514 John Arthur Rd

Cave Spring, VA 24065

$290,000F

2 bd · 2.0 ba · 1,352 sqft · Built 1987 · SingleFamily · Pending · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,674/mo
• Mortgage (P&I): −$1,521
• Tax + insurance: −$193
• HOA: −$0
• Vac / Maint / Mgmt: −$351
• Net cashflow: $-391/mo
• Annual: $-4,694/yr
• Cap rate: 4.67%
• Cash-on-cash: -5.78%
• DSCR: 0.74
• 1% rule: 0.58%
• Cash to close: $81,200

Investor read

• This is a 2-bed/2.0-bath single-family listed at $290k.
• At list price, monthly cash flow is $-391 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $221k (23.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $167k (42.3% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $167k (42.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#113 in VA, #3,513 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living A-; Watch: amenities F, commute F.
• Franklin County Public School District (town): math 69% / reading 72% proficiency, ranked #24 of 131 in VA (top 18%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Boones Mill Elementary (math 77% / reading 77%, grade A, #171 of 1,108 statewide, top 17%, 271 students, 75% FRL); Benjamin Franklin Middle (math 64% / reading 72%, grade A-, #94 of 342 statewide, top 28%, 1,397 students, 74% FRL); Franklin County High (math 79% / reading 82%, grade A, #57 of 319 statewide, top 18%, 1,904 students, 74% FRL) — zoned schools average 74% FRL vs 45% district-wide (30 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 43 active listings in the ZIP; 167 units permitted in Franklin County in 2024 (10 in 5+ unit buildings).
• Franklin County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 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.
• Current owner paid $165k; list at $290k implies a 76% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.7% vs local median 3.4% in Cave Spring — 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?
• 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?
• 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.
• 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.