#1 CR 1326, Texarkana, TX

Multi-family for Sale - $1,953,346 - 34,920 Sq. Ft. on 3.2 acres


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Agent Info

NameBill Beaver

Property Info

CIMLS #1015898
Location#1 CR 1326
Texarkana TX 75501
Last UpdatedSeptember 13th, 2018
TypeMulti-family
Price$1,953,346
Building34,920 Sq. Ft.
Land3.2 acres
DemographicsView data

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Property Description

The units are now 100% occupied with recent one year leases. A Oneyear lease is required, in addition to a background check and their rental history. The Monthly Rent currently is $1,050 per month. The tenant mix of the other developments that I have sold for these Developer/Operators have been stable and without significant problems. The Developers built all the units with an attached 2 car garge. It has been their leasing experience that units with two car garages tend have the greatest rental demand and tend to stay 100% occupied most, If not all, of the time. These units were designed to be energy efficient in their construction and have an insulation board in the attic and sub roof which significantly lowers the temperature in the attics during hot weather, thus reducing energy consumption to cool the unit.

The units have an enclosed patio and enclosed back yard with grass.

The units were designed for low maintenance as well as energy efficiency. There are ceramic floors throughout the unit. The outside exterior is brick and vinyl veneer.

The location is rural and quiet, but it provides immediate access onto the Loop in Texarkana. The Loop connects Interstate 30, Hwy 59 or Interstate 49 all in one circular loop around Texarkana. All three Interstates come into Texarkana and are accessed via the Loop.

Based on the most recent Crime Statistics, the Area where the Property is located has the lowest crime rates in Texarkana.

There are Two Fourplexes Floor Plan and One Six Plex Floor Plan for a total of 18 Units (Doors).


Financials

The Pro-Forma Income Statement assumes a 5% Management Fee and the Total Expense Ratio of EGI is 32%. Both these assumptions are in line with all the prior MAI Appraisals done for comparable units built and sold by the same Owners/Operators. The Vacancy Rate is assumed to be 95 %. At least a one-year warranty on all construction and appliances.

Similar comparative units in the Texarkana Market are leasing for $1,200 per month and according to a local appraiser, these comparable units with garages maintain a high occupancy. The Owners/Operators of these 18 units initially leased six of the 18 units for $1,200 per month. The Owners/Operators wanted the 18 units leased up quicker, so the rent was lowered for all 18 units to $1,050 per month. The 14 units that were not already leased were then leased much faster because of the lower rents and they are currently 100% occupied. We believe there is a good opportunity for the monthly rent to be increased when a tenant lease is prepared, either existing or for a new tenant. Any increase in rental income would, of course, lead to an increase in cash flow and an increase in the MAI Appraised Value. Depending on the amount of the rental increase, there could be a significant short-term increase in the MAI Appraised Value and the Cap Rate.

The Local Lender, who financed the 18 units and all prior units for the Owners/Operators, would like to keep the loan in house, if possible. For a qualified Buyer, the offer financing for qualified Buyers that would require a 20% down payment, and the Interest Rate would be Fixed at 5.75%. The loan would have a 20-year amortization. All the prior investors have chosen to use this lender, so they are highly competitive. Obviously, the Buyer may use any lender they choose, and we merely want the Buyer to know competitive financing exists locally for a qualified Buyer.

The Pro-Forma Income Statement is Below. The estimated Revenue and Expense numbers are in-line with the most recent MAI Appraisal results for the 18 units.

We believe these 18 Units represent an excellent Investment Opportunity for a Buyer/Investor. We believe the monthly rent is below the monthly rent for other comparative properties in the Texarkana Market. Depending on the amount of the monthly rental increase, there is an opportunity for a short-term increase in the MAI Appraised Value of the 18 units. A rental increase would also increase the cash flow in addition to increasing the Cap Rate. We estimate that a significant increase in the monthly rent, such as from the existing $1,050 per month to $1,200 per month, would increase the MAI Appraised Value by approximately $250,000, all other things remaining equal.

PRO-FORMA OPERATING INCOME STATEMENT

TEXARKANA, TEXAS 18 DUPLEX UNITS (Doors)

1,940 Sq. Ft. per Unit, TOTAL Sq. Ft is 34,920

INCOME

PROJECTED ANNUAL GROSS RENTAL INCOME $226,800

(18x$1050x12)

LESS 5% VACANCIES -$11,340

EFFECTIVE GROSS INCOME ESTIMATE (EGI) $215,460

EXPENSES

PROPERTY TAXES $32,980

INSURANCE $12,280

MANAGEMENT FEE (5%) $10,773

MAINTENANCE/RESERVES (3%) $6,463

LAWN, SEWER, MISC. (3%) $6,463

PROJECTED ANNUAL EXPENSES $68,959

(EXPENSE RATIO IS 32% OF EGI)

NET OPERATING INCOME (ROUNDED) $146,500


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