505 NW Thronton Lake Drive
Albany OR
Executive Summary
Deal Highlights
Purchase
Price
Price
$540K
Rehab / Holding Costs
$63K
After Repair Value
$720,000
Hold
Period
Period
6 months
Investor Capital Needed
$120K
Investor Loan
Annual Interest Rate
Annual Interest Rate
12%
Minimum return of 6%
A $50K Loan
Returns
Returns
$3,000
Deal Story
We are seeking $120,000 in addition to a $540 hard money loan for these two homes in a large lot in North Albany. Our plan is to split the lot to provide two affordable housing options.
The first home is the original stick-built house that also comes with a large shop (it's super cool). We'll do a very light touch on this property - enough to make it lendable. We've already talked to a couple of folks who are interested in buying it as-is simply because of the large shop and yard. We're happy to sell it at a reasonable price ($380,000) and let them capture the sweat equity. This is exactly what we did on an earlier project this year.
The other house is a 2002 manufactured home. The previous occupants had cats, so we'll replace the flooring and repaint inside and out. We'll also replace a crusty deck and clean off the roof. Otherwise, this house is in great shape! With a large backyard, we feel very confident we can sell it for $340,000 to a family looking for a little bit more space.
Rehab Project Plan
Focus on the manufactured home. Sell the stick-built as-is.
New carpet and paint on the interior. The fixtures and counters are in excellent shape, so we don't need to touch them.
Paint the outside
Redo the deck and remove the old hot tub.
We'll do some light work on the stick-built home to make it lendable, like replacing flooring in a couple of rooms.
See below for a detailed scope of work.
Sources of Funds
Hard Money $540,000
Investor Note $120,000
Total $660,000
Uses of Funds
Purchase Price $540,000
Closing Costs $8,100
Rehab / Holding Costs $63,300
Loan Payments $48,600
Total $660,000
+ Investor Note Interest $7,200 (12% APR for 6 mos)
Total Project Cost $667,200
Key Dates
PSA Executed
Nov 26th
Funds Due
Dec 20th
Close Date
Dec 23rd
Property Overview
Two homes and a shop on a 0 .9 acre lot backing up to school property. The main home was built in 1914, has 3 beds and 2 baths, and features a newer gas furnace and ADA amenities. The outside offers a cool outdoor fire pit area, fruit trees, and a private setting. The large shop has a 10,000lb car lift, overhead door, loft, and lean-to. The property also has a 2002 built, 3-bed/2-bath manufactured home. Both homes are connected to city sewer and share a well.
Facts and Features
Size: 1,504 SF & 1620 SF
Beds: 3
Baths: 2
Vintage: 1914 & 2002
Lot: 0.9 AC
Water/Sewer: shared well / city
Parking: front of houses
Heating: fireplace & central
Cooling: none
Hot Water: electric
Additional Resources
Business Plan
Risks
1
Lot Split Challenges
Delays or complications in the lot-splitting process could affect project timelines or saleability.
Pre-Approval: We called the city for an initial thumbs-up, and we have a pre-application meeting with the city scheduled before closing to ensure the lot-splitting process complies with zoning and planning regulations.
Experienced Professionals: We'll hire a surveyor and a land-use expert to navigate the lot-splitting process efficiently.
Plan B: We're prepared to sell the entire property as a single lot if splitting becomes too time-consuming or costly.
2
The rehab costs more than is budgeted
Or unforeseen issues may arise during repairs.
We're working with a contractor who likes us and has done a similar project for us earlier this year.
We underwrote the budget assuming we used a different contractor for each item instead of counting on the savings from using the same one.
In addition to a 10% rehab contingency, we'll also hold $5,700 in reserves.
James and Lawrence have construction experience and can do the work if needed.
3
The After Repair Values are lower than expected
The homes may not sell as quickly or for as much as anticipated due to changes in the real estate market or local demand.
Market Analysis: We conducted a market analysis and underwrote it conservatively. We will continue to monitor market trends to confirm pricing assumptions.
Pricing Flexibility: We built in a conservative buffer on expected sale prices ($380K and $340K). and can adjust pricing by 10% to sell the properties quickly if needed. Plus, we have additional personal funds to ensure our investors get paid.
Contingency: is to rent one or both homes as a backup strategy if a sale takes longer than expected.
4
Low demand for manufactured homes
The manufactured home may not attract as much interest as the stick-built homes.
Competitive Pricing: Our underwriting pricing is competitive compared to similar properties in the area.
Highlight Benefits: We'll emphasize the recent updates, spacious backyard, location, and other appealing features.
5
The project takes longer than anticipated
Renovations, lot-splitting, or sales could take longer than planned, increasing holding costs.
Realistic Timeline: We build a schedule with some buffer time for potential delays. We conservatively underwrote the deal as taking 6 months. Once the contractor starts, the work takes ~45 days to complete.
Project Management: We plan to monitor progress and address delays immediately.
Pre-Market the Homes: We'll start marketing both properties before renovations are fully complete to line up buyers early.
Construction Plan & Budget
Financial Projections
Financial Dashboard
We're conservative with our ARV, which is good. The Monte Carlo simulation is run 1000 times and takes into account the uncertainties of the rehab budget, the hold time, and the ARV. Our estimates are in the middle.
The Team
James Furlo
Sponsor
After getting his MBA, Mr. Furlo started working for HP Inc. and actively investing. Over the last 14 years, he purchased over $4 million in real estate. His investments include 10 properties that span apartments, storage, and warehouses. He's also a limited partner in a 112-unit development project. Learn more
Lawrence Potts
Sponsor
While working as a logistics coordinator & warehouse manager for Tigerlights in the agricultural industry, Mr. Potts invested in real estate in Oregon and Louisiana. He also started a Junk Removal company. After successfully selling his Louisiana portfolio and Junk Removal company, he became a full-time real estate investor and broker.
Mr. Potts has flipped several residential properties and continues to pursue specialty value-added opportunities. His focus is on always creating win-win scenarios and fostering long-term relationships. Learn more
Richard Hillsman
Contractor, Richard Hillsman Construction
Mr. Hillsman is a trusted general contracting firm based in Sweet Home, Oregon. With over 25 years of experience, his company specializes in construction and renovation projects, combining expert craftsmanship with a commitment to delivering on time and within budget. Mr. Hillsman has a strong reputation for reliability, integrity, and attention to detail, making them an ideal partner for our project.
Next Steps
Critical Dates
PSA Executed
Nov 26th
Funds Due
Dec 20th
Close Date
Dec 23rd
How To Invest
Call, email, or text either James or Lawrence expressing your interest. We'll sign a promissory note, and our escrow officer will send you the wiring instructions.
The promissory note will be with the following terms:
Loan Amount: Minimum of $50,000
Interest Rate: 12% annual, minimum of 6%
Payments: A single payment shall be made on the date of resale on or before the expiration date.
Loan Length: 1 year (though, we're targeting 6 months)
Deed of Trust Security: 505 NW Thornton Lake Dr, Albany OR
Guarantors: James Furlo and Lawrence Potts
City and State of Execution: Albany, OR
Frequently Asked Questions
How do I invest in the deal?
Let James or Lawrence know. We'll sign a promissory note, and our escrow officer will send you the wiring instructions.
Can I invest using a self-directed IRA?
Yes. Investments are accepted via 401K/IRA funds.
What is the minimum investment/loan?
$50,000
Where do I find the banking wiring information, and where is this entity located?
The wiring information is provided after we sign the initial note agreement. If your bank asks, the entity's location that will purchase the property is in Albany, OR.
When will the loan be paid?
You will be repaid, including interest, after the property is resold.
How much are the Sponsors investing in the deal?
The Sponsors are providing the earnest money ($5,400) and will provide any additional funds required to either complete the project or make sure investors are fully paid.
What does a minimum return of 6% mean?
This means you'll earn at least 6% on your money, even if we complete the project in less than 6 months. For example, if we finish in 4 months, you'll still receive 6% instead of 4%. That will increase your effective APR to 18%.
If the project takes longer than 6 months, you'll still receive 1% per month (or 12% APR). It's our way of ensuring you still receive a good return even if the hold period is extremely short.
What is the projected hold time?
6 months. The property is already vacant. We'll take 3 months to split and rehab the property, market it for 2 months, and 1 month for contingencies.
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