2317 SW State Ave

Decatur, AL 35601

$85,000B-

3 bd · 1.0 ba · 1,564 sqft · Built 1948 · SingleFamily · Pending · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,451/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$71
• HOA: −$0
• Vac / Maint / Mgmt: −$305
• Net cashflow: $630/mo
• Annual: $7,556/yr
• Cap rate: 15.18%
• Cash-on-cash: 31.75%
• DSCR: 2.41
• 1% rule: 1.71%
• Cash to close: $23,800

Investor read

• This is a 3-bed/1.0-bath single-family listed at $85k.
• At list price, monthly cash flow is $630 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $85k).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $588 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#28 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D+, crime F, amenities F.
• Decatur City (urban): math 22% / reading 40% proficiency, ranked #66 of 129 in AL (top 51%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Austinville Elementary School (math 12% / reading 27%, grade F, #467 of 627 statewide, top 76%, 416 students, 88% FRL); Austin Middle School (math 18% / reading 39%, grade F, #138 of 257 statewide, top 54%, 714 students, 77% FRL); Austin High School (math 20% / reading 24%, grade F, #142 of 305 statewide, top 51%, 1,025 students, 66% FRL) — zoned schools average 77% FRL vs 57% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.7%/yr); 225 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 90% of comp listings sitting > 30 days — soft ceiling on asking rent; 231 units permitted in Morgan County in 2024 (0 in 5+ unit buildings).
• Morgan County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-3.0% appreciation + 4.7% rent growth), your $24k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: moderate wind risk, 23% chance of damaging wind over 30y; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 15.2% vs local median 4.0% in Decatur — 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.
• This rent runs 34% of the median local income ($51k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1948 — 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.
• 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?
• 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.