Waller Group Properties is proud to present this 128-unit, 2 property portfolio, value-add investment opportunity in Kerrville, Texas.
The largest property was built in 1972 with renovations completed in 2019. The property has undergone over $520k in capital improvements such as roof, electric, flooring, HVAC, landscaping, parking, plumbing, windows, fixtures, and appliances. Second was built in 1955 and the units have been maintained but not updated. Both properties are in good condition, with no deferred maintenance, and if more enticing, can operate as a turn-key opportunity as well. The portfolio currently operates at 95.3% occupancy, bringing an annual NOI of $664,383.
However, prospective buyers have the rare opportunity to enter a rapidly expanding market while benefiting from an incredible value-add opportunity. While job opportunities continue to increase in the region thanks to corporate relocation and the rapidly expanding aerospace sector in the Hill County of Texas.
We estimate around $6,500 cost to renovate each unit with flooring, appliances, and any other renovations to bring units comparable to newer construction and area rent comps. This comes out to roughly $832,000 in capital expenditures to renovate the units, not including any exterior improvements new ownership decides to implement on the smaller property. Based off area rent comps, we believe with full renovations, new ownership can increase rents by $0.34 / sqft on average, leading to an annual proforma NOI of $927,179.
Further increases towards income can be through water conservation opportunities such as reducing water irrigation, updates on faucets, toilets, and showers, which can save up to 20% on water bills, as well as the implementation of utility reimbursements that are not included in the properties at the moment.
Current ownership pays out management fees and payroll to self- management along with onsite-assistant manager. Any other services needed for maintenance are contracted out. New ownership will need to find new management.