Katelyn Plan

Huntsville, AL 35806

$277,850D-

3 bd · 2.5 ba · 1,768 sqft · Built — · SingleFamily · Active · 140 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,846/mo
• Mortgage (P&I): −$1,541
• Tax + insurance: −$490
• HOA: −$0
• Vac / Maint / Mgmt: −$388
• Net cashflow: $-573/mo
• Annual: $-6,876/yr
• Cap rate: 3.95%
• Cash-on-cash: -8.36%
• DSCR: 0.63
• 1% rule: 0.63%
• Cash to close: $82,292

Investor read

• This is a 3-bed/2.5-bath single-family listed at $278k.
• At list price, monthly cash flow is $-573 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $211k (24.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $185k (33.6% below list).
• It's been on market 140 days — a 12% lower offer ($245k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $185k (33.6% below list) — sets the bar for 1% rule.
• In year one you build about $31k of equity ($2k loan paydown + $29k appreciation (10.0% local appreciation)).
• Location reads 82/100 on livability (#3 in AL, #1,082 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F.
• Huntsville City (urban): math 21% / reading 46% proficiency, ranked #48 of 129 in AL (top 37%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.6%/yr); 213 active listings in the ZIP; 11 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; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$51k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 140 days. Have you received any prior offers? Is the seller open to a 34% 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.
• Crime grade is F 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.