Bay Meadow Apartments
~~Name of Property: Bay Meadow Apartments
Location: Lexington, NC
This is a great opportunity to buy a small, Class “C” garden style, multi-family property in Lexington, NC. The Bay Meadow Apartments consists of 12 units with 1 bedroom and 1 bath. Bay Meadow Apartments are located on the southwest side of Lexington, NC in a quiet, predominantly single-family neighborhood. Walmart and Lowes Home Improvement are less than 2 miles east of the property. Wake Forest Baptist Health and other medical offices are less than 2 miles west of the property. Major employers nearby include medical, manufacturing, and shipping.
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Explanation of Owner Improvements and Rent Increases:
The current owner purchased this property as part of a portfolio without a thorough inspection of all the units. Then, he learned the seller (or seller’s rep) had misrepresented the number of tenants, collected rent, and shape of the units. 7 of the 12 tenants were either not paying or they were past due. 5 of the existing tenants were immediately evicted. 3 units had to be to be immediately renovated in order to rent them back out. Costs for these renovations alone was approximately $12,000. Eventually 2 more of the existing tenants were evicted bringing renovations costs closer to $15,000. In the past year, 9 of the 12 units have undergone some sort of renovations or upgrades. In addition, work was done on the outside decking, stairs and landscaping. All renovations and upgrades to date have had a cost of approximately $3,000 per unit ($36,000 total). Much of this has been expensed versus being shown as capital improvements, which is reflected in the higher maintenance costs and subsequent lower NOI on the trailing 12 report.
Since purchasing the property, the owner has replaced 2 different property managers because of mismanagement of varying descriptions. Total expenses were consistently higher than the average for similar properties. Some of this could be attributed to them not being from, or close by, the Lexington area. In April, a property manager from Greensboro took over. This new manager is less than 30 minutes away and she has other properties in the Lexington area. It is believed that this will make a difference with better screening of new tenants, more attention to details and keeping costs lower by utilizing existing relationships with local contractors and service companies.
Monthly rents were as low as $325 per month when the current owner took over the property. Even with the past property management issues, rents have been increased to as much as $495 per month. The average rent per unit is currently $400. 6 of the 12 units remain below at or below $340 per month which provides an opportunity for increased rents of the remaining 6 units. By raising these, the average rent will be closer to $460 per month.
Address: 101 & 113 Bay Meadow Court, Lexington, NC
Year Completed: 1986
Property Size: 1.87 acres
Parking: Approximately 2 per unit
Location: Southwest of downtown Lexington near Washington Park
2 Buildings total --- (2) 6-unit buildings.
All buildings are 2-story, garden style, with 1 bedroom and 1 bath.
All buildings are on slabs with covered front porches and staircases on each end leading to the 2nd floor units. Spacious wood decks.
Buildings are wood frame with brick siding.
Roofs are metal.
Separate water & electric meters for each unit.
Sewer is on site.
There is a creek along the southern portion of the site. A portion of that area is in a one percent flood zone. Buildings are not affected.
Kitchens: Each kitchen includes a refrigerator, stove/range combination with exhaust hood, double stainless steel sink, laminate countertop, vinyl flooring
Bathrooms: All units have a full bath with laminate countertops and vinyl flooring.
Bedroom: The bedroom has a closet with connections for a washer & dryer (washer & dryer not included).
Price Offering: $450,000 ($37,500/unit)
Tax Value: $305,610
Proforma Net Operating Income: $31,704
Proforma CAP Rate: 7.05%
Occupancy (April 2020): 92%
101 & 113 Bay Meadow Court
Lexington, NC 27292
|Total Sales Price||$450,000.00|
|Total SF Available||6,800|