111 Cross Memorial Ave

Morganton, NC 28655

$215,000F

3 bd · 1.0 ba · 989 sqft · Built 1952 · SingleFamily · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,530/mo
• Mortgage (P&I): −$1,127
• Tax + insurance: −$149
• HOA: −$0
• Vac / Maint / Mgmt: −$321
• Net cashflow: $-68/mo
• Annual: $-817/yr
• Cap rate: 5.91%
• Cash-on-cash: -1.36%
• DSCR: 0.94
• 1% rule: 0.71%
• Cash to close: $60,200

Investor read

• This is a 3-bed/1.0-bath single-family listed at $215k.
• At list price, monthly cash flow is $-68 ($-817/yr) — negative.
• To cash-flow at today's rent, offer at most $203k (5.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $153k (28.8% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $153k (28.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#149 in NC) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: amenities D, crime D-, commute F.
• Burke County Schools (rural): math 43% / reading 47% proficiency, ranked #89 of 178 in NC (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Mull Elementary (math 42% / reading 47%, grade F, #574 of 1,410 statewide, top 43%, 258 students, 69% FRL); Liberty Middle (math 42% / reading 48%, grade D, #160 of 475 statewide, top 35%, 457 students, 58% FRL); Robert L. Patton High School (math 77% / reading 62%, grade B, #121 of 535 statewide, top 24%, 752 students, 55% FRL).
• Watch-outs: built in 1952 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 436 active listings in the ZIP; 422 units permitted in Burke County in 2024 (94 in 5+ unit buildings).
• Burke County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 3y 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 $172k; 25% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.9% vs local median 3.5% in Morganton — 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.
• This rent runs 32% of the median local income ($58k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 1952 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.