20777 Southwood St

Fairhope, AL 36532

$349,000D

4 bd · 3.0 ba · 2,059 sqft · Built 2008 · SingleFamily · Active · 44 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,452/mo
• Mortgage (P&I): −$1,830
• Tax + insurance: −$233
• HOA: −$23
• Vac / Maint / Mgmt: −$515
• Net cashflow: $-149/mo
• Annual: $-1,790/yr
• Cap rate: 5.78%
• Cash-on-cash: -1.83%
• DSCR: 0.92
• 1% rule: 0.70%
• Cash to close: $97,720

Investor read

• This is a 4-bed/3.0-bath single-family listed at $349k.
• At list price, monthly cash flow is $-149 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $323k (7.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $245k (29.7% below list).
• It's been on market 44 days — a 3% lower offer ($339k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $245k (29.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k 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: Fairhope East Elementary (math 53% / reading 78%, grade B+, #37 of 627 statewide, top 6%, 740 students, 30% 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-school proficiency averages 58% at this address vs 45% district-wide (+13 pts) — the actual schools serving this property are materially stronger than the Baldwin County average implies; a family-tenant draw the district grade alone would hide.
• Market conditions: Rents rising (+3.0%/yr); 633 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 75% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 2 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.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.8% vs local median 2.8% 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.
• This rent runs 33% of the median local income ($90k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 44 days. Have you received any prior offers? Is the seller open to a 30% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.