790 Commercial Avenue, Coos Bay, Oregon
On June 6th, 2006, Gary Mountain was successful in buying a building at 790 Commercial Avenue, Coos Bay, Oregon. It is a 32,000 square foot former hospital building located a few blocks away from the Coos Bay Central Ave LLC property in downtown. This building is built like a fort and is constructed with concrete floors, ceilings and walls.
The way this pencils out is as follows:
Land value is $850,000 from the seller to Gary. Gary then sells the land and the development to our investors in an LLC and will build 20 units at about 1,200 to 1,600 square feet each. The units will sell to our own clients from the desert as Summer Vacation Homes for about $350,000 each. Remember that we don’t care much about the local market and the local economy. We create our own markets.
The capital requirement |
$ 4,850,000 |
The current building and land |
$ 850,000 |
The project development and cost |
|
Per unit costs: |
|
$ 3,125 |
|
$ 6,300 |
|
$ 156,000 |
|
Land cost divided by 20 units |
$ 42,500 |
General overhead and expense |
$ 20,000 |
Cost per unit |
$ 227,925 |
The gross sales price |
$ 350,000 |
The cost of sale 8% |
$ -28,000 |
Cost of product |
$ -227,925 |
Estimate of profit per unit |
$ 94,075 |
LLC partners own 80% |
X 80% |
20 units x $72,260= |
$ 75,260 |
The cash invested was |
$ 1,505,200 |
The cash profit = 31% ROI (Return On Investment) |
$ 4,850,000 |
On this project I will raise 4,850,000 at $200,000 each a total of 24 shares. The total investment also provides for cash reserves. There is no loan interest rate risk. The return to my investors is then 31% R.O.I.
The Coos Bay Planning Department has informed us that we may be approved to build up to 26, as opposed to 20, units to sell.
This property has views above the entire city skyline and out onto the beautiful bay!
This is just one of many opportunities that California Star Properties has identified. Talk to us about what you would enjoy doing!
