June showed continued momentum towards achieving a performing property. Three highlights were tenant placement for Unit 2, rehab complete with tenant placement for Unit 3 and progress on insurance carrier transition.
Tenant screening was complete and aligned favorably to the increased market rent target nearing $1,400. Tenant has been screened, approved and complete. This includes favorable credit history, income verification and rental payment history. First month and security deposits have been supplied and a lease has been executed targeting a start date of July 1st.
Unit 3 rehab has been complete as planned. Opportunity for additional upgrades remains, however, with the lower rent rate target due to third floor unit with less open square footage we are seeking tenants as is. Tenant rate was targeting $1,250 via ad placement. Tenant has been screened, approved and complete. This includes favorable credit history, income verification and rental payment history. Tenant move in scheduled for July 1st at the $1,250 rental rate.
Property insurance transfer remains underway with a pending insurance inspection required onsite. Additional clarification was requested on some home features (upgraded electrical, roof age, etc) but nothing that appears to be a non starter. Inspection included some minor remediation needs. Some were already underway (debris removal, rodent services) and others need scheduling (soffit and gutter repair). Need to target July to keep insurance active.
Finally, the business model was updated using the improved rent income and is now showing greater than 8% Pro Forma Cap Rate and greater than 9% Purchase Cap Rate. These rates do include operating contingency expenses such as vacancy (8%), capital expenditures (5%) and repairs (5%).
Unit 3 in "Rent Ready" state
Tenant Update
- First floor: $1,100 collected (+$35 late fee)
- Second Floor: $1,295 collected
- Third floor: $0 vacant
- First floor: $1,100 collected (+$35 late fee)
- Second Floor: $1,295 collected
- Third floor: $0 vacant
Major Costs Summary
- Unit 3: Tenant security deposit return ($500)
- Unit 3: Rehab ($2,850)
Activities / Milestones
- Unit 2 Tenant Placed (Lease Executed, Deposit Secured)
- Unit 3 Rehab complete, Tenant Placed
- Unit 2 Tenant Placed (Lease Executed, Deposit Secured)
- Unit 3 Rehab complete, Tenant Placed
Next / Todo
- Finalize property insurance transfer
- Insurance inspection remediation
- Transfer mortgage bill pay to property management
- Note: We may retain facilitation until a larger reserve has been accumulated
- Finalize property insurance transfer
- Insurance inspection remediation
- Transfer mortgage bill pay to property management
- Note: We may retain facilitation until a larger reserve has been accumulated
Rehab Before and After (Unit 3)
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