842 Holiday Ave

Hazelwood, MO 63042

$107,500B+

4 bd · 2.0 ba · 1,661 sqft · Built 1960 · SingleFamily · Pending · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,926/mo
• Mortgage (P&I): −$564
• Tax + insurance: −$244
• HOA: −$0
• Vac / Maint / Mgmt: −$404
• Net cashflow: $714/mo
• Annual: $8,563/yr
• Cap rate: 14.26%
• Cash-on-cash: 28.45%
• DSCR: 2.27
• 1% rule: 1.79%
• Cash to close: $30,100

Investor read

• This is a 4-bed/2.0-bath single-family listed at $108k.
• At list price, monthly cash flow is $714 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $108k).
• It's been on market 23 days — a 2% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $106k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $743 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#395 in MO) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime F, amenities F, commute F.
• Hazelwood (suburban): math 11% / reading 26% proficiency, ranked #306 of 324 in MO (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Armstrong Elem. (math 8% / reading 22%, grade F, #982 of 1,115 statewide, top 89%, 348 students, 83% FRL); West Middle (math 17% / reading 33%, grade F, #321 of 391 statewide, top 82%, 730 students, 56% FRL); Hazelwood West High (math 16% / reading 42%, grade F, #407 of 521 statewide, top 78%, 2,042 students, 54% FRL).
• Market conditions: Rents rising fast (+4.5%/yr); 68 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals at typical pace (median 17d on market — plan ~3-4 weeks tenant-placement turnaround); 920 units permitted in St. Louis County in 2024 (250 in 5+ unit buildings).
• Current owner paid $88k; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 4.5% rent growth), your $30k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 14.3% vs local median 7.3% in Hazelwood — 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 $1,926/mo this rent would consume 47% of the median local household income ($49k/yr) (locally 766% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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.