St Charles, Missouri
18-Unit Multifamily Investment Opportunity
Investment Summary
Target IRR: 18-22% | Hold Period: 5 Years
Acquire a well-located, cash-flowing asset with below-market rents in a strong St Charles location. Execute value-add renovations to common areas and units, raise rents to market, and sell to next buyer at compressed cap rate.
| Purchase Price | $2,100,000 |
| Price per Unit | $116,667 |
| Closing Costs | $63,000 |
| Renovations | $80,000 |
| Total Capital Required | $2,243,000 |
| Senior Debt (70% LTV) | $1,470,000 |
| Equity Required | $773,000 |
| Sponsor Equity (10%) | $77,300 |
| LP Equity (90%) | $695,700 |
Minimum Investment: $50,000
8%
Preferred Return to LPs
20/80
GP/LP Equity Split
18-22%
Target LP IRR
Waterfall: Tiered promote structure with 0%/10%/20% promote based on LP IRR performance (<15% / 15-20% / >20%)
| Population (1-mile) | ~12,000 |
| Median HH Income | ~$65,000 |
| Unemployment | 3.2% |
| Rent Growth (3-yr avg) | 3.5% |
Current Rent: $1,167/unit average
Market Rent: $1,250/unit average
Upside: 7% rent increase to market = $18,000/year additional revenue
Month 1-2
Deferred maintenance & critical repairs
Month 3-4
Common area upgrades
Month 5-12
Rent optimization
Year 2+
Stabilization & growth
Expected Impact: Renovations support rent increases from $1,167 to $1,250/unit (market rate), generating $18,000/year in additional NOI and significant value creation at exit.
| Item | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Gross Rental Income | $252,000 | $264,600 | $272,538 | $280,714 | $289,136 |
| Less: Vacancy (5%) | ($12,600) | ($13,230) | ($13,627) | ($14,036) | ($14,457) |
| Effective Gross Income | $239,400 | $251,370 | $258,911 | $266,678 | $274,679 |
| Operating Expenses (45%) | ($107,730) | ($113,117) | ($116,510) | ($120,005) | ($123,606) |
| Net Operating Income | $131,670 | $138,254 | $142,402 | $146,673 | $151,073 |
| Debt Service | ($117,936) | ($117,936) | ($117,936) | ($117,936) | ($117,936) |
| Cash Flow Before Fees | $13,734 | $20,318 | $24,466 | $28,737 | $33,137 |
6.27%
Going-In Cap Rate
$2,323,489
Projected Year 5 Exit Price (6.5% cap)
1.16x
Debt Coverage Ratio (Yr 1)
19.2%
Internal Rate of Return
1.87x
Equity Multiple
6-8%
Annual Cash-on-Cash (Years 1-5)
| Initial Investment | $100,000 |
| Cumulative Distributions | ~$35,000 |
| Sale Proceeds (Year 5) | ~$152,000 |
| Total Return | $187,000 |
| Profit | $87,000 |
Note: Projections are based on conservative assumptions including 5% vacancy, 3% annual rent growth, and 6.5% exit cap rate. Actual results may vary. Past performance does not guarantee future results.
Economic downturn could impact rental demand and rent growth
Mitigation: Strong local economy, conservative underwriting, existing cash flow
Rising rates could affect refinancing and cap rates at exit
Mitigation: Fixed-rate financing, conservative exit cap assumptions
Costs could exceed budget or timeline
Mitigation: Conservative budget with 10% contingency, experienced contractors
Investment is illiquid with 5-year expected hold period
Mitigation: Clear exit strategy, strong market fundamentals support sale
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Properties Managed
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Investment Minimum: $50,000
Accredited Investors Only
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We look forward to partnering with you on this opportunity