412 S Pearl St

Rocky Mount, NC 27804

$55,555D-

4 bd · 2.0 ba · 1,688 sqft · Built 1910 · MultiFamily · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,554/mo
• Mortgage (P&I): −$291
• Tax + insurance: −$93
• HOA: −$0
• Vac / Maint / Mgmt: −$536
• Net cashflow: $1,634/mo
• Annual: $19,605/yr
• Cap rate: 41.58%
• Cash-on-cash: 126.03%
• DSCR: 6.61
• 1% rule: 4.60%
• Cash to close: $15,555

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $56k. Condition is rated poor.
• At list price, monthly cash flow is $2k ($20k/yr) — positive. Per door: $817/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $56k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $384 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#134 in NC) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities F, employment F.
• Nash-Rocky Mount Schools (rural): math 20% / reading 32% proficiency, ranked #155 of 178 in NC (top 87%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: D S Johnson Elementary (math 3% / reading 13%, grade F, #1,396 of 1,410 statewide, top 99%, 362 students, 95% FRL); Rocky Mount Middle (math 7% / reading 26%, grade F, #449 of 475 statewide, top 96%, 407 students, 97% FRL); Rocky Mount High (math 27% / reading 36%, grade F, #449 of 535 statewide, top 85%, 1,072 students, 76% FRL) — zoned schools average 89% FRL vs 59% district-wide (30 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.2%/yr); 392 active listings in the ZIP; 500 units permitted in Nash County in 2024 (0 in 5+ unit buildings).
• Nash County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $16k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 72% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 41.6% vs local median 4.5% in Rocky Mount — 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 $2,554/mo this rent would consume 50% of the median local household income ($61k/yr) (locally 710% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1910 — 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 F-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?

Repairs flagged (vision-AI assessment)

• Major: Exposed wiring — Safety hazard and potential electrical failure
• Major: Missing cabinets — Structural integrity compromised
• Major: Damaged countertops — Safety hazard and potential water damage
• Major: Peeling paint — Structural integrity compromised
• Major: Missing siding — Structural integrity compromised
• Major: Damaged windows — Structural integrity compromised