Indian Creek Apartments, Kansas City, Missouri

Indian Creek Apartments
Kansas City, Missouri

Address: 700, 800, 808 East 100^th Terrace
Kansas City, MO 64114

Year Built: 1984

Number of Units: 70

Unit Mix:

• 35 1BD
• 35 2BD

Property Size: 3 Buildings, 3 Stories

Structure:

• Exterior: Masonry and Brick
• Roof: Flat – Mansard composition shingle
• Parking Lot: Concrete
• Railings: Wrought iron

Also included in the 3- property Kansas City portfolio was the 70-unit Indian Creek Apartments. This property is located next to local parks and the Indian Creek Trail. The Indian Creek Bike/Hiking Trail links two states, four communities and a multitude of parks along Indian Creek. It provides numerous connections to the surrounding areas, making it an excellent resource for members of the community for both recreation and transportation. The Indian Creek Apartments has a pool, and is already wired for Google fiber.

The owners performed a lot of work on this property, and as a result, there is very little work left to do to bring it up to the level expected of properties in the portfolio. The cost of the initial repairs was only $8k, including pool area upgrades, exterior railing repairs, and landscaping.

The 3-property portfolio was offered before it was opened up to the market. The Indian Creek Apartments was purchased for $3 Million on June 8, 2016, which is around an 8% cap rate in a 6% cap rate market. Management considers this another off market win – a testament to how building the right relationships have been instrumental in the fund’s success.

In addition to the initial repairs, Indian Creek Apartments is being included in the 10-year rehab plan for all 3 properties creating a financial structure intended to minimize future expenses while maximizing the property’s potential, driving up rents and investor returns. With all of the repair, maintenance and CapEx reserves budgeted, the goal is to limit variances in the returns and provide investors with a robust and stable payout. With this plan in place, the first year cash on cash return on investment for Indian Creek Apartments is projected to be 12.3% at current rents, increasing to a projected 18.2% in year two.  As of the end of Q2 2016, this property was 98% leased with only 2 vacant units.