Number of Units: 156 units
Purchase Price: $3,550,000
Purchase Date: December 22, 2014
City: Freeport, TX.
Price Per Unit: $25,357
Cap Rate: 11.27%
Cash On Cash: 13.6%
Rentable Sq. ft: 105,730
Price Per Sq. ft: $33.58
Land: 6.41 acres
Estimated Present Valuation: $8,500,000
This asset had many things that we could improve. To start with it had 16 units out of 156 that had burnt down. The sellers got insurance money and dropped the price for us to buy. First, we are rebuilding the 16 units to bring them back to lease by doing an A class rebuild with granite tops, tiles tubs, all steel appliances, moldings, fire sprinklers and more. We are also upgrading the rest 140 units interior lighting, cabinets, installing fans in master bedrooms, repairing the swimming pool, redoing the exterior paint, fixing the staircases, walkways, railings and foundation in two buildings.
The returns to investors have been better than projected. The job market was and is very strong, we were able to increase rents as the leases came due for renewal. By bringing a strong Management team to oversee the property, the asset has been performing very well. Job growth in the area has caused more demand, which, in turn, has pushed the rents higher.
Cash Flow Distributions
We are very excited that the asset is managed by top Community Manager with a strong staff under our supervision. The investors have been getting regular quarterly Cash Flow checks since the purchase.
Since we bought the asset, we have been doing renovations to make it an excellent community to live in. We did minor landscaping, upgraded parking, and small upgrades in a few units.