Memphis Value-Add Senior Housing Opportunity
Update 8/25/21: The owner has received 2 offers but has not accepted any of them yet. This is a pure value-add play with a lot being left on the table for the new buyer.
This property has multiple streams of positive cash flow.
The possibility of converting this asset to Senior Housing (Assisted Living or Independent Living) is very high. This is per conversations by the owner with a local Assisted Living Consultant who has over 20 years of experience in assisted living.
The average monthly rate in Memphis for a private room is currently approximately $3,585.00 a month per patient and typically operating expenses, etc., are between 40%-60%. These are conservative numbers from the owner's projections with an annual rent increase of 3% a year.
The U.S. Senior Housing Market Facing a Supply Shortage and The Increase Demand and Investor Appeal | https://stephaniehughes-20796.medium.com/the-u-s-senior-housing-market-facing-a-supply-shortage-5e43b1fc5277
This was another article, regarding the cost of care seeing a rise as well... "The cost of care is expected to continue trending upward in subsequent years — 67% of respondents see demand rising for assisted living, 62% of survey participants plan on increasing costs in the next six months, and 43% expect clients’ costs to rise by more than 5%." - (Senior Housing News)
If interested in keeping this property as a multifamily investment...
With Covid-19 cases on the decline, a recovering economy, and with Stimulus Bills being passed by the legislature, we expect significant growth in the rental market over the next 12-18 months. As it stands today, our vacancy factor is well below 1.00% and rents continue to remain strong with rent values continuing to increase in many rental markets.
Value-Add. The owner currently has 20 units occupied and the balance of 58 units being held back for rehab.
After the $500K in value-add improvements, the gross income is forecasted at $720K, expenses at $280K, yielding a Net Operating Income of $440,000 (8.00% cap rate at the forecasted value of $5.5M
The 20 units are currently bringing in about $10K per month and monthly expenses are running at about $4K.
The Memphis rental market currently have zero vacancies.
Prime Opportunity For The Astute Multifamily Buyer. Hot Location - 5 miles from University of Memphis! 78 Units. The owner is discounting the property for a quick sale, leaving a substantial amount of equity on the table for the right buyer who can recognize this opportunity and show ability to close quickly.
This property will only be sold to an all-cash buyer (no financing contingencies).
Per the owner, when the approx. $500k in improvements are completed, they anticipate that the appraisal will be in the $5.5 million range.
The information contained herein contains confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient will be prohibited. The information contained herein has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about the accuracy or completeness of the information. As a buyer, it is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this property to you depends on factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. We have no knowledge of this offering other than the information received from Seller or their representatives. We are neither your agent or an agent for the seller. We will not participate in the negotiation of the purchase price or attend the showing of this property. As a buyer, you will be required to indemnify us and hold us harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this property.