Company Description
This Duplex is fully occupied and located in an A.I. recommended neighborhood of Cleveland just a few blocks away from a brewery, coffee shop, and other trendy restaurants. The upper unit has been recently renovated.
Upper unit: Tenant is on a 1 year lease until 12/31/2022 paying $1,300/month. They have been delinquent since 5/9/2022 and the PM will be offering the tenant Cash for Keys in order to vacate the property. The vacancy reserve will cover the missing rental income.
Lower unit: Month-to-month lease paying $900/month. Tenant has been on a month-to-month lease for the past year and was on a 1 year lease beforehand.
All of the items in the inspection report have been repaired. You can view them in the property documents link below under "Repairs Completed by Seller".
The lower unit kitchen has a dropped ceiling, which is a secondary ceiling hung below the main (structural) ceiling. This can be viewed on picture 15 and will likely be replaced with a new dropped ceiling in a few years if necessary (cost - $500).
This property comes with a 1 year home warranty.
Updates:
Update 6/7/2022: There were a set of repairs made to the lower unit which were needed to pass the Housing Quality Standards inspection. These repairs include multiple carpentry refurbishments, plumbing fix and repairs, painting and more. The total cost of the repairs was $1,653 which is significantly less than the original contractors estimate of $3,421.25, which you can find attached below. We have received confirmation that the unit has since passed the inspection. These funds will be taken from the Maintenance Reserve of $9,510 which will be replenished with 10% of the cash flow until it is full again. Repair Estimate (total cost ended up being $1,653)
Update 6/9/2022: The resident living in the upper unit of 1845 W 48th St is 4 weeks behind on rent ($1,300/month). The Property Manager has reached out multiple times via phone, text, and in-person, starting the first day after the missed payment, with no response from the resident. Based on the original governance survey, token holders elected to wait 4 weeks before taking action. Now that this time has passed, the PM is recommending offering the tenant Cash for Keys (paying them to vacate the property) and if they don't accept, moving to an eviction. This governance vote will be determined by all token holders in Lofty Holding 1845 W 48th Street LLC and the winning vote will be determined via a Supermajority of 60%+. The voting results will be emailed to all token holders on Monday, June 13th, once the voting period ends. Rental income will continue to be paid out at the same rate and will be taken out of the Vacancy Reserve until this unit is leased out again.
Update 6/10/2022: We mistakenly reduced the CoC Return of this property (due to the tenant in the upper unit being delinquent on rent) without realizing there is a Vacancy Reserve in place. Your CoC Return has been reverted to its previous rate of 9.06% and you will be credited the additional rental income you should have received yesterday when your CoC was reduced. The rental income will come out of the Vacancy Reserve of $3,910 until the upper unit is leased out again.
Update 6/13/2022: Governance results: The PM will be offering the tenant Cash for Keys in order to vacate the property. Once we receive an update, it will be posted here.
Update 7/13/2022: - The tenant in the upper unit of 1845 W 48th St has not responded to the Cash for Keys offer, so the Property Manager will be proceeding with an eviction. The vacancy reserve will continue to fully cover the rental income for this unit until 8/9/2022. The seller has agreed to pay for half of the repairs needed after the eviction is complete in order to get the property rent-ready again, due to the fact that the tenant was delinquent shortly after the property closed.
Update 8/23/2022: The eviction for this tenant has moved forward and the hearing is scheduled on September 15th at 9am EST. After the hearing takes place, you will receive an update with the next steps.
Update 9/19/2022: The tenant in the upper unit did not attend the eviction hearing on 9/15. The Property Manager received confirmation from the downstairs tenant that the upstairs tenant moved out voluntarily last week. The PM will complete a move-out inspection and send over a turn estimate to start marketing the unit for a new tenant.
Update 9/27/2022: The tenant in the upstairs unit voluntarily moved out last week after missing their eviction hearing on 9/15. The Property Manager has completed a move-out inspection and turn service scope. The scope for the turn services include Reinstall and replace handles for kitchen cabinets. Realign closet doors off track in the living room. Install door handle and realign bedroom doors. Install shower/tub faucet. Install new smoke detectors and outlet covers. Touch up paint and drywall repairs for entire unit. Full clean for unit. Replace screen door. Replace light for bedrooms. Fill in gaps on ceiling in the back stairway to prevent pest/rodent access. The total estimate for turn service repairs is $1346.40. This includes a discount for on the maintenance fee from 15% to 5%. These funds will be deducted from the Maintenance Reserve which will be replenished via 10% of the cash flow until it is full again. The PM is waiting for the leasing team to confirm the rent the unit will be marketed for after the turn services are complete. The tenant in the Downstairs unit reported a leak in the ceiling and said it was about to cave in. The maintenance team had to resolve the emergency issue to preserve the property and avoid a health hazard for the tenants. The work completed includes gutter, siding, and flashing repairs to repair the source of the leak as well as drywall repairs to restore the condition of the property. The total cost of repairs was $1,800. These funds will be deducted from the Maintenance Reserve which will be replenished via 10% of the cash flow until it is full again. We are waiting on the invoice from the Property Manager. Once we receive the invoice, it will be uploaded to this property's Dropbox folder.
Update 10/10/2022: Upper Unit: The turn services have been completed and marketing photos are in progress. The Property Manager will list the unit with a target rent of $1,200, a $100 decrease from the last lease. The PM advised that $1,300 is over market and may increase risks of a non-paying tenant.
