3425 Dennis Ave

Montgomery, AL 36108

$18,900C

2 bd · 1.0 ba · 720 sqft · Built 1954 · SingleFamily · Active · 247 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $800/mo
• Mortgage (P&I): −$99
• Tax + insurance: −$17
• HOA: −$0
• Vac / Maint / Mgmt: −$168
• Net cashflow: $515/mo
• Annual: $6,186/yr
• Cap rate: 39.02%
• Cash-on-cash: 116.89%
• DSCR: 6.20
• 1% rule: 4.23%
• Cash to close: $5,292

Investor read

• This is a 2-bed/1.0-bath single-family listed at $19k.
• At list price, monthly cash flow is $515 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($800 rent vs $19k).
• It's been on market 247 days — a 12% lower offer ($17k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $17k (12.0% below list) — sets the bar for market timing.
• In year one you build about $643 of equity ($131 loan paydown + $512 appreciation (2.7% local appreciation)).
• Location reads 65/100 on livability (#138 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D, crime F, amenities D-.
• Montgomery County (urban): math 9% / reading 31% proficiency, ranked #106 of 129 in AL (top 82%) — 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: Carver Elementary School (math 8% / reading 47%, grade F, #389 of 627 statewide, top 62%, 365 students, 77% FRL); Southlawn Middle School (math 0% / reading 15%, grade F, #241 of 257 statewide, top 95%, 544 students, 96% FRL); Carver Senior High School (math 2% / reading 12%, grade F, #265 of 305 statewide, top 89%, 902 students, 89% FRL) — zoned schools average 87% FRL vs 70% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1954 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 65 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 460 units permitted in Montgomery County in 2024 (37 in 5+ unit buildings).
• Montgomery County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 27y ago; this cycle's ask has dropped $1k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (2.7% appreciation + 3.0% rent growth), your $5k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 78% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 39.0% vs local median 6.0% in Montgomery — 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

• It's been on market 247 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1954 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.