Current Listings

Case Study: 1902-1908 Hampton Avenue, North Charleston, SC

Background

1902 Hampton Avenue is an 11-unit multifamily property located in North Charleston, SC. The property consists of four buildings:

• A single-family home with 3 bedrooms and 1 bathroom.

• Three single-level buildings:

  • Two buildings with four one-bedroom, one-bath units each.

  • One building with two one-bedroom, one-bath units.

The property was purchased in 2021 for $888,000, with rents well below market rates at the time of acquisition. The property was in rough shape, with significant deferred maintenance, outdated interiors, wood rot, and roof issues.

Strategy

The strategy for 1902 Hampton Avenue centered on a comprehensive value-add renovation plan to modernize the units, address deferred maintenance, and significantly increase rents. The property’s location in a rapidly growing area with planned infrastructure improvements, such as the Lowcountry Rapid Transit, made it an ideal candidate for a long-term hold.

Execution

The renovation plan included substantial upgrades across the entire property:

• Single-Family Home Renovations:

  • HVAC installation

  • New DP-rated windows

  • New LVP flooring throughout

  • New kitchen with shaker cabinets, appliances, granite countertops, and subway tile backsplash

  • New bathroom with updated sink, tub, and tiled shower walls

  • New paint throughout the interior and exterior

  • New exterior doors and interior knobs

  • Electrical updates with new fixtures, fans, and lighting

  • Plumbing updates with new fixtures and sinks

  • New trim throughout

  • Landscaping improvements

• One-Bedroom Unit Renovations:

  • New window AC units

  • New LVP flooring throughout

  • New kitchen with shaker cabinets, appliances, granite countertops, and subway tile backsplash

  • New bathroom with updated sink, tub, and tiled shower walls

  • New paint throughout the interior and exterior of all buildings and units

  • New exterior doors and interior knobs

  • Electrical updates with new fixtures, fans, and lighting

  • Plumbing updates with new fixtures and sinks

  • New trim throughout

  • Landscaping improvements

  • New hot water heaters

Challenges

During the renovation process, several challenges arose:

1. Tenant Management:

   • Some tenants refused to vacate the property despite being provided notice and allowed to stay until the end of their lease. This required multiple evictions, which delayed certain renovations.

2. Termite Issues:

   • Termites were discovered in the single-family house, along with a termite-infested cypress tree on the property.

3. Plumbing Damage:

   • Plumbing lines were damaged by vehicles driving over them, requiring repairs and preventative measures.

Despite these obstacles, the renovation was completed in 12 months, and the property came in under budget.

Financial Results

• Gross Monthly Rents: Increased by approximately 101% since purchase.

• NOI (Net Operating Income): Increased by approximately 138% since purchase.

• Renovation Costs: Finished at 6% under renovation estimates.

Key Takeaways

1. Comprehensive renovations can dramatically improve property performance, even in challenging conditions.

2. Proactively addressing tenant-related challenges and deferred maintenance ensures long-term success.

3. Investing in a growing area with strong fundamentals and infrastructure development can yield significant returns.

Conclusion

1902 Hampton Avenue is now a well-performing multifamily property in a prime location. With its proximity to the planned Lowcountry Rapid Transit and other area investments, the property is positioned for long-term appreciation. The plan is to refinance into long-term debt in 2025 or 2026, depending on interest rate trends, to secure favorable financing and further optimize cash flow.

This property demonstrates the success of a value-add strategy and serves as a model for future acquisitions.