327 Johnson Dr

Pennington Gap, VA 24277

$130,900C

3 bd · 2.0 ba · 1,890 sqft · Built 1920 · SingleFamily · Active · 43 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,211/mo
• Mortgage (P&I): −$686
• Tax + insurance: −$108
• HOA: −$0
• Vac / Maint / Mgmt: −$254
• Net cashflow: $162/mo
• Annual: $1,948/yr
• Cap rate: 7.78%
• Cash-on-cash: 5.32%
• DSCR: 1.24
• 1% rule: 0.93%
• Cash to close: $36,652

Investor read

• This is a 3-bed/2.0-bath single-family listed at $131k.
• At list price, monthly cash flow is $162 ($2k/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 $121k (7.5% below list).
• It's been on market 43 days — a 3% lower offer ($127k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $121k (7.5% below list) — sets the bar for 1% rule.
• In year one you build about $8k of equity ($905 loan paydown + $7k appreciation (5.6% local appreciation)).
• Location reads 62/100 on livability (#410 in VA) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing B; Watch: amenities F, commute F, employment F.
• Lee County Public School District (rural): math 53% / reading 69% proficiency, ranked #62 of 131 in VA (top 47%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Elk Knob Elementary (math 47% / reading 52%, grade D, #742 of 1,108 statewide, top 70%, 283 students, 87% FRL); Pennington Middle (math 51% / reading 67%, grade B, #166 of 342 statewide, top 50%, 274 students, 100% FRL) — zoned schools average 93% FRL vs 58% district-wide (36 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 31 active listings in the ZIP; 18 units permitted in Lee County in 2024 (0 in 5+ unit buildings).
• Lee County population projected at -27% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 6y ago; this cycle's ask has dropped $14k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (5.6% appreciation + 3.0% rent growth), your $37k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 5, paydown + projected appreciation supports a ~$36k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 43 days. Have you received any prior offers? Is the seller open to a 7% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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.
• 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.