173 Old Montgomery Hwy Unit D

Homewood, AL 35216

$125,000B

2 bd · 1.0 ba · 961 sqft · Built 1969 · Townhouse · Active · 315 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,540/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$208
• HOA: −$0
• Vac / Maint / Mgmt: −$323
• Net cashflow: $353/mo
• Annual: $4,234/yr
• Cap rate: 9.68%
• Cash-on-cash: 12.10%
• DSCR: 1.54
• 1% rule: 1.23%
• Cash to close: $35,000

Investor read

• This is a 2-bed/1.0-bath townhouse listed at $125k. Condition is rated fair.
• At list price, monthly cash flow is $353 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $125k).
• It's been on market 315 days — a 12% lower offer ($110k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#5 in AL, #1,730 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+; Watch: cost of living F.
• Homewood City (suburban): math 55% / reading 74% proficiency, ranked #3 of 129 in AL (top 2%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Shades Cahaba Elementary School (math 48% / reading 70%, grade B-, #67 of 627 statewide, top 11%, 501 students, 24% FRL); Homewood Middle School (math 52% / reading 76%, grade B+, #5 of 257 statewide, top 2%, 926 students, 30% FRL); Homewood High School (math 62% / reading 63%, grade B-, #4 of 305 statewide, top 1%, 1,330 students, 28% FRL) — zoned schools at 27% FRL track the district average.
• Market conditions: Rents rising (+2.6%/yr); 199 active listings in the ZIP; 25 comparable units currently listed for rent nearby; rentals lingering (median 64d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 56% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,114 units permitted in Jefferson County in 2024 (556 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 12y ago; this cycle's ask has dropped $10k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $50k; list at $125k implies a 151% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 2.6% rent growth), your $35k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 9.7% vs local median 2.3% in Homewood — 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 315 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1969 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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?
• 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.

Repairs flagged (vision-AI assessment)

• Minor: Kitchen countertops — Light wear on the countertops.
• Minor: Paint touch-ups — Slight fading in some areas.