1140 Covert Ave

Evansville, IN 47714

$134,500D

2 bd · 1.0 ba · 1,056 sqft · Built 1925 · SingleFamily · Pending · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,016/mo
• Mortgage (P&I): −$705
• Tax + insurance: −$109
• HOA: −$0
• Vac / Maint / Mgmt: −$213
• Net cashflow: $-12/mo
• Annual: $-138/yr
• Cap rate: 6.19%
• Cash-on-cash: -0.37%
• DSCR: 0.98
• 1% rule: 0.76%
• Cash to close: $37,660

Investor read

• This is a 2-bed/1.0-bath single-family listed at $134k.
• At list price, monthly cash flow is $-12 ($-138/yr) — negative.
• To cash-flow at today's rent, offer at most $132k (1.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $102k (24.4% below list).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $102k (24.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $930 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#416 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, commute F, employment D-.
• Evansville Vanderburgh School Corporation (urban): math 36% / reading 43% proficiency, ranked #153 of 301 in IN (top 51%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Glenwood Leadership Academy (math 10% / reading 12%, grade F, #909 of 994 statewide, top 92%, 416 students, 88% FRL); Washington Middle School (math 14% / reading 24%, grade F, #274 of 330 statewide, top 83%, 353 students, 70% FRL); New Tech Institute (math 34% / reading 74%, grade C-, #79 of 369 statewide, top 26%, 275 students, 40% FRL) — zoned schools average 66% FRL vs 50% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.9%/yr); 191 active listings in the ZIP; 24 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 508 units permitted in Vanderburgh County in 2024 (32 in 5+ unit buildings).
• 10 sale attempts since 9y 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: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 4.6% in Evansville — 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

• 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 1925 — 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 D-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 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.