Bayou Villa Apartments

Description:

Bayou Villa was built in 1972, the way they used to build them on the Coast. Built slab on grade with concrete upper floors. The roofs are TPO surrounded by standing-seam metal mansards. The two-story buildings sit on 1.35 acres under mature live oaks, and parking in the rear, out of sight from the street. All units have their own balcony or patio. All 24 units are the same 775 SF, two-bedroom, one-bath floor plan. That makes them simple to manage, simple to turn, and simple to price. The kitchens have wood cabinets and full-size appliances. Eight units do not have a dishwasher. Two of the three vacant units need work and appliances. People do not leave this property. Six households have been here since 2013 or earlier, and one has been here since 2001. Eight units receive Section 8 housing assistance, which puts a government check behind part of the rent roll. Most residents are month-to-month, which gives the next owner room to move rents to market without waiting for a lease to roll. Year 1 operating expenses are $103,778, or $4,324 per unit. That includes $31,001 for property insurance and $7,223 for flood. That is $1,593 per unit, which is a real Gulf Coast number, not a wish. Management is underwritten at 8% of collections, and the Year 1 budget carries $20,000 for capital improvements for the renovation of the 2 out of service units. The roofs range from 1 to 7 years old. There is plenty of additional upside for a new owner. A $300,000 capital investment to update all units, landscape and paint would drive the gross potential rent to $280,800 conservatively ($975/mo), and the NOI to $157,000 and value to around $2 million based on an 8% Cap Rate. Run it as is with below market rents for 5 years and realize a nearly 29% IRR, or improve it and bring the rents to market and hit one over the fence. The tenants are in place, the expenses are realistic, and the biggest employer in the state is just up the road and just gave its workforce an 18% raise. Call to hear the back story about this deal.


Ingalls. Ingalls Shipbuilding employs more than 11,000 people and is Mississippi's largest manufacturing employer. In March 2026 its union shipbuilders ratified a contract with an immediate 18% raise and 35% to 47% wage growth through 2031. Add the largest Chevron refinery in the world and Singing River Health System, and you have a renter base that gets up every morning and goes to work. Median household income is $46,454, so a $695 rent is about 18% of income. These rents are not a stretch for the neighborhood. They are CHEAP. Amtrak's Mardi Gras Service carried about 150,000 riders between New Orleans and Mobile in its first year.


Bayou Villa is 24 two-bedroom, one-bath apartments on 1.35 acres in Pascagoula. Every unit is the same 775 SF floor plan. The two-story brick buildings were built in 1972, with metal mansard roofs, live oaks out front, and balconies or porches on all the units. Here is the deal in one sentence. The tenants stay, the rents are low, and three units are sitting empty. Twenty-one of 24 units are leased at an average of $695 a month, and nobody pays more than $750. In-place NOI is $71,123 ($51,458 per unit). Lease up the vacancies and bring rents to $795, and NOI reaches $109,386 in Year 1 (8.86%) and $127,990 in Year 2 (10.36%). With 35% down, before-tax cash-on-cash goes from 5.95% in Year 1 to 14.49% in Year 2.