OFFERING MEMORANDUM 204 WOLFE AVE COLORADO SPRINGS, CO 80905 JEFF DIMMEN JASON KOCH Investment Advisor Co-Founder/Principal [email protected] [email protected] 719.459.5756 303.918.8909 TABLE OF CONTENTS • EXECUTIVE SUMMARY • FINANCIAL OVERVIEW • LOCATION OVERVIEW 01 EXECUTIVE SUMMARY PROPERTY HIGHLIGHTS Two 3 Bed, 2.5 Bath Units. Large, fenced in backyards. Ability to use as short-term rental. Desirable location minutes from the Broadmoor. Amazing views of Cheyenne Mountain. Located in School District 12. BUILDING DETAILS Units: 2 Building SF: 3,846 Parking: 6 Land: 11,304 Zoning: R 1-6 PROPERTY Year Built: 1979 OVERVIEW SYSTEMS Gas / Elec Meters: Separate / Separate Water: Separate Trash: Springs Waste Roof: Pitched Heating: Boiler Cooling: None LOCATION MAP UNIVERSITY OF COLORADO N ACADEMY BLVD CHEROKEE RIDGE PATTY JEWETT GOLF COURSE GOLF COURSE COLORADO COLLEGE VALLEY HI GOLF COURSE MEMORIAL PARK 204 WOLFE 24 AVE THE BROADMOOR GOLF CLUB 25 COUNTRY CLUB OF COLORADO 204 WOLFE WOLFE AVE AVE AREA STREET MAP OXFORD LN CANIS LN AREA MAP 204 WOLFE AVE NEIGHBORHOOD MAP DINING 1 Panino's Westside 2 Golden Bee 14 3 Bristol Brewing Company 21 12 7 4 Edelweiss German Restaurant 5 Panera Bread 15 6 Chipotle 3 7 Dos Santos 4 8 9 1 5 19 8 Chick-fil-A S 6 RETAIL 18 9 Natural Grocers 10 10 Broadmoor Towne Center 2 11 King Soopers 17 16 12 22 Walmart Supercenter 13 Sam's Club 14 Hobby Lobby 11 15 Motor City 20 13 LIFESTYLE 16 The Broadmoor 17 North Cheyenne Canon Park Cheyenne Mountain 18 Junior High School 25 19 24 Hour Fitness 20 Cheyenne Mountain Zoo 21 Bear Creek Dog Park 23 22 Broadmoor World Arena 115 23 Fort Carson PHOTOS 204 WOLFE AVE PHOTOS 204 WOLFE AVE PHOTOS 204 WOLFE AVE UNIT MIX & CURRENT RENTS Unit Type Unit Amount Unit SF Current Ave. Rent Current Rent / SF Market Rent Market Rent / SF 3 Bed / 2.5 Bath 2 2,500 $2,600 $1.04 $2,900 $1.16 Total / Average 2 2,500 $2,600 $1.04 $2,900 $1.16 02 FINANCIAL OVERVIEW INVESTMENT SUMMARY DEBT SUMMARY Purchase Price: $749,000 Loan to Value: 75.00% Units: 2 Loan Amount: $561,750 Price Per Unit: $374,500 Loan Term: 60 Months Total SF: 3,846 Interest Rate: 4.00% Price Per SF: $195 Amortization: 30 Years T12 Cap Rate: 6.51% Year 1 Cap Rate: 7.25% Year 1 Cash Flows: $24,510 5 Year IRR: 21.31% T12 Year 1 Year 2 Year 3 Year 4 Year 5 REVENUE Gross Potential Revenue $62,400 $69,600 $71,688 $73,839 $76,054 $78,335 Vacancy ($1,872) ($3,480) ($3,584) ($3,692) ($3,803) ($3,917) Rental Revenue $60,528 $66,120 $68,104 $70,147 $72,251 $74,419 Expense Reimbursements $514 $514 $529 $545 $561 $578 Effective Gross Revenue $61,042 $66,634 $68,633 $70,692 $72,812 $74,997 EXPENSES Repairs and Maintenance ($2,100) ($2,100) ($2,163) ($2,228) ($2,295) ($2,364) Utilities ($685) ($685) ($706) ($727) ($749) ($771) Insurance ($1,800) ($1,800) ($1,854) ($1,910) ($1,967) ($2,026) CASH FLOW Real Estate Taxes ($2,381) ($2,381) ($2,452) ($2,526) ($2,602) ($2,680) PROJECTIONS Property Management ($4,842) ($4,842) ($4,988) ($5,137) ($5,291) ($5,450) Admin and Other ($500) ($500) ($515) ($530) ($546) ($563) Total Expenses ($12,308) ($12,308) ($12,677) ($13,058) ($13,450) ($13,853) Expenses Per Unit ($6,154) ($6,154) ($6,339) ($6,529) ($6,725) ($6,927) Net Operating Income $48,734 $54,326 $55,955 $57,634 $59,363 $61,144 Cap Rate 6.51% 7.25% 7.47% 7.69% 7.93% 8.16% Debt Service - Yr 1 ($29,816) ($29,816) ($29,816) ($29,816) ($29,816) ($29,816) Total Cash Flow $18,918 $24,510 $26,139 $27,818 $29,547 $31,328 Cash on Cash Return 10.10% 13.09% 13.96% 14.86% 15.78% 16.73% T12 REVENUE Gross Potential Revenue $62,400 Vacancy ($1,872) Rental Revenue $60,528 Expense Reimbursements $514 Effective Gross Revenue $61,042 EXPENSES Repairs and Maintenance ($2,100) HISTORICAL Utilities ($685) ANALYSIS Insurance ($1,800) Real Estate Taxes ($2,381) Property Management ($4,842) Admin and Other ($500) Total Expenses ($12,308) Expenses Per Unit ($6,154) Net Operating Income $48,734 Cap Rate 6.51% SOLD COMPS Property Address Units Price $ Price Per Unit (subject) 204 Wolfe Ave 2 $749,000 $374,500 1 4256 Orchid St 2 $685,943 $342,972 2 124 N Corona St 2 $699,990 $349,995 3 1272 Lady Campbell Drive 1 $375,000 $375,000 4 109 Miramar Drive 1 $379,900 $379,900 Averages $535,208 $361,967 N POWERS BLVD POWERS N 1 BLVD POWERS N 2 3 25 S 4 03 LOCATION OVERVIEW DEMOGRAPHICS Census 2020 Summary .25m .5m .75m Population 1,355 3,403 6,501 Households 848 1,834 3,362 Families 337 845 1,617 Average Household Size 1.60 1.85 1.92 Owner Occupied Housing Units 339 844 1,597 Renter Occupied Housing Units 509 990 1,765 Median Age 49.7 47.4 46.0 Median Household Income $48,985 $55,446 $57,023 Average Household Income $65,728 $83,008 $83,988 Census 2025 Summary .25m .5m .75m Population 1,396 3,483 6,650 Households 877 1,883 3,448 .25 MILE Families 343 857 1,639 Average Household Size 1.59 1.85 1.92 Owner Occupied Housing Units 371 895 1,668 .5 MILE Renter Occupied Housing Units 506 988 1,781 Median Age 51.4 48.9 47.2 Median Household Income $53,028 $59,251 $60,972 .75 MILE Average Household Income $72,240 $89,118 $90,125 COLORADO SPRINGS NOTABLE RANINGS #1 #1 BEST CITY MOUNTAIN 3RD BEST CITY TO LIVE (MONEY MAGAZINE) CITY FOR LIVABILITY (MONEY MAGAZINE, 2016) (U.S. NEWS & WORLD REPORT, 2016) #21 BEST CITY IN AMERICA 5TH BEST REAL FOR STARTING A BUSINESS ESTATE MARKET (INC'S, 2019 ) (WALLETHUB, 2018) #1 MOST DESIRABLE PLACE TO LIVE (U.S. NEWS & WORLD REPORT, 2018) NATIONAL HUB FOR CYBERSECURITY - ROOT9B - #1 SECURITY COMPANY 10% INCREASE IN IN THE WORLD MEDIAN HOME PRICES (U.S. NEWS & WORLD REPORT, 2016) Y-O-Y (NATIONAL ASSOCIATION OF REALTORS, 2018) #2 BEST PLACES TO LIVE (U.S. NEWS & WORLD REPORT, 2018) TOP 5 RENT GROWTH #2 FITTEST CITY IN MARKET IN THE U.S. AMERICA (AXIOMETRICS) (MEN'S FITNESS) COLORADO SPRINGS The 186-square mile city of Colorado Springs is located near the base of one of the most famous American mountains, Pikes Peak, and 61 miles south of Denver. It is one the fastest growing cities in Colorado, and in the country. With an estimated population of 456,568, Colorado Springs is the most populous city in El Paso County and it is estimated that the population will increase 58.6% by 2050. In 2019 the city was ranked #29 in the nation for fastest growing large cities (over 300,000 people) by Wallethub. Many factors contribute the popularity of the city, as well as the unprecedented growth. The city was ranked "Most Desirable Place to Live" in 2018 by US News. Along with many trails and parks, major attractions include: • Pikes Peak • Garden of the Gods Park • The Broadmoor Seven Falls • Cave Of The Winds Mountain • Cheyenne Mountain Heritage Center • Cheyenne Mountain Zoo • Colorado Springs Fine Arts Center • Colorado Springs Pioneers • Peterson Air and Space Museum • United States Air Force Academy • Olympic Training Center *Some information sourced from https://www.visitcos.com/about-cvb/about-colorado-springs/. COLORADO SPRINGS Colorado Springs is currently undergoing a downtown transformation. These new developments are the seeds of a new and modern downtown at the heart of Colorado Springs. The entertainment, restaurants and services that follow will contribute to a re-imagined experience for both visitors and residents. The energy and vibrancy will further the quality of life enjoyed by this community that attracts top jobs and talent. These benefits radiate beyond downtown into the greater metro area. Here are the upcoming additions: • U.S. Olympic Museum & Hall of Fame • Professional Soccer Stadium • Multi-use Stadium - directly across from soccer stadium • 82 acre master planned redevelopment across from both new stadiums • 3,000 seat NCAA D-1 Hockey Arena • University of Colorado Sports Medicine and Performance Center • 4 Downtown Hotels • Colorado Springs Fine Arts Center • 2,700 aprtment units under construction, 2,800 more planned. MILITARY IN COLORADO SPRINGS Colorado Springs is heavily influenced by the military. Approximately 5.40% of the city’s population is in the military, and the military presence accounts for nearly 40% of the city’s economy with an annual impact of $2.5 billion. Additionally, a significant number of defense corporations and bases are located within the area. El Paso County is unique as the only county in the nation that is home to five military commands: • Fort Carson • U.S. Air Force Academy • Peterson Air Force Base • Schriever Air Force • Base Cheyenne Mountain Together, these bases employ approximately 60,000 people and contribute almost $6 billion to the local economy. Putting these numbers in context, the Pikes Peak region has a population of almost 680,000 people and a salaried workforce of 257,000 people. Although the military population in Colorado Springs has been declining over the past few years due to reduced defense spending from the 2011 sequestration plan, some of the military bases, such as Fort Carson, have added to their capabilities and troop levels as other bases around the country were forced to close.