4913 Cotton Row NW

Huntsville, AL 35816

$405,000C-

8 bd · 4.0 ba · 3,384 sqft · Built 1984 · MultiFamily · Active · 125 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,834/mo
• Mortgage (P&I): −$2,124
• Tax + insurance: −$463
• HOA: −$0
• Vac / Maint / Mgmt: −$805
• Net cashflow: $442/mo
• Annual: $5,300/yr
• Cap rate: 7.60%
• Cash-on-cash: 4.67%
• DSCR: 1.21
• 1% rule: 0.95%
• Cash to close: $113,400

Investor read

• This is a 4 × 2-bed/1.0-bath units multifamily listed at $405k.
• At list price, monthly cash flow is $442 ($5k/yr) — positive. Per door: $110/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 $383k (5.3% below list).
• It's been on market 125 days — a 12% lower offer ($356k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $356k (12.0% below list) — sets the bar for market timing.
• 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 82/100 on livability (#3 in AL, #1,082 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F.
• Huntsville City (urban): math 21% / reading 46% proficiency, ranked #48 of 129 in AL (top 37%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.7%/yr); 64 active listings in the ZIP; lower-income renter base — watch delinquency; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 8y 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.
• Current owner paid $133k; list at $405k implies a 205% 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 7.6% vs local median 3.8% in Huntsville — 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 $3,834/mo this rent would consume 114% of the median local household income ($40k/yr) (locally 1145% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 125 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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?
• 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.
• 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.