705 Circle Dr

Tullahoma, TN 37388

$159,900D+

2 bd · 1.0 ba · 870 sqft · Built 1946 · SingleFamily · Pending · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,321/mo
• Mortgage (P&I): −$839
• Tax + insurance: −$139
• HOA: −$0
• Vac / Maint / Mgmt: −$277
• Net cashflow: $66/mo
• Annual: $796/yr
• Cap rate: 6.79%
• Cash-on-cash: 1.78%
• DSCR: 1.08
• 1% rule: 0.83%
• Cash to close: $44,772

Investor read

• This is a 2-bed/1.0-bath single-family listed at $160k.
• At list price, monthly cash flow is $66 ($796/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 $132k (17.4% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $132k (17.4% 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 $5k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#109 in TN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety C-, crime D+, employment D+.
• Tullahoma (town): math 23% / reading 24% proficiency, ranked #101 of 139 in TN (top 73%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Bel Aire Elementary (math 17% / reading 27%, grade F, #601 of 952 statewide, top 66%, 370 students, 0% FRL); Tullahoma High School (math 15% / reading 32%, grade F, #145 of 332 statewide, top 44%, 1,137 students, 0% FRL) — zoned schools average 0% FRL vs 46% district-wide (46 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1946 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 326 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 389 units permitted in Coffee County in 2024 (6 in 5+ unit buildings).
• Coffee County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 14y 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.
• Current owner paid $88k; list at $160k implies a 81% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.8% vs local median 3.4% in Tullahoma — 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

• Built in 1946 — 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.
• 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?
• Crime grade is D 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?
• 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.
• 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.