2111 Capitol Ave

Montgomery, AL 36107

$137,900D

4 bd · 1.0 ba · 1,728 sqft · Built 1925 · SingleFamily · Active · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,314/mo
• Mortgage (P&I): −$723
• Tax + insurance: −$141
• HOA: −$0
• Vac / Maint / Mgmt: −$276
• Net cashflow: $174/mo
• Annual: $2,089/yr
• Cap rate: 7.81%
• Cash-on-cash: 5.41%
• DSCR: 1.24
• 1% rule: 0.95%
• Cash to close: $38,612

Investor read

• This is a 4-bed/1.0-bath single-family listed at $138k.
• At list price, monthly cash flow is $174 ($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 $131k (4.7% below list).
• It's been on market 70 days — a 6% lower offer ($130k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $130k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $953 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#138 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D, crime F, amenities D-.
• Montgomery County (urban): math 9% / reading 31% proficiency, ranked #106 of 129 in AL (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Morningview Elementary School (math 0% / reading 15%, grade F, #598 of 627 statewide, top 96%, 448 students, 86% FRL); Capitol Heights Middle School (math 0% / reading 15%, grade F, #241 of 257 statewide, top 95%, 655 students, 97% FRL); Lee High School (math 2% / reading 8%, grade F, #276 of 305 statewide, top 95%, 1,374 students, 86% FRL) — zoned schools average 89% FRL vs 70% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 7% at this address vs 20% district-wide (-13 pts) — the specific schools serving this property underperform the Montgomery County average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.0%/yr); 67 active listings in the ZIP; 32 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 44% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 460 units permitted in Montgomery County in 2024 (37 in 5+ unit buildings).
• Montgomery County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.8% vs local median 6.0% in Montgomery — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• At $1,314/mo this rent would consume 49% of the median local household income ($32k/yr) (locally 642% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 70 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1925 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.