173 River Birch Rd

Chelsea, AL 35043

$389,900D

4 bd · 3.0 ba · 2,424 sqft · Built 2005 · SingleFamily · Active · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,700/mo
• Mortgage (P&I): −$2,045
• Tax + insurance: −$300
• HOA: −$10
• Vac / Maint / Mgmt: −$567
• Net cashflow: $-222/mo
• Annual: $-2,659/yr
• Cap rate: 5.61%
• Cash-on-cash: -2.44%
• DSCR: 0.89
• 1% rule: 0.69%
• Cash to close: $109,172

Investor read

• This is a 4-bed/3.0-bath single-family listed at $390k.
• At list price, monthly cash flow is $-222 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $351k (10.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $270k (30.8% below list).
• It's been on market 70 days — a 6% lower offer ($367k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $270k (30.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#52 in AL) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Shelby County (suburban): math 30% / reading 58% proficiency, ranked #16 of 129 in AL (top 12%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 287 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 987 units permitted in Shelby County in 2024 (0 in 5+ unit buildings).
• Shelby County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 13y ago; this cycle's ask has dropped $35k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $280k; 39% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major wind risk, 41% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 4.1% in Chelsea — 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.

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?
• It's been on market 70 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.