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*UPDATE* $800 a Month Cash Flow – rented [Code 8403]

Posted by Powered by Simply Do It on February 22, 2022
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  • ** All units are leased. ** We have requested the rent roll, but have not received it yet from the seller's agent
  • 10-unit group-buy.  You are able to buy 1 or more (or all) units depending on your preference, but all 10 units need to be purchased with SDI investors at the same time as a group
  • No (low) crime area
  • Around $800/mo. cash flow for each unit based on market rent
  • Six 4-bedroom townhomes with 2.5 baths and 2 car garages (one unit has a 1.5 car garage)
  • Two 3-bedroom (with bonus room) townhomes with 2.5 baths and 2 car garages
  • Two 3-bedroom townhomes with 2.5 baths and 1 car garages
  • Townhomes are in separate buildings ranging from 2 units to 3 units per building  
  • Hardwood flooring/carpet throughout
  • The master insurance policy will allow for a lower premium – added the upper range of the reduced premium to the spreadsheet

  • Each of the units are titled separately and can be split and sold off individually
  • HOA provides lawn care
  • Buyers must show proof of funds or pre-approval letter

Why should you consider this house / what makes it a good investment?

  • Built: 2017-2018
  • Size: 19,750  sq ft (approximately 1200 sq. foot per unit depending on which unit is selected)
  • Quiet residential street, Desirable community, B rated schools
About the area
  • Nashville Metro near Chattanooga

  • 3-5 minutes to VW, Amazon, and FedEx, Interstate 75. Exceptional location

**UPDATES**

After speaking directly with the seller, we have some clarification to share with you below:

  • We have to combine and make a joint offer for all 10 to buy simultaneously. – seller wants them to be sold at the same time. 
  • The townhomes are individually titled / parceled – for individual financing.
    • Possibly, if you wanted to purchase an entire building where there are only two, a lender could potentially consolidate them – that is a question for your particular lender – Simply Do It may be able to assist you with accomplishing this.
    • The seller is not concerned with how they are divided – only wants them closed together. 
  • As of now there are, Simply Do It has 6-7 buyers interested – we need commitments for all 10 units to make the sale work.
  • Additional marketing activities are coming today and tomorrow.

 

To proceed – we need commitment for purchase (and how many units) – and matching pre-approval letters (not just pre-qualification).


 

Property Breakdown Details:

8403 & 8407

4 bedroom

(8403 is 1.5 garage)

8407 is a 2 car garage

Both are end units

 

8438 & 8442

Both are middle units (the end units are owned separately)

Both are 3 bedroom with bonus (can’t be called a bedroom as there is no window) room

2.5 bath

1 car garage

 

8421, 8425, 8427

(8425 is a middle unit)

8421 & 8427 are end units.

8421 & 8427 are 4 bedroom 2 car garage

8425 is 3 bedroom with bonus and 2 car garage

 

8437, 8441, 8445

8437 & 8445 are end units – 4 bedroom and 2 car garage

8441 is a 3 bedroom & bonus room (as it is a middle unit)

 

All 10 units are currently grossing $205,000 a month and underpriced

Leases all expire in less than 12 months and rents can be raised to $2,400–$2,500

 

THE 4-BEDROOM UNITS WILL LIKELY LEASE FOR $50-$100 MORE THAN THE 3-BEDROOM UNITS – as they are end units and have additional windows

The garages won’t impact pricing as all the units have them.

 

The middle unit is the same size as the 4-bedroom units and will likely rent for $100–$50 less than the end units. So the price rather than simply being divided by 10 should be reduced for the 3-bedroom unit/bonus room. The 3 bedroom unit/bonus room cannot be advertised for lease or sale due to lacking windows, but it can still be used as a bedroom or office. The garage size doesn’t often impact leasing (unless there are an abundance of vacant homes – a situation we have not seen for at least 10 years – and will not likely see in the next decade, based on the national trends)


 

Great properties & location:

High end, turn key, newer construction (2017-2018), in a private community. Only 3-5 minutes to VW, Amazon, and FedEx, Interstate 75. Exceptional location. 100% occupied, excellent tenants in place.

 


Additional Details:

For offer consideration and financials, Buyers must show proof of funds or pre-approval letter, where only lender final underwriting approval is required.

Properties will not be shown without an accepted contract.

What's next?

Email/text for address, analysis and to get connected to Simply Do It's local team that handles this transaction.

Metro: Nashville

Team: Fred – email directly at nash1@simplydoit.net

Code: 8403



**Example of analysis with generic numbers (these could change depending on which unit chosen)**

Purchase Assumptions My Offer
Offer used for analysis $324,000
Suggested offer (low) $324,000
Suggested offer (high) $324,000
Asking $324,000
Market Value (after improvements) $324,000
Improvements (lower) $1,500
Improvements (upper) $2,500
Closing Costs $3,240
Mortgage Costs $3,240
Other Fees At Closing $0
Total Cost  $332,480

Financial Assumptions Monthly Yearly
Rent (upper) $2,500 $2,550 $30,600
Rent (lower) $2,450 $29,400
 Property Tax Rate (Approx.) 0.3%  
 Property Taxes $76 $912
 Insurance $70 $840
 Repairs $75 $900
Variable-Cost PM 8.0%  
Property Management Fee $200 $2,400
 Leasing Fee 50% $52.1 $625
 HOA $46 $552
 Vacancy Rate 4.0%  
 Total Fixed Expenses $611 $7,333
 Total Expenses (Fixed + Mortgage) $1,771 $21,254

Financial Analysis / Deal Attractiveness        
Years: 5 10 15 20
 Cap Rate 10.8% 12.2% 13.6% 15.2%
 Net Cash Flow $48,353 $108,983 $183,168 $272,320
 Equity Increase $93,408 $207,154 $345,667 $514,339
 Total Gain $141,761 $316,137 $528,835 $786,659
           
 Average Cash Flow/Year $9,671 $10,898 $12,211 $13,616
 Average Cash Flow/Month $806 $908 $1,018 $1,135
 Average Gain/Year $28,352 $31,614 $35,256 $39,333
 Average ROI 158.4% 353.3% 591.0% 879.1%
 Annual ROI 31.7% 35.3% 39.4% 44.0%
 Projected Property Value $394,196 $479,599 $583,506 $709,924

Property Ratings Suggestions
 Item      Suggested Criteria (Min.) This Property FAVORABLE /
INSUFFICIENT
 Schools     B B FAVORABLE
 Square Feet   1000 1,975 FAVORABLE
 Bedrooms   3 4 FAVORABLE
 Bathrooms   2 2.5 FAVORABLE
 Year Built   1970 2017 FAVORABLE
 Rent/Price (%)   0.75% 0.79% FAVORABLE
 Average Cash Flow (at year 5) $125 $806 FAVORABLE
 Average ROI (at year 5) 15% 31.7% FAVORABLE


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Disclaimer

Information contained herein was obtained from sources deemed reliable, however, Simply Do It and/or the owner(s) of the property make no guarantees, warranties or representation as to the completeness or accuracy thereof. The presentation of the property is offered subject to errors, omissions, changes in price and/or terms, prior sale or lease or removal from the market for any reason without notice.

The analysis is provided “As Is”. All the information is believed to be accurate (except for the small effects of some simplifying assumptions), but is not guaranteed, and depends on the values entered for the property. This analysis is intended for the purpose of illustrative projections. The information provided is not intended to replace or substitute for any legal, accounting, investment, real estate, tax, or other professional advice, consultation, or service. Simply Do It and/or the owner(s) are not responsible nor liable for any damages arising from the use of the analysis info. 

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