| Get the best possible return on your investment... |
| ...by providing a home for someone in need! |
SITO's management company, Neighborhood Enterprises, is a licensed, Missouri Real estate company and handles all sales. Call Jim Roos at (314)771-3509 for more information. |
 |  |  |  |  |  |  |
Purchasing a Building SITO has buildings that are fully rented and available for purchase as well as buildings in need of remodeling that can be purchased. SITO 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 SITO. 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 SITO is to provide decent, affordable housing for low-income persons. We want our investment partners to share that mission, 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 SITO 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: 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 our management company, Neighborhood Enterprises, the surprises can be minimized and your cash flow maximized. |
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. |
| ||||||||||||||||||||||||||||||||||||
| 3515 Oregon - 2 family in need of rehab |
| 3527 Oregon - 2 family in need of rehab |
| 3000 Henrietta - 2 family selling for $100,000 |
| 3224 Henrietta - 4 family owned by NE's management client, SITO |
| 3228 Henreietta - 4 family owned by an NE management client |
| 3014-16 Henrietta - 4 family managed by NE sold in 2005 |
| 3006-08 Henrietta - 4 family managed by NE sold in 2005 |
| 2341 Michigan - single family for sale to potential investor |
SITO Investment Properties <<<<<>>>>> "You own them. We purchase,rehab, and manage them for you." |