1212 Dry Hill Rd

Butler, TN 37640

$385,000C-

2 bd · 2.0 ba · 1,824 sqft · Built 2007 · SingleFamily · Active · 277 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,000/mo
• Mortgage (P&I): −$2,019
• Tax + insurance: −$307
• HOA: −$0
• Vac / Maint / Mgmt: −$630
• Net cashflow: $44/mo
• Annual: $528/yr
• Cap rate: 6.60%
• Cash-on-cash: 1.11%
• DSCR: 1.05
• 1% rule: 0.78%
• Cash to close: $107,800

Investor read

• This is a 2-bed/2.0-bath single-family listed at $385k.
• At list price, monthly cash flow is $44 ($528/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 $300k (22.1% below list).
• It's been on market 277 days — a 12% lower offer ($339k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $300k (22.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Johnson County (rural): math 27% / reading 31% proficiency, ranked #69 of 139 in TN (top 50%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Roan Creek Elementary (math 32% / reading 27%, grade F, #423 of 952 statewide, top 48%, 345 students, 0% FRL); Johnson Co Middle School (math 28% / reading 31%, grade F, #107 of 333 statewide, top 33%, 284 students, 0% FRL); Johnson Co High School (math 17% / reading 32%, grade F, #129 of 332 statewide, top 43%, 643 students, 0% FRL) — zoned schools average 0% FRL vs 59% district-wide (59 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: flood insurance adds $56/mo.
• Market conditions: 207 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 6 units permitted in Johnson County in 2024 (0 in 5+ unit buildings).
• Johnson County population projected at -21% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 6 sale attempts since 7y ago; this cycle's ask has dropped $90k (19%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $150k; list at $385k implies a 157% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe flood risk; moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 1.7% in Butler — 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

• It's been on market 277 days. Have you received any prior offers? Is the seller open to a 22% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.
• 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.