Waller Group Properties is proud to present the 88-unit Gateway Grove community in La Porte, Texas. Built in 1965 with four units renovated in 2021, the property consists of two studio apartments at 500 SF, 12 one-bedroom units averaging 625 SF, 67 two-bedroom units at 700 SF, and 7 three-bedroom units at 900 SF. The new owner will have ample opportunity to acquire an asset with value-add potential.
Current ownership has proven $100 rent increases per unit with $6,000 in renovation capital expenditures. This $6,000 includes new countertops, flooring, appliances, retiling bathrooms, and refinishing kitchen cabinets. The current owner manages the property with one full time maintenance employee and one leasing agent that are compensated through the payroll and management fee. We believe new ownership can achieve over $100 in rental increases and unlock over $125,000 in annual top-line revenues upon turning remaining units.
We estimate that within five years of renovations and including $100,000 in replacement reserves for exterior maintenance, the asset will recover all capital expenditures by the end of year 5. This estimate does not include monthly and yearly repair and maintenance savings that will accompany renovations. Thanks to a consistent workforce supported by the largest oil and gas port in the United States. Current ownership has stabilized the asset at over 93% occupancy. The stabilization will allow new ownership to offset a portion of renovation costs and cover debt service payments in the interim.