1706 Sarasota Ct

Lexington-Fayette, KY 40505

$259,900C-

4 bd · 1.0 ba · 1,550 sqft · Built 1960 · SingleFamily · Active · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,319/mo
• Mortgage (P&I): −$1,363
• Tax + insurance: −$159
• HOA: −$0
• Vac / Maint / Mgmt: −$487
• Net cashflow: $311/mo
• Annual: $3,728/yr
• Cap rate: 7.73%
• Cash-on-cash: 5.12%
• DSCR: 1.23
• 1% rule: 0.89%
• Cash to close: $72,772

Investor read

• This is a 4-bed/1.0-bath single-family listed at $260k.
• At list price, monthly cash flow is $311 ($4k/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 $232k (10.8% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $232k (10.8% below list) — sets the bar for 1% rule.
• 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: area grade C — 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.
• Market conditions: Rents rising fast (+4.3%/yr); 68 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 15d 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.
• 2 sale attempts 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.
• Current owner paid $225k; 16% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.7% 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.
• At $2,319/mo this rent would consume 48% of the median local household income ($58k/yr) (locally 1232% 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 1960 — 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.
• 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.