405 Melrose St

Jonesboro, AR 72401

$399,900B-

None bd · None ba · 6,716 sqft · Built — · MultiFamily · Active · 44 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,878/mo
• Mortgage (P&I): −$2,097
• Tax + insurance: −$666
• HOA: −$0
• Vac / Maint / Mgmt: −$2,074
• Net cashflow: $5,040/mo
• Annual: $60,480/yr
• Cap rate: 21.42%
• Cash-on-cash: 54.01%
• DSCR: 3.40
• 1% rule: 2.47%
• Cash to close: $111,972

Investor read

• This is a multifamily listed at $400k. Condition is rated poor.
• At list price, monthly cash flow is $5k ($60k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($10k rent vs $400k).
• It's been on market 44 days — a 3% lower offer ($388k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $388k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#145 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities F, commute F.
• Jonesboro School District (urban): math 28% / reading 28% proficiency, ranked #169 of 238 in AR (top 71%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Annie Camp Jr. High School (math 22% / reading 34%, grade F, #150 of 201 statewide, top 76%, 784 students, 100% FRL); The Academies At Jonesboro High School (math 16% / reading 27%, grade F, #225 of 292 statewide, top 78%, 1,386 students, 100% FRL) — zoned schools average 100% FRL vs 67% district-wide (33 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.6%/yr); 295 active listings in the ZIP; 926 units permitted in Craighead County in 2024 (69 in 5+ unit buildings).
• Craighead County population projected at +38% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 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.
• At projected returns (-3.0% appreciation + 3.6% rent growth), your $112k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 21.4% vs local median 4.4% in Jonesboro — 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 $9,878/mo this rent would consume 262% of the median local household income ($45k/yr) (locally 2606% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 44 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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)

• Major: roof — The roof appears to be in poor condition, with visible damage and discoloration.
• Major: exterior siding — The exterior siding is peeling and in poor condition, with visible damage and discoloration.
• Major: flooring — The flooring in the interior appears to be in poor condition, with visible wear and tear.
• Major: interior walls — The interior walls appear to be in poor condition, with visible damage and discoloration.
• Major: exterior fencing — The exterior fencing is in poor condition, with visible damage and discoloration.
• Major: landscaping — The landscaping appears to be in poor condition, with overgrown grass and weeds.