3807 Colton Ln NE

Huntsville, AL 35811

$99,000B+

3 bd · 1.0 ba · 840 sqft · Built 1959 · SingleFamily · Pending · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,248/mo
• Mortgage (P&I): −$519
• Tax + insurance: −$78
• HOA: −$0
• Vac / Maint / Mgmt: −$262
• Net cashflow: $389/mo
• Annual: $4,668/yr
• Cap rate: 11.01%
• Cash-on-cash: 16.84%
• DSCR: 1.75
• 1% rule: 1.26%
• Cash to close: $27,720

Investor read

• This is a 3-bed/1.0-bath single-family listed at $99k.
• At list price, monthly cash flow is $389 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $99k).
• It's been on market 22 days — a 2% lower offer ($98k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $98k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $684 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#3 in AL, #1,082 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F.
• Huntsville City (urban): math 21% / reading 46% proficiency, ranked #48 of 129 in AL (top 37%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Martin Luther King Jr Elementary School (math 4% / reading 18%, grade F, #560 of 627 statewide, top 90%, 464 students, 89% FRL); Lee High School (math 2% / reading 17%, grade F, #252 of 305 statewide, top 84%, 840 students, 77% FRL) — zoned schools average 83% FRL vs 46% district-wide (36 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 10% at this address vs 34% district-wide (-23 pts) — the specific schools serving this property underperform the Huntsville City average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.8%/yr); 560 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 47% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 6.8% rent growth), your $28k cash investment doubles in ~6 years — after that, you're playing with house money.
• 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 11.0% vs local median 3.8% in Huntsville — 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 is only 16% of the median local income ($91k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• Built in 1959 — 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.
• 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.