3605/3609 Hodley Ave

Chattanooga, TN 37410

$465,000C-

12 bd · 9.0 ba · 1,800 sqft · Built 2026 · MultiFamily · Active · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,644/mo
• Mortgage (P&I): −$2,439
• Tax + insurance: −$775
• HOA: −$100
• Vac / Maint / Mgmt: −$975
• Net cashflow: $355/mo
• Annual: $4,263/yr
• Cap rate: 7.21%
• Cash-on-cash: 3.27%
• DSCR: 1.15
• 1% rule: 1.00%
• Cash to close: $130,200

Investor read

• This is a 3 × 2-bed/1.5-bath units multifamily listed at $465k. Condition is rated excellent.
• At list price, monthly cash flow is $355 ($4k/yr) — positive. Per door: $118/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $464k (0.1% below list).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $464k (0.1% below list) — sets the bar for 1% rule.
• In year one you build about $9k of equity ($3k loan paydown + $6k appreciation (1.3% local appreciation)).
• Location reads 78/100 on livability (#3 in TN, #2,582 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: employment D+, crime F.
• Hamilton County (urban): math 31% / reading 31% proficiency, ranked #42 of 139 in TN (top 30%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Hixson Elementary (math 24% / reading 20%, grade F, #601 of 952 statewide, top 66%, 402 students, 0% FRL); Orchard Knob Middle (math 5% / reading 6%, grade F, #291 of 333 statewide, top 88%, 334 students, 0% FRL) — zoned schools average 0% FRL vs 52% district-wide (52 pts lower); this property's tenant base skews higher-income than the district average.
• Zoned-school proficiency averages 14% at this address vs 31% district-wide (-17 pts) — the specific schools serving this property underperform the Hamilton County average; the district grade overstates school quality for this exact location.
• Market conditions: 61 active listings in the ZIP; lower-income renter base — watch delinquency; 2,133 units permitted in Hamilton County in 2024 (405 in 5+ unit buildings).
• Hamilton County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (1.3% appreciation + 3.0% rent growth), your $130k cash investment doubles in ~8 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• 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 7.2% vs local median 3.4% in Chattanooga — 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 $4,644/mo this rent would consume 194% of the median local household income ($29k/yr) (locally 406% 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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.