40 Folly Field Rd Unit A113

Hilton Head Island, SC 29928

$267,000C-

1 bd · 1.0 ba · 540 sqft · Built 1980 · SingleFamily · Active · 108 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,284/mo
• Mortgage (P&I): −$1,400
• Tax + insurance: −$445
• HOA: −$0
• Vac / Maint / Mgmt: −$480
• Net cashflow: $-41/mo
• Annual: $-491/yr
• Cap rate: 6.11%
• Cash-on-cash: -0.66%
• DSCR: 0.97
• 1% rule: 0.86%
• Cash to close: $74,760

Investor read

• This is a 1-bed/1.0-bath single-family listed at $267k. Condition is rated good.
• At list price, monthly cash flow is $-41 ($-491/yr) — negative.
• To cash-flow at today's rent, offer at most $261k (2.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $228k (14.5% below list).
• It's been on market 108 days — a 9% lower offer ($243k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $228k (14.5% below list) — sets the bar for 1% rule.
• In year one you build about $10k of equity ($2k loan paydown + $9k appreciation (3.2% local appreciation)).
• Location reads 64/100 on livability (#157 in SC) — a middle-class / working-renter tenant base. Strengths: employment A+, crime A-; Watch: amenities F, commute F, cost of living F.
• Beaufort 01 (town): math 42% / reading 51% proficiency, ranked #17 of 80 in SC (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+3.2%/yr); 838 active listings in the ZIP; solid renter incomes; 1,824 units permitted in Beaufort County in 2024 (618 in 5+ unit buildings).
• Beaufort County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 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.
• At projected returns (3.2% appreciation + 3.2% rent growth), your $75k cash investment doubles in ~6 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 6.1% vs local median 3.0% in Hilton Head Island — 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?
• It's been on market 108 days. Have you received any prior offers? Is the seller open to a 14% concession, seller financing, or rate buy-down credit?
• 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.
• Schools are B-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?
• 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.