5 Minorca Way

Hot Springs Village, AR 71909

$277,000D

3 bd · 2.0 ba · 2,202 sqft · Built 1987 · SingleFamily · Active · 125 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,976/mo
• Mortgage (P&I): −$1,453
• Tax + insurance: −$182
• HOA: −$115
• Vac / Maint / Mgmt: −$415
• Net cashflow: $-188/mo
• Annual: $-2,257/yr
• Cap rate: 5.48%
• Cash-on-cash: -2.91%
• DSCR: 0.87
• 1% rule: 0.71%
• Cash to close: $77,560

Investor read

• This is a 3-bed/2.0-bath single-family listed at $277k.
• At list price, monthly cash flow is $-188 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $244k (12.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $198k (28.7% below list).
• It's been on market 125 days — a 12% lower offer ($244k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $198k (28.7% 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 69/100 on livability (#76 in AR) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, cost of living A; Watch: amenities F, commute F, health & safety F.
• Fountain Lake School District (rural): math 43% / reading 40% proficiency, ranked #49 of 238 in AR (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Fountain Lake Elementary (math 55% / reading 35%, grade D-, #138 of 454 statewide, top 31%, 514 students, 54% FRL); Fountain Lake Middle School Cobra Digital Prep Academy (math 45% / reading 47%, grade D+, #53 of 201 statewide, top 28%, 429 students, 44% FRL, charter); Fountain Lake Charter High School (math 27% / reading 33%, grade F, #138 of 292 statewide, top 48%, 406 students, 32% FRL, charter) — zoned schools at 43% FRL track the district average.
• Market conditions: 770 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 446 units permitted in Saline County in 2024 (0 in 5+ unit buildings).
• Saline County population projected at +39% 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 $135k; list at $277k implies a 105% gain — meaningful room to come down on a strong offer.
• 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 5.5% vs local median 3.6% in Hot Springs Village — 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.
• This rent runs 31% of the median local income ($75k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• It's been on market 125 days. Have you received any prior offers? Is the seller open to a 29% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?
• 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.