Hey, this is Devin and I’m in one of my projects here in San Antonio, and I want to talk about adding extra units for NOI increase. In this particular case, we had one larger unit and part of a storage unit that was adjacent to the other unit. And what we ended up doing was separating part of that storage out and creating a unit out of it, and then making the existing unit a little bit smaller. So we’ve got … Effectively, turning a 74-unit property into a 75-unit property. And if you look at the gross income potential, let’s just say it’s $1,000 for easy math, over a 12 month period, so we’ve got $12,000 of potential gross revenue added by adding a single unit. And then let’s say we cut half of that off for expenses at a 50% expense ratio, so now we’ve got $6,000 of extra net operating income on the property. And if you divide that $6,000 by let’s just say a seven cap rate, you’re going to see a tremendous amount of value for a relatively minimal investment on adding another unit to the property.
One of my other projects in San Antonio, we’re actually adding 24 units to the property by converting some larger units into some smaller units which will make a more affordable rent and it will also create much nicer NOI for the project. So if you’ve got an opportunity on a multifamily project to add units and increase your NOI, that could be a very smart move with the investment.