Knowledge Integration

I got into property development because I realized that I had a passion for eventually developing something of my own. The past few years I have looked over different deals in the Houston area. Being that I am just now graduating, I liked the idea of doing a project with relatively low equity. A few of my friends and I have worked together and are in the process of purchasing and renovating a small four unit building in the Houston area.

• The deal we have currently put together is for a 4 bedroom, 4 bathroom apartment building.
• It is located in the Spring Valley area of Houston, Texas.
• Built in the early 2000's
• It is a two story complex located on .15 acres of land.
• It is currently renting out for $900 a month / unit which is on par for the area
• The total cost is around $600,000
• We have formed a limited partnership where I will serve as the general partner and they will be limited partners
• the LTV ratio is 70%
• There will be $180,000 of initial equity with a $20,000 retainer for tenant improvement

I would like to own and operate this facility for a five or so years as a way to learn the basics of property development. I plan to use all the tenant improvement money to upgrade the space and then sell it for a small profit. I do not expect to make very much on this project, but I think it will teach me valuable lessons about putting together a deal and managing a property.