2702 Valley Rd

Tarrant, AL 35217

$45,000B-

2 bd · 1.0 ba · 864 sqft · Built 1992 · SingleFamily · Pending · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,036/mo
• Mortgage (P&I): −$236
• Tax + insurance: −$108
• HOA: −$0
• Vac / Maint / Mgmt: −$218
• Net cashflow: $474/mo
• Annual: $5,692/yr
• Cap rate: 20.71%
• Cash-on-cash: 51.50%
• DSCR: 3.29
• 1% rule: 2.30%
• Cash to close: $12,600

Investor read

• This is a 2-bed/1.0-bath single-family listed at $45k.
• At list price, monthly cash flow is $474 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $45k).
• It's been on market 26 days — a 2% lower offer ($44k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $44k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $311 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 51/100 on livability (#507 in AL) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+; Watch: crime C-, amenities F, commute F.
• Tarrant City (suburban): math 4% / reading 17% proficiency, ranked #121 of 129 in AL (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 89% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Tarrant Elementary School (310 students, 85% FRL); Tarrant High School (math 3% / reading 16%, grade F, #258 of 305 statewide, top 85%, 559 students, 84% FRL) — zoned schools at 85% FRL track the district average.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents rising (+3.6%/yr); 94 active listings in the ZIP; lower-income renter base — watch delinquency; 2,114 units permitted in Jefferson County in 2024 (556 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (-3.0% appreciation + 3.6% rent growth), your $13k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: severe flood risk; major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 20.7% vs local median 11.0% in Tarrant — 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.
• This rent runs 31% of the median local income ($40k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.