Waller Group is proud to present this 124-Unit, turn-key investment opportunity in Harlingen, Texas. Built-in 1982 with renovations completed in 2018, the property consists of 33 – 1 bed/1 bath units (752/SF), 44 – 2 bed/1.5 bath units (1,216/SF), 19 – 1 bed/1.5 bath units (1,015/SF), 27 – 2 bed/1 bath units (864/SF), and one 3 bed/1.5 bath unit (1,216/SF). 60 of the units have undergone capital improvements such as a new roof in 2020, flooring, granite counter-tops, new plumbing, lighting, and appliances. Thanks to extensive improvements, the property is able to operate more efficiently as a new construction property which will continue for the new owner.
Current management is being compensated at 3% of EGI with one maintenance and one leasing representative on site. The current management has agreed to stay on for a year. Pro Forma management has been calculated at 5%. This property currently operates at 98.4% occupancy. Currently, the property is operating at an annual NOI of $575,832 at a cap rate of 6.94%. The proforma financials were underwritten based on a 7% economic vacancy to reflect fully stabilized performance. We estimate a cost of $480,000 in budgeted capex to renovate the remaining 64 units fully, coming in at about roughly $7500 per unit. This property would likely appraise for 7.00% cap, which would return approximately $1,478,149 to the investor after stabilization.
Since 2019, the property has averaged both overall asking rent and effective rent growth below the greater Harlingen submarket. New ownership can increase rents by $0.18/SF on average based on rent comps and completed renovations, leading to an annual Pro Forma NOI of $858,811 Prospective buyers have the rare opportunity to enter a rapidly expanding market as the market leader in both rental rates and quality while benefiting immensely from past groundwork laid by the current ownership. While job opportunities continue to increase in the region thanks to corporate relocation and commitments from the University of Texas, competition is relatively stagnant. Within a 10-mile radius, no units have been delivered since 24 units in 2019, and 0 units are expected to come online through 2022.