The Snyder Apartment Portfolio

Snyder, Texas

On August 11, 2009 we purchased the Snyder Apartment Portfolio. This allowed us to reinvest gains from a previous investment, Canal Road in Mississippi, via a tax-deferred exchange. Snyder consists of 101 units in two locations: Western Crest and Windridge. In order to meet the capital requirements for this project new investors were added, for which purpose we formed Schrogin/ Baar XIV, Ltd.

Snyder is a small town located eighty miles southeast of Lubbock. In addition to the cost of the acquisition, our business plan allowed us to fund approximately $400,000 in capital improvements, there­by bringing the apartments into very good condition.

Kim and Ken May, our onsite manager and maintenance staff, were hired after some difficulty with the previous management. We have found the onsite management under our direct control to be effective in Andrews and now in Snyder, which is now cashflowing as originally anticipated.

We refinanced the property in 2012. Proceeds from the refinance were applied to  $150,000 in capital improvements to the property and to purchasing an additional sixteen units on a main street in Snyder. That purchase, the College Park Apartments, has now been completed. We have repaved the property, which has effected a radically improved street presence. We are also in the process of rehabilitating the units as they vacate, some into “Corporate Units,” which are fully furnished and equipped with dishes, linens, etc. These are intended to be rented to itinerant workers who will be coming in to work in the oilfields; they are much cheaper for them than motels but valuable to us because of good income we can achieve. Because we were persuaded, for better visual presence, to plant some palm trees at College Park, we have renamed the complex “College Palms.”

Snyder continues to pay a return greater than the preferred annualized 7% return. The recent plummet in oil prices, however, has meant cutbacks in oil industry employment. We have lost many tenants who were laid off, and we suffered sudden and radical vacancy. As a first in our decades of owning residential property, we purchased a billboard ad for our Snyder apartments.  At this point we are about 85% occupied and are still cash-flowing, but not at the rate that we have seen in the past.