3416 Highway 1804

Jellico, TN 40769

$87,500D+

2 bd · 1.0 ba · 576 sqft · Built — · Other · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $789/mo
• Mortgage (P&I): −$459
• Tax + insurance: −$201
• HOA: −$0
• Vac / Maint / Mgmt: −$166
• Net cashflow: $-37/mo
• Annual: $-442/yr
• Cap rate: 6.55%
• Cash-on-cash: 0.92%
• DSCR: 1.04
• 1% rule: 0.90%
• Cash to close: $24,500

Investor read

• This is a 2-bed/1.0-bath other listed at $88k.
• At list price, monthly cash flow is $-37 ($-442/yr) — negative.
• To cash-flow at today's rent, offer at most $82k (6.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $79k (9.8% below list).
• It's been on market 15 days — a 2% lower offer ($86k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $79k (9.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-0.7%/yr); year-one equity from $605 of loan paydown is wiped out by about $648 of value loss. Plan a longer hold.
• Location reads 55/100 on livability (#352 in TN) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A-; Watch: schools F, amenities F, commute F.
• Whitley County (rural): math 26% / reading 43% proficiency, ranked #80 of 165 in KY (top 48%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $56/mo.
• Market conditions: 65 units permitted in Whitley County in 2024 (0 in 5+ unit buildings).
• Whitley County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Climate carrying-cost: severe flood risk; moderate wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.5% vs local median 4.3% in Jellico — 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.

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's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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.
• 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.