The Waller Group Properties is proud to present the 5 property 405-Unit South Carolina Portfolio. 3 of the properties are located in Sumter, SC, and the other 2 are in Hartsville and Manning, 2 cities outside of Sumter. The portfolio consists of 65 total buildings. The new owner will have ample opportunity to acquire a sizable portfolio with opportunity to consolidate management. Ownership has assembled this portfolio slowly over the past 5 years, but is selling to mitigate potential capital gain tax rate increase in 2022.
This property is a value-add play, and currently has 30% of the total units fully renovated within the last 5 years. 207 14th St. has done extensive RM work, replacing 21 HVACS, improved grounds, resurfaced parking area, new security system, and replacement of many appliance and painting of hallways, doors, and a few of the units. 915 Miller Rd has built a new deck, replaced water heaters, and updated a few of the units’ appliances. 43 Birnie Cir has replaced all roofs, repaved parking lot, and has fully renovated around 50% of its units. 1199 N Lafayette has replaced 1 roof, 75 appliances, 24 new HVACS, vinyl on 20 new decks, and 35 units flooring. Finally, 211 Dickson st. has replaced 2 roofs and replaced parking lot. They have 28 new HVACS, and 20 units have received new flooring and 36 new appliances. With 30% of the units fully renovated, and some slightly renovated, we estimate a cost of $1,680,000 in budgeted capex to renovate the rest of the units fully, coming in at about roughly $6000 per unit. This would qualify for agency debt, and likely appraise for 6.25% cap, which would return approximately $3,000,000 to the investor after stabilization.
Current ownership has been able to achieve $55 in rent bumps with renovated units, however we believe this can be extended to $105 in total, from $0.66 / sft to $0.79 / sft based on rental comps. This $0.13 bump will help increase rental income by $40,000 from where it is currently running. The current NOI of $1,291,330 will increase to $1,879,315 with the remaining renovations of these properties.
A potential upside and a way to increase other income is through month-month fees as there is a large density of month-to-month residents in the portfolio. Another upside could be implementing any ratio utility billing system to help lower utility costs on the properties with owner paid utilities. Management upside exists in consolidating management with professional management experience versus the current payroll heavy expenses of an onsite manager at every property. EASLAN Management quoted this portfolio at a 5% management fee, and will be reduced as rents increase.