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Francisville, Philadelphia Triplex Exited Investment

Investment Highlights

Location
Francisville, Philadelpia, PA
Property Type
Triplex
Total Project Cost
$580k
Raise Amount
$175k
Minimum Investment
$25k
Capital Allocation
Equity + Financing
Target COC ROI
8-10% / Year
Target Total ROI
25-30%
Acquisition
2016
Exit
2019
Actual COC ROI
16.33% / Year
Actual Total ROI
49%
Actual IRR
26%
Actual Cash Return
$298k

Investment Overview

Hearthfire Holdings is please to report another successful syndication exit in Philadelphia. All performance projections were exceeded, as was the case for the 3 other exits that were recently completed. The annualized Cash on Cash (COC) return was a whopping 16.33%, with a preliminary total cash distribution of $24k on a $48k investment, including draws and sale profit. We were also able to generate a bump in the return on this project through the use of a 5 year ARM loan at 4.75% instead of the 6% commercial rate at the time of financing. The resulted in substantially less in mortgage interest payments throughout the hold period.

The property was a full gut rehab triplex in the booming Francisville/Fairmount area of Philadelphia. Each unit was custom built with hardwood-tile floors and cabinets, stainless steel appliances, granite counters and a full tile bath. All units have in-unit laundry with Unit 1 also having sole access to a huge 450 sqft. patio. All units 850+/-sqft 2br 1ba, all with common access to the basement with a dedicated storage unit for each unit. Construction was completed in May 2016. Lease-up was completed prior to closing, with no vacancy during the hold period.

This sale also completes the exit strategy implemented in late 2018 to recapitalize our investor pool for larger acquisitions. The strategy also proved our underwriting model to deliver the returns projected, which we have exceeded in all cases. The next phase of the strategy is to target investment opportunities that offer the greatest potential with least downside risk for where we are in the market cycle.

Exit Highlights

Sale Price
$760,000
2018 Gross Rents and Income
$57,315
Expenses - Pro Forma
$7,956
Cash Flow
$49,359
Cap Rate
6.49%