513 Mccarter Rd Unit 4M

Gatlinburg, TN 37738

$425,000F

2 bd · 2.0 ba · 1,337 sqft · Built 2007 · Condo · Active · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,783/mo
• Mortgage (P&I): −$2,229
• Tax + insurance: −$708
• HOA: −$300
• Vac / Maint / Mgmt: −$585
• Net cashflow: $-1,038/mo
• Annual: $-12,458/yr
• Cap rate: 3.36%
• Cash-on-cash: -10.47%
• DSCR: 0.53
• 1% rule: 0.65%
• Cash to close: $119,000

Investor read

• This is a 2-bed/2.0-bath condo listed at $425k. Condition is rated good.
• At list price, monthly cash flow is $-1k ($-12k/yr) — negative.
• To cash-flow at today's rent, offer at most $275k (35.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $278k (34.5% below list).
• It's been on market 34 days — a 3% lower offer ($412k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $275k (35.3% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#27 in TN) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A; Watch: crime F, amenities F, employment D-.
• Sevier County (rural): math 31% / reading 28% proficiency, ranked #62 of 139 in TN (top 45%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: New Center Elementary (math 32% / reading 28%, grade F, #415 of 952 statewide, top 44%, 855 students, 0% FRL); Seymour Junior High (math 40% / reading 30%, grade F, #65 of 333 statewide, top 20%, 766 students, 0% FRL); Sevier County High School (math 20% / reading 38%, grade F, #92 of 332 statewide, top 28%, 1,248 students, 0% FRL) — zoned schools average 0% FRL vs 52% district-wide (52 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: 1075 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 1d on market — plan ~1-2 weeks tenant-placement turnaround); 1,594 units permitted in Sevier County in 2024 (456 in 5+ unit buildings).
• Sevier County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 14y ago; this cycle's ask has dropped $74k (15%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $224k; list at $425k implies a 90% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 8→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.4% vs local median 1.5% in Gatlinburg — 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 $2,783/mo this rent would consume 53% of the median local household income ($63k/yr) — very limited rent-growth headroom before tenants either downsize or default.

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?
• It's been on market 34 days. Have you received any prior offers? Is the seller open to a 35% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?