2806 Hanna Pl

Lexington-Fayette, KY 40509

$170,000C

2 bd · 2.5 ba · 1,088 sqft · Built 1999 · Townhouse · Pending · 138 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,564/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$133
• HOA: −$0
• Vac / Maint / Mgmt: −$328
• Net cashflow: $211/mo
• Annual: $2,535/yr
• Cap rate: 7.78%
• Cash-on-cash: 5.33%
• DSCR: 1.24
• 1% rule: 0.92%
• Cash to close: $47,600

Investor read

• This is a 2-bed/2.5-bath townhouse listed at $170k.
• At list price, monthly cash flow is $211 ($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 $156k (8.0% below list).
• It's been on market 138 days — a 12% lower offer ($150k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $150k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Fayette County (urban): math 35% / reading 45% proficiency, ranked #27 of 165 in KY (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Madeline M Breckinridge Elem School (math 27% / reading 37%, grade F, #348 of 676 statewide, top 55%, 509 students, 78% FRL); Henry Clay High School (math 43% / reading 49%, grade D-, #20 of 254 statewide, top 8%, 2,031 students, 47% FRL) — zoned schools average 62% FRL vs 44% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+2.2%/yr); 279 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,036 units permitted in Fayette County in 2024 (542 in 5+ unit buildings).
• Fayette County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 19y 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.
• Cap rate 7.8% vs local median 3.8% in Lexington-Fayette — 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 138 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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.
• 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.