5367 James Madison Hwy

Palmyra, VA 23055

$225,000D

2 bd · 1.0 ba · 1,008 sqft · Built 1936 · SingleFamily · Active · 114 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,213/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$142
• HOA: −$0
• Vac / Maint / Mgmt: −$255
• Net cashflow: $-364/mo
• Annual: $-4,373/yr
• Cap rate: 4.35%
• Cash-on-cash: -6.94%
• DSCR: 0.69
• 1% rule: 0.54%
• Cash to close: $63,000

Investor read

• This is a 2-bed/1.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-364 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $161k (28.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $121k (46.1% below list).
• It's been on market 114 days — a 9% lower offer ($205k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $121k (46.1% below list) — sets the bar for 1% rule.
• In year one you build about $5k of equity ($2k loan paydown + $4k appreciation (1.6% local appreciation)).
• Location reads 49/100 on livability (#556 in VA) — a working-class tenant base; expect higher turnover. Strengths: crime A, cost of living A, schools B+; Watch: amenities F, commute F, employment F.
• Fluvanna County Public School District (rural): math 61% / reading 71% proficiency, ranked #34 of 131 in VA (top 26%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1936 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 15 active listings in the ZIP; 138 units permitted in Fluvanna County in 2024 (6 in 5+ unit buildings).
• 2 sale attempts; this cycle's ask has dropped $75k (25%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $45k; list at $225k implies a 400% gain — meaningful room to come down on a strong offer.
• By year 7, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.3% vs local median 2.9% in Palmyra — 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 114 days. Have you received any prior offers? Is the seller open to a 46% concession, seller financing, or rate buy-down credit?
• Built in 1936 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.