This refined plan for a $2.4 million project in Howell, Michigan, significantly improves your cash flow and makes the 6% preferred stock offer much more attractive to investors.
By increasing to 6 apartments and optimizing your commercial rent, you've moved the project from a "gap" to a healthy surplus.
1. The New Cash Flow Statement (Monthly)
With your updated figures, here is how the building performs each month:
| Income Source | Calculation | Total Monthly |
|---|---|---|
| 6 Apartments | 6 units × $1,350 | $8,100 |
| TV Station Lease | Flat rate | $3,000 |
| Bistro Lease | Flat rate | $4,200 |
| Gross Monthly Revenue | $15,300 |
2. The Dividend & Expense Obligation
Since you are raising $2.4M at 6% preferred stock, your obligation to investors is fixed:
- Yearly Dividend: $144,000 ($2.4M × 6%)
- Monthly Dividend Payment: $12,000
- Operating Expenses: ~$2,500 (Taxes, insurance, maintenance)
- Total Monthly Outflow: $14,500
- Security: If the Bistro has a slow month, the TV station and Apartments keep the dividends paid.
- The TV Station "Anchor": $3,000/month for a TV station is quite competitive. It provides a stable, long-term tenant that likely won't move frequently due to the high cost of their specialized equipment.
- The Bistro "Premium": $4,200/month reflects the value of that outdoor seating you designed, which is a major revenue driver in Michigan's warmer months.
- Pay the investors their 6% first.
- Any profit above that (like your $800/month) stays with you as the "Sponsor" for managing the building.