Case Study 2 - Ground Up in Vernon, CT

The second deal that we're going to present today is a ground development in Vernon, Connecticut. The price for the land is $975,000. Earnest Money is $70,000.

Here is a site map. This facility is a part of a larger development where the previous owners have already built out multiple retail, commercial areas. As you can see here, they have Starbucks, AT&T, Taco Bell, Verizon, Wendy's People's United Bank. So this is going to be a very heavily trafficked area, which is good for ground up.

The population in the area is 1.2 million. Medium Household Income is even stronger at 76,000. It's very close to some of the top colleges and universities in the area. And the plans have already been approved. That's huge for ground up developments because one of the biggest issues that can come about is if the city does not want you to have this on the location and they'll actually fight you with the plans and the permits and the approvals.

And it's also, like I said before next to multiple national credit retail tenants. The land size is about 2.06 acres. Gross Square Footage of the building is going to be about 90,000 square feet. The Net Rentable Square Feet is going to be about 67,700. So as a good rule of thumb, you can usually assume that you're going to lose about 30ish. 25% to 30% in your Gross Square Footage when it comes to removing hallways and utility closets and office space, bathrooms. And usually come out with about a 70% to a 75% efficiency.

So equate to about 668 units. Vehicles per day is roughly 26,000. So very strong there. And the Supply Index is 5.4 Net Rentable square feet per Capita. Here is a aerial view of the commercial area, commercial district. You can see the facility is very close to interstate 84. Has about 94,000 cars per day, and then route 30, which has about 26 to 27,000 per day. And then you can see that there's multiple national credit tenants surrounding the location. Here's a quick map of where the closest competitors are.

Both Vernon Storage and Bolton Notch self storage. Those are generation one and two self storage facilities. So would not really be competing with us. We'd be, the main competitors for this facility would be Public Storage and Keep Smart.

Acquisition Price is 975,000. Closing and Financing costs about 225,000. Construction's going to fall about 5.6 to 5.7 million. Interest in Reserves about 725,000. Which brings to Total Cost of 7.6 million for this project. Growth Potential Revenue will be about 1.4 with a Net Rental Revenue at 1.1 million to about 1.2 million. And then once the Ancillary Profit Centers are added in such as locks, moving supplies, boxes, U-haul, you're going to be falling about 1.2 to 1.3 million in Total Revenue. Operating Expenses are going to fall about 430,000, which gives us an NOI of 811,000 per year. We go ahead and take that NOI. And we divide by 6% cap rate, which is pretty standard currently in the area. There are REITs that are showing comparable sales in the five to five and a half percent cap rate. So this is a rather conservative number. Subtracted by our 7.6 million Total Cost. And that shows a Gross Profit of $5.9 million on this property. So to sum up, Acquisition Price is 975,000. Earnest Money's going to be roughly $70,000.

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Fernando O. Angelucci is Founder and President of Titan Wealth Group. He also leads the firm’s finance and acquisitions departments. Fernando Angelucci and Steven Wear founded Titan Wealth Group in 2015, and under his leadership, the firm’s revenue has grown over 100% year over year. Today,
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Titan Wealth Group operates nationwide sourcing off market investment properties for Titan Wealth Group’s acquisition as well as servicing a network of thousands of active real estate investors world wide. Prior to founding Titan Wealth Group, Fernando worked for Dow Chemical, a Fortune 50 company, rolling out a flagship product estimated to gross $1B in global revenues.
With an engineering background, Fernando is able to approach real estate investing with a keen analytical mindset that allows Titan Wealth Group to identify opportunities and project accurate pictures of future performance.
Fernando graduated from the University of Illinois at Urbana-Champaign with a B.A. degree in Technical Systems Management.
Titan Wealth Group was founded in 2015 with the vision of gathering individual investors that have the means to invest but lack either the time to find high-yield investment opportunities or the access to these off-market deals. All too often, founders Fernando Angelucci & Steven Wear came across investors who had deployed their capital only to regret the lack of consistency or degree of returns their investments were producing. In response, Titan Wealth Group provides access to highly-vetted real estate secured investments and off-market acquisition opportunities primarily in the Greater Chicago MSA. Today, Titan Wealth Group not only assists individual investors but has grown to support the acquisition goals and capital deployment of investment groups, private equity firms, and real estate investment trusts (REITs).
As a facilitator of wealth growth, Titan Wealth Group believes that success is not limited to the sum of our efforts and is infinite with what can be accomplished through partnership.
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