533 1st Ave NW Arab NW

Arab, AL 35016

$249,000C

3 bd · 2.0 ba · 2,821 sqft · Built 1900 · SingleFamily · Active · 57 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,200/mo
• Mortgage (P&I): −$1,306
• Tax + insurance: −$152
• HOA: −$0
• Vac / Maint / Mgmt: −$462
• Net cashflow: $280/mo
• Annual: $3,357/yr
• Cap rate: 7.64%
• Cash-on-cash: 4.82%
• DSCR: 1.21
• 1% rule: 0.88%
• Cash to close: $69,720

Investor read

• This is a 3-bed/2.0-bath single-family listed at $249k.
• At list price, monthly cash flow is $280 ($3k/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 $220k (11.6% below list).
• It's been on market 57 days — a 3% lower offer ($242k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $220k (11.6% 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 $7k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#149 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, crime D, amenities F.
• Arab City (rural): math 47% / reading 64% proficiency, ranked #9 of 129 in AL (top 7%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Arab Elementary School (math 59% / reading 73%, grade B+, #36 of 627 statewide, top 6%, 580 students, 52% FRL); Arab High School (math 37% / reading 47%, grade F, #28 of 305 statewide, top 10%, 779 students, 40% FRL) — zoned schools average 46% FRL vs 29% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 178 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 163 units permitted in Marshall County in 2024 (0 in 5+ unit buildings).
• 2 sale attempts since 12y ago; this cycle's ask has dropped $40k (14%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $50k; list at $249k implies a 398% gain — meaningful room to come down on a strong offer.
• Cap rate 7.6% vs local median 3.0% in Arab — 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 57 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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 D 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.