1702 N. Newsom Street, Mineola, Texas 75773
Acquisition Date: March 15, 2019
Disposition Date: March 5, 2021
Hold Period: 23 Months
Invested Capital: $420,000
Investor Equity Multiple: 1.73x
Investor Internal Rate of Return: 36%
Royal Village is a 35-unit townhome community in Mineola, Texas, originally constructed in 1976. At takeover in March 2019, in-place rents averaged $640 per unit. Through 23 months of ownership, modest unit rehabilitations were performed alongside operational improvements to raise in-place rents to $765 per unit (19.5%) upon disposition.
Along with the rental rate increases, the remaining (55%) leases under an “all utility bills paid” structure were successfully converted to having the resident reimburse the property for their portion of these utility bills, further increasing the property’s operating revenues.
All of these improvements were accomplished at the height of the COVID-19 global pandemic and led to a successful property disposition in March 2021. While initially projected as a five year hold, in less than half of this time, investors received a 73% return on their capital contribution, a 36% internal rate of return.