Breaking Down Laguna Farms in Nampa, IdahoAug 21, 2020
Here's an inside look at the Boise Valley, Nampa, Meridian, and Idaho as a whole. As part of a webinar with Steve Olson and Chase Leavitt, we discuss and break down our Laguna Farms multifamily project for sale in Nampa.
Laguna Farms Project Info:
Transcription of the Breakdown of Laguna Farms
Good afternoon, everybody. Steve Olson here with the Fourplex Investment Group. I'm going to run through some highlights on our Laguna Farms project over in Nampa, Idaho. Laguna Farms is a 300 door development beginning in May 2020. And this one's split out over two phases. We have almost all of the first phase reserved, but there will be a second phase and there are a few stragglers in that in that first one as well. And it has similar amenities to Starwood Farms.
We're talking pool clubhouse, walking trails, lots of places for tenants to move around, and feel like they're in a good masterplan. well maintained community. So on this particular project, you're looking at a projective cap in the high sixes with a year one IRR of 25.2. Your cash on cash is five, seven, you should net $1000 a month and about 12 grand a year as well. So numbers-wise these two projects are actually quite similar to one another Chase.
I'm going to go to a basic map on the next screen once you kind of walk us through the Nampa area. What you see happening and why we like it. I think
More than anything before I dive into Napa specifically here, I want to just zoom out just a little bit not on this screen here. But just chat with everyone online here in regards to the Boise Metro, also known as Treasure Valley, we're looking at the southwest side of Idaho consists of about 725 people. And the main reason why I want to zoom out just a little bit before we get into Napa is I think you mean 725,000 people?
Yeah, sorry. 725,000 people minor detail, right? Yeah, yeah.
But we've seen a lot of articles recently where people are talking about and in stating that it's one of the fastest-growing cities and a lot of times you just hear here Boise, but it's important to know that when people are talking about Boise or the Boise Metro, that also includes Napa and Meridian, we're seeing extreme growth in both of those cities and I know we're looking at Napa here, but if we if you had your maps in front of you feel free to check-in, they're off to the right there.
You're gonna have meridian and then just right to that, you have Boise. And so within that location, it's very nice if you go there, you can be at our project site there where that red little arrow is. And if you wanted to get to downtown Boise, we're talking about a 20 to 25-minute commute, which is amazing. You can live in Napa, you can live in Meridian in those locations and get downtown and still enjoy some of those things that you want to enjoy. Whether you're working there or whether you want to go out and enjoy the nightlife or go to Boise State and enjoy the game. important things to know.
They're Napa, we're a little under 100,000 population. The growth here in Idaho is a little different than what Jon was talking about there in Houston. 2018. They had a little over 2500 people moving to the Napa area meridian were a little over 6000 people and then in Boise, believe it or not, it was under 2000 people The reason why I point that out as well. What are we talking about here is we're seeing more people that are starting to move to Napa and meridian a little bit more than the Boise city because the cost of living is a little bit cheaper. So where are these people coming from? Well within its state, the state itself.
A lot of people are moving to Napa and Rhydian from other places within Idaho. We see people within Utah County going there, California, there's been a huge rush of people from California, Riverside, San Bernardino, Orange County that are going there. And then Maricopa, the Phoenix metro Arizona, people are moving there. That's where we're seeing a lot of people coming from that location there.
Why are they coming?
So what's driving people to that area and why do we love it? Why does fig-like that market so much and why do we have that site there? Great question. The cost of Living talked about that a little bit. Your price to get into a single-family home to get an investment property. Your cost for rent is going to be much cheaper than what they're seeing on the west side of the West Coast. crime rates are very low crime is almost nonexistent.
It's very safe to have your kids play in the neighborhood. Go to the parks, people are very friendly within that area. And people love that out also state and the state in general or that location is naturally beautiful. You're going to enjoy different seasons, where you can get outside you can enjoy walking trails, biking, hiking, skiing. Another thing that I'd point out is job opportunities. You have your tech jobs there healthcare and hospitality is huge. You got some major medical centers right there Napa, you're gonna have St. Alphonsus. And then also St. Luke, which is close by there and meridian and then you have the Union Pacific Railroad there and Napa it's going to bring in quite a bit of employment as well.
The overall culture drives people There, you got jazz, you got theater, you have Shakespeare festivals. You have outdoor concerts spring, summer, and fall. It's just a cute quaint city that you can really enjoy. Whether you're in Napa Murray meridian or Boise, there's plenty of things to do, especially downtown Boise you can go to a game as I said before, you can enjoy the atmosphere there. There's shopping malls, nearby dining areas. And then there are also numerous parks.
As you can see that area as we're looking at that map, there's a lot of green space not only open land and places to build, but there are parks that families can enjoy. There's golf courses, things like that. The last thing that I will also mention why we're in that location. And what's driving people there is education opportunities. We're looking at a major university, Boise State four year colleges, there's numerous for your colleges there. There's at least four that I can think of and then there are community colleges and trade schools. They're in that NAFTA campus that you're looking at, right? There's right by one college of Western Idaho, the Napa campus. And so those are some of the reasons why we've seen so much growth in that area the last couple of years. And why fig is within that location. There's just a lot of pluses in that area right now.
Yeah. When you look at the Boise Metro and if you compare it to say, Houston, you know, it's got a 10th of the population but for the Pacific Northwest, it's growing quite rapidly. And it's easy to get around people move there for a lifestyle experience. They want to reduce their cost of living, be in the great outdoors. It's but simple too, you know, I think you I'm not sure if you were there, Chase but a couple of trips ago, some of us here at fig took went up to Boise to work on some project details and our Uber driver was from Hawaii, and he was a surf bomb from Hawaii and he moved to Boise and absolutely loved it there. So people are coming from all over the place. I want to simplify a little bit, but also have a really good cost of living and such. Anyways, let's continue forward Chase, I'm going to put you on mute for just a minute unless you have something else you want to add.
The last thing that I will leave with is we read an article recently, and we can send this to you if you'd like the Treasure Valley housing, they have a housing crisis, they're in need of 19,000 plus more homes by 2021. And what that means is the price for a home is going up and the price for rent is going up. That was definitely a great article to look over. If you want us to get more specific, as far as this location of Napa. As far as stats, let your fig agent known we can send you an overview that we've done of Napa
a few more highlights on the Boise market. I got this from the Boise development group. A couple of highlights from a recent article they released and this article is based off a similar study to the Marcus and Millichap study that I featured for Houston earlier but This one's from Colliers, you've got 95 to 99.5% of all units have people living in them in every area, the lowest is in southeast Boise that's 95 and a half, the highest is over an eagle, which is closer to us. Boise saw the fifth-highest increase in overall apartment rents in the country. And the rents are up year over year 11.8%.
I'm not gonna sit here and say you're gonna get that this year. But that's, that's a sign of a market that needs rental units. It needs clean, new, affordable rental units, and it's a huge reason. I got a question on the chat. I'm gonna go ahead and answer it because it's really simple. If I don't get into enough details as questions from Louis wants to know what parameters we're using for the loans.
When we're getting to our net cash flow. I'm just really simple, Louis, we're talking 25% down on your construction loan, you're gonna have an interest rate of around 5% when the building is done, so you'll refinance into a long term 30-year fixed-rate mortgage at around 5% on that So that's what we calculated the mortgage off of. And we, of course, added taxes, insurance, all those carrying costs on top of it.
So I hope that helps but reach out to us if you'd like to dig into some, some more of the assumptions there. Here we are to my terrible formatting again, I'm so, so embarrassed about this. I edited this on my laptop and I email it to my desktop. And I'm doing this webinar from my desktop and but your makeup of employment in this particular neighborhood in Nampa. And Chase alluded to these two big hospitals there.
We've got a lot of health care at 14%. And a bunch of retail comes with that to support those jobs. Everything else from there, you can see Union Pacific Railroad with manufacturing and there are transportation and public service. You've got nine and six and six out of 10 on the schools on the school scores for the area so they're good solid schools where people will want to live there in the age of attorneys. A little bit of a disclaimer here that I'm going to read to you. fig is not a company but a marketing platform. All information needs to be verified by an independent study on your part that can't be guaranteed.
We've made our best efforts to be accurate in the assessment of future rents, interest rates, vacancies, and other details, but you should verify that. Please consult with your tax advisor, attorney and other relevant professionals where appropriate.