122 S 5th St

Spring Lake, NC 28390

$115,000C-

2 bd · 1.0 ba · 779 sqft · Built 1956 · Land · Active · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,116/mo
• Mortgage (P&I): −$603
• Tax + insurance: −$124
• HOA: −$0
• Vac / Maint / Mgmt: −$234
• Net cashflow: $155/mo
• Annual: $1,860/yr
• Cap rate: 7.91%
• Cash-on-cash: 5.78%
• DSCR: 1.26
• 1% rule: 0.97%
• Cash to close: $32,200

Investor read

• This is a 2-bed/1.0-bath land listed at $115k.
• At list price, monthly cash flow is $155 ($2k/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 $112k (2.9% below list).
• It's been on market 29 days — a 2% lower offer ($113k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $112k (2.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $795 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 59/100 on livability (#543 in NC) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+; Watch: crime F, amenities F, commute F.
• Cumberland County Schools (urban): math 32% / reading 41% proficiency, ranked #126 of 178 in NC (top 71%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Spring Lake Middle (math 15% / reading 31%, grade F, #406 of 475 statewide, top 86%, 512 students, 99% FRL); Pine Forest High (math 73% / reading 51%, grade B-, #184 of 535 statewide, top 37%, 1,572 students, 62% FRL) — zoned schools average 81% FRL vs 55% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.5%/yr); 348 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 1,125 units permitted in Cumberland County in 2024 (104 in 5+ unit buildings).
• 9 sale attempts since 3y 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.
• Cap rate 7.9% vs local median 4.5% in Spring Lake — 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 1956 — 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 D-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.
• 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.