Real Estate Investment Analysis: 3704 Greenwood Blvd Deal Scenario

Property Identification and Strategic Context

  • Subject Property Address: 3704 Greenwood Blvd, Saint Louis, MO 63143.
  • Classification Status: The property is categorized as a "BUY-BOX FIT" and specifically a "PARTIAL FIT."
  • Objective of Analysis: The current process involves running a scenario to stress-test the deal by adjusting numbers to observe potential impacts on viability.

Buy-Box Criteria Analysis: Market and Scale

  • Market Qualification:
        - Target Region: The investor's target markets explicitly include the Midwest.
        - Specific Qualification: Saint Louis, Missouri, qualifies cleanly within this geographic mandate.
  • Unit Count and Scale:
        - Property Count: The subject property contains 2424 units.
        - Target Parameter: The investor's target range for acquisition is defined as 2121 to 5050 units.
        - Alignment: The property sits comfortably within the specified unit range.

Capital Requirements and Financial Availability

  • Down Payment Amount: The required down payment is identified as $267,500\$267,500.
  • Total Capital Deployment: The total capital required encompasses the $267,500\$267,500 down payment, plus additional funds for closing costs and reserves.
  • Capital Ceiling Constraints:
        - Investor Ceiling: The investor has a stated capital ceiling of $100,000\$100,000.
        - Note on Funding: The analysis states that the total requirement will require close to the full $100,000\$100,000 capital ceiling. (Per verbatim transcript: "The $267,500\$267,500 down payment plus closing costs and reserves will require close to your full $100k\$100k capital ceiling").
        - Feasibility: The deal is considered fundable if the investor is prepared to deploy the majority of their available cash.

Performance Metrics and Return Analysis

  • Cash on Cash (CoC) Return:
        - Current Performance: The calculated CoC for this deal is 7.64%7.64\%.
        - Minimum Threshold: The investor's established minimum threshold for CoC is 8%8\%.
        - Discrepancy: The deal is noted as "brushing the floor" of the requirement, as the 7.64%7.64\% return is slightly below the 8%8\% target.
  • Monthly Cash Flow:
        - Current Performance: The property generates a monthly cash flow of $1,703\$1,703.
        - Target Parameter: The investor's target range for monthly cash flow is $200\$200 to $400\$400.
        - Performance Evaluation: The current cash flow exceeds the target range by a wide margin.

Final Assessment and Alignment Gaps

  • Primary Alignment Issue: The "CoC gap" (the difference between the actual 7.64%7.64\% and the targeted 8%8\%) is the specific dimension preventing this property from achieving full alignment with the investor's buy-box.
  • Overall Status: While market and unit count align, and cash flow exceeds expectations, the thin margin on the Cash on Cash return and the high capital deployment relative to the ceiling characterize this as a partial fit.