406 Schad St

East Brewton, AL 36426

$149,000C-

3 bd · 1.0 ba · 1,404 sqft · Built 1958 · SingleFamily · Active · 46 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,485/mo
• Mortgage (P&I): −$781
• Tax + insurance: −$98
• HOA: −$0
• Vac / Maint / Mgmt: −$312
• Net cashflow: $294/mo
• Annual: $3,528/yr
• Cap rate: 8.66%
• Cash-on-cash: 8.46%
• DSCR: 1.38
• 1% rule: 1.00%
• Cash to close: $41,720

Investor read

• This is a 3-bed/1.0-bath single-family listed at $149k.
• At list price, monthly cash flow is $294 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $149k (0.3% below list).
• It's been on market 46 days — a 3% lower offer ($145k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $145k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#174 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A-, health & safety B+; Watch: amenities F, commute F, employment F.
• Escambia County (town): math 17% / reading 39% proficiency, ranked #83 of 129 in AL (top 64%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: W S Neal Elementary School (math 17% / reading 52%, grade F, #296 of 627 statewide, top 49%, 542 students, 72% FRL); W S Neal Middle School (math 10% / reading 45%, grade F, #144 of 257 statewide, top 57%, 416 students, 76% FRL); W S Neal High School (math 12% / reading 22%, grade F, #195 of 305 statewide, top 68%, 358 students, 70% FRL) — zoned schools at 73% FRL track the district average.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 88 active listings in the ZIP; 18 units permitted in Escambia County in 2024 (0 in 5+ unit buildings).
• Escambia County population projected to shrink 10% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts 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 $41k; list at $149k implies a 263% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 46 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1958 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.