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Valencia Apartments

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Address: 6220 N 11th St, McAllen, TX 78504, USA

Texas + Apartment Buildings

Created date: April 10, 2024

Date last updated: September 20, 2024

- Assumable Loan originated July 2021 with a current balance of $1.7 Million
- $1.7M balance at 4.25% Interest, Maturing July 2041 with 20 Year Amortization
- Property is priced below replacement cost at $88.57 PSF.
- Opportunity for operational improvements through addition of professional property management team.
- The property is located a strong school district with 1-mile medium HH income of $69,856
- Well positioned in the McAllen-Edinburg-Mission MSA with close proximity to numerous retail and grocery option.
- New ownership, based upon area rent comps, can raise rents up to an average of $98 / unit, which is a $0.13 / sqft rent bump.

Property Description

Carrying an assumable loan originated in July 2021, Waller Group Capital is proud to present the 54-unit, light value-add Valencia Apartments. The current loan on the property is with Falcon Bank and has a remaining balance of $1.7MM at a 4.25% interest rate, maturing July 2041, and with 20-year amortization. The loan has a rate increase in July 2026 from 4.25% to Prime + 1%, refinance is recommended in Year 2 as the rate is scheduled to increase. The subject property additionally benefits from its location in the McAllen-Edinburg-Mission MSA and its proximity to nearby grocery and retail options, including Target and ALDI. The property is currently 92.6% occupied with current rents at 94% of proven, new move-in rents and 88.7% of market rents, based upon a survey of area rent comps. In addition to increasing rents to market rates, new ownership can also benefit from the addition of professional property management to improve the property’s operational efficiency and to continue to push rents through unit-turns and the addition of sunscreens on the exterior windows. new ownership can benefit from the implementation of a Ratio Utility Billing System (RUBS), increased monthly charges for the 5 on-site storage units, and by converting the space currently used as an office to an expanded laundry facility to increase the laundry income received by the property. Current ownership is achieving $242,284 in annual NOI. New ownership, based upon area rent comps, can raise rents up to an average of $98 / unit, which is a $0.13 / sqft rent bump. With the increases to rental income and the additional increase to RUBS and Other Income, proforma NOI is estimated to be $301,994. Due to the assumable loan’s scheduled rate increase in July 2026 to Prime + 1%, the underwritten 8-year cashflows forecast a refinance leading into year 3, with the refinanced loan assumption at 65% LTV with a 6.00% interest rate, 5 years of interest only (IO), a 10-year term, and 30-year amortization. Based upon the outlined improvements that drive increases to the property’s NOI and the refinance prior to the rate increase, proforma underwriting anticipates a forecasted Unlevered IRR of 10.78% and a Levered IRR of 16.65% over an 8-year hold period. The property is currently being self-managed. Proforma financials were underwritten with a 4.0% management fee.

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Key Property Information

Listing Status:	Unavailable
Listing Type:	Call for offers
Property Types:	Apartment Buildings
Price:	$3,500,000
No. of Units:	54
Average Occupancy:	6.92
Year Built:	1985
Lot Size:	39,515.00 Sq ft
Opportunity Zone:	No
Price per unit:	$64,815
Property Website	Click Here