Lofty 3435-3437 Alberta St

Lofty 3435-3437 Alberta St

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Location
St. Louis, MO
Projected Return
12.38%

Company Description

Property originally listed for sale on the marketplace by Jeff Christian with Re/Max Results.

Click here to learn more about how third parties sell their properties on the Lofty Marketplace.


Owners voted to get a loan of $13,500 for a TPO Roof Replacement and continue holding the property after the repairs are completed. See "Property Update (05/15/2023)" below for more details.

View Updated Loan Balance Spreadsheet

Based on the projected monthly cash flow ($1,961.5), it will take ~7 months to pay off the loan balance of $13,500.

Once the loan is paid off, it will take ~3.1 months for the reserve to be half full ($6,050) and ~6.2 additional months to go from half full to full (12,100).

The Operating Reserve balance is part of the property value. As a result, the property will increase in value as the Operating Reserve is replenished.


4-Unit property (Fourplex) located in St. Louis, Missouri.

Details

  • 4 one bedroom units with separate entrances, living room with non-functional fireplace, kitchen with stove and refrigerator, bedroom, and full bathroom
  • New windows installed May 2021, including in basement
  • Building lead remediated May 2021
  • Parking pad in rear
  • Located next to several parks
  • Drone Video

Property Management and Insurance

Occupancy Status

  • Unit 3435 1F
    • Month-to-month lease
    • $675/month
    • $650 Security Deposit
    • Same tenant was previously on 1 year lease from 07/20/2021 - 07/19/2022
    • Lease Agreement
  • Unit 3435 2F
    • 1 year lease (10/01/2022 - 10/01/2023)
    • $695/month
    • $695 Security Deposit
    • Lease Agreement
  • Unit 3437 1F
    • Month-to-month lease starting 05/1/2023.
    • $650/month
    • $600 Security Deposit
    • Tenant was previously on a 1 year lease (05/01/22 - 04/30/23)
    • Lease Agreement
  • Unit 3437 2F (Delinquent, eviction in progress)
    • The tenant owes a balance of $650.
    • The PM proceeded with an eviction and confirmed the hearing date is scheduled for 9/12.
    • 1 year lease (03/01/2022 - 02/28/2023)
    • $600/month
    • Lease Agreement

Location Data

Due Diligence Documents


Property Updates

  • Property Update (09/02/2023):

    • Roof Update:
    • Evernest confirmed the roof repairs were completed successfully.
    • We are currently waiting for an update on the interior repairs that the previous PM, Intersection, advised to complete.
    • The estimate for interior repairs from the previous PM was $1,188 ($990 + 20% PM markup)
    • Unit 3437-1F:
    • The tenant was delinquent when Evernest took over management of the property.
    • The tenant has now cleared their balance to $0.
    • In light of this, the PM suggests extending a renewal to the tenant for a MTM lease at an additional charge or offering a shorter-term renewal.
    • This approach aims to assess if the tenant can sustain a positive payment history moving forward.
    • Unit 3437-2F:
    • The tenant owes a balance of $650.
    • The PM confirmed the tenant has made no communication attempts.
    • An occupancy check was completed last week and it was confirmed that the tenant is still residing at the property.
    • The PM proceeded with an eviction and confirmed the hearing date is scheduled for 9/12.
  • Property Update (06/27/2023):

    • Owners recently voted to change Property Managers for this property from Intersection to Evernest Property Management.
    • Update 1: The roofer notified the PM that the job was delayed due to rain in the area and were not able to start on the job on 6/19.
    • The roofer rescheduled to start the job on 6/21.
    • The work was estimated to take 3 days to complete, and we are currently waiting on an update from the previous Property Manager, Intersection, to confirm the repairs are completed.
    • There is a 5-year warranty for workmanship. The roofer will pay for any interior repairs if there are roof leaks after they complete the repairs.
    • Update 2: Intersection noted that there are interior repairs that need to be completed after the roof is replaced for Unit 3435-2F. They confirmed that 3437-2F does not require interior repairs.
    • The estimate for interior repairs from the previous PM is $1,188 ($990 + 20% PM markup)
    • Repair Estimate
    • The PM estimates the interior work will take about 5-6 days to complete.
    • Owners recently voted to change Property Management companies to Evernest Property Management.
    • Once Evernest takes over management, they will investigate the interior repairs further, and provide an estimate from their vendors.
    • Update 3: The tenant in Unit 3437-1F has told the PM they will not be renewing their lease for another year, as they want to move closer to family.
    • The tenant owes a balance of $919.
    • $209.50 for May & $709.50 for June's rent/ late fees.
    • The last payment received from the tenant was on 5/15.
    • The tenant has reached out to the PM regarding their past due balance.
    • The tenant explained they are switching jobs due to medical conditions and will need a few weeks to catch up on their past due balance.
    • Once Evernest takes over management, they will reach out to the tenant to collect the balance. If the tenant does not respond, they will move forward with an eviction.
  • Property Update (06/26/2023):

    • Owners voted to change property managers to Evernest Property Management via a Supermajority of 91.9%.
  • Property Update (05/15/2023):

    • Governance results for 3435-3437 Alberta St:
    • The Governance Voting results are back to determine the next steps to replace the roof and either hold or sell the property afterwards.
    • The winning vote is: Get a loan of $13,500 for a TPO Replacement and continue holding the property after the repairs are completed.
    • This vote was declared the winner in round 4 with 1,331 token votes.
    • The other options were eliminated in the following rounds of voting:
    • Round 1 - Get a loan of $19,130.05 for a Roof Replacement and sell the property after the repairs are completed: 14 votes
    • Round 2 - Get a loan of $13,500 for a TPO Replacement and sell the property after the repairs are completed: 7 votes
    • Round 3 - Get a loan of $19,130.05 for a Roof Replacement and continue holding the property after the repairs are completed. 160 votes
    • The loan agreement will be signed and uploaded to the property's Dropbox folder. Once the funds have been received by the lender, they will be sent to the vendor and the repairs will commence immediately. All updates on the repairs will be sent to owners promptly.
  • Property Update (05/10/2023):

    • Governance Vote for 3435-3437 Alberta St:
    • The Property Manager advised that the roof must be replaced as quickly as possible. Per the previous update, the PM previously said that the tarp covering the roof should last a considerable amount of time as it is covered well. But, due to the recent storms in the area, including tornadoes, and the projected upcoming storms, the PM now recommends to replace the roof right away.
    • The PM stated the following this morning:
    • The tenants are reaching out from 3435 Alberta 2F indicating the tarp is no longer keeping water from infiltrating the home. If this replacement is not addressed soon you are going to have extensive interior damage as well as possibly create a safety hazard if the ceiling starts giving way/ falling.
    • Photos of the roof from early April can be viewed by clicking here.
    • Per the update on 04/03/2023, the Property Manager provided three options to replace the roof. More information can be found on these options by going to the property page under Property Update (04/03/2023):
    • Estimate 1 - Roof Replacement ($19,130.05)
    • Estimate 2 - Torch Down Replacement ($8,317.66)
    • Estimate 3 - TPO Replacement ($13,500)
    • Owners will have the opportunity to get a loan for the different loan amounts above to replace the roof. Owners will also have the option to either hold the property or sell the property afterwards to pay off the loan balance.
    • Based on the previous month's cash flow of $2,019, it would take 9.5 months to pay back Estimate 1, 4.1 months to pay back Estimate 2, and 6.7 months to pay back Estimate 3.
    • The Property Manager advised that the roof would not be covered under insurance, as the damage would be considered wear-and-tear by the insurance adjuster. Due to the projected upcoming storms and liability for tenants if the roof were to collapse, the PM advised against selling the property without completing the repairs. They mentioned that the sales process could take a few months, in which time the roof could collapse and damage the property & injure tenants.
    • More information about the Loan agreement can be found here:
    • View Loan Agreement here (Exact loan amount will be added once the governance vote is complete)
    • 11.25% interest per annum, compounded monthly
    • The monthly payments shall be 100% of the Net Operating Income from the property
    • Rent will not be distributed to owners, it will be held in a sub-account where it accrues
    • Once owners decide to prepay the loan or the term ends, the principal balance will be sent to the lender from the sub-account
    • The original broker who sold this property on the marketplace, Alicia Sierra with EXP REALTY, has provided the following information on listing the property for sale.
    • The original purchase price of this property was $242,000. Owners will have the opportunity to vote on the price the property will be listed for if owners choose to sell after the repairs are completed.
    • Here are a couple comps that are 1 bedroom units w/ window units for cooling. 1 property that sold was an owner occupant. We would recommend a list price of $249,900. We charge 6% commission - 2.7% of that is allocated to the Buyers Agent. On a plus side we are able to package the property inspections and repair information from your acquisition and have located the paid receipt & lien waiver for the sewer repairs. We may need to prepare for an owner occupant buyer and in that scenario one of the units may need to be vacant upon closing, we will cross that bridge when we get there.
    • 3760 Dunnica closed in February 2023
    • 3637 Dunnica closed in October 2022
    • View Comps
    • The winning vote will be determined by a Supermajority of 60%+ using the Ranked Choice Voting method and the results will be sent to all investors in 3435-3437 Alberta St on Monday, May 15th once the voting period ends.
  • Property Update (04/13/2023):

    • The Property Manager has tarped the roof to prevent further leaks from occurring.
    • The PM advised that the tarp should last a considerable amount of time as it is covered well. They have not received complaints from tenants about water infiltration since it was placed.
    • The PM recommends to leave the tarp on as a meantime solution, but that the roof will still need to be replaced in the future. This will allow the Operating Reserve more time to replenish in order to pay for the roof replacement.
    • Owners voted to apply 50% of cash flow to replenish the reserve until it reaches 50% full ($6,050), and then apply 10% of cash flow until the reserve is 100% full ($12,100).
    • Picture of Tarped Roof
  • Property Update (04/03/2023):

    • Update 1: The tenant in Unit 3437-1F has a lease due to expire on 4/30.
    • The current lease is at $650 and the PM recommends a 3% increase.
    • The PM will present a lease renewal offer of $670 to the tenant.
    • Update 2:
    • There were heavy rains and the tenants reported significant water infiltration, despite previous patch work on the roof.
    • Per a previous property update, a full replacement had been suggested earlier by the vendor (see the property update on 01/20/2023 for more details), but a patch and repair was done instead.
    • Next steps could include tarping to prevent further water infiltration, but the PM recommends a full replacement to permanently solve the issue.
    • Per the property update on 01/20/2023, the PM received an estimate of $19,130.15 for a a roof replacement.
    • The vendor inspected the roof for warranty repairs and recommends replacing it due to leaks in an area where a new layer was previously laid as a repair.
    • The PM obtained a second estimate for replacement from another vendor.
    • The vendor proposed two options for a Torch Down and TPO roof. Torch Down and TPO are two different roofing materials used for flat roofs.
    • Both estimates come with 5-year workmanship warranties and a manufacturer's specification warranty.
    • The Torch Down option is officially known as modified bitumen. It is a rolled roofing product that is about 3ft wide per section and is a non-woven polyester mat and a membrane embedded in a thick asphalt layer. The vendor uses a torch to chemically adhere it directly to the underlayment. The vendor indicated it is a durable product and very easy to repair, but does not typically have as long of a life as TPO. The vendor indicated it is a good, cheaper option.
    • The roof estimate for Torch Down replacement is $8,317.66.
    • TPO is white and reflects the sun, instead of being black and absorbent like the Torch Down. It has ISO underneath, which provides additional insulation from the weather. ISO is a popular low slope commercial building roof insulation. TPO is more energy efficient than the torch down and lasts longer.
    • The estimate for TPO replacement is $13,500.
    • The PM recommends the TPO option due to the cost, longevity, and the energy efficiency benefits.
    • The PM is working on obtaining a quote to tarp the roof to prevent leaks in the meantime, but has advised this is a temporary fix.
    • In the near future, owners will have the opportunity to vote on which roof repair option they'd prefer or to sell the property outright.
    • Because the Operating Reserve is depleted, a loan would be required to pay for the roof repairs.
    • The Property Manager and brokers in the St. Louis area will be providing feedback on what owners could expect if the property was listed on the open market before a governance vote is sent out.
    • The property is currently fully occupied and all four tenants are up-to-date on their rent payments.
    • The Operating Reserve is below 50% full. Owners voted to apply 50% of cash flow to replenish the reserve until it reaches 50% full ($6,050), and then apply 10% of cash flow until the reserve is 100% full ($12,100).
    • Roof Photos
    • Estimate 1 - Roof Replacement ($19,130.05)
    • Estimate 2 - Torch Down Replacement ($8,317.66)
    • Estimate 3 - TPO Replacement ($13,500)
    • Update 3: The PM has had a challenge with finding suitable vendors to bid out the issue with the slanted bathroom floor brought up by a tenant in December. See the property update on 1/20/2023 for more details.
    • The field inspector noted that while repairs are needed, the floor will not collapse.
    • The floor is sagging due to the weight of the existing tile's concrete.
    • The inspector has reached out to additional vendors and are waiting for a bid for the repairs.
  • Property Update (01/31/2023):

    • Unit 3437-1F: The tenant paid off their balance in full.
    • Owners will receive rent back-pay for this unit from 12/22/2022 (when daily rental income turned off) until 01/30/2023 and daily rent will increase starting today.
    • All tenants are now current on their rent.
  • Property Update (01/20/2023):

    • Unit 3437-2F: The tenant paid off their balance in full.
    • Owners will receive rent back-pay from 12/22/2022 (when daily rental income turned off) until 01/19/2023 and daily rent will increase starting today.
    • Unit 3437-1F: The tenant made two partial payments in January, total $969. The tenant has a balance of $500 for January.
    • Once the tenant's balance is paid off in full, owners will receive rent back-pay.
    • Roof Coping Repairs: A water infiltration issue was reported in the ceiling of Unit 3437-2F and a roofing company (Happy Roof) was sent to investigate.
    • The proposed solution is a Low Slope System Maintenance Overhaul, although it is noted that the roof is in need of replacement in the near future and has multiple layers.
    • The repair work is estimated to provide temporary relief, but it is uncertain how long it will last. A roof replacement cost was quoted at $19,130.05 by the vendor.
    • The maintenance overhaul includes: removing loose debris, repairing any voids larger than .75 inches with Eternabond Fleeceback self-adhering tape, installing new flashing detail around penetrations using 502 rubberized elastomeric flex by Karnak, installing new flashing detail on any chimneys or parapet wall sheets as needed using the same materials, and removing all debris from the job site.
    • The estimate cost of repairs is $1,608.25.
    • Tenant Repair Requests: The tenant has several concerns regarding their home. These include:
    • An issue with their hot water heater, which is leaning on blocks and needs to be flushed, uninstalled, and reset
    • A slanted bathroom floor, which may be due to previous work on the joists below and which a contractor has been asked to assess
    • A basement door that is not properly secured, with a wood piece added instead of fixing it to the frame (this issue has already been addressed)
    • Walls and ceilings that are not smooth, due to the building being 110 years old (no action can be taken on this issue)
    • A gap above the front door that has been filled with newspaper (this issue can be easily addressed)
    • A dirty stack pipe in the basement (no action has been taken on this issue unless directed)
    • Plans have been made to address the hot water heater and door gap next week, and the contractor's assessment of the bathroom floor will be shared once received.
    • These repair costs exceed the current Maintenance Reserve balance. Because of this, a Governance Vote will be sent out shortly to determine how owners would prefer to pay for these repair costs. Options will include a loan from a third party, a capital call, and selling the property outright.
  • Property Update (12/22/2022):

    • Unit 3437-2F: Tenant owes $1,109.50 for partial November rent and all of December's rent, has ignored Property Manager's attempts to get promise-to-pay date, and has not provided update on rental assistance application. Majority vote is to move to eviction immediately. Lease is set to expire on 2/28/2023 and Property Manager recommends filing eviction and not renewing lease as tenant has been relying on rental assistance and programs will soon be out of funds.
    • Unit 3437-1F: Tenant owes $709.50 for December's rent, is late due to starting new job and has promised to pay by end of week. Tenant is withholding rent for repairs but Property Manager has not been made aware of any repairs. Majority vote is to offer tenant a payment plan. Property Manager will work with tenant to pay off balance.
    • Balcony repair update: Balcony structures for second floor units have been removed and screen doors installed. Removing balconies revealed concerning brickwork that needs to be addressed to avoid water intrusion into lower units. Property Manager has received two repair estimates, recommends estimate 1 at $5,400 because vendor identified specific areas to be addressed with solid tuckpointing. Estimate 2 at $3,600 only advises spot tuckpointing as needed but cannot identify specific areas. Repair costs exceed current Maintenance Reserve balance, so a Governance Vote will be sent out shortly to determine how to pay for repairs (options include third party loan or loan from another DAO LLC).
  • Property Update (10/20/2022):

    • Property Manager and vendors discussed scope of work to replace balconet and recommended installing screen door instead for aesthetic purposes
    • Estimate to remove decking structure and install new screen door is $2,500
    • Funds will be deducted from Maintenance Reserve and replenished with 10% of cash flow until it is full again
    • Repairs expected to be completed by Friday, 10/28
  • Property Update (10/01/2022):

    • Unit 3435 2F: Tenant's lease renewal begins today at $695/month, a 15.8% rent increase over previous rent of $600
    • Tenant has two cats and paid a refundable pet deposit of $300
  • Property Update (09/28/2022):

    • Property Manager has received two estimates to remove wood balcony structure and install balconette: Little Man's Contracting ($3,900) and T&R Construction ($2,800)
    • Update will be provided on which proposal Property Manager recommends
    • Tenant in Unit 3437-2F reported roaches and requested pest control service. PM recommends treating all units at cost of $380, to be deducted from Maintenance Reserve
  • Property Update (09/082022):

    • New tenant approved for Unit 3435 2F with move-in date of 10/1, signing 12 month lease at $695 (15.8% rent increase over previous rent of $600) and paying $300 refundable pet deposit
    • Property did not pass required Occupancy Inspection with violations totaling $850, to be deducted from Maintenance Reserve
    • PM waiting on clarification on hatch cover violation as basement door is regular door, not hatch door
  • Property Update (08/16/2022):

    • Unit 3435-2F turn service was delayed due to vendor's team being out with COVID, but work has now been completed
    • Property Manager will complete quality inspection for unit
    • Occupancy inspection with city scheduled for 8/18
    • Target rent for this unit is $675/month, a $75 (12.5%) increase from previous lease
  • Property Update (08/15/2022):

    • Unit 3437-2F tenant has been approved for rental assistance program
    • Program will cover all back-rent and three months of rent moving forward
  • Property Update (08/05/2022):

    • Unit 3435 1F tenant will roll into Month-to-Month status at $675, a $25 increase from current rentProperty Manager does not recommend renewing tenant due to issues with trash and pet waste
    • PM coordinated visits with three vendors for balcony repair estimates for Units 3435 2F and 3437 2F, with one vendor estimating around $800 to tear down existing wood balconies and three estimates for balconet installation to be available next week
  • Property Update (07/22/2022):

    • Unit 3435 2F: $4,560 in repairs needed including paint, sheetrock, new mini blinds and light fixtures, and new ceiling fan fixture. Repairs to be taken from maintenance reserve, with target rent of $675/month (a $75 increase from previous lease)
    • Unit 3435 2F balcony repair: Vendor proposal for replacement at cost of $6,000, PM waiting for proposal for less expensive balconette option instead. Doors with balconies will be double locked in the meantime due to structural concerns.
    • Unit 3435 1F: Other tenants have had issues with this tenant leaving trash and not picking up after their pet, with fines and lease violations issued. Lease expired on 7/19 and PM will present $675 renewal offer (a $25 increase) if tenant cures violations, or move forward with non-renewal if they do not.
    • Unit 3437 2F: Tenant made partial payment of $350 this month and owes more than 1 month's rent in past due balance. Applying for rental assistance but application is under review. Based on governance survey, PM will offer cash for keys equal to 50% or 100% of monthly rent to vacate immediately. If tenant declines or rental assistance falls through, PM will look to increase rent for next lease.
  • Property Update (07/14/2022):

    • The tenant in Unit 3435 2F has moved out and the unit is now vacant
    • The Property Manager estimates around $5,000 in repairs for the unit
    • The balcony structure in Unit 3435 2F is in need of repair or replacement
    • The Property Manager is working on getting proposals for reinforcing the balcony or installing a balconette instead
    • The Property Manager will check with the city to see if a balconette is a viable option for the property
  • Property Update (05/26/2022):

    • The Property Manager has recommended making a number of repairs in three units for a total cost of $2,000
    • Based on the governance survey, 63% of token holders voted to follow the Property Manager's recommendation for immediate repairs
    • The repairs will be made right away and the funds will be deducted from the maintenance reserve of $12,100
  • Property Update (04/06/2022):

    • A roof leak needs to be repaired to prevent further damage
    • The repair will cost $665
    • The majority of owners (63%) voted to follow the Property Manager's recommendation for immediate repairs
    • The repair will be taken care of immediately and the cost will be deducted from the maintenance reserve.
  • Property Update (03/02/2022):

    • The rent for Unit 3435 2F and Unit 3437 1F has been increased from $600 to $650 per month, resulting in a higher Cap Rate of 8.2% (up from 7.8%) and effective immediately
    • The tenant in Unit 3437 1F no longer wants a 2 year lease because they have received a salary increase and will be looking to buy a house within the next year
    • The tenant in Unit 3435 2F wants to start a 1 year lease on April 1st, currently on a month-to-month lease
  • Property Update (02/15/2022):

    • Owners voted to offer the tenant living in Unit 3435 2F a 2 year lease term
Amount Raised : $0
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