1621 Spencer Dr

Tuscaloosa, AL 35405

$189,900C-

3 bd · 1.0 ba · 1,878 sqft · Built 1945 · Townhouse · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,756/mo
• Mortgage (P&I): −$996
• Tax + insurance: −$152
• HOA: −$0
• Vac / Maint / Mgmt: −$369
• Net cashflow: $239/mo
• Annual: $2,871/yr
• Cap rate: 7.80%
• Cash-on-cash: 5.40%
• DSCR: 1.24
• 1% rule: 0.92%
• Cash to close: $53,172

Investor read

• This is a 3-bed/1.0-bath townhouse listed at $190k.
• At list price, monthly cash flow is $239 ($3k/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 $176k (7.5% below list).
• It's been on market 16 days — a 2% lower offer ($187k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $176k (7.5% 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 77/100 on livability (#9 in AL, #2,909 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, health & safety A+, cost of living A; Watch: crime F, employment D-.
• Tuscaloosa County (suburban): math 21% / reading 45% proficiency, ranked #47 of 129 in AL (top 36%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Englewood Elementary School (math 19% / reading 48%, grade F, #318 of 627 statewide, top 51%, 512 students, 74% FRL); Hillcrest High School (math 18% / reading 26%, grade F, #142 of 305 statewide, top 51%, 1,356 students, 65% FRL) — zoned schools average 69% FRL vs 45% district-wide (24 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.4%/yr); 457 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 80% of comp listings sitting > 30 days — soft ceiling on asking rent; 622 units permitted in Tuscaloosa County in 2024 (69 in 5+ unit buildings).
• Tuscaloosa County population projected at +26% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major wind risk, 63% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.8% vs local median 3.4% in Tuscaloosa — 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.
• This rent runs 34% of the median local income ($62k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1945 — 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.
• 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.