5613 Cairo Ave

Birmingham, AL 35228

$33,500B+

2 bd · 1.0 ba · 1,022 sqft · Built 1952 · SingleFamily · Pending · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,062/mo
• Mortgage (P&I): −$176
• Tax + insurance: −$90
• HOA: −$0
• Vac / Maint / Mgmt: −$223
• Net cashflow: $573/mo
• Annual: $6,877/yr
• Cap rate: 26.82%
• Cash-on-cash: 73.32%
• DSCR: 4.26
• 1% rule: 3.17%
• Cash to close: $9,380

Investor read

• This is a 2-bed/1.0-bath single-family listed at $34k.
• At list price, monthly cash flow is $573 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $34k).
• It's been on market 70 days — a 6% lower offer ($31k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $31k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $232 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#78 in AL) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities C-, crime F, employment F.
• Birmingham City (urban): math 4% / reading 20% proficiency, ranked #116 of 129 in AL (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 82% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Oxmoor K5 (math 2% / reading 12%, grade F, #601 of 627 statewide, top 98%, 478 students, 85% FRL); Wenonah High School (math 2% / reading 2%, grade F, #291 of 305 statewide, top 100%, 656 students, 85% FRL) — zoned schools at 85% FRL track the district average.
• Watch-outs: property tax is 2.7% of price; built in 1952 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-1.5%/yr); 87 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,114 units permitted in Jefferson County in 2024 (556 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $23k; 46% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $9k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 26.8% vs local median 6.2% in Birmingham — 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 70 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1952 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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 F 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?
• 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.