505 W Sherman Ave

Harrison, AR 72601

$154,000D+

4 bd · 2.5 ba · 1,306 sqft · Built — · SingleFamily · Active · 44 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,267/mo
• Mortgage (P&I): −$808
• Tax + insurance: −$133
• HOA: −$0
• Vac / Maint / Mgmt: −$266
• Net cashflow: $60/mo
• Annual: $714/yr
• Cap rate: 6.76%
• Cash-on-cash: 1.66%
• DSCR: 1.07
• 1% rule: 0.82%
• Cash to close: $43,120

Investor read

• This is a 4-bed/2.5-bath single-family listed at $154k.
• At list price, monthly cash flow is $60 ($714/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 $127k (17.8% below list).
• It's been on market 44 days — a 3% lower offer ($149k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $127k (17.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-1.9%/yr); year-one equity from $1k of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#52 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Harrison School District (town): math 53% / reading 54% proficiency, ranked #11 of 238 in AR (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 437 active listings in the ZIP; 92 units permitted in Boone County in 2024 (72 in 5+ unit buildings).
• Boone County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 5 sale attempts since 13y ago; this cycle's ask has dropped $18k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $101k; list at $154k implies a 52% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.8% vs local median 3.0% in Harrison — 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 44 days. Have you received any prior offers? Is the seller open to a 18% 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.
• 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.