5980 Carmel Dr

Montgomery, AL 36117

$114,900C+

2 bd · 2.0 ba · 1,421 sqft · Built 1984 · Townhouse · Active · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,198/mo
• Mortgage (P&I): −$603
• Tax + insurance: −$139
• HOA: −$0
• Vac / Maint / Mgmt: −$252
• Net cashflow: $205/mo
• Annual: $2,456/yr
• Cap rate: 8.43%
• Cash-on-cash: 7.63%
• DSCR: 1.34
• 1% rule: 1.04%
• Cash to close: $32,172

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $115k.
• At list price, monthly cash flow is $205 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $115k).
• It's been on market 27 days — a 2% lower offer ($113k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $113k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $794 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#138 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D, crime F, amenities D-.
• Montgomery County (urban): math 9% / reading 31% proficiency, ranked #106 of 129 in AL (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Dozier Elementary School (math 2% / reading 17%, grade F, #568 of 627 statewide, top 94%, 394 students, 84% FRL); Jefferson Davis High School (math 3% / reading 16%, grade F, #258 of 305 statewide, top 85%, 1,522 students, 83% FRL).
• Market conditions: Rents rising (+3.0%/yr); 409 active listings in the ZIP; 29 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 460 units permitted in Montgomery County in 2024 (37 in 5+ unit buildings).
• Montgomery County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 9 sale attempts since 28y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $80k; 44% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.4% vs local median 6.0% in Montgomery — 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

• 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.