Group Six

Menlo Gate Group Six

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Closing Letter

Thank you to all for your continued support and feedback regarding Menlo Gate, LLC.  We very much appreciate the words of encouragement as we continue to capitalize on the present state of the local Bay Area real estate market.

Menlo Gate’s latest acquisition group closed on Friday, April 27, 2012.  This building is comprised of six units located in Westside Redwood City, CA. This is a terrific building in a great Westside El Camino location. The property has been in the portfolio of a seasoned local real estate investor for over twenty years. This is a true pride of ownership building. The building has been well maintained throughout its ownership and was recently painted.  We especially like this building for its location close to transportation and easy access to the local up and coming downtown of Redwood City.  This was an off-market transaction meaning that the building was not listed on the MLS.  Through our network, we learned that the local real estate investor was interested in selling the property.  We approached the owner and entered into discussions for acquisition close to our target price of $1,000,000. We were able to enter into a Letter of Intent with the seller for a contract price of $1,015,000.  This equates to an average door price of $169,166 per door.

Over the last six months, we have watched the Bay Area rental market escalate rapidly.  There is presently a very low level of multi-family properties on the market.  Very few owners are bringing their assets to market since there is simply no incentive for the owners to transact as they have watched their rent rolls start to swell.  Further, real estate gurus and prognosticators have estimated that vacancies will dip below 4% nationally this year; vacancy levels are expected to be even tighter here in the Bay Area, and especially on the mid-Peninsula. As vacancy rates decline, it is estimated that rents will climb as high as 10% year to year for the next three to five years. Therefore, we see a tightening of the multi-family market as owners take advantage of low interest rates and position themselves for the long term hold.  Based on these facts, we believe that we found a great deal for Menlo Gate’s latest acquisition group.

You can read more about the present state of the Bay Area rental market, historically low vacancy rates, and escalating rents at Facebook and Menlogate.com under the “News” and “Articles” tabs.  This Menlo Gate group provides a healthy annual positive cash flow for all participants in one of the best rental income markets in the country according to recent national rental market reports issued by Marcus & Millichap and Colliers Parish. You don’t have to be a real estate guru to see that this was a great deal!

If you missed out on this opportunity, don’t despair.  Menlo Gate, LLC is in the process of forming another group for its next venture.  We are presently analyzing pro formas for several properties.  If you have any questions regarding our next group, or Menlo Gate, LLC’s structured real estate groups in general, please don’t hesitate to contact us.

Pro forma financials for our next group are available upon request to qualified participants.  Inquiries may be submitted at Menlogate.com or directly via email to investing@menlogate.com.  The company can also be contacted at (650) 641-2226.  We hope to hear from you soon!