Memphis Deal Analysis

[Eric Gabriel]

I need help with the following deal from a smaller turnkey provider in Memphis, TN 38117.  It looks good to me, but I'd like to know if the numbers look good for local Memphis investors/realtors. 

Deal Details:

Sale + Rehab = $69,000 (cash)

Comps = 64,000-94,000

http://www.zillow.com/homes/comps/42211062_zpid/

ARV = $92,000

Rent: $875-$900

I've been told by the mortgage broker, the preliminary appraisal, and the turnkey provider that there will be 25-30% equity which meets my financing/purchase requirements. I will get all my money back out minus $5,000 in closing costs. I also asked the turnkey provider if he will adjust the sales price lower if the ARV comes in lower than expected.

Advice and opinions are welcome for this out of state investor.  This will be my first of my goal of 50 units generating a net cashflow of $10,000-$15,000 in 5 years or less.  

scope of work/rehab:

converting to central HVAC (new), refinished hardwood floors through out, paint interior & exterior, new tile in kitchen & bathrooms, new tub stall, new faucets, new vanity, new water supply lines, new water shut off valves, new light fixtures, new outlets, new light switches, new countertops, refinished cabinets, new washer connection box & drain line, new dimensional roof (already installed), new front & rear doors, new closet doors. 

[Dean Letfus]

We own in that area and it rents strong. We have one on Willow as well always stays rented no problem. Just don't get starry eyed over the value. As my original mentor always said "Most homes you buy in Memphis are like tattoo's, you're gonna have them for life".

If you've got no money in the deal sounds great, buy it. You'll have no issues with renting it.