#156: 12 units. $168K in. BAH-funded soldiers paying rent.

OPPORTUNITY

Conditional buy at the realistic 7% cap - request T-12, pull building permits, and confirm OZ status before committing to the headline numbers. Renovated brick 6-unit in a Kansas City Opportunity Zone with newer roof, HVAC, plumbing, and electrical at $87,917/unit. QOZ designation provides the primary upside for investors with capital gains to shelter - a 10-year hold may eliminate federal tax on all appreciation gains inside the zone, materially improving after-tax returns beyond what the cap rate alone captures.

RISK

The advertised 13.65% cap rate treats $72K gross rent as NOI with no vacancy, management, maintenance, taxes, or insurance subtracted. Full expense reconstruction produces a realistic 7.09% cap and $7,373/yr in cash flow. Verify renovation scope via permits, confirm OZ tract status through the IRS census tract tool, and request T-12 before any offer.

VERDICT

Conditional buy - the Opportunity Zone tax treatment and renovated brick basis in the KC Eastside corridor are the actual investment thesis. Rebuild from the T-12, verify permits, confirm QOZ status, and evaluate at the realistic 7% cap. If you have capital gains to shelter and a 10-year hold conviction, this deal warrants serious attention.

OPPORTUNITY

Buy at the normalized 7.88% cap - confirm the three-building 12-unit package structure, plan for normalized Year 1 expenses, and budget $96K to $180K in renovation capital beyond acquisition costs. Three 4-plex buildings at $50,000/unit adjacent to Fort Cavazos - the largest US Army installation in the country - with BAH-funded soldiers as the primary tenant base, verified T-12 NOI of $59,690, and a 29% rent gap from $564 current to $739 post-renovation market. CoC grows from 7.84% in Year 1 to 19.3% by Year 10 through natural rent growth and a light renovation program.

RISK

The headline 9.95% cap rate is built on a self-managing owner T-12 with no PM fee, no reserves, and below-market maintenance. Real normalized Year 1 expenses produce a 7.88% going-in cap. Renovation program to capture the $739/unit Year 3 target requires $96K to $180K in additional capital beyond the $168K acquisition cash-in. Confirm the three-building 12-unit package structure with the broker before any offer.

VERDICT

Buy at the normalized 7.88% cap. Killeen military market makes this a stable, compounding income hold. Execute the light renovation program on natural vacancy, push rents toward the $739 Year 3 target, and hold for the 10-year trajectory the OM details accurately.

OPPORTUNITY

Conditional buy for an STR operator or long-term appreciation investor - verify TWIA windstorm quote, add flood insurance, confirm lender feasibility for pre-completion purchase, and buy only if the STR strategy is part of the plan. New 2026 oceanfront construction with private balconies, in-unit W/D, and UTMB Hospital proximity in one of the most supply-constrained coastal markets on the Texas Gulf. Galveston draws 7M annual tourists and oceanfront 1BRs command $140 to $250/night peak - activating all 8 units as vacation rentals could push gross revenue above $200,000/yr and flip the economics from near-breakeven LTR to 14%+ CoC.

RISK

Every unit is in pre-lease with zero operating history and Q4 2026 completion still pending. The OM expense model omits property management, maintenance, reserves, and vacancy - real normalized expenses cut the cap rate from 8.87% to 5.83% and leave realistic LTR cash flow near breakeven on $392,000 invested. The $0 flood insurance line on a Galveston oceanfront building is unacceptable unhedged risk regardless of FEMA zone designation.

VERDICT

Conditional buy for an STR operator or Texas coastal appreciation investor. Get actual TWIA and flood insurance quotes, add both to the expense model, confirm lender will fund the pre-completion purchase, and buy only if the STR activation strategy is the plan from day one.

OPPORTUNITY

Buy via FHA 3-unit at 3.5% down - confirm the current offer status, verify FHA qualification, and move. Owner in the 4BD at $6,585/month effective housing cost with $1.29M in equity by Year 10. FHA 3-unit financing at 3.5% down puts a $1.449M College Area 3-unit within reach for $50,715 total down payment. The 4BD/2BA tenant is voluntarily vacating May 31 - no owner move-in legal process required. Section 8 on the 2BD provides SDHC-guaranteed income. SDSU enrollment of 37,000 students ensures the studio and 4BD re-lease immediately at market rates. By Year 10 equity exceeds $1.29M on a $94K investment.

RISK

$11,085/month total PITI and MIP requires stable employment income even with rental offset - verify FHA qualification with a lender before falling in love with the deal. Studio is currently vacant and needs re-leasing. Normalized expenses drop the stated 5.36% cap to 3.66%, confirming this works as a housing cost offset play and not a passive income investment. Listing notes an accepted offer - verify current deal availability before investing time in diligence.

VERDICT

Buy via FHA 3-unit at 3.5% down. Owner in the 4BD/2BA, renting the studio and Section 8 2BD, produces $6,585/month effective housing cost in College Area San Diego on $94,185 invested. The 10-year equity trajectory on SDSU-adjacent real estate justifies every dollar of the monthly premium over renting.