386 Tom Berry Rd

Mendenhall, MS 39114

$138,000D

4 bd · 2.0 ba · 912 sqft · Built 1988 · SingleFamily · Active · 156 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,044/mo
• Mortgage (P&I): −$724
• Tax + insurance: −$167
• HOA: −$0
• Vac / Maint / Mgmt: −$219
• Net cashflow: $-66/mo
• Annual: $-787/yr
• Cap rate: 5.72%
• Cash-on-cash: -2.04%
• DSCR: 0.91
• 1% rule: 0.76%
• Cash to close: $38,640

Investor read

• This is a 4-bed/2.0-bath single-family listed at $138k.
• At list price, monthly cash flow is $-66 ($-787/yr) — negative.
• To cash-flow at today's rent, offer at most $126k (8.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $104k (24.3% below list).
• It's been on market 156 days — a 12% lower offer ($121k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $104k (24.3% below list) — sets the bar for 1% rule.
• In year one you build about $15k of equity ($954 loan paydown + $14k appreciation (10.0% local appreciation)).
• Location reads 60/100 on livability (#220 in MS) — a middle-class / working-renter tenant base. Strengths: cost of living A+, crime A-; Watch: amenities F, commute F, employment F.
• Simpson County School District (rural): math 18% / reading 24% proficiency, ranked #90 of 130 in MS (top 69%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 76% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Mendenhall Elementary School (math 27% / reading 27%, grade F, #203 of 375 statewide, top 56%, 579 students, 100% FRL) — zoned schools average 100% FRL vs 76% district-wide (24 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 69 active listings in the ZIP; 3 units permitted in Simpson County in 2024 (0 in 5+ unit buildings).
• Simpson County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 5y ago 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 (10.0% appreciation + 3.0% rent growth), your $39k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 3.2% in Mendenhall — 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 156 days. Have you received any prior offers? Is the seller open to a 24% 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.
• 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.