2070 Covey Dr

Auburn, AL 36879

$358,000D-

3 bd · 2.0 ba · 1,826 sqft · Built 2012 · SingleFamily · Pending · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,348/mo
• Mortgage (P&I): −$1,877
• Tax + insurance: −$408
• HOA: −$0
• Vac / Maint / Mgmt: −$493
• Net cashflow: $-431/mo
• Annual: $-5,173/yr
• Cap rate: 4.85%
• Cash-on-cash: -5.16%
• DSCR: 0.77
• 1% rule: 0.66%
• Cash to close: $100,240

Investor read

• This is a 3-bed/2.0-bath single-family listed at $358k.
• At list price, monthly cash flow is $-431 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $282k (21.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $235k (34.4% below list).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $235k (34.4% below list) — sets the bar for 1% rule.
• In year one you build about $13k of equity ($2k loan paydown + $10k appreciation (2.9% local appreciation)).
• Location reads 80/100 on livability (#6 in AL, #1,842 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, health & safety A+; Watch: commute F.
• Auburn City (urban): math 51% / reading 69% proficiency, ranked #7 of 129 in AL (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Margaret Yarbrough Elementary School (math 56% / reading 74%, grade B+, #40 of 627 statewide, top 7%, 518 students, 34% FRL); Drake Middle School (math 44% / reading 69%, grade B, #16 of 257 statewide, top 6%, 711 students, 31% FRL); Auburn High School (math 54% / reading 50%, grade D+, #11 of 305 statewide, top 4%, 2,143 students, 27% FRL).
• Market conditions: 66 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,858 units permitted in Lee County in 2024 (113 in 5+ unit buildings).
• Lee County population projected at +54% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $301k; 19% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 3, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 68% chance of damaging wind over 30y; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.8% vs local median 2.7% in Auburn — 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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.
• 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.