Waller Group is proud to present the 94% occupied Rabon Chapel Apartments in Montgomery, TX, located in the rapidly growing Montgomery County/Lake Conroe submarket, less than 1 hour from downtown Houston. Current rents grew 11.7% YoY and are 85.6% of market rents. 1-mile median HH income is $82,078. Given the high occupancy and recent move-in rents, there is plenty of room to push rents. Additionally, the subject property benefits from its location near Lake Conroe and convenient access to I-45. Current ownership is selling to reallocate proceeds to larger & newer vintage assets.
Current ownership has completed the following renovations: renovated 14/16 units (9 extensive renovations costing $15k – $20k / unit, plus 5 mild/moderate renovations costing $3k – $6k / unit), new windows, the roofs were replaced in 2017 for the 2 main buildings, and in 2021 for the new laundry facility, installed water softener systems, rebuilt water / sewer pipes, rebuilt half of parking lot, rebuilt walkways/stairs, and built a new laundry facility and storage shed in 2020.
The subject property has well water (no city water/sewer), 4 buildings (1 is a newly build laundry facility & 1 is a utility building), and the HVAC systems are less than 10 years old. There is no galvanized piping, no aluminum wiring, and no Federal Pacific breakers.
Current ownership is achieving $132,207 in annual NOI. New ownership, based upon area rent comps, can raise rents up to $158 / unit, which is a $0.25 / sqft rent bump. With this bump and implementation of a ratio utility billing system (for water/trash), new ownership can achieve an annual NOI of $153,600.
The property is currently being self-managed. Proforma financials were underwritten with a 4.0% management fee.