Waller Group is proud to present the 100% occupied 56-unit value-add TEX Villas Apartments property in Giddings, TX, along the fast-growing US 290 corridor, less than 1 hour from Austin. Current rents are 83% of market rents. Given the 100% occupancy, there is plenty of room to push rents. 40% of the 2 BD units are achieving $845 on new move-in rents. 1 out of 8 of the 3 BD units was recently leased at $1,000 on new move-in rent. Bumping up the remaining 36 units to these new move-in rents will increase rental revenues to $52,046, which equates to $393,117 in NOI, which equals a 11.0% cap rate based upon purchase price and a 15.0% Yr 1 Levered Cash on Cash return (assuming $605k in capex fully paid for with equity, so any capex financing will further boost these returns). Additionally, the subject property benefits from its location adjacent to Altman Plants (the largest grower/breeder of succulents in the world – and one of Giddings’ fastest growing employers). Current ownership is selling to re-allocate proceeds to new projects.
All roofs were replaced 2 years ago. Has own sewer plant on-site. Units are individually metered for electric. Building 12 is currently down (4 units – all 2 BD / 2 BA). Building 12 foundation is in-place, so new ownership can re-build the 4 units to add more income potential. Owner has a quote to repair wood siding/decking on all buildings for $350k.
New ownership has the opportunity to implement interior renovation program with black or stainless steel appliances, granite countertops, adding full-size or stackable W/D in each unit, upgrading parking lot, and replacing window A/C units with new HVACs. Current rent comparables achieving top of the market rent in the submarket contain on-site laundry facilities, black appliances, and HVACs, but lack granite countertops, stainless steel appliances, or W/D connections, so there may be additional room to push rents beyond where market rents currently stand. An additional income opportunity would be adding in-unit stackable or full-size W/D units and charging $50 / month, adding lease violation fees, month to month fees, billing back for pest control fees, adding pet deposit/fees, and adding a bark park to induce more pets to boost pet fee collections.
Current ownership is achieving $333,854 in annual NOI. New ownership, based upon area rent comps, can raise rents up to $130 / unit, which is a $0.22 / sqft rent bump. With this bump, new ownership can achieve an annual NOI of $502,751.
The property is currently managed by ownership’s property management company. One Stop Leasing has quoted a 5.0% management fee. Proforma financials were underwritten with a 5.0% management fee.