Lofty 3850 W 17th St

Property originally listed for sale on the marketplace by Red Door Renovations LLC.

Click here to learn more about how third parties sell their properties on the Lofty Marketplace.

The Operating Reserve balance ($1,913) is below half full.

Once the property is rented out again, owners voted to apply 100% of cash flow to replenish the reserve until it is half full ($3,675), and then apply 50% of cash flow until the reserve is full ($7,350).

Based on the projected monthly cash flow ($1,234.99) once the Property Management leasing fees are paid, it will take ~1.4 months for the reserve to be half full and ~6 additional months to go from half full to full.

The Operating Reserve balance is part of the property value. As a result, the property will increase in value as the Operating Reserve is replenished.

2-Unit property (Duplex) located in Cleveland, Ohio.

Details

• Two 2 bedroom, 1 bathroom units
• Fully renovated kitchens, fully renovated bathrooms, new electrical panels, new furnaces and hot water tanks, new paint in all interior rooms, new LVP flooring, and painted hardwood floors.
• Off-street parking and full basement
• Separately metered gas and electric
• Conveniently located near shopping and freeway access
• Comes with a 1 year home warranty

Property Management and Insurance

• Managed by Northpoint Asset Management
• Insurance Policy through Obie Insurance

Occupancy Status

• Upper unit
  • 1 year lease (07/01/2023 - 06/30/2024)
  • $800/month
  • Lease Agreement
• Lower unit
  • 1 year lease (08/01/2023 - 07/31/2024)
  • $850/month
  • $850 Security Deposit
  • Lease Agreement

Location Data

• 1.5/5 Neighborhood Rating on Roofstock
• "B-" Rating for Zip Code on Niche

Due Diligence Documents

• HouseCanary Property Valuation Report (HouseCanary valuations are less accurate for 2+ Unit properties, like this property)
• Inspection Report
• Additional Sales Comps
• Purchase Agreement
• Operating Agreement
• Closing Statement
• View All Documents

Property Updates

Property Update (08/21/2023):

• Owners voted to change Property Managers from Northpoint Asset Management to HomeRiver Group Institutional Services.

Property Update (08/12/2023):

• The tenant paid first month's rent and took possession of the unit on 8/5.
• The tenant signed a 1 year lease at $850.
• The lease term is 08/01/2023 - 07/31/2024.
• The tenant paid a deposit of $850.
• The leasing fee is $425 and will be deducted from August's rent.
• The lease agreement is currently being redacted and will be uploaded to the property's Dropbox folder once the redaction is complete.

Property Update (07/22/2023):

• Upper Unit:
• The plumbing repairs from the 7/5 service call involved addressing a spillage issue at the draft hood of the Hot Water Tank.
• A section of the venting was removed and cleaned to ensure proper ventilation.
• A 2X2 foot access hole was created to remove a cabinet from the wall, allowing access to the shut-off valves inside.
• A single-handle Delta cartridge was replaced, and a new handle was installed.
• No leaks were found, and the PM confirmed the overall condition is satisfactory.
• The total cost of repairs is $806.65 ($733.32 + 10% PM markup).
• The PM confirmed that this concludes all repairs for this Unit.
• Per the previous update, the new tenant moved in on 7/5.
• Lower Unit:
• The listing had 16 leads, 2 prequalified, and 4 showings in the last 14 days.
• The PM offered a 48-hour special of reduced rent at $850 for the showings from the weekend, and has approved an application.
• The tenant will sign a 1 year lease at $850. The target move in date is 8/1.
• The PM is waiting for the tenant to execute the lease.
• The PM received estimates of $600 and $750 from two vendors to complete the final paint repairs for the unit.
• Both vendors are swamped at the moment and the PM will award work to the vendor who can complete the job the quickest, in order for the unit to be ready for move-in on 8/1.

Property Update (07/08/2023):

• Upper Unit:
• The tenant moved in on 7/5 at $800/month.
• The tenant scheduled for the gas utilities to be connected and the gas company tagged the hot water tank.
• The PM had a vendor assess the HWT and they were able to repair a drip on the hot water tank for less than $200.
• The PM completed a QC inspection prior to the move-in and found that the shower & tub did not have running water.
• The plumber was re-called and they advised that a new shower cartridge/valve may be needed. The repair was completed, but it did not resolve the issue of no running water for the shower & tub.
• The plumber advised that they would need to open the walls to locate where the line is disconnected to complete the repairs.
• Due to the scope of work, the repairs could not be completed before the tenant move in on 7/1. As a result, the move-in was rescheduled for 7/5.
• The plumber returned on 7/5 and found that the line was disconnected between the kitchen and the shower. The repair was completed and the shower now has running water.
• The PM advised that the additional cost for plumbing repairs is around $800. However, the PM is working on disputing the charges or getting a discount with the vendor due to the miscommunication between the office and field at the plumbing company.
• The total for the drain repair is $1,100 ($1,000 + 10% PM markup), instead of the original approved quote of $2,321.35 ($2,110.03 + 10% PM markup).
• Repair Invoice
• The PM gave the tenant a credit of 4-days of rent (7/1 - 7/4) due to the move-in delay.
• The Operating Reserve balance after the repairs is $1,414.44. This does not include the plumbing repairs of around $800 that the PM is currently disputing.
• Lease Agreement
• Lower Unit:
• The PM is scheduling a vendor to completed the drywall repair now that the plumbing repairs for the Upstairs unit have been resolved.
• The PM had showings scheduled last weekend, which were rescheduled for this weekend due to the Fourth of July Holiday.
• The PM has 4 confirmed showings for today.
• The PM is marketing the unit for rent at $900, a $50 increase from the previous lease of $850, because the interior finishes in the Lower unit are superior to those in the Upper unit.
• The PM will reduce the rent to $850 if no applications are received over the weekend.

Property Update (06/27/2023):

• Upper Unit: The tenant did not connect the utilities in their name in time and changed their move-in date to 7/1.
• The new lease term will be 07/01/2023 - 06/30/2024 at $800/month.
• The leasing fee is $400 and will be deducted from July's rent.
• The Lease Agreement is currently being redacted and will be uploaded to the property's Dropbox folder once the redaction is complete.

Property Update (06/19/2023):

• Upper Unit: The PM received the deposit of $800 from the applicant and they are scheduled to move in on 6/26.
• The new lease is for 1 year at $800/month.
• The PM has sent the lease to the tenant and is waiting for them to execute the lease.
• The leasing fee is $400 and will be deducted from first month's rent.
• The tenant will pay first month's rent on 6/26 and June's prorated rent will be due July 1st.
• Lower Unit: The PM has starting working on leads for the lower unit by reaching out to all the prospects from the listing for the upper unit.
• The PM had showings scheduled throughout the week from the be-backs.
• The PM deactivated the listing for the upper unit and reposted the listing for the lower unit yesterday. The system can take up to 48 hours to repost the listing for the unit.
• The total cost for the make ready cleaning is $330.
• Repair Invoice
• The cost for the lock change is $291.06 ($264.60 + 10% PM markup).
• Repair Invoice
• The remaining repair for the make ready is the drywall repair in the ceiling by the tub in the upstairs bathroom.
• The PM estimates the drywall repair to be less than $200.
• The previous tenant had a deposit of $800 and the total deposit will be applied towards the repairs.

Property Update (06/19/2023):

• The Governance Voting results are back for the owner-proposed governance vote to list this property for sale on the open market.
• The winning decision based on a Supermajority of 60%+ is: Do not sell the property
• Governance vote results:
• Do not sell the property
• 1,494/1,958 token votes (76%)
• Sell the property
• 464/1,958 token votes (24%)

Property Update (06/17/2023):

• Upper Unit: The listing had 10 leads, 0 prequalified, and 0 showings in the last 7 days.
• The rental application from last week has been approved with a move in date of 6/26.
• The lease will be for 12 months at $800.
• The PM received an additional estimate from another plumber to install a new drain for the bathtub and toilet for $2,321.35 ($2,110.32 + 10% markup).
• Repair Estimate
• The PM recommends to approve this estimate as they have experience with this vendor doing quality work on other properties previously.
• They can also start on the job on Monday, 6/19 and complete the work in 2 days, in time for the new move in on 6/26.
• Lower Unit: The PM completed a walk through and advised that the turn services require a deep cleaning and drywall repairs caused by the drain repairs.
• The PM advised that the housekeeper has completed the cleaning and is waiting on their invoice.
• The PM estimates the drywall work and housekeeping should come in around $500.
• The property has been listed for rent at $850, a $0 change from the previous lease of $850.
• The PM is hosting an open rental showing this weekend and has 6 confirmed viewings.
• The PM advised that the unit may lease quickly because the unit has new LVP flooring.
• Property Listing

Property Update (06/15/2023):

• Governance Vote for 3850 W 17th St:
• An Owner in this property has proposed a Governance Vote to sell 3850 W 17th St on the open market.
• Their exact reasoning is below:
• I am writing to propose a motion for selling the property located at 3850 W 17th St, Cleveland, Ohio 44109, within the Lofty platform. After careful consideration of the property's current status and evaluating the financial projections, I firmly believe that selling the property is the most prudent course of action for maximizing the return on our investment.
• I would like to bring to your attention the following key details concerning the property:
• Operating Reserve Balance: The Operating Reserve balance currently stands at $3,548, which is below half full. This indicates a potential risk in maintaining sufficient reserves to cover unforeseen expenses.
• Cash Flow Allocation: Owners have voted to apply 100% of cash flow to replenish the reserve until it reaches half full, estimated at $3,675. Subsequently, 50% of cash flow will be directed towards the reserve until it reaches full capacity ($7,350).
• Projected Cash Flow: Based on the projected monthly cash flow of $1,290.05, assuming the Upper Unit is rented for $850 and the Lower Unit is rented for $850, it will take 6 to 10 months at best to reach full capacity.
• Considering the current occupancy status of the property, it is evident that the projected cash flow will not be generated for at least 6 months. The Upper Unit is vacant, and the Lower Unit tenant is delinquent with a balance of $5,100. While eviction proceedings have resumed, the tenant has indicated their intention to vacate on 6/5. With the uncertain timeframe for finding new tenants and the existing outstanding balance, it is clear that it would be more advantageous to liquidate our investment and allocate the funds to more profitable ventures.
• The Trade volume for the last 4 weeks has been $120. Which would mean that in order to make a 20,000-investment liquid we would have to wait around 166 months.
• Given these circumstances, I kindly request your assistance in initiating the necessary steps to facilitate the sale of the property located at 3850 W 17th St, Cleveland, Ohio 44109. I understand that there may be associated costs or fees, and I am willing to cooperate to ensure a smooth and efficient transition.
• Owners will have the opportunity to vote to sell the property. If owners vote to sell the property, multiple local brokers will be consulted to provide their suggested listing price.
• Owners will then have the opportunity to vote on the listing price of the property. There will also be an option at this time to not sell the property, based on newly available information about the suggested listing price.
• The winning vote will be determined by a Supermajority of 60%+ and the results will be sent to all owners on Monday, June 19th once the voting period ends.

Property Update (06/11/2023):

• Upper Unit: The listing had 19 leads, 4 pre-qualified, and 4 showings in the last 7 days at $800/month.
• All 4 of the prospects did not apply for the house because they had concerns with their children getting hurt from the heating system, as it is easily accessible.
• The PM is looking into ways to address this concern in order to place a tenant faster.
• The PM had another tour during the week and the prospect submitted an application.
• The PM is waiting on the prospect to verify their income.
• If approved, the lease will be for 1 year at $800, and the tenant can move in right away after the plumbing repairs are completed.
• Property Listing
• The PM had one plumber open the ceiling from the 1st floor unit to investigate the bathtub drain issue.
• The cost for the service call was $247.50 ($225 + 10% PM markup).
• The repair estimate involves removing the toilet and vanity, cutting open the wall to adjust the vent and toilet bend, and removing a portion of the vent.
• Further work involves re-piping the drain lines of the tub, shower, toilet, and vanity, all connecting to the main stack.
• After the plumbing work, the toilet and vanity will be re-installed.
• The total estimate for the repairs is $4,287 and does not cover any drywall repairs.
• The PM is working on getting additional estimates from the plumber and their General Contractor.
• Plumbing Photos
• Lower Unit: The PM confirmed that the tenant moved out on 6/5.
• The PM advised that the property was left in fairly good condition.
• The PM is soliciting turn estimates and expects to have them ready by 6/15.
• The tenant had a Security Deposit of $800 which will be applied towards the turn repairs.

Property Update (06/03/2023):

• Upper Unit: The listing had 10 leads, 2 pre-qualified, and 0 showings in the last 7 days.
• The PM had an open rental showing on 6/2 with 12 confirmed showings, and will send an update on the outcome early next week.
• The PM does not recommend to lower the rent from $800 as the price is competitive for a 3 bedroom unit.
• View Property Listing
• The PM had one plumber asses the unit and they suspect that the tub does not have a drain.
• However, the plumber will need to open the ceiling from Unit 1 to confirm if this is the case.
• The plumber gave a verbal estimate of $1,500 if they have to install an entirely new drain line for the tub.
• The PM has 2 other plumbers scheduled to visit the property next week after the tenant in the lower unit moves out.
• Lower Unit: The tenant has promised to move out on 6/5.
• The PM has an appointment with the tenant on 6/5 to collect keys for the unit.
• The PM will complete the move out inspection at that time and will solicit vendors for turn estimates.
• The tenant has a Security Deposit of $800 which will be applied towards the turn repairs.

Property Update (05/26/2023):

• The Property Management company managing this property, Northpoint Asset Management, recently assigned a new Property Management team to all Lofty properties due to the delays in turning the properties and leasing up vacant units. All properties are now under institutional services, instead of retail services.
• Institutional services includes a weekly and monthly financial reporting cadence, additional tools to streamline turn and repair processes, centralized SOPs with a local presence, additional local vendor contacts, and a specialized team in both Cleveland and Akron focused on leasing properties more efficiently.
• Upper Unit: The listing had 15 leads, 3 pre-qualified, and 1 showing in the last 7 days.
• The target rent has been lowered to $800 due to no applications being received from last weekend.
• View Property Listing
• One plumber has been by the property to assess the plumbing issue.
• The PM is waiting for the summary and estimate from the plumber.
• The PM advised that the plumbing vendor's estimates are usually on the high end.
• The PM is still working on getting additional vendors to assess the plumbing issue for comparative analysis.
• It will also be easier for the vendors to assess the plumbing issue once the Downstairs tenant moves out.
• The PM will continue to show the unit in the meantime.
• In addition, the PM is awaiting cost estimates for addressing the mildew issue in the basement.
• Lower Unit: The tenant changed their move out date to 6/5.
• The PM has an appointment with the tenant on 6/5 to collect keys for the unit.
• The PM will complete the move out inspection at that time and will solicit vendors for turn estimates.
• The tenant has a Security Deposit of $800 which will be applied towards the turn repairs.

Property Update (05/09/2023):

• Upper Unit: The listing had 15 leads, 3 pre-qualified, and 6 showings scheduled in the last 7 days.
• 5 of the 6 confirmed showings did not show up and the other prospect rescheduled their showing for next week.
• The PM also has 2 additional showings scheduled for this weekend.
• The PM will reduce the rent from $850 to $800 on 5/22 if the weekend's viewings do not show or if no applications are received.
• The PM tested the bathtub and found that running water was not working, even though it was working for the kitchen and bathroom sinks.
• The PM attempted to locate a shut-off valve for the tub and the rest of the unit without success.
• The PM contacted their plumbing service providers to expedite the assessment of the plumbing issue.
• In addition, the PM is awaiting cost estimates for addressing the mildew issue in the basement.
• Lower Unit: The tenant owes a balance of $5,100.
• The PM informed that the tenant that they have resumed eviction.
• The tenant responded to the PM and advised that they will vacate on 6/1.
• The PM will continue the eviction process due to the tenant changing their move out date twice already, and the tenant stalling to move out amicably.
• The eviction case can be dismissed if the tenant vacates before the hearing date, reducing the eviction expenses.

Property Update (05/09/2023):

• Upper Unit: The PM is waiting on an estimate from a vendor to clean up the mildew in the basement.
• There is no visible mold or mildew in the first floor unit or the second floor unit.
• The PM advised that it is not necessary to open up walls or further investigate since there's no signs of mold or mildew in the units.
• The unit is ready for move in and the PM will continue to market the unit for rent.
• The PM has a showing scheduled for 5/11.
• The PM is also waiting on 4 additional leads to confirm a showing date.
• The PM will reassess pricing after the showings on Thursday.
• The target is rent $850, a $50 increase from the previous lease of $800.
• View Property Listing

Property Update (05/06/2023):

• Lower Unit: The tenant has informed the PM that they do not want to move, but they also do not want to pay rent while there's mold in the basement of the property.
• The PM is working to find new housing for the tenant, ideally at another Lofty property, and the tenant has been cooperative so far.
• The PM recommends to vacate the non-paying tenant rather than paying the fees for Cash for Keys or eviction, and that even after the mold is remediated, the tenant will still not likely pay.
• Upper Unit: The PM confirmed that there is visible mold in the basement, and will be following up with the next steps.
• There is no visible mold in the first floor unit or the second floor unit.
• While preparing this unit for showing, the PM found that one of the tubs is not working.
• The PM is having a plumber assess the issue and has scheduled them to visit the property next week.
• The unit is still being listed for rent while the plumbing issue is being addressed.
• The listing has had 15 leads, 3 qualified, and 1 showing so far.
• The target is rent $850, a $50 increase from the previous lease of $800.

Property Update (04/26/2023):

• Lower Unit: The tenant has informed the PM that they are no longer moving because their new housing arrangements fell through.
• Given the tenant's previous claims of mold and health issues, the PM wants to try and build rapport with the tenant and assist them with finding new housing that is not with Lofty.
• The PM does not recommend Cash for Keys since the tenant has accepted and rescinded twice.
• The PM recommends eviction as the next step if the tenant does not want to cooperate and move out amicably.
• Upper Unit: The PM has concerns with leasing the unit with the open mold issues reported by the downstairs tenant.
• The PM has contacted two vendors to scope the walls to confirm if there is a mold hazard at the property before re-listing it for rent.
• The PM estimates the scope to be around $250-$300 and will have a confirmation on the mold by Friday, 4/28.

Property Update (04/17/2023):

• Lower Unit: The tenant has now changed their move out date to 4/30.
• They stated that they do not have enough time to look for a new place and schedule movers.
• Because the tenant did not move out by 4/15, the Cash for Keys offer has been reduced from $1,000 to $500.

Property Update (03/29/2023):

• Lower Unit: The delinquent tenant has accepted a Cash for Keys offer of $1,000 with a move-out date of 4/15.

Property Update (03/22/2023):

• The PM received a notice from the City regarding mold for the property.
• The PM believes that the Downstairs tenant reported the issue to the city, but at the same time refused entry for the vendors when they arrived to assess the complaint.
• The PM is enlisting assistance with legal to handle the mold complaint and eviction for the tenant.

Property Update (03/20/2023):

• Upstairs Unit: The vendor painted the entire unit, repaired patches in the ceiling, and cleaned the walls.
• The total cost of repair is $1,838.
• The Operating Reserve balance after the repairs is $3,813.17.
• Repair Invoice
• This unit will be marketed for $850/month, a $50 increase from the previous lease.
• Downstairs Unit: The PM has been reaching out to the tenant to collect rent for December-March.
• The tenant owes a balance of $3,400 as of 3/17 for December-March rent.
• The tenant has promised to pay and said that they were having issues with paying rent through the portal in previous months.
• The tenant is now complaining about mold in the unit and is refusing to pay rent until the repairs are completed.
• The PM send a vendor to assess the repair complaint, but the tenant did not allow the vendors in to get an estimate for repairs.
• The PM has advised the tenant that they will have to move if they don't pay rent.
• The PM recommends to start eviction on this tenant.
• The PM advised that the tenant is not a good candidate for Cash for Keys because they have not been consistent with their reasons for not paying rent.

Property Update (01/30/2023):

• Lower Unit: The tenant has failed to make their rent payment and owes a balance of $1,700 for December and January rent.
• The PM reached out to tenant and they informed the PM that they are having issues with the payment portal.
• The PM has confirmed that the tenant is registered on the payment portal and has made multiple attempts to collect the rent.
• The PM will work with the tenant to pay down their balance
• Owners will continue to receive daily rent from the Vacancy Reserve for this unit.
• Upper Unit: The Property Manager is currently waiting on multiple vendors to provide quotes to handle the turn repairs before the unit can be marketed for rent.
• Owners will continue to receive daily rent from the Vacancy Reserve for this unit.

Property Update (12/21/2022):

• New property manager, Northpoint Asset Management, has taken over turn services and marketing for the property
• Exterior of the property has been inspected and trash violations have been addressed
• Leak and small patch of mold need to be repaired
• Property manager is working with vendors to get an estimate for repairs, change the locks, and provide a target rent for the property

Property Update (12/02/2022):

• This property has migrated to the new Property Manager, Northpoint Asset Management, based on the previous governance vote.
• The Property Management fee has been reduced from 8% to 7% of Annual Gross Rents and investors will see an increase in their daily rental income starting today.

Property Update (09/28/2022):

• Tenant of the upstairs unit moved out without notice and left trash on the exterior of the property
• Property was cited with violations by the city
• Property manager is working on an estimate for repairs and targeting a rent of $900-$1,000 for the unit, a 12.5%-25% increase from the previous lease
• The unit is expected to be listed by 10/15 and daily rental income will continue to be received through the vacancy reserve