Park Hill apartments is a 168 unit stabilized “A” Class garden style apartment community that was purchased at well below replacement cost, located in the growing city of San Marcos. This low risk property was purchased for investors that were looking for a long term cash flow and capital appreciation.
Not much work was necessary on this property. A capital investment of $318,000 was made, mostly into the upgrade units and then some for clubhouse and amenities. The unit upgrade took roughly 18 months. As tenants vacate units, an upgrade of new flooring, premium paint with a 2 tone color scheme, new countertops and a stainless steel appliance package is installed, thus increasing rents roughly 6-8% afterwards. Some minor improvements were made to landscaping, parking lot and exterior features.
The property sold in July 2017 at a 5.92% Cap Rate. This project was proposed as 5-year hold, and the final holding period was 21 calendar quarters, or 5 years and 3 months. Final IRR and Equity Multiple exceed proforma expectations.