Creekside Heights is a stabilized 24 unit apartment building located in Fenton, MI. 16 of the units are two bedroom two bath (1,100 square feet), 4 units are two bedroom one bath (900 square feet) and 4 of the units are one bedroom one bath (800 square feet). The property sits on 23 acres and is zoned by right to develop and additional 86 units. The property is 100% occupied grossing $28,300 per month.
The property was built in 1989. Two of the buildings are 100% wood siding, and the other has a brick lower level and vinyl siding second level. The roofs are roughly 10 years old. Each unit is separately metered for electricity, so the tenants pick up those bills. There is a water bill back to the tenants, but paid by the landlord. The water and sewer system is through a wastewater treatment facility that is maintained by the owner. The only utility the owner has to pay for is common electric and trash. Each unit has its own washer and dryer for the tenant use (landlord owned) which is a huge amenity compared to what is available in the immediate area. Each unit has its own private entrance. There are 16 private garages that is assigned to tenants, along with a covered parking area for about 11 cars. There are roughly 40 parking spaces for the apartment building.
The three buildings are on 23 acres. The current owner has preliminary plans to develop and build an additional 72 units on the property plus a clubhouse. The buildings are townhome style with individual garages. All of the plans and preliminary drawings are included in the sale of the property.
The Opportunity
The average rent at Creekside Heights is currently $1,164 per month, which is under-market by about $160 compared to what is currently being offered in the area. Rental increases through interior renovation have taken place in 15 of the units at the property. A +- $10,000 upgrade, including vinyl plank flooring, new paint, new kitchen appliances and counters, new tub, toilet, and counter in the bathroom have pushed rents by $100 - $200. Renovating the remaining units would increase the NOI by around $46,000 per year. This is an increase in value by around $769,000 per year. The cost to finish the units is around $90,000, which would be a 52% return on investment.
The property has third party property management that can be retained once purchased. This will ensure that the property continues to run smoothly and operate as it has been. The property management company has also been managing the renovations, so retaining them would ensure the same quality and pricing as they have been achieving.
Location
Fenton, Michigan is located in Metro Detroit conveniently between highway 75 and highway 23. Surrounded by lakes, Fenton is a less than a 10 minute drive to these major highways which have access to hundreds of major employers. There are several major employers in Fenton including Magna, Home Depot, Walmart, Amazon, and USPS. Fenton is a destination for people who enjoy the outdoors as it is a short drive to several golf courses and nature preserves. There are dozens of popular retail and boutique restaurants located in downtown Fenton, that are less than a 5 minute drive from Creekside Heights.
Fenton is a very wealthy community; average household income within a mile is north of $167,000, and the median income within a mile is more than $137,000. The average home price in Fenton is $340,000 which is a 9% increase from last year. Based on this average home cost, the average payment for a house would be over $2,200 per month. This is $1,000 more per month than the average rent in the current building - showing the affordability and need for workforce housing in the area.
