4514/ 4516 Oakland Ave

Chattanooga, TN 37410

$585,000F

6 bd · 5.0 ba · 2,342 sqft · Built 2023 · MultiFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,597/mo
• Mortgage (P&I): −$3,068
• Tax + insurance: −$460
• HOA: −$0
• Vac / Maint / Mgmt: −$545
• Net cashflow: $-1,476/mo
• Annual: $-17,713/yr
• Cap rate: 3.27%
• Cash-on-cash: -10.81%
• DSCR: 0.52
• 1% rule: 0.44%
• Cash to close: $163,800

Investor read

• This is a 2 × 3.0-bed/2.5-bath units multifamily listed at $585k.
• At list price, monthly cash flow is $-1k ($-18k/yr) — negative. Per door: $-738/mo.
• To cash-flow at today's rent, offer at most $324k (44.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $260k (55.6% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $260k (55.6% below list) — sets the bar for 1% rule.
• In year one you build about $12k of equity ($4k loan paydown + $8k 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: 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 6% at this address vs 31% district-wide (-26 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.
• 4 sale attempts since 3y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• By year 4, paydown + projected appreciation supports a ~$42k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $2,597/mo this rent would consume 109% 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• 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 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.