Company Description
This recently renovated Duplex is a 4 bedroom 2 bathroom property located in a trending neighborhood of Memphis. The following renovations have been completed: New bathroom, updated kitchen, new roof, interior and exterior paint, new doors, new laminate flooring, new windows, new plumbing, and new cabinets.
Unit 3038: As of August 26th, 2022, the tenant has vacated the property and the eviction is now closed. The Property Manager will be providing a scope and estimate for turn services and marketing the unit for a new tenant. The target rent for the unit is $750, a $55 (7.9%) increase from the previous lease. A full rental credit is being provided for this unit until a new lease is signed.
Unit 3040: Currently occupied on a one year lease ending on 6/3/2023 and renting for $695/month.
Updates:
Update 2/28/2022: Token holders voted to offer the tenant in unit 3038 a 2 year lease term.
Update 6/3/2022: 3040 Sinclair St is occupied and the tenant is paying $695/month. This is less than the projected rent via the rental credit you've been receiving at $725/month, so the Cash on Cash return will decrease slightly. This tenant was supposed to move in mid-April, but there was a service issue with MLGW (Memphis Gas, Light, and Water) and the tenants utilities were not connected correctly according to the Property Manager. Apparently MLGW had been reading the meter for the other unit, instead of for 3040. There have been several issues with this PM in Memphis thus far, and in the near future there will be a governance vote to switch to a new, highly recommended PM in Memphis.
Update 6/9/2022: The resident living at 3038 Sinclair St is 4 weeks behind on rent. 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.
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 7/7/2022: The tenant at 3038 Sinclair St verbally agreed to the first Cash for Keys offer of $348 but refused to sign the agreement presented by the Property Manager. They also refused to sign the agreement when presented with the second Cash for Keys offer of $695. Because of this, the PM will be moving forward with an eviction immediately. Evictions in Memphis typically take 2-3 months to complete.
Update 7/28/2022: The eviction court date for Unit 3038 has not been set but the Property Manager believes it will be set for the 2nd or 3rd week of August. We will know more details on the next steps once a judgement is received for this property. Once evictions have closed, this property will migrate over to the new PM, HomeRiver Group, who will handle any turn repairs as well as listing the unit on the market for rent.
Update 8/18/2022: The Property Management fees have been reduced to 5.7% due to a new National Partnership Agreement between Lofty and the Property Manager, HomeRiver Group.
Update 8/26/2022: Unit 3038: The tenant has vacated the property and the eviction is now closed. The Property Manager will be providing a scope and estimate for turn services and marketing the unit for a new tenant.
Update 9/2/2022: Unit 3038: We are currently waiting on the Property Manager to write up an estimate to turn the unit. The target rent for the unit is $750, a $55 (7.9%) increase from the previous lease.
Update 9/22/2022: Unit 3040: The tenant owes a balance of $764.50 for September's rent and late fees. The tenant has not been late before this. Based on the governance survey for rent delinquencies, the majority vote is to offer a payment plan (subject to PM discretion). Once the tenant has paid their balance off, you will receive rent back-pay for this unit as well as daily rental income for this unit moving forward.
Update 10/13/2022: Unit 3038: The Property Manager has completed the move out inspection and obtained estimates for turn services and flooring repairs. The refrigerator and the washing machine both leaked extensively and there was standing water on the floor when the PM completed the move out inspection. The flooring replacement is required to effectively market the unit for a new tenant. The flooring replacement scope includes demo and installation of new laminate vinyl plank and quarter round throughout the unit. The cost to replace the floors is $3,060. The turn service scope of work includes trash out, full paint (walls, doors, and trim), sheetrock repairs as needed throughout, replace blinds throughout, replace smoke detectors throughout, replace broken window, replace screens, and full cleaning. The PM received two estimates, one at $7982 and a second at $7000. The PM recommends the first estimate as the vendor is slow on work and can get started on the turn service immediately. The total cost for turn service and floor replacement is $11,042. Target rent is $750, a $55 increase from the previous lease. During the move out inspection, the PM also reported that the outside AC unit was missing. They obtained two estimates to replace the AC unit and complete a startup on the system. Estimate 1: $4400, includes new cage. Estimate 2: $3900, does not include cage. We are currently waiting on the PM's recommendation for which estimate they recommend as well as an insurance adjuster review. Because the repairs exceeds the current maintenance reserve of $6,750, Lofty will be providing the funds for the additional repairs. All future cash flow will go to Lofty until the funds are paid back, at which point, you will begin receiving daily rental income again.
