1720 Valley Ave Unit C

Homewood, AL 35209

$165,000D

3 bd · 1.5 ba · 1,154 sqft · Built 1944 · Condo · Active · 772 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,500/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$275
• HOA: −$400
• Vac / Maint / Mgmt: −$315
• Net cashflow: $-356/mo
• Annual: $-4,266/yr
• Cap rate: 3.71%
• Cash-on-cash: -9.23%
• DSCR: 0.59
• 1% rule: 0.91%
• Cash to close: $46,200

Investor read

• This is a 3-bed/1.5-bath condo listed at $165k. Condition is rated good.
• At list price, monthly cash flow is $-356 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $114k (31.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $150k (9.1% below list).
• It's been on market 772 days — a 12% lower offer ($145k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $114k (31.2% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#5 in AL, #1,730 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+; Watch: cost of living F.
• Homewood City (suburban): math 55% / reading 74% proficiency, ranked #3 of 129 in AL (top 2%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Shades Cahaba Elementary School (math 48% / reading 70%, grade B-, #67 of 627 statewide, top 11%, 501 students, 24% FRL); Homewood Middle School (math 52% / reading 76%, grade B+, #5 of 257 statewide, top 2%, 926 students, 30% FRL); Homewood High School (math 62% / reading 63%, grade B-, #4 of 305 statewide, top 1%, 1,330 students, 28% FRL) — zoned schools at 27% FRL track the district average.
• Watch-outs: HOA is 27% of rent; built in 1944 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.3%/yr); 143 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 82d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 68% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 2 sale attempts since 2y ago; this cycle's ask has dropped $24k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.7% vs local median 2.3% in Homewood — 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 772 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• Built in 1944 — 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?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?