Help on Deal Analysis in Memphis

[Dean Suzuki]

HI,

I'm looking at a deal in Memphis, TN (SFR, 3bd, 2ba, 1335sqft) from a turnkey provider at $77900 and wanted to get the community's feedback.

It just got leased with a tenant at $995/month on a 2 year lease.

The turnkey provider made it rent-ready (new AC/Furnance, carpet, flooring, etc.) so no fix-up costs.

• Property taxes = $1490/year
• Insurance estimate = $700/year
• Property Management = 9%/month
• Estimate vacancy at 8% (1 month)
• Estimate maintenance at 10% (built in 1985)

income:  $995/month

monthly expenses:

• $80 = vacancy
• $124 = prop tax
• $58 = insurance
• $82 = prop mgmt.
• $100 = maintenance
• Total exp = $444/month

NOI = $551

With loan, 25% down, fixed 5% at 30 year

• $322 ; Mortgage payments

$229 = net cashflow

It looks like its in a "B" class area.  Property appraised at 89K.

Any feedback appreciated.

Thanks,
Dean