5700 Colony Ln

Hoover, AL 35226

$257,000F

2 bd · 2.0 ba · 1,220 sqft · Built 2004 · Townhouse · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,883/mo
• Mortgage (P&I): −$1,348
• Tax + insurance: −$226
• HOA: −$29
• Vac / Maint / Mgmt: −$395
• Net cashflow: $-116/mo
• Annual: $-1,387/yr
• Cap rate: 5.75%
• Cash-on-cash: -1.93%
• DSCR: 0.91
• 1% rule: 0.73%
• Cash to close: $71,960

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $257k.
• At list price, monthly cash flow is $-116 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $237k (7.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $188k (26.7% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $188k (26.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#1 in AL, #630 nationally) — a professional / high-income tenant draw. Strengths: crime A+, employment A+, housing A+.
• Hoover City (urban): math 45% / reading 66% proficiency, ranked #8 of 129 in AL (top 6%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 19% free/reduced lunch — higher-income household profile.
• Zoned schools: Deer Valley Elementary School (math 62% / reading 76%, grade A-, #29 of 627 statewide, top 5%, 740 students, 13% FRL); Hoover High School (math 46% / reading 47%, grade D-, #17 of 305 statewide, top 5%, 2,841 students, 32% FRL) — zoned schools at 22% FRL track the district average.
• Market conditions: Rents rising (+3.7%/yr); 203 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals leasing fast (median 3d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 2,114 units permitted in Jefferson County in 2024 (556 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 10y 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.
• Climate carrying-cost: major wind risk, 41% 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.
• Cap rate 5.8% vs local median 2.4% in Hoover — 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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.
• 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.