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Residential Buildings

Why Invest in
Multi-Family ADU,
with Solidon?

  • What is ADU? (Pg 1)

  • Safe Investment (Pg 2)

  • Great Return on Investment (Pg 3)

  • Steady Rental Income (Pg 4)

  • Tax Advantage (Pg 5)

  • Ability to Leverage Funds (Pg 6)

  • Diversification of Assets (Pg 7)

  • Trusted Person (Pg 8)

Ability to Leverage Funds
or
Exit Strategy

After Construction &
Rental Cash Flow Stabilization

Ex:
6 units (Avg $1,800/M/Unit) - Purchase at $1,800,000
Additional 2 ADUs / Adjusted Avg Rent ($2,300/M/Unit) 

Yearly Rental Income:

Property Taxes (1.25%):
Utilities:

Repairs (6%):
Management (6%):
Insurance:

Reserves / Vacancy (3%):

Total Expenses:


Net Rental Cash Flow:

BEFORE

$129,600

$22,500
$12,000
$7,776
$7,776
$1,500
$3,888

$55,440


$74,160

AFTER

$220,800

$30,000
$18,000
$13,248
$13,248
$2,500
$6,624

$83,620


$137,180

CAP Rate:

Value by CAP:

4.50%

$1,648,000

4.50%

$3,048,000

CAP Rate after 30 month:

Value by CAP:

5.00%

$2,744,000

Financing Strategy

  • Refinance and cash out up to 60% loan to value

  • ​Prepayment penalty to be waived in case of sale

Down Payment:
Construction Cost:
Reserves:

Initial Invest:

$800,000
$400,000
$100,000

$1,300,000

Property Value:
New Loan:

Existing Loan

Cash Out

$2,744,000
$1,646,000 

$1,000,000

$646,000

After cash out, investors will have the first opportunity to make an investment on the 2nd project.

Exit Strategy

1031 Exchange to defer taxes

Sale Price:
Reserve:
Mortgage:
Selling Cost:

Net Proceeds:

+ $2,800,000
+ $100,000
- $1,000,000
- $150,000

- $1,750,000

1031-Exchange-Tiny.png

Capital Gain:      +- $450,000

With the net proceeds $1.75 million, it can easily give a purchasing power up to $5 million.  The same strategy of ADUs and rent adjustment will be utilized. 

Page 6

© Copyright 2016 Solidon Corp & Solidon Real Estate, Inc. All Rights Reserved

21707 Hawthorne Blvd. Ste 107, Torrance, CA 90503

Tel: 213 - 706 - 5848    /   Fax: 866 - 323 - 4948  /   Email: Contact@solidoncorp.com 

Solidon Corp and Solidon Real Estate, Inc. are licensed under Department of Business Oversight and CA Department of Real Estate and operate in full compliance with California regulation. 

CFLL 60DBO-56512 / DRE 02061367 / NMLS 1614815

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