Income Property Organization is pleased to present the Kingsley Apartments, which is located in the City of Corunna, Michigan, the "City of History/City of Growth".
PROPERTY:
Kingsley Apartments is a 24-unit, garden-style property located at 111-131 N Kingsley in Corunna, Michigan. The property consists of six, two-story apartment buildings. The reinforced concrete foundation, brick exterior and low-pitch roof were constructed in 1972 on a 2.7-acre site. Notable for investors is the tenant-paid heat with individual boilers in the two southern buildings and tenant-paid gas-forced air in the northern 4 building with sleeve A/C found in the majority of units. Occupancy, is currently at 96%, and reflects the strong historical operations. Kingsley Apartments has been well-maintained with numerous recent capital improvements completed including; 11 new Magic-Pak furnaces, one new roof and unit upgrades receiving new flooring, countertops and appliances. This offering represents a turn-key investment for a multifamily investor with easy upside via rental rate increases.
FINANCIAL:
At the $840,000 asking price this offering represents an attractive 8.43% cap rate and potential 11.76% cash-on-cash return, based upon 2017 NOI of $70,055. IPO has a pro forma of $70K based upon current rents and a pro forma of $84K based upon current rents plus $50/unit. As a result of a detailed rental study it has come to our attention that current street rents at Kingsley Apartments are below market on a street rent basis. Specifically, IPO has found that rents are below market by approximately $147 on a street rent basis for one-bedroom units and below market by approximately $185 on a street rent basis for two-bedroom units. If an investor were to successfully implement a modest rent increase of $50 for one and two-bedroom units, they would add approximately $170K in value at an 8.43% cap rate. The increased NOI would be $84K at an impressive 10.04% cap rate and 18.21% cash-on-cash return and substantial additional cash flow with no financial investment. There is substantial value-add opportunity without requiring large capital outlays for rehab or upgrades.
