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Why Invest in
Multi-Family ADU,
with Solidon?
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What is ADU? (Pg 1)
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Safe Investment (Pg 2)
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Great Return on Investment (Pg 3)
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Steady Rental Income (Pg 4)
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Tax Advantage (Pg 5)
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Ability to Leverage Funds (Pg 6)
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Diversification of Assets (Pg 7)
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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
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Refinance and cash out up to 60% loan to value
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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
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.
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