Case Study 3 - Existing Facility in Meridian, MS_1

Third deal we'd like to present here is an Existing Heavy Value Add Facility in Meridian, Mississippi.

The price is about 300,000, which equates to about 11% cap rate on the proforma financials. With Earnest Money being $20,000. As you can see, this facility is on the off ramp to major highways. So you have interstate 59 as well as interstate 20. Population in the area is just shy of a hundred thousand people. You know, household income is 29,000. So that is a little low, but because of the, there's a heavy value add component to this deal. That's one of those things where we're willing to look past that. This is an extreme value add. It is in an opportunity zone, which means that you can take capital gains money invested in here and not only defer those capital gains, but if you hold the property for 10 plus years, then you actually have a tax free growth on your invested capital. And like I said, it's next to two major highways there.

The Net Rentable square feet currently is about 23,000. There is additional land to expand, which equates to 158 units. Occupancy currently is 10%. The reason why is this is, this is very typical. When you find a facility that is neglected by an owner. The story on this facility was actually that the owner purchased a portfolio of industrial and commercial properties to find the assets that he wanted. And this just happened to come along with that portfolio. He never actually wanted it or intended on operating this facility.

It's about 46,000 cars per day, which is very, very advantageous. Supply index is 6.1. So it's still very good. Anything below a seven to an eight Net Rentable square feet per capita is a typically a good deal. Here is the existing competition. See, Meridian Self Storage, Cotton Press Warehouse, and Interstate Climate Controlled Self Storage. That Compress Warehouse is not actually a self storage facility, but every once in a while, the land classification is incorrect and you can get some of these kinds of false positives coming up.

So the Total Revenue is about one 141,000. Operating Expenses, 48,000. Now this is once you do the value add and get it to 85% to 90% occupancy. So that will show about an NOI, Net Operating Income of about $72,000 per year. Which comes to a proforma cap rate of 11%. How we got to that number is the current purchase price of 300,000 plus, we're assuming that we're going to put in another 300,000 in rehab. And the reason for that is number one, for an opportunity zone for you to experience the benefits, you usually have to double your cost basis. So that means if you buy the property for 300,000, you need to put at least 300,000 into the property, which for this property is very doable. Especially if you expand on the back part of the lot. And again, that's a $300,000 purchase price with earnest money in the $20,000 range.

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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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