135 Denali Ln

Auburn, AL 36832

$400,000D-

4 bd · 2.0 ba · 2,039 sqft · Built 2012 · SingleFamily · Pending · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,587/mo
• Mortgage (P&I): −$2,098
• Tax + insurance: −$316
• HOA: −$0
• Vac / Maint / Mgmt: −$543
• Net cashflow: $-370/mo
• Annual: $-4,438/yr
• Cap rate: 5.18%
• Cash-on-cash: -3.96%
• DSCR: 0.82
• 1% rule: 0.65%
• Cash to close: $112,000

Investor read

• This is a 4-bed/2.0-bath single-family listed at $400k.
• At list price, monthly cash flow is $-370 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $335k (16.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $259k (35.3% below list).
• It's been on market 21 days — a 2% lower offer ($394k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $259k (35.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#6 in AL, #1,842 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, health & safety A+; Watch: commute F.
• Auburn City (urban): math 51% / reading 69% proficiency, ranked #7 of 129 in AL (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+6.2%/yr); 359 active listings in the ZIP; 2 comparable units currently listed for rent nearby; lower-income renter base — watch delinquency; 1,858 units permitted in Lee County in 2024 (113 in 5+ unit buildings).
• Lee County population projected at +54% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 7y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $250k; list at $400k implies a 60% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 68% chance of damaging wind over 30y; 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 2.7% in Auburn — 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.
• At $2,587/mo this rent would consume 73% of the median local household income ($43k/yr) (locally 2503% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• 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.