535 Mt Vernon Rd

Berea, KY 40403

$54,900B-

3 bd · 1.0 ba · 1,419 sqft · Built — · SingleFamily · Pending · 148 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,362/mo
• Mortgage (P&I): −$288
• Tax + insurance: −$92
• HOA: −$0
• Vac / Maint / Mgmt: −$286
• Net cashflow: $696/mo
• Annual: $8,351/yr
• Cap rate: 21.50%
• Cash-on-cash: 54.32%
• DSCR: 3.42
• 1% rule: 2.48%
• Cash to close: $15,372

Investor read

• This is a 3-bed/1.0-bath single-family listed at $55k.
• At list price, monthly cash flow is $696 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $55k).
• It's been on market 148 days — a 12% lower offer ($48k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $48k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $380 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#104 in KY, #4,354 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Madison County (town): math 31% / reading 47% proficiency, ranked #35 of 165 in KY (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 205 active listings in the ZIP; 453 units permitted in Madison County in 2024 (64 in 5+ unit buildings).
• Madison County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 7y ago; this cycle's ask has dropped $25k (31%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $15k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: moderate flood risk; major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 21.5% vs local median 3.0% in Berea — 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

• It's been on market 148 days. Have you received any prior offers? Is the seller open to a 12% 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.
• 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.