40 Walley Dr

Arab, AL 35016

$210,000D-

3 bd · 2.0 ba · 1,334 sqft · Built 2005 · SingleFamily · Active · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,418/mo
• Mortgage (P&I): −$1,101
• Tax + insurance: −$131
• HOA: −$0
• Vac / Maint / Mgmt: −$298
• Net cashflow: $-112/mo
• Annual: $-1,341/yr
• Cap rate: 5.65%
• Cash-on-cash: -2.28%
• DSCR: 0.90
• 1% rule: 0.68%
• Cash to close: $58,800

Investor read

• This is a 3-bed/2.0-bath single-family listed at $210k.
• At list price, monthly cash flow is $-112 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $190k (9.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $142k (32.5% below list).
• It's been on market 22 days — a 2% lower offer ($207k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $142k (32.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#149 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, crime D, amenities F.
• Marshall County (rural): math 14% / reading 38% proficiency, ranked #86 of 129 in AL (top 67%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Brindlee Mountain Elementary School (math 25% / reading 41%, grade F, #323 of 627 statewide, top 52%, 236 students, 46% FRL); Brindlee Mountain High School (math 7% / reading 27%, grade F, #195 of 305 statewide, top 68%, 553 students, 51% FRL).
• Market conditions: 178 active listings in the ZIP; 163 units permitted in Marshall County in 2024 (0 in 5+ unit buildings).
• 6 sale attempts since 4y 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 $150k; 40% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• 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.
• Cap rate 5.7% vs local median 3.0% in Arab — 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Crime grade is D 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.
• 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.