Est ARV Est Rent Est Repairs ACQ Date Appraised Value Actual Rent Actual Repairs Value % Rent % Repairs %
$220,000 $1,995 $25,000 10/14/2022 $237,000 $1,995 $38,490 108% 100% 154%
$155,000 $1,350 $22,000 11/7/2022 $167,000   $31,750 108% 0% 144%


 
PROPERTY INFORMATION

 10/6/22 – 

Address: 4437 Hodge Rd, Memphis, Tennessee, 38109
Property Type: SFR
Number of units: 1
Total cash outlay to purchase: $131,978.75
Repairs: Minimal repairs expected.  Clean up, interior paint and possible floors in a couple of rooms. 
Cash Purchase Cap Rate (ROI): 7.6%
Financed Purchase Annual Return on Investment (ROI): 12.98
Financed Purchased actual cash invested: $19,943.75
Close Date: 10-26-2022

10/6/22 – Initial walkthrough completed by John Jones:

You’ll find the link to the walk thru photos below. The property is a 4/2 and located in a good location. It’s overall in good condition but I do have some recommendations mostly from a cosmetic standpoint to command maximum value. We’d be looking to paint the interior, install kitchen tile, renovating both bathrooms mostly, servicing HVAC equipment, installing new flooring throughout, and other miscellaneous items. For a ballpark estimate, you’d be looking at 27-30K (this INCLUDES the fee). See summary below.

Roof: The roof was in decent shape and you could probably get a few more years of usefulness out of it. There were no signs of active leaking at the time of the walk thru.

Exterior: The exterior was in good shape and there wouldn’t be much to do to it.
Interior: The interior has been well maintained. Some of the cosmetic details are dated and I’d recommend changing them out to something more modern for value and rental purposes. This is more specific to the kitchen and flooring. The room colors are different colors, so we’d paint them all one uniform color. You wouldn’t necessarily have to, but I’d recommend upgrading both bathrooms tile surround, floor tile, and get new tubs.

Mechanical: The HVAC equipment seemed to be in good working order at the time of the walk thru. The ductwork was a little beat up but looks like it’s holding. I would suggest getting the equipment serviced. The water heater was in good working condition at the time as well.

Electric: The property is on breakers.
Gas: N/A
Additional: N/A
Appliances: A stove, fridge, washer, dryer, and dishwasher were present at the time of the walk thru. The seller reported having issues with the dishwasher, so we’d look to get that replaced.

Pictures: Walkthrough Inspection

Confirmed market value: $165,000 to $185,000

Confirmed market rent: Start marketing at $1,350 and reduce to $1,250 if required.

Deal Analysis: WORST CASE SCENARIO  →  ANTICIPATED SCENARIO

10/18/22 – We may be able to get $1,400 to $1,425 rent on this property as it is a 4/2.  We will consider this when finalizing the renovation costs. It will be extremely beneficial to have a little higher renovation budget to demand a higher rent. 

10/20/22 – Insurance quote attached from Alicia Spicer. Jenni Spicer gave us 4.49% at 1.5pts and would like to work with Lendserv title for all refinance closings. They will give us a discounted rate of $350 vs. $625 at Saddle Creek.

11/3/22 – We are all set for closing this one Monday 11/7/22. Pre-close property inspection is scheduled for 9am CST. HUD review posted on Slack channel. Need to make sure the $150 fee is taken from Solution Based Corp. Total wire tomorrow or Monday morning is $150,931.73. This includes $33,000.00 for renovation escrow. It is the top side of the walkthrough estimate so we should not have to make a second wire when final quotes are delivered. 

11/16/22 – Repair cost in at $30,525 includes refinishing wood floors. We are all set because we have $33,000 in escrow and I am tracking this. This one is going to be nice. I asked John about the kitchen countertops to see if wee need to do anything with them. We should end up in a great equity position on this property. Attached the SOW, Budget, executed closing docs and will keep you updated on Start and Completion timeline. 

11/19/22 – Reno Update – Week 0 – Everything is executed and ready to go. We are working through the challenge of Memphis Light Gas Water “MLGW”. This is currently a government entity with room for improvement. The team is experienced working within the current operational challenges. RiverTown Realty has been feverishly trying to get this taken care of but MLGW is proving once again to be very difficult to get a call back and things scheduled. As it stands, this item is still pending. We won’t be able to start until we get the utilities on so we can have power.

12/12/22 – Reno Update – Week 1 – Still waiting on MLGW to get the utilities turned on. We had our third appointment scheduled with them that was supposed to occur last week. The team has elected to start demo/trash out and has completed the work. We need the power on to proceed and will continue to pursue solutions with MLGW.  Link to Photos

12/19/22 – Reno Update – Week 2 – Utilities still held up by MLGW scheduling issues. We have multiple solutions in progress and will now move forward on the repairs with generators. Should have utilities issue addressed by end of next week at the latest.

12/27/22 – Reno Update – Week 3 –  We’re prepping for the interior painting as you’ll see in the link to the photos below. The mud isn’t drying as fast as we’d like since because of the temp and lack of constant heat but our fortunes should turn when we get the power back on this week. Link to Photos

1/16/23 – Reno Update – Week 5 –  We’ve got the ceilings mostly painted and are working on the walls. We found some plumbing leaks with the water valves which will all need to be changed out and there is a burst pipe in the wall where the washer box is located. My plumber has quoted me $475 to make the repairs. It’s one of those things that we have to get done so we can square that up on the back end, but I wanted to notify you of it. We’re going to be pushing to get everything done by the end of next week. Link to Photos

1/23/23 –  Reno Update – Week 6 – You’ll find the link to the progress photos below. We were pushing to get this one wrapped but we ran into more plumbing issues! My plumber found 4 more leaks and we had to get them repaired so you’d be looking at another $400 on top of the overrun from last week. Fortunately, after the repairs, there were no more leaks so we should be good moving forward. Aside from that, we have the tile installed and most of the painting completed for the walls/ceilings. We’ll be finishing out the bathroom, refinishing the flooring, and other miscellaneous items over the next week. For the countertop overhang, it adds about a foot of countertop space so would you want us to remove it? Link to Photos

1/30/23 – Reno Update – Week 7 – You’ll find the link to the progress photos below. We were really working to be done this week but we ran into a problem in that someone broke in and stole some tools, tile, and my contractor’s trailer. Damage to the property was minimal but they damaged the carport door and framing. We think we can salvage the framing but the door will need to be replaced because of how they broke it. We’d go with a metal door, so you’d be looking at $350. Also, there was a large metal structure in the back of the property that they tried cutting down as well so we’d just need to trash it. We are going to be boarding the entrances up until we have everything completed. Sorry to be the bearer of bad news but apart from that, we have some patchwork to do, a few bathroom fixtures to install, and get the flooring refinished then we’ll be all done here. Link to Photos

2/6/23 – Reno Update – Week 8 – You’ll find the link to the photos below. We weren’t able to finish due to the ice storm we had for the last few days but we did pick things back up today. We found that the property is without power so we’ll reach out to MLGW to get it restored. In the meantime we’re working around it so that we can get this one finished! We have painting completed, patchwork underway, and are putting the finishing touches in the bathrooms. Afterwards, we’ll get the flooring refinished and we’ll be all wrapped up! Link to Photos

2/13/23 – Reno Update – Week 9 – You’ll find the link to the progress photos below. The appraisal was completed! We’re not quite ready to turn the property over to Rivertown yet because we had to get the refinisher in after the appraisal was done and the property can’t be walked in for 3 days. But afterwards, we’ll be turning it over so Rivertown can get whatever they need. My contractor will also be installing the new door for the carport entrance to the property. Link to Photos