1987 Joe Stephens Road Rd

Morristown, TN 37814

$255,000D+

3 bd · 2.0 ba · 1,736 sqft · Built 1952 · MultiFamily · Active · 279 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,365/mo
• Mortgage (P&I): −$1,337
• Tax + insurance: −$215
• HOA: −$0
• Vac / Maint / Mgmt: −$497
• Net cashflow: $316/mo
• Annual: $3,796/yr
• Cap rate: 7.78%
• Cash-on-cash: 5.32%
• DSCR: 1.24
• 1% rule: 0.93%
• Cash to close: $71,400

Investor read

• This is a 3-bed/2.0-bath multifamily listed at $255k.
• At list price, monthly cash flow is $316 ($4k/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 $236k (7.3% below list).
• It's been on market 279 days — a 12% lower offer ($224k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $224k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#175 in TN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A-; Watch: schools D-, crime F, amenities F.
• Hamblen County (urban): math 31% / reading 30% proficiency, ranked #57 of 139 in TN (top 41%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1952 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 330 active listings in the ZIP; 298 units permitted in Hamblen County in 2024 (48 in 5+ unit buildings).
• 2 sale attempts; this cycle's ask has dropped $20k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $51k; list at $255k implies a 400% 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 7.8% vs local median 2.9% in Morristown — 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.
• At $2,365/mo this rent would consume 51% of the median local household income ($56k/yr) (locally 1001% 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 279 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1952 — 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.
• 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.