Get the best possible return on your investment...

Neighborhood
Enterprises
Investment Properties
<<<<<>>>>>
"You own them.  We purchase,rehab,
and manage them for you."
...by providing a home for someone in need!
Neighborhood Enterprises is a licensed, Missouri Real estate
company.
Call Jim Roos at (314)771-3509
for more information.
                     
                     Purchasing a Building
    Neighborhood Enterprises has buildings that are fully rented and available
    for purchase as well as buildings in need of remodeling that can be purchased.  
    NE will help put together a loan package to be used with one of our banking
    partners or you can arrange for your own financing.

    Whether the loan is a straight purchase or a purchase/rehab (construction) loan,
    investors generally have 20% equity in the purchase.  For example, if a building
    can be purchased for $20,000 and needs $80,000 in rehab, the total amount
    needed would be $100,000.  An investor should think in terms of a 20% equity
    stake in the deal, in this case $20,000.  That means you bring a check for
    $20,000 to the loan closing or allow the bank to hold something else worth
    $20,000 for the term of the loan.  Most banks will accept cash, real equity in
    property, Certificates of Deposit, and similar collatoral.  The bank will also
    hold a Deed of Trust on the property you are purchasing for the term of the loan.

    The old adage, "You make your money not when you sell a property but when
    you buy it", holds true for low-income housing also.  This means that you must
    buy a property for a low enough price to be able to make money, when you sell
    it.  In today's real estate market, with housing valued at premium levels, it is
    important to have a partner like Neighborhood Enterprises.  Our familiarity
    with the neighborhoods in which we work and the properties in them will help
    you to identify a purchase that is a good investment.
                                        
                                     Rental Income
    The Mission of Neighborhood Enterprises is to provide decent, affordable
    housing for low-income persons.  We want our investment partners to share that
    mission and ministry in the name of Christ, not primarily be interested in a quick
    return on their investment.  

    Over the long haul, however, most of our investment partners realize a decent
    return on their initial investment.  What would be typical?  Let's take a typical
    Neighborhood Enterprises 4-family building as an illustration.  These are
    generally 4-room apartments--living room, dining room, kitchen, and bedroom.  
    (Most of our families will use the dining room as a second bedroom).  

    The rents for these units range from $325 to $400 per month without utilities.  
    Taking the lower rent of $325 times four yields a Gross Possible Rent of $1,300
    per month and $15,600 per year.  We normally allow 5-10% as a vacancy rate.  
    Taking the higher amount, that is $15,600 X 10% = $1,560.    $15,600 - $1,560
    = $14,040.  Out of that amount you must take normal operating expenses for
    Management, Repairs, Taxes, Insurance, and Water and Sewer.  Here are some
    typical amounts:



















     Increasing Value of Your Building

    Real estate investment has been one of the most popular and lucrative forms of
    making money in the past few years.  "Info-mercials" on television trumpet the
    fortunes that can be made in real estate.  You will not make a fortune on low-
    income housing.  Over the years, however, our investors who have weathered
    the ups and downs of the real estate market have seen the value of their buildings
    increase at a respectable rate.
Income
Gross Possible Rent
15,600
100%
Vacancy/Delinquency Rate
1,560
10%
Collected Rent
14,040
90%
Expenses
Management Fee
1,404
10%
Repairs ($100/room/year)
1,600
12%
Taxes
550
5%
Insurance
550
5%
Water & Sewer
1,100
8%
Total Expenses
5,204
40%
Net Operating Income
8,836
60%
3515 Oregon - 2 family in need
of rehab
3527 Oregon - 2 family in need
of rehab
3228 Henreietta - 4 family owned
by Neighborhood Enterprises

    Out of Net Operating Income must still be subtracted yearly debt service.  On an
    $80,000 loan at 7.25% the monthly payment is $575 or $6,900 per year.  So the
    true cash flow for this fairly typical property would be roughly $1,936--if there
    are no surprises, like a furnace or water heater having to be replaced.  

    With careful management of your property by Neighborhood Enterprises, the
    surprises can be minimized and your cash flow maximized.