40 Folly Field Rd Unit A229

Hilton Head Island, SC 29928

$287,500D-

1 bd · 1.0 ba · 540 sqft · Built 1980 · Condo · Pending · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,284/mo
• Mortgage (P&I): −$1,508
• Tax + insurance: −$479
• HOA: −$524
• Vac / Maint / Mgmt: −$480
• Net cashflow: $-707/mo
• Annual: $-8,479/yr
• Cap rate: 3.34%
• Cash-on-cash: -10.53%
• DSCR: 0.53
• 1% rule: 0.79%
• Cash to close: $80,500

Investor read

• This is a 1-bed/1.0-bath condo listed at $288k. Condition is rated excellent.
• At list price, monthly cash flow is $-707 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $261k (9.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $228k (20.6% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $228k (20.6% below list) — sets the bar for 1% rule.
• In year one you build about $11k of equity ($2k loan paydown + $9k appreciation (3.2% local appreciation)).
• Location reads 64/100 on livability (#157 in SC) — a middle-class / working-renter tenant base. Strengths: employment A+, crime A-; Watch: amenities F, commute F, cost of living F.
• Beaufort 01 (town): math 42% / reading 51% proficiency, ranked #17 of 80 in SC (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Hilton Head Island Elementary (math 50% / reading 49%, grade D, #168 of 597 statewide, top 31%, 709 students, 56% FRL); Hilton Head Island Middle (math 33% / reading 42%, grade F, #90 of 229 statewide, top 42%, 856 students, 52% FRL); Hilton Head Island High (math 70% / reading 82%, grade A-, #34 of 196 statewide, top 17%, 1,345 students, 40% FRL) — zoned schools at 49% FRL track the district average.
• Watch-outs: HOA is 23% of rent.
• Market conditions: Rents rising (+3.2%/yr); 846 active listings in the ZIP; solid renter incomes; 1,824 units permitted in Beaufort County in 2024 (618 in 5+ unit buildings).
• Beaufort County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 2y 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.
• By year 4, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.