Waller Group is proud to present a 104 unit townhouse style multifamily project in Terre Haute, IN. The first phase was originally built as one story in 1983 and after a recent phase 2 addition in 2016 of 2 story units the property now has 24 – 1 bed / 1 bath units (650 SF), 8 – 2 bed / 1 bath units (1,000 SF), 36 – 2 bed / 1 bath units (1,050 SF), 14 – 2 bed / 1.5 bath units (1,224 SF), 8 – 2 bed / 1.5 bath units (1,544 SF), and 14 – 3 bed / 2.5 bath units (1,650 SF).
There is on-site leasing and fitness center. The units have high speed internet access and washer/dryers in unit. The AC/Furnaces are still under warranty. The newest phase has a parking garage for each unit while the original units have parking outside the buildings. The property qualifies for agency debt and is generating over $79,000/mo in gross rental revenue. It was underwritten at T3 expenses and a T1 economic vacancy. Current NOI is $610,211.
The property has a valuation of $9,500,000 at a 6.42% cap rate. The Pro Forma NOI of $710,884 reflects achievable rents with the trash valet implemented and a 75% RUBs recovery bringing in an additional $61,000. With rents averaging $0.69/SF increasing the rents on turnover to the Pro Forma income of $0.79/SF will realize a gain of $107,784 annually. All expenses were adjusted with a 3% increase with taxes increased by 25%. The leveraged IRR on this investment is 31.15% (see page 15 of OM).
Property is in good condition with great upside in maximizing both rents and additional income with professional management that should bring the Pro Forma Cap to 7.48%. The property has one full time maintenance employee ($30,000/annually) and a leasing team ($11,690 in 2020). The owner does some management duties, a 4% management fee has been factored into the underwriting to reflect new third party management or a new on-site manager.