project overview 3234 canyon memphis, tn · memphis, tn 38119 901.620.6787 (o) 901.205.0629 (f)...
TRANSCRIPT
# 21 Ranked University of Memphis v. # 13 Ole Miss, October 17, 2015
Memphis 37 Ole Miss 24
Project Overview
3234 Canyon
Memphis, TN
Above Picture Copyrighted.
1060 Brookfield Rd Suite 100· Memphis, TN 38119
(O) 901-410-5452 · (F) 901-205-0629 · www.MemphisTurnkey.com· www.LittleRockTurnkey.com
August 3, 2016
To our current and prospective clients:
Enclosed in this packet you will find various pieces of information about our latest
offering in Memphis, TN including pictures, scope of work, hard cost and projected
revenue. With any of our projects, our goals are to provide a property that will maximize
our clients cash flow by performing a thorough renovation that will reduce maintenance
and vacancy. We do this by addressing in our renovation deferred maintenance items,
adding upgrades such as vinyl plank flooring and ceramic tile that are more durable and
adding in several upgrades to make the home standout above other competing rental
properties in the area. As landlords ourselves, we have learned that the best way to
maximize profits starts with the renovation and continues on with a strong management
team, which we have accomplished through our in house property management company.
If you have any questions, please feel free to reach out to us at 901-410-5452. We
would be happy to provide you with any amount of information we can to make you feel
comfortable with your investment decision.
Thanks,
Alex Craig
President
Memphis Turnkey Properties
Little Rock Turnkey Properties
1 Year Performance Projection
Memphis Property with $1,095 a MonthMemphis, TN 38134Retail Ready Renovation w/ Granite
Square Feet 1,836
Initial Market Value $ 106,900
Purchase Price $ 106,900
Downpayment $ 21,380
Loan Origination Fees $ 855
Depreciable Closing Costs $ 3,207
Other Closing Costs and Fixup $ 0
Initial Cash Invested $ 25,442
Cost per Square Foot $ 58
Monthly Rent per Square Foot $ 0.60
Income Monthly Annual
Gross Rent $ 1,095 $ 13,140
Vacancy Losses $ -76 $ -919
Operating Income $ 1,018 $ 12,220
Expenses Monthly Annual
Property Taxes $ -139 $ -1,678
Insurance $ -64 $ -769
Management Fees $ -81 $ -977
Leasing/Advertising Fees $ 0 $ 0
Association Fees $ 0 $ 0
Maintenance $ -65 $ -788
Other $ 0 $ 0
Operating Expenses $ -351 $ -4,214
Net Performance Monthly Annual
Net Operating Income $ 667 $ 8,006
- Mortgage Payments $ -452 $ -5,430
= Cash Flow $ 214 $ 2,575
+ Principal Reduction $ 107 $ 1,290
+ First-Year Appreciation $ 89 $ 1,069
= Gross Equity Income $ 411 $ 4,934
+ Tax Savings $ 0 $ 0
= GEI w/Tax Savings $ 411 $ 4,934
Mortgage Info First Second
Loan-to-Value Ratio 80% 0%
Loan Amount $ 85,520 $ 0
Monthly Payment $ 452.58 $ 0.00
Loan Type Amortizing Fixed
Term 30 Years
Interest Rate 4.875% 0.000%
Monthly PMI $ 0
Financial Indicators
Debt Coverage Ratio 1.47
Annual Gross Rent Multiplier 8
Monthly Gross Rent Multiplier 98
Capitalization Rate 7.5%
Cash on Cash Return 10%
Total Return on Investment 19%
Total ROI with Tax Savings 19%
Assumptions
Real Estate Appreciation Rate 1%
Vacancy Rate 7%
Management Fee 8%
Maintenance Percentage 6%
Comments
*Information is not guaranteed and investors should do their ownresearch, get professional advice and conduct due diligenceprior to investing.
This report was generated using the tools available at www.PropertyTracker.com | © 2004-2014
General Project Overview
Permits Pulled: Mechanical, Electrical and Plumbing
Start Date: TBD upon closing
Projected Finish Date: Estimated 28 days
General spec along with specific details custom to this house are enclosed in the scope of work.
The scope of work are repairs and upgrades that are designed to reduce maintenance and
vacancy. We feel turning the ½ bath into a full bath will add substantial value and rent. This will
be the most time consuming part of the rehab as we are going to have to jack hammer into the
concrete slab to tie into the existing DWV pipe coming off the lavatory. By doing this, we will
be pulling a permit and waiting on code to approve our work. Also, by expanding the ½ bath, we
are losing the hall cabinet where the H2O tank is located, thus moving it into the attic, which is a
standard install for Memphis, TN. Doing so will require electrical and mechanical permit to be
pulled. We foresee the rehab taking 28 days unless code inspectors slow us down as we have 3
separate permits to pull. The granite counter tops will maximize the rent value of the home and
make it more marketable than any other home in the area as very few homes have this nice
upgrade that tenants live. Level of renovation for this home is considered slightly above retail
ready for the area given the granite install at the estimated value of $105,000 to $115,000
Prior to buyer’s inspection, all utilities must be active. Water Cut off at the end of each day.
The Scope of Work while specific may change depending on unforeseen circumstances
discovered during the renovation.
Items such as laying and refinishing floors, ceramic tile install, painting, carpentry, landscaping
and other simple trades will be performed by in house crews. Electrical, plumbing and HVAC
work will be subbed out to our licensed vendors.
3234 Canyon Scope of Work
Roof
Clean roof and inspect. Roof appears to be 5 years’ old
New layover roof on shed
General
Replace Blinds as Necessary
Closet rods in all closets
Interior 3 color Paint expect on paneling
Interior door open and close smoothly
Kitchen and hall smoke detector along with kitchen Fire Extinguisher installed
Check insulation around all exterior doors
Poly hardwood floors / no sanding necessary
Plumbing Spec
Check all valves, P-traps and DWV pipe for leaks (replace supply lines, valves and p-traps as necessary).
Keep existing if they function properly
Check shower drains and area drains for proper installation and drainage
Inspect plumbing in crawl space and attic
Check toilet for property installation. Repair and replace as necessary
Replacement toilet if needed (HD # 340995)
Repair & replace exterior hose bibs as necessary
Check WMOB for property function and drain fall and venting
Check DWV system for plumbing back up (run all fixtures simultaneously for long period of time)
New Electric Hot Water Tank in attic (Keep AO Smith Current tank as it is 2015 and put in storage)
Electrical Spec
All outlets work and verified through tester
No open grounds/all new outlets and switches
Weather heads checked and replaced/repaired as necessary
All interior and exterior outlets/switches have ivory cover plates
Open junction boxes closed
All interior/exterior lights working
Proper Breaker Amps in box for reciprocating item
Inspect box
HVAC Spec
AC age 2013
New Furnace
Condensate line checked for clearance
Ducts not smashed
AC’s exterior lines insulated
AC cage
Exterior
Front yard weed control and removal of Nutgrass
Remove weeds growing in driveway
All windows open and lock, check for cracks
Back patio seems ok—pressure wash & seal
Entry gate to backyard replace
Security doors appear in good shape
Paint wood siding and trim. Shutters do not need black paint
Pressure wash walkway to the door & back patio
Repair soffit and siding where necessary
All exterior lights working
Cut back branches off House
Overgrowth along fence lines is ok as it provides privacy from neighbors
Mailbox Presentable
Remove above ground pool – see if dirt truck load of dirt can be delivered
Landscaping ($75)
Shrubs cut and pull weeds out of bushes
Thin out shrubs around light pole
No mulch necessary
Attic
Attic clean
Attic door & attic in general insulated well
Hallway
Small Spec Light (HD# 287958)
Den
Spec 44” fan
Floor ok
Carport
Spec light
Front Living Room
Spec Light (replaces only light in front room)
Pull carpet and keep hardwood
Remove door
Hall bath
Spec light
Keep green tile in shower surround, but demo green tile on walls and replace with drywall
Keep floor
New vanity (Kinghurst 30.5” – or 24” Glacier Bay Lancaster or other vanity with 3 drawers on right and
one in the center)
Spec shower head (HD# 725532)
Spec faucet (HD # 247368)
Kitchen & Area off Kitchen
Ceramic tile floor
Paint and cabinets with brush nickel hardware
New vent-a-hood
Accommodate smaller stove by adding another base cabinet
Spec faucet (HD # 709463)
2cm Granite Counter top
Spec white kitchen fan (HD# 754470)
Spec brush nickel light
Keep florescent light near pantry
Keep dishwasher if works
Small spec light over sink
Remove wave over sink
Enclosed patio
Paint match floor
Laundry
Ceramic Tile
Cabinets ok – replace hardware with brush nickel
Small spec light
Bed 1
Spec Light
Bed 2
Spec Light
Bed 3 (Addition)
Spec Fan
No paint panel
Ceiling ok
Carpet
Office (off Bed 3)
Carpet
No paint
Area in between office and bed 3
Small spec light
Master Bed
Spec 44” Fan
Master Bath
Spec light
New vanity and medicine cabinet
Turn ½ bath into full bath with permit pulled
Ceramic tile floor and shower. No tile on walls
Spec shower stall with Spec shower head (HD# 725532) and single handle valve
Spec faucet (HD # 247368)
Before Pictures: https://app.box.com/v/3234Canyon
After Pictures:
1060 Brookfield Rd
Memphis, TN 38119
901.620.6787 (O)
901.205.0629 (F)
Property Address: 3234 Canyon
Rent Data
Projected Rent: $1,025 to $1,095
Closest in House Comp: 1060 Bluefield at $1,095 a month
Area Overview
This is one of our strongest rental areas in all of Memphis as we have a large portfolio of homes in this
specific area 38128/38134. 38128/38134 is a large zip code that has untouchable areas, most of these are
West of Raleigh-Millington. 4 bedroom homes have historically received in the $1,055 to $1,095 range.
The low end is $1,095, but level of rehab here often times can push our properties to the high end. Rent
values are strongest East of Coleman over to Covington Pike. Crossing over Covington Pike rents go up,
but the zip code is 38134 where house values are about 10 to 15% more. Rents drop about 10 to 15%
when going West of Austin Peay and 20% when crossing South of Raleigh-Millington. The area has a
large presence of jobs supporting the auto sales and service industry. Approximately 1 miles to the East is
Bartlett, TN, a very desirable suburb of Memphis that offers a large area of choices to shop, dine and
entertain. Approximate drive time to Memphis Airport/Fed Ex is 20 minutes. Drive time downtown is
roughly 20 minutes. Drive to Cordova is 15 minutes.
Marketing Plan
Heavy focus online with high res pictures upon completion of the renovation and descriptive marketing.
Currently 75% of our leads come from online; the other 25% are general neighborhood drive through and
calling the for rent sign. We utilize inside customer service for call in and a property management hotline
# that rings our leasing agents.
Online Marketing Copy
Nicely renovated home with 4 bedrooms and 2 bathrooms. The outside of the home features nice
landscaping, a carport and an architectural shingle roof that not only looks great, but will may help reduce
your utility bill. Inside the home, hardwood floors make up the living room, hallway and 3 of the
bedrooms, while the 4th bedroom and bonus room feature carpet. Speaking of the kitchen, it has been
redone with ceramic tile, new countertops and the cabinets have been refurbished. Both bathrooms have
been updated, with the master bath having a ceramic tile shower with mosaic accent, single handle brush
nickel valve, energy efficient shower head and bathroom faucet. The backyard is fenced in with a deck
and enclosed patio. We have an A+ Rating with the BBB that is earned from taking care of the
individuals that live in our houses.
Area Tenant Profile through 2016 Only Data Collection (10)
Avg. Credit score: 639
Avg. Rent: $1,073
Avg. Income: $5,177
Data represents only tenant moves in for 2016 and may not be representative of the entire portfolio managed by CB Properties for this respective
zip code. Accumulate of past data is a work in progress.
“Better Properties, Better Areas, Better Investments”
All Memphis & Little Rock Turnkey Properties come with a maintenance guarantee of 90 days after the purchase date
listed on the closing settlement statement. If a tenant is not in place at time of closing, the 90 day warranty would begin
after tenant occupancy as listed by the 1st day on the tenant lease. Memphis Turnkey will also guarantee Heating and
Air system to be functioning properly for 180 days after the date on the closing settlement statement. This 90 day
warranty only includes maintenance issues within the 4 walls of the house. This warranty would exclude but not limited
to decks, fences, sewer lines, roofs, irrigation systems, retaining walls, free standing lighting fixtures in the yard and brick
structures such as patios.
Property inspections are not always successful in finding all the flaws with a property as these inspections are done
typically while the home is vacant. Such flaws that are present may only surface when a tenant is living in a house
cycling and running simultaneous items within the major systems of the house. The 90 day guarantee is designed to find
these flaws that were missed during renovation and property inspection. Depending on when the property was bought,
it may be impossible to test the entire heating and air system. For example, if a property was bought in January, it
would be impossible to test the AC for property function. The 180 day guarantee is designed to give our investor piece of
mind that the heating and air system is functioning properly.
Because the 90 day warranty only includes within the 4 walls of the house, it is strongly encouraged that an inspection of
the plumbing system by a licensed plumber to run a camera down the sewer line to test for blockage.
Certain items are excluded from the 90/180 day warranty. These items include:
Damage done due to tenant negligence
Vandalism/Theft
Acts of God
Force Majeure
Power Surges
Appliances not installed by Memphis Turnkey
Pilot lighting of Furnace
Vermin
Property Address:_______________________________________________________
Buyer:________________________________________________________________
Seller:_________________________________________________________________
Date:__________________________________________________________________
Memphis Turnkey Properties · 1060 Brookfield Rd. Suite 100 · Memphis, TN 38119
(O) 901-410-5452 · (F) 901-205-0629 · www.MemphisTurnkey.com
Dear Investor,
As you know, we are constantly developing new techniques and ideas for maximizing the
returns on our properties. One of our largest expenses is insurance, and thus we have
worked with a local broker, Insight Risk Management, to put together a program that will
afford all of our clients the best possible coverage at the most competitive rates. By
aggregating all of our insurance purchasing with a single company, we have been able to
leverage the volume to get better pricing than can be achieved by any one investor.
This program is tailored specifically for our rental properties and has the following
coverages:
1. Replacement cost coverage so that the insurance company is obligated to replace
the property, subject to the deductible, without any allowance for depreciation or
similar limitations
2. Limits of $90 a square foot, which should be appropriate under most
circumstances, though you should review your own home to ensure this is
sufficient
3. Lost rents of $12,000 a year should a large loss occur
4. $1,000 deductible without any other charges such as depreciation or coinsurance
5. $1,000,000 of general liability coverage per location, thus providing separate
limits for each house
6. Standard general liability wording without any exclusions for assault, battery,
sexual abuse or animals
7. No coverage for contents, so you are not paying for any contents that you do not
own
8. 60 day vacancy clause
9. “A” rated carrier
A typical house costs about 33% less on this program than with other carriers, and no
individual underwriting is required.
If you would like to get a quote for coverage, please contact the administrator of the
program, Mandy Roberts, at [email protected] or +1 901 202 8676 or you may
contact Pat Ashford at [email protected] or +1 901 761 3100. They would be happy
to provide you with quotes or answer any other questions that you may have.
We have had great success with this program and hope you will take advantage of it.
Sincerely
Alex Craig
President
Video Testimonials Click on the Web Page Below to Link you to our Video Testimonials