505 Warnock St

Louisville, KY 40217

$133,500D+

2 bd · 1.0 ba · 840 sqft · Built 1900 · SingleFamily · Active · 51 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,199/mo
• Mortgage (P&I): −$700
• Tax + insurance: −$193
• HOA: −$0
• Vac / Maint / Mgmt: −$252
• Net cashflow: $53/mo
• Annual: $640/yr
• Cap rate: 6.77%
• Cash-on-cash: 1.71%
• DSCR: 1.08
• 1% rule: 0.90%
• Cash to close: $37,380

Investor read

• This is a 2-bed/1.0-bath single-family listed at $134k.
• At list price, monthly cash flow is $53 ($640/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 $120k (10.2% below list).
• It's been on market 51 days — a 3% lower offer ($129k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $120k (10.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $923 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#333 in KY) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, health & safety D+, schools D-.
• Jefferson County (urban): math 19% / reading 35% proficiency, ranked #121 of 165 in KY (top 73%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 72 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 2,836 units permitted in Jefferson County in 2024 (1,558 in 5+ unit buildings).
• Jefferson County population projected at +13% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 19y ago; this cycle's ask has dropped $16k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $100k; 34% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.8% vs local median 5.0% in Louisville — 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

• It's been on market 51 days. Have you received any prior offers? Is the seller open to a 10% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.