Abita Springs Apartment Homes is a 40-unit multifamily community located in St. Tammany Parish. The property is currently operating at a 56.38% expense ratio and maintains an 85% average occupancy (34 units occupied).

The community feeds into highly rated local schools, including Abita Springs Elementary (7/10), Fontainebleau Junior High (7/10), and Fontainebleau High School (8/10).

Abita Springs Apartment Homes consists of two nearby sites—one on Snead Drive and the other on Chapman Drive—both offering a quiet, rural living environment with convenient access to downtown Abita Springs and major transportation corridors.

Abita Springs Apartments - Red Dot, 15 minutes to Covington, LA, 25 minutes to Mandeville, LA

The properties together cash flow at an acquisition cost of $2.7 million with an average rent of $1.05/SQFT ($480,00 PGI), 85% occupancy, and 56.38% expense ratio. This is with no monetary improvements to the property and a 70% LTC on the deal at 6.5% interest over 30 years. Cash flow equates to 6,036.51 per month at with the above acquisition cost and current property conditions.

Dirksing Holdings is proposing buying the property at $2.7 million and adding $527,000 in improvements between hard and soft costs. Conditions for this are modeled as 70% LTC with a $977,100 equity raise. The idea of the improvements is to renovate all apartments interior finishes to bring the building itself from a class C to class B. As renovations occur, rent per SQFT will be brought to $1.30/SQFT, slightly under market rent. Furthermore, average T-12 occupancy will be raised to 94% and the expense ratio will be cut to 44.38% through a combination of streamlined management and building improvements. Estimated gross income is $570,878.40 with the NOI at $308,432.83. At the before mentioned conditions the property cash flows down to roughly 71% occupancy. Dirksing Holdings plans on a 3 year stabilization period with a projected value at year 4 of $4,166,183.31 (7.00% sale cap rate). This would be an equity multiplier of 2..07% and 24% IRR (before GP/LP split).

Furthermore, Dirksing Holdings plans on using the 4 extra lots within the Chapman Drive property to entitle and build single family homes and use the extra acreage on the Snead Drive property to add more multifamily units.

Please reach out to Jack Dirksing at JDirksing@DirksingHoldings.com for more information.

Financials - Value Add