3223 Herman St

Louisville, KY 40212

$178,360C-

4 bd · 2.0 ba · 1,548 sqft · Built 2002 · Other · Active · 71 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,390/mo
• Mortgage (P&I): −$935
• Tax + insurance: −$113
• HOA: −$0
• Vac / Maint / Mgmt: −$292
• Net cashflow: $49/mo
• Annual: $594/yr
• Cap rate: 6.63%
• Cash-on-cash: 1.19%
• DSCR: 1.05
• 1% rule: 0.78%
• Cash to close: $49,941

Investor read

• This is a 4-bed/2.0-bath other listed at $178k.
• At list price, monthly cash flow is $49 ($594/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $139k (22.1% below list).
• It's been on market 71 days — a 6% lower offer ($168k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $139k (22.1% below list) — sets the bar for 1% rule.
• In year one you build about $19k of equity ($1k loan paydown + $18k appreciation (10.0% local appreciation)).
• Location reads 63/100 on livability (#333 in KY) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, health & safety D+, crime F.
• Jefferson County (urban): math 19% / reading 35% proficiency, ranked #121 of 165 in KY (top 73%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Foster Traditional Academy (math 2% / reading 12%, grade F, #662 of 676 statewide, top 99%, 578 students, 84% FRL); Robert Frost Sixth-Grade Academy (math 3% / reading 14%); Ballard High (math 42% / reading 46%, grade F, #27 of 254 statewide, top 10%, 2,014 students, 34% FRL) — zoned schools at 59% FRL track the district average.
• Market conditions: Rents flat; 142 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 18d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 2,836 units permitted in Jefferson County in 2024 (1,558 in 5+ unit buildings).
• Jefferson County population projected at +13% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 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.
• At projected returns (10.0% appreciation + 0.5% rent growth), your $50k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 5.0% in Louisville — 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 $1,390/mo this rent would consume 47% of the median local household income ($36k/yr) (locally 1148% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 71 days. Have you received any prior offers? Is the seller open to a 22% 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.
• 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.