3540 Adkisson Dr NW

Cleveland, TN 37312

$1,499,000C

None bd · 8.0 ba · 5,022 sqft · Built 1986 · MultiFamily · Active · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $16,019/mo
• Mortgage (P&I): −$7,861
• Tax + insurance: −$1,117
• HOA: −$0
• Vac / Maint / Mgmt: −$3,364
• Net cashflow: $3,677/mo
• Annual: $44,126/yr
• Cap rate: 9.24%
• Cash-on-cash: 10.51%
• DSCR: 1.47
• 1% rule: 1.07%
• Cash to close: $419,720

Investor read

• This is a 16 × 1-bed/1-bath units multifamily listed at $1.50M.
• At list price, monthly cash flow is $4k ($44k/yr) — positive. Per door: $230/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($16k rent vs $1.50M).
• It's been on market 30 days — a 2% lower offer ($1.48M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.48M (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $10k of loan paydown is wiped out by about $45k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#55 in TN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: employment D, crime F, amenities F.
• Cleveland (urban): math 23% / reading 28% proficiency, ranked #85 of 139 in TN (top 61%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Cleveland High (math 8% / reading 29%, grade F, #208 of 332 statewide, top 63%, 1,842 students, 0% FRL) — zoned schools average 0% FRL vs 53% district-wide (53 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents flat; 549 active listings in the ZIP; solid renter incomes; 768 units permitted in Bradley County in 2024 (0 in 5+ unit buildings).
• Bradley County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 9y ago; this cycle's ask has dropped $101k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $670k; list at $1.50M implies a 124% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.2% vs local median 3.5% in Cleveland — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• At $16,019/mo this rent would consume 246% of the median local household income ($78k/yr) (locally 908% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.