Magnolia Plan

Madison, AL 35758

$1D-

4 bd · 3.5 ba · 2,670 sqft · Built — · SingleFamily · Active · 337 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,909/mo
• Mortgage (P&I): −$3,883
• Tax + insurance: −$1,234
• HOA: −$0
• Vac / Maint / Mgmt: −$611
• Net cashflow: $-2,819/mo
• Annual: $-33,829/yr
• Cap rate: 1.72%
• Cash-on-cash: -16.32%
• DSCR: 0.27
• 1% rule: 0.39%
• Cash to close: $207,342

Investor read

• This is a 4-bed/3.5-bath single-family listed at $1. Condition is rated excellent.
• At list price, monthly cash flow is $-3k ($-34k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $1).
• It's been on market 337 days — a 12% lower offer ($0) is reasonable based on typical stale-listing flexibility.
• In year one you build about $79k of equity ($5k loan paydown + $74k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#12 in AL, #3,280 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, schools A; Watch: amenities F, commute F.
• Madison City (suburban): math 51% / reading 71% proficiency, ranked #4 of 129 in AL (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Watch-outs: property tax is 1110758.5% of price.
• Market conditions: Rents rising (+1.6%/yr); 382 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); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$127k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 27% 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 1.7% vs local median 2.6% in Madison — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 337 days. Have you received any prior offers? Is the seller open to a 5% concession, seller financing, or rate buy-down credit?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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?
• 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.