The McGinnis Plan

Owens Cross Roads, AL 35763

$324,900F

4 bd · 2.5 ba · 2,372 sqft · Built — · SingleFamily · Active · 134 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,221/mo
• Mortgage (P&I): −$2,106
• Tax + insurance: −$669
• HOA: −$0
• Vac / Maint / Mgmt: −$466
• Net cashflow: $-1,021/mo
• Annual: $-12,249/yr
• Cap rate: 3.24%
• Cash-on-cash: -10.89%
• DSCR: 0.52
• 1% rule: 0.55%
• Cash to close: $112,436

Investor read

• This is a 4-bed/2.5-bath single-family listed at $325k. Condition is rated good.
• At list price, monthly cash flow is $-1k ($-12k/yr) — negative.
• To cash-flow at today's rent, offer at most $254k (21.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $222k (31.7% below list).
• It's been on market 134 days — a 12% lower offer ($286k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $222k (31.7% below list) — sets the bar for 1% rule.
• 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 68/100 on livability (#65 in AL) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Madison County (rural): math 27% / reading 56% proficiency, ranked #19 of 129 in AL (top 15%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Madison County Elementary School (math 17% / reading 47%, grade F, #331 of 627 statewide, top 57%, 412 students, 59% FRL); Madison County High School (math 32% / reading 42%, grade F, #39 of 305 statewide, top 13%, 483 students, 35% FRL) — zoned schools average 47% FRL vs 29% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.5%/yr); 559 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 51d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 83% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.2% vs local median 4.4% in Owens Cross Roads — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 134 days. Have you received any prior offers? Is the seller open to a 32% concession, seller financing, or rate buy-down credit?
• 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.
• 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.