Profitable 18 home development with great upside potential : 12% Cap rate
Fabulous opportunity to buy ahighly profitable park located just outside of Jacksonville, NC and Camp Lejeune in an area getting ready to explode. This Onslow County development sits on the inside corner of the soon-to-be-completed south side of the Maysville bypass, just ten miles north of Jacksonville(and two miles south of Maysville).
The development includes eighteen homes on over seventeen acres of gently sloping land (it used to be a working farm). The ten Running Root Lane homes sit on about a half acre each and could be sold off individually, if desired. The eight Tadpole Lane homes sit on about an acre each and while they are currently on a single tax card, could be sold individually if a DOT road were to be put in place. The utilities were positioned with that in mind.
The owners have invested heavily in capital improvements. All have a recent roof, the vast majority of which have thirty yearwarranties. All but three homes have a newer heat pump. Most major appliances are relatively new. All sit on a permanent foundation. As public room floors required updating, they have been converted to hard surfaces to last longer. Most homes have a fireplace, and most have been converted to LP gas with vent free logs installed (chimneys were removed when replacing roofs to prevent future leaks). The development is landscaped for tenant privacy and appeal. It also includes a playground with picnic shelter, a park, a covered carport bus stop (carport comes with the purchase, but it sits (with permission) on Jones Onslow EMC property as a benefit to the children and waiting parents). The sale could also include a large ‘Baby’ Lowes Hardware store (garage) and covered lumberyard to prevent most special trips to town for tools and supplies.
The formula for the development is: everyone gets a three or four bedroom home with two baths, a deck, a large fenced in back yard, and a shed. It is marketed as a family and pet-friendly neighborhood featuring safe dead end roads plus a playground for the children.
There is plenty of upside potential as for the past five years, the owner has been dealing with serious family issues that have distracted her from making the park a priority. In addition, a major marketing problem with Craigs List (the main source of prospects) was resolved last fall. The owner travels significantly for weeks at a time (over twelve weeks in 2016), and while doing so, does not market or do any changeovers, meaning one could make instant improvements in vacancy rates/gross income. Also, our president plans to increase military spending, which will positively affect this Marine Corp region, even though the majority of our tenants are civilian (currently fifteen of the eighteen tenants). In the past five years, with one exception, the landlord did not increase rents when the year’s lease was up, so there are nine tenants that have been in place for over a year without an increase. With thirty days notice, rents could be increased (four of which have below market rents which should certainly be raised (in addition, 107TP is below market and that lease is up in Aug).
Tenants are responsible for all utilities: ONWASA county water and Jones Onslow electric (and LP gas if they choose to use their fireplace). Each home has its own septic tank. The electric to the house is underground with the main lines overhead. Thesepoles have street lights which the landlord pays for ($74.55/mo). The landlord pays for management, taxes, insurance, maintenance, landscaping and reserves. The tenant is responsible for maintaining their own yards. One tenant currently maintains the common grounds for a reduction in rent. Another tenant maintains the roads, and yet another pressure washes the homes when necessary. Management and maintenance averages about twenty hours per week, but it comes in spurts, usually with a changeover. That is also when most maintenance expense occurs.
The land is zoned RA - Rural Agricultural (Tadpole Ln portion) and R-8M - Mobile Home District (Running Root Ln portion) by the Onslow County Planning Dept (and the property complies).
Due to the new bypass, the land across the street on Hwy 17 was just permitted to rezone to the more valuable HB - Highway Business. If you look at the attached DOT bypass map with the wetlands outlined, you can see that this property and the adjacent Hwy 17 property (4.74 acres of which the landlord also owns and would consider selling), is the largest buildable tract on the highly desirable inside corner as it has no wetlands.
As you drive up from Jacksonville to this property, you can see that this Hwy 17 corridor is getting ready to explode. The town of Mayville is actively trying to recruit employers with an industrial park. Here is an opportunity to own a currently profitable and desirable piece of property which can be instantly made more profitable with improvedmanagement and with significant future potential as the area continues to grow.
GENERAL INFORMATION
Jacksonville, NC is the 14th largest city in NC. The Camp Lejeune and New River Air Stations, the proximity to the beautiful Emerald Isle beach, the nearby historical New Bern, Beaufort and Swansboro towns, and the moderate climate all help to attract residents and to provide a stable economy.
According to Census.gov, the average rent during 2010-2014 in this area was $1025, putting current rents of this development below average. The census also states that owner occupied housing is only 35%, which indicates a strong rental market. The average commute is 20 minutes, which puts this development on a par with the competition.
This development is ten miles to a population in excess of 70,000. It is also two miles to the local village of Maysville (population about 1000), where tenants can pick up forgotten groceries, get gas or a fast food meal, saving them a trip to town. It is also super convenient to the prettiest beach in the area, Emerald Isle, which is a straight shot down Hwy 58 from Maysville. With this convenient location, tenants can find employment in Jacksonville, Camp Lejeune, New Bern or the beach. Some former tenants have even worked at Cherry Point, crossing the unpaved Catfish Lake Rd from Hwy 58 to Hwy 70.
To see a aerial video of this property, visit
Easements & Encroachments: There is a 30’ wide ingress/egress leading from US Hwy 17 and along the northern border of 127, 129, 133, 135, 141 and 143 Running Root Ln providing access to these lots.
Flood Hazard one: Zone X of Panel 3720542000K, dated November 3rd, 2005. Zone X is not located in a flood hazard zone.
VALUATION
INCOME CAPITALIZATION
Potential Gross Income$177,120
-5% Vacancy 8,856
Effective Gross Income$168,264
-20% Expense 33,653
Net Operating Income$134,611
Cap Rate of 12% .12
INDICATED VALUE$1,121,758