214 W Lake Cir

Madison, AL 35758

$404,000C-

4 bd · 2.5 ba · 2,750 sqft · Built 2007 · Townhouse · Active · 54 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,552/mo
• Mortgage (P&I): −$2,119
• Tax + insurance: −$334
• HOA: −$46
• Vac / Maint / Mgmt: −$536
• Net cashflow: $-483/mo
• Annual: $-5,793/yr
• Cap rate: 4.86%
• Cash-on-cash: -5.12%
• DSCR: 0.77
• 1% rule: 0.63%
• Cash to close: $113,120

Investor read

• This is a 4-bed/2.5-bath townhouse listed at $404k.
• At list price, monthly cash flow is $-483 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $319k (21.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $255k (36.8% below list).
• It's been on market 54 days — a 3% lower offer ($392k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $255k (36.8% below list) — sets the bar for 1% rule.
• In year one you build about $43k of equity ($3k loan paydown + $40k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#12 in AL, #3,280 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime B+; Watch: amenities F, commute F.
• Madison City (suburban): math 51% / reading 71% proficiency, ranked #4 of 129 in AL (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Zoned schools: Horizon Elementary School (math 53% / reading 78%, grade B+, #37 of 627 statewide, top 6%, 547 students, 34% FRL); Discovery Middle School (math 46% / reading 69%, grade B, #13 of 257 statewide, top 5%, 1,334 students, 25% FRL); Bob Jones High School (math 53% / reading 51%, grade D+, #11 of 305 statewide, top 4%, 1,920 students, 24% FRL).
• Market conditions: Rents rising (+1.6%/yr); 382 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 56% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 8y 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 $350k; 15% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$69k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.9% vs local median 2.6% in Madison — 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

• 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 54 days. Have you received any prior offers? Is the seller open to a 37% 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• This sits on a lake — are riparian / water-frontage rights deeded with the parcel? Any dock permits, shoreline easements, or HOA water-use restrictions?
• What's the documented flood / surge / shoreline-erosion history here (FEMA AND non-FEMA — e.g., storm surge, creek backup, septic-field saturation)?
• Any water-quality or seasonal algae-bloom issues that affect tenant satisfaction or short-term-rental demand?