regency presentation package

7/29/2019 Regency Presentation Package

1/17

Joe Lumbley

214-941-3417

[email protected] Dallas, Texas, 75208

Located on frontage road (crossing Park Row) of SH 360 in Arlingtron TX

Regency Apartments

2507 Airport Circle

Prepared for

Prospective Purchaser

Arlington Texas

Individual HVAC

Presented by

819 N. Bishop

JP Lumbley & Associates, LLC, Realtors

Bishop Arts District Office

Individual Hot Water Heaters

Built in 1967

Separate Electric Meters, Tenants pay electric


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Potential Rental Income 420,480$ Purchase/Asking Price 1,850,000$ Property Type Apartments

Other Income 7,988 Improvements - No. of Units 70

Total Vacancy and Credits (42,048) Other - Price Per Unit 26,429$

Operating Expenses (240,574)$ Closing Costs - Total Sq Ft 56,996

Annual Reserves: $ Finance Points - Price Per Sq Ft 32$Net Operating Income (NOI) 145,846$ Income per Unit 6,121$

MIP Payments $ Total Acquisition Cost 1,850,000$ Expenses per Unit (3,437)$

Annual Reserves: $

Debt Service: (91,942)$Mortgage (s) 1,387,500$

Cash Flow Before Taxes 53,905$

(7,808) Down Payment / Investment 462,500$

Cash Flow After Taxes 46,097$

% of Asking % of Cost

Rental Growth Rate: 5.00% Down Payment: 462,500$ 25.00% 25.00%

Expense Growth Rate: 5.00% Initial Loan Balance: 1,387,500$ 75.00% 75.00%

Capitalization Rate (Resale): 8.00%

Marginal Tax Rate: 28.00% Loan Amount Interest Rate Term Payment

Capital Gain Tax Rate: 15.00% 1,387,500$ 5.25% 30 $7,662

$ 5.00% 30 $0

$ 4.00% 30 $0

Year 1 Year 3 Year 7

Debt Coverage Ratio (DCR) 1.59 1.89 2.42

Loan-to-Value Ratio (LVR) 67.7% 55.2% 42.0%

Capitalization Rate Based on Cost 7.88% 9.41% 12.03%

Capitalization Rate Based on Resale Price 8.00% 8.00% 8.00%

Gross Rent Multiplier 4.40 5.18 5.18

4.00% 99,955 556,045 1,250,917

10.00% 43,776 304,677 557,124

Cash on Cash Return - Before Taxes 11.66% 17.77% 28.23%

Cash on Cash Return - After Taxes 9.97% 14.75% 21.97%

Internal Rate of Return - Before Taxes 37.93% 30.52%

Internal Rate of Return - After Taxes 31.78% 26.25%

35.17% 25.11%

29.68% 21.97%

Loan InformationAssumptions

Income Taxes: Benefit (Expense) @ 28%

Financial Measurements Notes / Discussion

The information, calculations and data presented in this report are believed to be accurate but are not guaranteed. The information contained in this report shall not be considered as

a subs titution for legal, accounting or other professional advice. Please s eek proper legal and tax advice as appropriate before making investments.

Modified Internal Rate of Return - Before Taxes

Modified Internal Rate of Return - After Taxes

Net Present Value (NPV) - B/ Taxes

Net Present Value (NPV) - A/Taxes

Disclaimer: All information presented is believed to be accurate.

Joe Lumbley

JP Lumbley & Associates, LLC, Realtors

214-941-3417

Property Overview

Regency Apartments

2507 Airport Circle

Arlington Texas

Income, Expenses & Cash Flow


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South Park

Apartments 76Units

Regency

Apartments 70Units


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Regency Apartments


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Regency Apartments

2507 Airport Circle

Arlington Texas

Potential Rental Income 420,480$ 441,504$ 463,579$ 486,758$ 511,096$

Other Income 7,988 8,388 8,807 9,248 9,710

Less: Vacancy & Credit Losses (42,048) (35,320) (32,451) (24,338) (25,555)

Effective Gross Income 386,420$ 414,572$ 439,936$ 471,668$ 495,251$

Less: Operating Expenses (240,574) (252,956) (265,789) (279,468) (293,441)

Net Operating Income (NOI) 145,846$ 161,616$ 174,147$ 192,200$ 201,810$

Less: Annual Debt Service (91,942) (91,942) (91,942) (91,942) (91,942)

CASH FLOW Before Taxes 53,905$ 69,674$ 82,205$ 100,258$ 109,868$

Projected Sales Price 2,020,196$ 2,176,835$ 2,402,499$ 2,522,624$ 2,648,755$

Less: Selling Expenses (121,212) (130,610) (144,150) (151,357) (158,925)

Adjusted Projected Sales Price 1,898,984$ 2,046,225$ 2,258,349$ 2,371,267$ 2,489,830$

Less: Mortgage(s) Balance Payoff (1,367,935) (1,347,319) (1,325,593) (1,302,699) (1,278,574)

SALE PROCEEDS Before Taxes 531,049$ 698,907$ 932,756$ 1,068,567$ 1,211,256$

Cash Generated in Current Year 46,097$ 59,487$ 68,200$ 80,872$ 87,448$

Cash Generated in Previous Years n/a 46,097 105,583 173,783 254,656

Cash Generated from Property Sale 510,807 643,124 831,701 937,120 1,048,569

Original Initial Investment (462,500) (462,500) (462,500) (462,500) (462,500)

94,404$ 286,208$ 542,984$ 729,276$ 928,174$

Debt Coverage Ratio (DCR) 1.59 1.76 1.89 2.09 2.19

Loan-to-Value Ratio (LVR) 67.7% 61.9% 55.2% 51.6% 48.3%

Capitalization Rate Based on Cost 7.88% 8.74% 9.41% 10.39% 10.91%

Capitalization Rate Based on Resale Price 8.00% 8.00% 8.00% 8.00% 8.00%

Gross Rent Monthly Multiplier (GRM) 52.80 59.17 62.19 62.19 62.19

Gross Rent Yearly Multiplier (GRM) 4.40 4.93 5.18 5.18 5.18

Value of Property Using this GRM 5.00 2,102,400 2,207,520 2,317,896 2,433,791 2,555,480

Break-Even Ratio 77.61% 76.66% 75.73% 74.88% 74.00%Operating Expense Ratio 62.26% 61.02% 60.42% 59.25% 59.25%

Net Present Value (NPV) - Before Taxes 4.00% 99,955 299,927 556,045 725,945 898,397

Cash-on-Cash Return with Equity 20.41% 37.55% 39.93% 22.40% 21.22%

Cash-on-Cash Return - Before Taxes 11.66% 15.06% 17.77% 21.68% 23.76%

Internal Rate-of-Return (IRR)- Before Taxes 26.48% 34.87% 37.93% 35.08% 33.13%

Modified Internal Rate-of-Return (MIRR)- Before Taxes 26.48% 33.44% 35.17% 31.49% 28.83%

Joe Lumbley

214-941-3417

Financial Measurements

Year 4 Year 5

Cash Position

Rental Activity Analysis

Total Potential CASH Generated

Property Resale Analysis

Year 1 Year 2 Year 3

2/8/2013 1:39 PM 1993 - 2012 Cash Flow Analyzer h ttp://RentalSoftware.com


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Regency Apartments

2507 Airport Circle

Arlington Texas

Per unit Total Percent of Monthly Rent Monthly Annua

Sq Ft Sq Ft Total Rev/ Sq Ft Per Unit Rent Rent

1-1 12 602 7,224 12.67% 0.710 425$ 5,100$ 61,$

1-1 4 682 2,728 4.79% 0.640 435$ 1,740$ 20,$

1-1 2 720 1,440 2.53% 0.630 450$ 900$ 10,$

1-1 12 756 9,072 15.92% 0.600 450$ 5,400$ 64,$

1-1 6 790 4,740 8.32% 0.600 475$ 2,850$ 34,$

2-1 6 792 4,752 8.34% 0.660 525$ 3,150$ 37,$

2-1 12 912 10,944 19.20% 0.600 550$ 6,600$ 79,$

2-2 12 996 11,952 20.97% 0.580 575$ 6,900$ 82,$

2-2 4 1,036 4,144 7.27% 0.580 600$ 2,400$ 28,$

0 0 0 0 0.00% 0.000 $ $ $

Totals 70 7,286 56,996 100.0% 0.615 4,485 35,040$ 420,$

Joe Lu

214-941

Unit Description

Number of

Units


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Regency Apartments

2507 Airport Circle

Arlington Texas

Per Unit Total

Sq. Ft. Sq. Ft.

Laundry 666$ 7,988$ 10$ 0.09 0.01

Totals 666$ 7,988$ 10$ 0.09 0.01

Joe Lumbley

214-941-3417

DescriptionAnnualAmount

Per UnitMonthlyAmount


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Regency Apartments

2507 Airport Circle

Arlington Texas

% of % of

Expenses Revenue

350 5.0% 5.00 0.01 0.1% 0.1%

612 5.0% 8.74 0.01 0.3% 0.1%

235 5.0% 3.36 0.00 0.1% 0.1%

17,276 5.0% 246.80 0.30 7.2% 4.1%

41,666 5.0% 595.23 0.73 17.3% 9.9%

15,137 216.25 0.27 6.3% 3.6%

62,764 5.0% 896.63 1.10 26.1% 14.9%

3,988 5.0% 56.96 0.07 1.7% 0.9%

200 5.0% 2.86 0.00 0.1% 0.0%

42,762 5.0% 610.89 0.75 17.8% 10.2%2,433 5.0% 34.76 0.04 1.0% 0.6%

9,276 5.0% 132.51 0.16 3.9% 2.2%

3,716 5.0% 53.08 0.07 1.5% 0.9%

1,327 5.0% 18.96 0.02 0.6% 0.3%

38,832 5.0% 554.74 0.68 16.1% 9.2%

240,574$ 3,437$ 56,996 100.0% 57.2%

Electricity

Per Unit

Supplies

Water

Expense Description

Telephone

Total Annual Operating Expenses

Trash Removal

Payroll

Maintenance

Office Expenses

Property Taxes

Payroll

Management Fee

Annual

Increase

Accounting

Insurance

Joe Lumbley

214-941-3417

Per Sq Ft

Advertising

Association Fees

Annual

Amount


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Annual Property Operating DataRege ncy Apartments

2507 Airport Circle

Arlington Texas

Year 1 Sq Ft Pe r Unit Year 2 Sq Ft Pe r Unit Year 3 Sq Ft Per Unit Year 4

Potential Rental Income 420,480$ 0.61 500.57 441,504$ 0.65 525.60 463,579$ 0.68 551.88 486,75$

Less: Vacancy & Credit Losses (42,048) -0.06 -50.06 (35,320) -0.05 -42.05 (32,451) -0.05 -38.63 (24,33

Other Income 7,988 0.01 9.51 8,388 0.01 9.99 8,807 0.01 10.48 9,24

386,420$ 0.56 460.02 414,572$ 0.61 493.54 439,936$ 0.64 523.73 471,66$

Accounting 350 0.00 0.42 368 0.00 0.44 386 0.00 0.46 40

Advertising 612 0.00 0.73 643 0.00 0.77 675 0.00 0.80 70

Association Fees 235 0.00 0.28 247 0.00 0.29 259 0.00 0.31 27

Insurance 17,276 0.03 20.57 18,140 0.03 21.60 19,047 0.03 22.67 19,99

Maintenance 41,666 0.06 49.60 43,749 0.06 52.08 45,937 0.07 54.69 48,23

Management Fee 15,137 0.02 18.02 16,247 0.02 19.34 17,245 0.03 20.53 18,49

Payroll 62,764 0.09 74.72 65,902 0.10 78.46 69,198 0.10 82.38 72,65

Office Expenses 3,988 0.01 4.75 4,187 0.01 4.98 4,396 0.01 5.23 4,61

Supplies 200 0.00 0.24 210 0.00 0.25 221 0.00 0.26 23

Property Taxes 42,762 0.06 50.91 44,900 0.07 53.45 47,145 0.07 56.13 49,50

Payroll 2,433 0.00 2.90 2,555 0.00 3.04 2,682 0.00 3.19 2,81

Trash Removal 9,276 0.01 11.04 9,740 0.01 11.60 10,227 0.01 12.17 10,73

Electricity 3,716 0.01 4.42 3,902 0.01 4.64 4,097 0.01 4.88 4,30

Telephone 1,327 0.00 1.58 1,393 0.00 1.66 1,463 0.00 1.74 1,53

Water 38,832 0.06 46.23 40,774 0.06 48.54 42,812 0.06 50.97 44,95

240,574$ 0.35 286.40 252,956$ 0.37 301.14 265,789$ 0.39 316.42 279,46$

145,846$ 0.21 173.63 161,616$ 0.24 192.40 174,147$ 0.25 207.32 192,20$

Less: Annual Debt Service (91,942) -0.13 -109.45 (91,942) -0.13 -109.45 (91,942) -0.13 -109.45 (91,94

Cash Flow Before Taxes 53,905$ 0.08 64.17 69,674$ 0.10 82.94 82,205$ 0.12 97.86 100,25$

Net Operating Income (NOI)

Total Operating Expenses

Operating Expenses

Effective Gross Income

1993 - 2


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Regency Apartments

Joe Lumb

214-941-3

Time Net Operating Debt Cash Flow Incomes Cash Flow

Period Income Service Before Tax Taxes After Tax

Int Investment (462,500)$ (462,500)$

Year 1 145,846 - (91,942) 53,905 (7,808) 46,097

Year 2 161,616 - (91,942) 69,674 (10,187) 59,487

Year 3 174,147 - (91,942) 82,205 (14,005) 68,200

Year 4 192,200 - (91,942) 100,258 (19,386) 80,872

Year 5 201,810 - (91,942) 109,868 (22,420) 87,448

2507 Airport Circle

Arlington Texas

MIP Payments

$

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

1 2 3 4 5

Cash Flow After Taxes

Cash Flow Before Taxes

1993 - 2012 Cash Flow Analyzer http://RentalSoftware.com


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Regency Apartments

2507 Airport Circle

Arlington TexasJoe Lumb

214-941-3

Time Initial Investment Cash Flow Cash on Cash Income Cash Flow Cash on Cash

Period Adj for Refinance Before Taxes Before Taxes Taxes After Taxes After Taxes

Year 1 462,500$ 53,905$ 11.66% (7,808)$ 46,097$ 9.97%Year 2 462,500 69,674 15.06% (10,187) 59,487 12.86%

Year 3 462,500 82,205 17.77% (14,005) 68,200 14.75%

Year 4 462,500 100,258 21.68% (19,386) 80,872 17.49%

Year 5 462,500 109,868 23.76% (22,420) 87,448 18.91%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

1 2 3 4 5

After Taxes

Before Taxes



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Regency Apartments

2507 Airport Circle


214-941-3

Time Net Operating Cap Rate on Cost Resale

Period Income (NOI) 1,850,000$ Value

Year 1 145,846$ 7.88% 2,020,196$

Year 2 161,616 8.74% 2,176,835

Year 3 174,147 9.41% 2,402,499

Year 4 192,200 10.39% 2,522,624

Year 5 201,810 10.91% 2,648,755

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

1 2 3 4 5



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Regency Apartments

2507 Airport Circle


214-941-3

Time Net Operating Mortgage Debt Coverage

Period Income Payments Before Taxes

Year 1 145,846$ (91,942)$ 1.59

Year 2 161,616 (91,942) 1.76

Year 3 174,147 (91,942) 1.89

Year 4 192,200 (91,942) 2.09

Year 5 201,810 (91,942) 2.19

-

0.50

1.00

1.50

2.00

2.50

1 2 3 4 5



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Regency Apartments

2507 Airport Circle


214-941-3

Before Taxes After Taxes

Year 1 26.48% 20.41%

Year 2 34.87% 28.34%

Year 3 37.93% 31.78%

Year 4 35.08% 29.65%

Year 5 33.13% 28.20%

Internal Rate of Return (IRR)Time Period

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

1 2 3 4 5

IRR After TaxIRR Before Tax



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Regency Apartments

2507 Airport Circle

Arlington Texas Joe Lumb

214-941-3

Cash on Cash Time Period Potential Operating, Debt, Occupancy BreakEven Max Vacancy BreakEven Max Vacanc

Requirement Rental Income Reserve Expenses Rate (Existing) Occupancy Rate BreakEven Rate Occupancy Rate BreakEven Ra

6.00% w/ Cash on Cash w/ Cash on Ca

Year 1 428,468 (332,516) 90.00% 77.61% 22.39% 84.08% 15.92%

Year 2 449,892 (344,898) 92.00% 76.66% 23.34% 82.83% 17.17%

Year 3 472,386 (357,731) 93.00% 75.73% 24.27% 81.60% 18.40%

Year 4 496,006 (371,410) 95.00% 74.88% 25.12% 80.47% 19.53%

Year 5 520,806 (385,383) 95.00% 74.00% 26.00% 79.33% 20.67%

68.00%

70.00%

72.00%

74.00%

76.00%

78.00%

80.00%

82.00%

84.00%

86.00%

1 2 3 4 5

BreakEven Occupancy

BreakEven Occupancy with Cash on Cash Requirment



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214-941-3417

Joe Lumbley

About Us

JP Lumbley & Associates, LLC, RealtorsBishop Arts District Office

819 N. BishopDallas, Texas, 75208

[email protected]

Joe has been selling income properties in the DFW area for over 33 years. Over the past

few years, he and his firm have been responsible for the sale of almost 100 multifamily

properties in the Dallas/Fort Worth area. Many of the firm's sales have been in close-in,redeveloping areas such as North Oak Cliff. We have lots of experience in C and D level

properties as well as experience in rehabbing and upgrading these properties.

The firm has also managed multifamily properties all over the DFW area. We seek similar

experience in our sales agents. Our last two new hires have both owned multifamily

properties in the 50-100 unit range. We feel that there's no substitute for on-the-ground

experience in the industry.

Joe's overall approach to multifamily investing can best be described as "data driven". He

is a database guru, having written the best-selling Informix DBA Survival Guide.

It's the "Bible" of IBM database administration and has been used as a college textbookfor administration of large IBM database systems. His book has been referenced in many

IT doctoral dissertations as well as being the best-selling book ever written on the

subject.

With that kind of background, it's no surprise that the JP Lumbley & Associates, LLC

corporate database contains features no other real estate firm in the area can match. We

have all multifamily properties in North Texas on our servers, and we can search and

analyze investment opportunities using a myriad of parameters. We also have a corporate

buyer database that enables us to remain in contact with the top buying principals who

are active in the area.

Joe's often said "We're not in the real estate business. We're in the information business.

We sell information and we sell streams of money." With that kind of philosophy you can

expect more than the typical sales pitch from a JPLA agent. You can expect actionable,

usable information about all of our listings. WE DON'T USE PROFORMA NUMBERS.

Life's too short to deal with bogus numbers.


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10-10-11

Before working with a real estate broker, you

should know that the duties of a brokerdepend on whom the broker represents. Ifyou are a prospective seller or landlord

(owner) or a prospective buyer or tenant (buyer), youshould know that the broker who lists the property forsale or lease is the owners agent. A broker who actsas a subagent represents the owner in cooperationwith the listing broker. A broker who acts as a buyersagent represents the buyer. A broker may act as anintermediary between the parties if the partiesconsent in writing. A broker can assist you in locatinga property, preparing a contract or lease, or obtainingfinancing without representing you. A broker isobligated by law to treat you honestly.

I F THE BROKER REPRESENTS THE OWNER:The broker becomes the owners agent by enteringinto an agreement with the owner, usually through awritten - listing agreement, or by agreeing to act as asubagent by accepting an offer of subagency from thelisting broker. A subagent may work in a different realestate office. A listing broker or subagent can assistthe buyer but does not represent the buyer andmust place the interests of the owner first. The buyershould not tell the owners agent anything the buyerwould not want the owner to know because anowners agent must disclose to the owner any

material information known to the agent.

I F THE BROKER REPRESENTS THE BUYER:The broker becomes the buyers agent by enteringinto an agreement to represent the buyer, usuallythrough a written buyer representation agreement. Abuyers agent can assist the owner but does notrepresent the owner and must place the interests ofthe buyer first. The owner should not tell a buyersagent anything the owner would not want the buyerto know because a buyers agent must disclose to thebuyer any material information known to the agent.

I F THE BROKER ACTS AS AN I NTERMEDI ARY:A broker may act as an intermediary between theparties if the broker complies with The Texas RealEstate License Act. The broker must obtain the writtenconsent of each party to the transaction to act as an

Appro ved by th e Texas Rea l Es ta te Com m iss ion fo r Vo lun t a ry Use

Texas law requires all real estate licensees to give the following information about

brokerage services to prospective buyers, tenants, sellers and landlords.

Information About Brokerage Services

Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensees records.

intermediary. The written consent must state who will

pay the broker and, in conspicuous bold or underlinedprint, set forth the brokers obligations as anintermediary. The broker is required to treat eachparty honestly and fairly and to comply with TheTexas Real Estate License Act. A broker who acts asan intermediary in a transaction:

(1) shall treat all parties honestly;

(2) may not disclose that the owner will accept aprice less that the asking price unless authorized inwriting to do so by the owner;

(3) may not disclose that the buyer will pay aprice greater than the price submitted in a written offer

unless authorized in writing to do so by the buyer; and

(4) may not disclose any confidential information orany information that a party specifically instructs thebroker in writing not to disclose unless authorized inwriting to disclose the information or required to do so byThe Texas Real Estate License Act or a court order or ifthe information materially relates to the condition of theproperty.

With the parties consent, a broker acting as anintermediary between the parties may appoint a personwho is licensed under The Texas Real Estate LicenseAct and associated with the broker to communicate

with and carry out instructions of one party andanother person who is licensed under that Act andassociated with the broker to communicate with andcarry out instructions of the other party.

I f you choose to have a broker represent you,you should enter into a written agreement with thebroker that clearly establishes the brokers obligationsand your obligations. The agreement should statehow and by whom the broker will be paid. You havethe right to choose the type of representation, if any,you wish to receive. Your payment of a fee to a brokerdoes not necessarily establish that the brokerrepresents you. If you have any questions regarding

the duties and responsibilities of the broker, youshould resolve those questions before proceeding.

Buyer, Seller, Landlord or Tenant Date

Texas Real Estate Brokers and Salespersons are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a question or complaintregarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas 78711-2188 , 512-936-3000 (http://www.trec.texas.gov)

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