# 21 Ranked University of Memphis v. # 13 Ole Miss, October 17, 2015

Memphis 37 Ole Miss 24

Project Overview

3234 Canyon

Memphis, TN

Above Picture Copyrighted.

1060 Brookfield Rd Suite 100· Memphis, TN 38119

(O) 901-410-5452 · (F) 901-205-0629 · www.MemphisTurnkey.com· www.LittleRockTurnkey.com

August 3, 2016

To our current and prospective clients:

Enclosed in this packet you will find various pieces of information about our latest

offering in Memphis, TN including pictures, scope of work, hard cost and projected

revenue. With any of our projects, our goals are to provide a property that will maximize

our clients cash flow by performing a thorough renovation that will reduce maintenance

and vacancy. We do this by addressing in our renovation deferred maintenance items,

adding upgrades such as vinyl plank flooring and ceramic tile that are more durable and

adding in several upgrades to make the home standout above other competing rental

properties in the area. As landlords ourselves, we have learned that the best way to

maximize profits starts with the renovation and continues on with a strong management

team, which we have accomplished through our in house property management company.

If you have any questions, please feel free to reach out to us at 901-410-5452. We

would be happy to provide you with any amount of information we can to make you feel

comfortable with your investment decision.

Thanks,

Alex Craig

President

Memphis Turnkey Properties

Little Rock Turnkey Properties

1 Year Performance Projection

Memphis Property with $1,095 a MonthMemphis, TN 38134Retail Ready Renovation w/ Granite

Square Feet 1,836

Initial Market Value $ 106,900

Purchase Price $ 106,900

Downpayment $ 21,380

Loan Origination Fees $ 855

Depreciable Closing Costs $ 3,207

Other Closing Costs and Fixup $ 0

Initial Cash Invested $ 25,442

Cost per Square Foot $ 58

Monthly Rent per Square Foot $ 0.60

Income Monthly Annual

Gross Rent $ 1,095 $ 13,140

Vacancy Losses $ -76 $ -919

Operating Income $ 1,018 $ 12,220

Expenses Monthly Annual

Property Taxes $ -139 $ -1,678

Insurance $ -64 $ -769

Management Fees $ -81 $ -977

Leasing/Advertising Fees $ 0 $ 0

Association Fees $ 0 $ 0

Maintenance $ -65 $ -788

Other $ 0 $ 0

Operating Expenses $ -351 $ -4,214

Net Performance Monthly Annual

Net Operating Income $ 667 $ 8,006

- Mortgage Payments $ -452 $ -5,430

= Cash Flow $ 214 $ 2,575

+ Principal Reduction $ 107 $ 1,290

+ First-Year Appreciation $ 89 $ 1,069

= Gross Equity Income $ 411 $ 4,934

+ Tax Savings $ 0 $ 0

= GEI w/Tax Savings $ 411 $ 4,934

Mortgage Info First Second

Loan-to-Value Ratio 80% 0%

Loan Amount $ 85,520 $ 0

Monthly Payment $ 452.58 $ 0.00

Loan Type Amortizing Fixed

Term 30 Years

Interest Rate 4.875% 0.000%

Monthly PMI $ 0

Financial Indicators

Debt Coverage Ratio 1.47

Annual Gross Rent Multiplier 8

Monthly Gross Rent Multiplier 98

Capitalization Rate 7.5%

Cash on Cash Return 10%

Total Return on Investment 19%

Total ROI with Tax Savings 19%

Assumptions

Real Estate Appreciation Rate 1%

Vacancy Rate 7%

Management Fee 8%

Maintenance Percentage 6%

Comments

*Information is not guaranteed and investors should do their ownresearch, get professional advice and conduct due diligenceprior to investing.

This report was generated using the tools available at www.PropertyTracker.com | © 2004-2014

General Project Overview

Permits Pulled: Mechanical, Electrical and Plumbing

Start Date: TBD upon closing

Projected Finish Date: Estimated 28 days

General spec along with specific details custom to this house are enclosed in the scope of work.

The scope of work are repairs and upgrades that are designed to reduce maintenance and

vacancy. We feel turning the ½ bath into a full bath will add substantial value and rent. This will

be the most time consuming part of the rehab as we are going to have to jack hammer into the

concrete slab to tie into the existing DWV pipe coming off the lavatory. By doing this, we will

be pulling a permit and waiting on code to approve our work. Also, by expanding the ½ bath, we

are losing the hall cabinet where the H2O tank is located, thus moving it into the attic, which is a

standard install for Memphis, TN. Doing so will require electrical and mechanical permit to be

pulled. We foresee the rehab taking 28 days unless code inspectors slow us down as we have 3

separate permits to pull. The granite counter tops will maximize the rent value of the home and

make it more marketable than any other home in the area as very few homes have this nice

upgrade that tenants live. Level of renovation for this home is considered slightly above retail

ready for the area given the granite install at the estimated value of $105,000 to $115,000

Prior to buyer’s inspection, all utilities must be active. Water Cut off at the end of each day.

The Scope of Work while specific may change depending on unforeseen circumstances

discovered during the renovation.

Items such as laying and refinishing floors, ceramic tile install, painting, carpentry, landscaping

and other simple trades will be performed by in house crews. Electrical, plumbing and HVAC

work will be subbed out to our licensed vendors.

3234 Canyon Scope of Work

Roof

Clean roof and inspect. Roof appears to be 5 years’ old

New layover roof on shed

General

Replace Blinds as Necessary

Closet rods in all closets

Interior 3 color Paint expect on paneling

Interior door open and close smoothly

Kitchen and hall smoke detector along with kitchen Fire Extinguisher installed

Check insulation around all exterior doors

Poly hardwood floors / no sanding necessary

Plumbing Spec

Check all valves, P-traps and DWV pipe for leaks (replace supply lines, valves and p-traps as necessary).

Keep existing if they function properly

Check shower drains and area drains for proper installation and drainage

Inspect plumbing in crawl space and attic

Check toilet for property installation. Repair and replace as necessary

Replacement toilet if needed (HD # 340995)

Repair & replace exterior hose bibs as necessary

Check WMOB for property function and drain fall and venting

Check DWV system for plumbing back up (run all fixtures simultaneously for long period of time)

New Electric Hot Water Tank in attic (Keep AO Smith Current tank as it is 2015 and put in storage)

Electrical Spec

All outlets work and verified through tester

No open grounds/all new outlets and switches

Weather heads checked and replaced/repaired as necessary

All interior and exterior outlets/switches have ivory cover plates

Open junction boxes closed

All interior/exterior lights working

Proper Breaker Amps in box for reciprocating item

Inspect box

HVAC Spec

AC age 2013

New Furnace

Condensate line checked for clearance

Ducts not smashed

AC’s exterior lines insulated

AC cage

Exterior

Front yard weed control and removal of Nutgrass

Remove weeds growing in driveway

All windows open and lock, check for cracks

Back patio seems ok—pressure wash & seal

Entry gate to backyard replace

Security doors appear in good shape

Paint wood siding and trim. Shutters do not need black paint

Pressure wash walkway to the door & back patio

Repair soffit and siding where necessary

All exterior lights working

Cut back branches off House

Overgrowth along fence lines is ok as it provides privacy from neighbors

Mailbox Presentable

Remove above ground pool – see if dirt truck load of dirt can be delivered

Landscaping ($75)

Shrubs cut and pull weeds out of bushes

Thin out shrubs around light pole

No mulch necessary

Attic

Attic clean

Attic door & attic in general insulated well

Hallway

Small Spec Light (HD# 287958)

Den

Spec 44” fan

Floor ok

Carport

Spec light

Front Living Room

Spec Light (replaces only light in front room)

Pull carpet and keep hardwood

Remove door

Hall bath

Spec light

Keep green tile in shower surround, but demo green tile on walls and replace with drywall

Keep floor

New vanity (Kinghurst 30.5” – or 24” Glacier Bay Lancaster or other vanity with 3 drawers on right and

one in the center)

Spec shower head (HD# 725532)

Spec faucet (HD # 247368)

Kitchen & Area off Kitchen

Ceramic tile floor

Paint and cabinets with brush nickel hardware

New vent-a-hood

Accommodate smaller stove by adding another base cabinet

Spec faucet (HD # 709463)

2cm Granite Counter top

Spec white kitchen fan (HD# 754470)

Spec brush nickel light

Keep florescent light near pantry

Keep dishwasher if works

Small spec light over sink

Remove wave over sink

Enclosed patio

Paint match floor

Laundry

Ceramic Tile

Cabinets ok – replace hardware with brush nickel

Small spec light

Bed 1

Spec Light

Bed 2

Spec Light

Bed 3 (Addition)

Spec Fan

No paint panel

Ceiling ok

Carpet

Office (off Bed 3)

Carpet

No paint

Area in between office and bed 3

Small spec light

Master Bed

Spec 44” Fan

Master Bath

Spec light

New vanity and medicine cabinet

Turn ½ bath into full bath with permit pulled

Ceramic tile floor and shower. No tile on walls

Spec shower stall with Spec shower head (HD# 725532) and single handle valve

Spec faucet (HD # 247368)

Before Pictures: https://app.box.com/v/3234Canyon

After Pictures:

1060 Brookfield Rd

Memphis, TN 38119

901.620.6787 (O)

901.205.0629 (F)

Property Address: 3234 Canyon

Rent Data

Projected Rent: $1,025 to $1,095

Closest in House Comp: 1060 Bluefield at $1,095 a month

Area Overview

This is one of our strongest rental areas in all of Memphis as we have a large portfolio of homes in this

specific area 38128/38134. 38128/38134 is a large zip code that has untouchable areas, most of these are

West of Raleigh-Millington. 4 bedroom homes have historically received in the $1,055 to $1,095 range.

The low end is $1,095, but level of rehab here often times can push our properties to the high end. Rent

values are strongest East of Coleman over to Covington Pike. Crossing over Covington Pike rents go up,

but the zip code is 38134 where house values are about 10 to 15% more. Rents drop about 10 to 15%

when going West of Austin Peay and 20% when crossing South of Raleigh-Millington. The area has a

large presence of jobs supporting the auto sales and service industry. Approximately 1 miles to the East is

Bartlett, TN, a very desirable suburb of Memphis that offers a large area of choices to shop, dine and

entertain. Approximate drive time to Memphis Airport/Fed Ex is 20 minutes. Drive time downtown is

roughly 20 minutes. Drive to Cordova is 15 minutes.

Marketing Plan

Heavy focus online with high res pictures upon completion of the renovation and descriptive marketing.

Currently 75% of our leads come from online; the other 25% are general neighborhood drive through and

calling the for rent sign. We utilize inside customer service for call in and a property management hotline

# that rings our leasing agents.

Online Marketing Copy

Nicely renovated home with 4 bedrooms and 2 bathrooms. The outside of the home features nice

landscaping, a carport and an architectural shingle roof that not only looks great, but will may help reduce

your utility bill. Inside the home, hardwood floors make up the living room, hallway and 3 of the

bedrooms, while the 4th bedroom and bonus room feature carpet. Speaking of the kitchen, it has been

redone with ceramic tile, new countertops and the cabinets have been refurbished. Both bathrooms have

been updated, with the master bath having a ceramic tile shower with mosaic accent, single handle brush

nickel valve, energy efficient shower head and bathroom faucet. The backyard is fenced in with a deck

and enclosed patio. We have an A+ Rating with the BBB that is earned from taking care of the

individuals that live in our houses.

Area Tenant Profile through 2016 Only Data Collection (10)

Avg. Credit score: 639

Avg. Rent: $1,073

Avg. Income: $5,177

Data represents only tenant moves in for 2016 and may not be representative of the entire portfolio managed by CB Properties for this respective

zip code. Accumulate of past data is a work in progress.

“Better Properties, Better Areas, Better Investments”

All Memphis & Little Rock Turnkey Properties come with a maintenance guarantee of 90 days after the purchase date

listed on the closing settlement statement. If a tenant is not in place at time of closing, the 90 day warranty would begin

after tenant occupancy as listed by the 1st day on the tenant lease. Memphis Turnkey will also guarantee Heating and

Air system to be functioning properly for 180 days after the date on the closing settlement statement. This 90 day

warranty only includes maintenance issues within the 4 walls of the house. This warranty would exclude but not limited

to decks, fences, sewer lines, roofs, irrigation systems, retaining walls, free standing lighting fixtures in the yard and brick

structures such as patios.

Property inspections are not always successful in finding all the flaws with a property as these inspections are done

typically while the home is vacant. Such flaws that are present may only surface when a tenant is living in a house

cycling and running simultaneous items within the major systems of the house. The 90 day guarantee is designed to find

these flaws that were missed during renovation and property inspection. Depending on when the property was bought,

it may be impossible to test the entire heating and air system. For example, if a property was bought in January, it

would be impossible to test the AC for property function. The 180 day guarantee is designed to give our investor piece of

mind that the heating and air system is functioning properly.

Because the 90 day warranty only includes within the 4 walls of the house, it is strongly encouraged that an inspection of

the plumbing system by a licensed plumber to run a camera down the sewer line to test for blockage.

Certain items are excluded from the 90/180 day warranty. These items include:

Damage done due to tenant negligence

Vandalism/Theft

Acts of God

Force Majeure

Power Surges

Appliances not installed by Memphis Turnkey

Pilot lighting of Furnace

Vermin

Property Address:_______________________________________________________

Buyer:________________________________________________________________

Seller:_________________________________________________________________

Date:__________________________________________________________________

Memphis Turnkey Properties · 1060 Brookfield Rd. Suite 100 · Memphis, TN 38119

(O) 901-410-5452 · (F) 901-205-0629 · www.MemphisTurnkey.com

Dear Investor,

As you know, we are constantly developing new techniques and ideas for maximizing the

returns on our properties. One of our largest expenses is insurance, and thus we have

worked with a local broker, Insight Risk Management, to put together a program that will

afford all of our clients the best possible coverage at the most competitive rates. By

aggregating all of our insurance purchasing with a single company, we have been able to

leverage the volume to get better pricing than can be achieved by any one investor.

This program is tailored specifically for our rental properties and has the following

coverages:

1. Replacement cost coverage so that the insurance company is obligated to replace

the property, subject to the deductible, without any allowance for depreciation or

similar limitations

2. Limits of $90 a square foot, which should be appropriate under most

circumstances, though you should review your own home to ensure this is

sufficient

3. Lost rents of $12,000 a year should a large loss occur

4. $1,000 deductible without any other charges such as depreciation or coinsurance

5. $1,000,000 of general liability coverage per location, thus providing separate

limits for each house

6. Standard general liability wording without any exclusions for assault, battery,

sexual abuse or animals

7. No coverage for contents, so you are not paying for any contents that you do not

own

8. 60 day vacancy clause

9. “A” rated carrier

A typical house costs about 33% less on this program than with other carriers, and no

individual underwriting is required.

If you would like to get a quote for coverage, please contact the administrator of the

program, Mandy Roberts, at mroberts@irmllc.com or +1 901 202 8676 or you may

contact Pat Ashford at pashford@irmllc.com or +1 901 761 3100. They would be happy

to provide you with quotes or answer any other questions that you may have.

We have had great success with this program and hope you will take advantage of it.

Sincerely

Alex Craig

President

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