103 Summerset Ln

Huntsville, AL 35811

$262,000D-

3 bd · 1.0 ba · 1,221 sqft · Built 2012 · SingleFamily · Pending · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,631/mo
• Mortgage (P&I): −$1,374
• Tax + insurance: −$162
• HOA: −$0
• Vac / Maint / Mgmt: −$342
• Net cashflow: $-247/mo
• Annual: $-2,967/yr
• Cap rate: 5.16%
• Cash-on-cash: -4.05%
• DSCR: 0.82
• 1% rule: 0.62%
• Cash to close: $73,360

Investor read

• This is a 3-bed/1.0-bath single-family listed at $262k.
• At list price, monthly cash flow is $-247 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $218k (16.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $163k (37.8% below list).
• It's been on market 48 days — a 3% lower offer ($254k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $163k (37.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k 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.
• Madison County (rural): math 27% / reading 56% proficiency, ranked #19 of 129 in AL (top 15%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Central School (math 38% / reading 63%, grade D+, #114 of 627 statewide, top 19%, 657 students, 37% FRL); Riverton Intermediate School (math 25% / reading 63%, grade D, #42 of 257 statewide, top 17%, 813 students, 36% FRL); Madison County High School (math 32% / reading 42%, grade F, #39 of 305 statewide, top 13%, 483 students, 35% FRL).
• Market conditions: Rents rising fast (+6.8%/yr); 570 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.2% 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.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 48 days. Have you received any prior offers? Is the seller open to a 38% concession, seller financing, or rate buy-down credit?
• 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?
• 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.