20881 Highway 55

Sterrett, AL 35147

$140,000B

3 bd · 2.0 ba · 2,300 sqft · Built 1994 · Other · Active · 103 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,171/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$93
• HOA: −$0
• Vac / Maint / Mgmt: −$456
• Net cashflow: $888/mo
• Annual: $10,654/yr
• Cap rate: 13.90%
• Cash-on-cash: 27.18%
• DSCR: 2.21
• 1% rule: 1.55%
• Cash to close: $39,200

Investor read

• This is a 3-bed/2.0-bath other listed at $140k. Condition is rated fair.
• At list price, monthly cash flow is $888 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $140k).
• It's been on market 103 days — a 9% lower offer ($127k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $127k (9.0% below list) — sets the bar for market timing.
• In year one you build about $2k of equity ($968 loan paydown + $975 appreciation (0.7% local appreciation)).
• Location reads 53/100 on livability (#475 in AL) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+, crime A; Watch: schools F, amenities F, commute F.
• Shelby County (suburban): math 30% / reading 58% proficiency, ranked #16 of 129 in AL (top 12%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 95 active listings in the ZIP; 987 units permitted in Shelby County in 2024 (0 in 5+ unit buildings).
• Shelby County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (0.7% appreciation + 3.0% rent growth), your $39k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 103 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.

Repairs flagged (vision-AI assessment)

• Major: Porch flooring — Worn-out and in need of replacement
• Major: Landscaping — Overgrown vegetation and debris
• Minor: Exterior walls — No visible damage