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January 24, 2014
Sigma Tau Gamma Alumni Brothers,
The good news from our quarterly meeting needs to be shared!
The short term committee, established at our annual homecoming meeting to expedite the search for an interim tenant, has reported their success and brought focus to the issues that remain to be resolved. Committee chair Tom Witt has identified a group of eight VU students that are interested in renting 801 Union for their senior year, 2016-2017. Documents have been executed and deposit money has been tendered to secure this plan. The board has acted to approve their planned occupancy effective August 1, 2016 with provision for secure storage of tenant possessions at the end of the current spring semester! Projected net income $26,000 to $28,000 for the school year.
This agreement will provide a stable stream of income that should allow continued ownership and control of the house and property. Phase one of our plan nears completion with this done!
We now can more accurately report what remains to be completed, to allow this to happen.
| Three absolute requirements: (from quotes and/or estimates) |
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| 1. Life safety improvements required by the city and fire inspections |
$5600 |
| 2. Insurance upgrade and extension to annual policy |
$6000 |
| 3. Misc. work which must be completed |
$2400 |
| Total |
$14,000 |
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| Two contingencies we may need to cover: |
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| 1. Water Heater – 100 gal. commercial grade |
$1500 |
| 2. Furnace (upper level) replacement |
$3500 |
| Total for contingencies |
$5000 |
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| Minimum contingent reserve |
$1000 |
| Minimum to Complete Phase 1 |
$20,000 |
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| Current funds available |
$6000 |
Funds needed to cover expenses and
contingencies through 8/1/16 |
$14,000 |
Potential source of short term funding to meet our needs: Three possible sources were discussed:
- A direct appeal to our Alumni for payment of dues and request for contributions to meet the projected need that will allow phase 1 completion.
- Request for Alumni “investment” similar to “crowd” funding. We would ask for the “investment” of $1,000.00 as a 5 year “loan” with a simple 5 percent annual interest ($50.00) which could be paid out or donated in lieu of annual Alumni Dues ($50.00) and the principle returned at or before the 5 year term. Of course the Alumnus would retain the option of making the principle amount a donation at any point during the term or at maturity.
- Finally, a commercial (or private) loan could be undertaken for between $15,000 and $20,000 using the property as collateral. Our estimate of current property value is $450,000. Recent Zillow estimate was reported to be $413,000. There is no guarantee that we will qualify for a bank loan given the lack of sufficient recent income history.
Our hope is that Alumni will respond allowing us to avoid a commercial loan.
ACTION NEEDED: your response is requested so the board can choose by February 29th, 2016! Please email your feedback to Tom Witt at tvkam@embarqmail.com so that the board can close on this decision. Details about the choice we make will follow shortly.
Kurt Ulbricht ’71, President Omicron Delta Inc
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