3231 Cottonwood Bnd #306

Verandah, FL 33905

$229,000C

3 bd · 3.0 ba · 1,821 sqft · Built 2006 · Townhouse · Active · 41 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,445/mo
• Mortgage (P&I): −$1,201
• Tax + insurance: −$880
• HOA: −$815
• Vac / Maint / Mgmt: −$724
• Net cashflow: $-174/mo
• Annual: $-2,087/yr
• Cap rate: 7.62%
• Cash-on-cash: 4.73%
• DSCR: 1.21
• 1% rule: 1.50%
• Cash to close: $64,120

Investor read

• This is a 3-bed/3.0-bath townhouse listed at $229k.
• At list price, monthly cash flow is $-174 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $198k (13.4% below list).
• Meets the 1% rule at list price ($3k rent vs $229k).
• It's been on market 41 days — a 3% lower offer ($222k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $198k (13.4% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Lee (suburban): math 47% / reading 50% proficiency, ranked #42 of 73 in FL (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Veterans Park Academy For The Arts (math 41% / reading 45%, grade F, #1,366 of 2,144 statewide, top 64%, 2,133 students, 36% FRL); Oak Hammock Middle School (math 43% / reading 41%, grade D-, #340 of 571 statewide, top 61%, 1,563 students, 56% FRL); Lehigh Senior High School (math 23% / reading 45%, grade F, #394 of 667 statewide, top 60%, 2,476 students, 57% FRL).
• Watch-outs: flood insurance adds $427/mo; HOA is 24% of rent.
• Market conditions: Rents soft (-3.0%/yr); 768 active listings in the ZIP; 18 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); 15,411 units permitted in Lee County in 2024 (4,686 in 5+ unit buildings).
• Lee County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 11y 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.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→28/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $3,445/mo this rent would consume 57% of the median local household income ($72k/yr) (locally 1358% 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?
• It's been on market 41 days. Have you received any prior offers? Is the seller open to a 13% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.
• This sits on a lake — are riparian / water-frontage rights deeded with the parcel? Any dock permits, shoreline easements, or HOA water-use restrictions?
• What's the documented flood / surge / shoreline-erosion history here (FEMA AND non-FEMA — e.g., storm surge, creek backup, septic-field saturation)?
• Any water-quality or seasonal algae-bloom issues that affect tenant satisfaction or short-term-rental demand?