOI $ 123,343.90

Cap Rate NOI/ VALUE $ 123,343.90/ 1,799,900 .069 (6.9%)

ECONOMICS 3

Stabalized Proforma 3.3


Overview Total project cost $ 1,779,020.00 Total loan (70% LTV) $ 1,245,314.00 Equity (30%) $ 533,706.00 Loan Interest rate 6.75% Loan Amortization 30 years Loan Constant .07783

Monthly Debt Service

$ 8,076.90

Annual Debt Service $ 96,922.78

Projected Expenses Peoples Energy $ 11,937.00 Water Department $ 1,435.42 Waste Management $ 1,502.38 Comed $ 703.30 Building Insurance $ 5,669.00 2008 taxes $ 16,809.00

Total $ 38,056.10


Projected Rent Roll (Income)

Garden $ 950.00 44 1st Fl $ 985.00 44 2nd Fl $ 1,170.00 44 3rd FL $ 1,170.00 1/2 1E $ 1,100.00 1/2 2E $ 985.00 1/2 3E $ 950.00 1/2 1W $ 1,000.00 1/2 2W $ 800.00 1/2 3W $ 950.00 46 1S $ 975.00 46 2S $ 985.00 46 3S $ 975.00 46 1W $ 985.00 46 2W $ 975.00 46 3W $ 950.00

Total (monthly) $ 15,905.00 Annual $ 190,860.00

Projected NOI Gross income $ 190,860.00 Vacancy $ ( 5,725.80) Operating cost $ ( 38,056.10) NOI $ 147,078. 90


Debt Service Coverage Ratio NOI/ Debt Service $ 147,078.90 / $96,922.78

DSCR 1.51

Cash Flow NOI $ 147,078.90 Debt service ($ 96,922.78)

Cash Flow $ 50,156.12

Break Even Ratio Total Expenses/Gross Operating income

$134,978.58/ $190,860.00

BER 70.7%

Return on Equity Cash Flow/Equity $50,156.12 / $533,706

ROE 9.3%

New CAP Rate NOI/Value $ 147,078.90/ $ 1,620,000.00

Cap Rate .09 (9%)

Leverage AMC .07783

Positive Leverage .09> .07783

Conclusion

Asking Price $ 1,799,900.00 The asking price greater than the value

Value (offer) $ 1,620,000.00

The Projected Performa shows:

• A 18.25 % increase in the income from $161,400.00 to $ 190,860.00 ( after the improvements)

• A 30% increase in cap rate from 6.9% to 9%

• Positive leverage exist .09> .07783

Thus, this is a great investment

Real Estate Finance Package

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