432 Spring St

Hot Springs, AR 71901

$268,500C

None bd · None ba · — sqft · Built 1920 · MultiFamily · Active · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,074/mo
• Mortgage (P&I): −$1,408
• Tax + insurance: −$448
• HOA: −$0
• Vac / Maint / Mgmt: −$646
• Net cashflow: $573/mo
• Annual: $6,875/yr
• Cap rate: 8.85%
• Cash-on-cash: 9.14%
• DSCR: 1.41
• 1% rule: 1.14%
• Cash to close: $75,180

Investor read

• This is a multifamily listed at $268k. Condition is rated average.
• At list price, monthly cash flow is $573 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $268k).
• It's been on market 25 days — a 2% lower offer ($264k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $264k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#140 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A-; Watch: schools D, crime F, amenities F.
• Hot Springs School District (urban): math 24% / reading 25% proficiency, ranked #195 of 238 in AR (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 363 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 88% of comp listings sitting > 30 days — soft ceiling on asking rent; 117 units permitted in Garland County in 2024 (24 in 5+ unit buildings).
• Garland County population projected at +7% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Climate carrying-cost: moderate flood risk; extreme-heat days projected 8→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.9% vs local median 2.8% in Hot Springs — 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.
• At $3,074/mo this rent would consume 69% of the median local household income ($54k/yr) (locally 961% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1920 — 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.

Repairs flagged (vision-AI assessment)

• Minor: Landscaping — Overgrown grass needs trimming
• Moderate: Exterior paint — Yellow siding shows wear