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Fortify Your Future!

The Deal

• Location: Dayton, Ohio
• Purchase Price: $295,000
• Size: Multifamily (Four Units)
• Age: 1944
• Financing: 30 yr conventional
• Current Gross Income: $4,000/mo
• Expected Gross Income: $5,000-$7,500/mo
• Comparable Value: $344,000

Operational Plan

Upon initial analysis, we discovered that this property fell slightly below our ideal size criteria for investment. As a result, we decided not to involve additional investors or raise capital, aiming to protect returns. Our long-term business plan involves focusing on self-storage facilities in B-C class markets, where we will bring in investors.

The operational plan for this property includes assessing the current tenant situation. We found that rents were significantly below market value, so after the purchase, we immediately raised the rents to align with market rates, resulting in an additional $900 per month in gross income. The property also features two recently renovated 2 bed/1ba units that we look to convert to short term rentals.

The short-term rental strategy aligns with current market trends in Dayton, where there is strong demand from professionals, traveling workers, and short-term residents seeking flexible housing. Our analysis indicates that short-term rentals generate higher month-to-month cash flow compared to traditional long-term leases. To meet this demand, the units have been furnished with amenities designed for short-term guests and listed on platforms such as Airbnb and VRBO. Minor cosmetic upgrades including cabinetry, flooring, and paint were completed to enhance marketability. All furnishing and renovation costs were fully incorporated into the initial underwriting.

The Market

The Dayton Market boasts an abundance of hospitals, several colleges, and military installations in close proximity. Moreover, Dayton is conveniently located within driving distance of major cities across Ohio. Compared to surrounding tertiary markets, Dayton demonstrates favorable job growth and economic stability, promising high occupancy rates in the future.

Financing

The property was acquired using a conventional loan through a traditional banking institution, secured at a fixed rate for 30 years. This long-term financing structure supports our strategy of holding the asset as a core part of our portfolio, providing stability and predictable cash flow while allowing us to capitalize on the Dayton short-term rental market over the long term.

Conclusion

Though smaller than our ideal investment criteria that we would like to bring to investors, this investment aims to refine our operational processes required to conquer larger acquisitions. Through meticulous analysis, strategic planning, and innovative financing, we look to maximize the potential of this investment.