The 116-unit Hidden Creek at 4407 Hatcher St. sold for slightly more than $1.1 million while the $1.4-million balance bought the 159-unit Carpenter Cove at 4312 Carpenter Ave. The class C assets were on the market just three weeks when the buyer put an offer on the table to get a nod from John Baker of Arlington, who started piecemeal selling a multifamily portfolio a few months ago.
"He knew the properties," Steve Defterios of the Dallas office of Marcus & Millichap tells GlobeSt.com of the "no-inspection deals" that the buyer laid in front of Baker. About $1 million will go into rehabbing Carpenter Cove and some $800,000 will be spent on Hidden Creek.
Carpenter Cove, built in 1970, is a 16-building project with a 48% occupancy. The 5.4-acre development has one-, two- and four-bedroom units that average 725 sf and bring in monthly rents ranging from $495 to $900.
The 62%-leased Hidden Creek, built in 1970, has 13 buildings on 3.2 acres. The two-bedroom units are 625-sf designs, with the monthly rent standing at $500 all-bills paid. Both complexes have rents that fall below market, according to Defterios. He represented the buyer and co-brokered with Marcus & Millichap's Norman Eastwood.
Defterios says the buyer is looking to acquire another 700 units in the same area in a plan to end up with roughly 1,300 apartments, all class C, before the year ends. "He wants to change the face of South Dallas," Defterios says of the Los Angeles native who moved to town and now has ticketed the low-income area for a large-scale turnaround play. The rehabs, which will take a year, will bring security guards as well as a top-to-bottom, inside and out retrofitting. He estimates some 50% of the existing tenants will move out once the new owner's new rules kick into play.
Robert Dunn of Fremont Investment in Dallas arranged a financing package with San Felipe Commercial Co. in Houston. The deeds turned in a start to finish of 60 days, says Defterios. Renovations and management will be handled by in-house crews.
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