3464 Sutherland Dr

Lexington-Fayette, KY 40517

$180,000D-

2 bd · 1.5 ba · 1,044 sqft · Built 1974 · Townhouse · Pending · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,527/mo
• Mortgage (P&I): −$944
• Tax + insurance: −$142
• HOA: −$87
• Vac / Maint / Mgmt: −$321
• Net cashflow: $34/mo
• Annual: $409/yr
• Cap rate: 6.52%
• Cash-on-cash: 0.81%
• DSCR: 1.04
• 1% rule: 0.85%
• Cash to close: $50,400

Investor read

• This is a 2-bed/1.5-bath townhouse listed at $180k.
• At list price, monthly cash flow is $34 ($409/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 $153k (15.2% below list).
• It's been on market 34 days — a 3% lower offer ($175k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $153k (15.2% 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 $5k of value loss. Plan a longer hold.
• Location reads: area grade D — 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: Tates Creek Elementary School (math 31% / reading 37%, grade F, #329 of 676 statewide, top 49%, 642 students, 70% FRL); Tates Creek Middle School (math 29% / reading 38%, grade F, #105 of 217 statewide, top 51%, 769 students, 58% FRL); Tates Creek High School (math 29% / reading 32%, grade F, #121 of 254 statewide, top 47%, 1,734 students, 52% FRL) — zoned schools average 60% FRL vs 44% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+4.5%/yr); 104 active listings in the ZIP; 37 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 5 sale attempts since 10y 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 6.5% 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.
• This rent runs 34% of the median local income ($54k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 34 days. Have you received any prior offers? Is the seller open to a 15% concession, seller financing, or rate buy-down credit?
• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.