Case Studies
Mebane
The Path of Growth
The latest asset in the ENSAF portfolio is a 12-unit (6 duplexes) property 25 minutes West of the “Research Triangle” (Durham and Chapel Hill) in the city of Mebane. This location is in the path of growth as it also sits 45 minutes North of Siler City, where VinFast will have a manufacturing plant that has the capacity to build 150,000 vehicles a year, thereby creating thousands of jobs.
ENSAF acquired the asset in April of 2022 for $1.15MM with 11 of the 12 units occupied. Four additional tenants decided to vacate, leaving a total of 7 of 12 units occupied. ENSAF conducted complete renovations on the five empty units, renting them out for ~$1095 a month. The cost of the renovations along with some exterior improvements totaled $177K. The remaining units were left unrenovated with the existing tenants paying an average rent of ~$850 a month. Using the standard definition of affordability (30% rent to income) these units are affordable for families making $44K a year (renovated) and $34K (unrenovated), respectively.
In addition to creating beautiful and affordable units, this deal was a financially sound one for investors. The unlevered (i.e., no debt) yield on cost went from 5.0% to 7.0% with additional upside over time if other tenants in unrenovated units decide to vacate.
Durham
The Quad
On June 1st of 2021, ENSAF Capital acquired a 3,000 square foot "quad" (four units) located at 2128 South Roxboro Street in Durham, North Carolina for $405,000. The property was in poor condition and needed a gut renovation consisting of:
– Exterior: New siding, paint, windows and doors
– Interior: New kitchen, bathroom, floors, plumbing, and electrical
In addition, only two of the four units were occupied and on month to month leases, with one of those two units not paying any rent at all. ENSAF Capital worked with the non paying tenant to arrive at an agreement for her to vacate the premises in exchange for full rent forgiveness and covering her moving costs. ENSAF Capital then hired a contractor to conduct the renovations on the exterior and renovate the three vacant units for $142,010. The other remaining tenant was disabled and continues to live in the unit at below market rents.
Below are pictures of the renovations as well as a chart comparing the pre and post renovation economics of the quad where ENSAF was able to bring the yield on cost from 0.9% to 8.4%
