125 Houston St

Lexington, VA 24450

$217,000F

2 bd · 1.0 ba · 920 sqft · Built 1941 · SingleFamily · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,531/mo
• Mortgage (P&I): −$1,138
• Tax + insurance: −$236
• HOA: −$0
• Vac / Maint / Mgmt: −$322
• Net cashflow: $-164/mo
• Annual: $-1,974/yr
• Cap rate: 5.38%
• Cash-on-cash: -3.25%
• DSCR: 0.86
• 1% rule: 0.71%
• Cash to close: $60,760

Investor read

• This is a 2-bed/1.0-bath single-family listed at $217k.
• At list price, monthly cash flow is $-164 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $188k (13.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $153k (29.4% below list).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $153k (29.4% 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 80/100 on livability (#62 in VA, #1,813 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, health & safety A+; Watch: commute F.
• Lexington City Public School District (town): math 82% / reading 88% proficiency, ranked #4 of 131 in VA (top 3%) — strong family-tenant draw, lease renewals of 3-5y typical; only 18% free/reduced lunch — higher-income household profile.
• Zoned schools: Harrington Waddell Elementary (math 82% / reading 87%, grade A+, #71 of 1,108 statewide, top 8%, 324 students, 32% FRL); Lylburn Downing Middle (math 82% / reading 87%, grade A+, #14 of 342 statewide, top 4%, 161 students, 26% FRL).
• Watch-outs: built in 1941 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 148 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 1 units permitted in Lexington city in 2024 (0 in 5+ unit buildings).
• Lexington County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $175k; 24% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 3.3% in Lexington — 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?
• Built in 1941 — 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 A-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.
• 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.