SULLIVAN Plan

Fairhope, AL 36532

$301,800C+

4 bd · 2.0 ba · 1,410 sqft · Built — · SingleFamily · Active · 102 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,381/mo
• Mortgage (P&I): −$1,593
• Tax + insurance: −$506
• HOA: −$0
• Vac / Maint / Mgmt: −$710
• Net cashflow: $571/mo
• Annual: $6,851/yr
• Cap rate: 8.55%
• Cash-on-cash: 8.05%
• DSCR: 1.36
• 1% rule: 1.11%
• Cash to close: $85,074

Investor read

• This is a 4-bed/2.0-bath single-family listed at $302k. Condition is rated good.
• At list price, monthly cash flow is $571 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $302k).
• It's been on market 102 days — a 9% lower offer ($275k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $275k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#15 in AL, #3,577 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: cost of living D, amenities F, commute F.
• Baldwin County (rural): math 33% / reading 57% proficiency, ranked #18 of 129 in AL (top 14%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: J Larry Newton School (math 45% / reading 70%, grade C+, #74 of 627 statewide, top 12%, 827 students, 50% FRL); Fairhope Middle School (math 54% / reading 75%, grade A-, #3 of 257 statewide, top 1%, 777 students, 33% FRL); Fairhope High School (math 43% / reading 46%, grade F, #22 of 305 statewide, top 8%, 1,629 students, 31% FRL) — zoned schools at 38% FRL track the district average.
• Market conditions: Rents rising (+3.0%/yr); 1028 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 3,883 units permitted in Baldwin County in 2024 (481 in 5+ unit buildings).
• Baldwin County population projected at +42% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 8.5% vs local median 2.9% in Fairhope — 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.
• At $3,381/mo this rent would consume 45% of the median local household income ($90k/yr) (locally 15% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 102 days. Have you received any prior offers? Is the seller open to a 9% 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 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?
• 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.