894 Mckinney Gap Dr

Mars Hill, NC 28754

$497,000C+

2 bd · 2.5 ba · 3,312 sqft · Built 1976 · SingleFamily · Active · 314 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,500/mo
• Mortgage (P&I): −$2,606
• Tax + insurance: −$363
• HOA: −$120
• Vac / Maint / Mgmt: −$945
• Net cashflow: $466/mo
• Annual: $5,587/yr
• Cap rate: 7.42%
• Cash-on-cash: 4.01%
• DSCR: 1.18
• 1% rule: 0.91%
• Cash to close: $139,160

Investor read

• This is a 2-bed/2.5-bath single-family listed at $497k.
• At list price, monthly cash flow is $466 ($6k/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 $450k (9.5% below list).
• It's been on market 314 days — a 12% lower offer ($437k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $437k (12.0% below list) — sets the bar for market timing.
• In year one you build about $38k of equity ($3k loan paydown + $34k appreciation (6.9% local appreciation)).
• Location reads 75/100 on livability (#49 in NC, #4,088 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, crime A; Watch: amenities D, commute F.
• Madison County Schools (rural): math 51% / reading 56% proficiency, ranked #55 of 178 in NC (top 31%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Mars Hill Elementary (math 45% / reading 51%, grade D, #477 of 1,410 statewide, top 35%, 500 students, 53% FRL); Madison Middle School (math 44% / reading 56%, grade C, #113 of 475 statewide, top 25%, 452 students, 57% FRL); Madison High School (math 57% / reading 52%, grade C-, #270 of 535 statewide, top 52%, 414 students, 48% FRL) — zoned schools at 52% FRL track the district average.
• Market conditions: 248 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 209 units permitted in Madison County in 2024 (5 in 5+ unit buildings).
• 4 sale attempts since 4y ago; this cycle's ask has dropped $100k (17%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (6.9% appreciation + 3.0% rent growth), your $139k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$60k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 7.4% vs local median 2.3% in Mars Hill — 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

• It's been on market 314 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1976 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.