265 Broad St

Lexington, NC 27295

$170,000C-

3 bd · 1.0 ba · 1,406 sqft · Built 1917 · SingleFamily · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,387/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$126
• HOA: −$0
• Vac / Maint / Mgmt: −$291
• Net cashflow: $79/mo
• Annual: $945/yr
• Cap rate: 6.85%
• Cash-on-cash: 1.98%
• DSCR: 1.09
• 1% rule: 0.82%
• Cash to close: $47,600

Investor read

• This is a 3-bed/1.0-bath single-family listed at $170k.
• At list price, monthly cash flow is $79 ($945/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 $139k (18.4% below list).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $139k (18.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#89 in NC) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, health & safety A+; Watch: crime F, amenities D-, employment F.
• Lexington City Schools (suburban): math 32% / reading 38% proficiency, ranked #136 of 178 in NC (top 76%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 78% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Pickett Elementary School (math 32% / reading 32%, grade F, #908 of 1,410 statewide, top 67%, 394 students, 99% FRL); Lexington Middle School (math 31% / reading 41%, grade F, #273 of 475 statewide, top 58%, 647 students, 100% FRL); Lexington Senior High School (math 27% / reading 52%, grade F, #393 of 535 statewide, top 75%, 928 students, 99% FRL) — zoned schools average 99% FRL vs 78% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1917 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.4%/yr); 362 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 990 units permitted in Davidson County in 2024 (54 in 5+ unit buildings).
• Davidson County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $50k; list at $170k implies a 240% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.8% vs local median 3.5% in Lexington — 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

• Built in 1917 — 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 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?
• 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.