3802 Penny St

Huntsville, AL 35806

$270,000D-

5 bd · 2.0 ba · 1,085 sqft · Built 1957 · SingleFamily · Active · 36 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,010/mo
• Mortgage (P&I): −$1,416
• Tax + insurance: −$450
• HOA: −$0
• Vac / Maint / Mgmt: −$422
• Net cashflow: $-278/mo
• Annual: $-3,340/yr
• Cap rate: 5.06%
• Cash-on-cash: -4.42%
• DSCR: 0.80
• 1% rule: 0.74%
• Cash to close: $75,600

Investor read

• This is a 5-bed/2.0-bath single-family listed at $270k.
• At list price, monthly cash flow is $-278 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $230k (14.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $201k (25.6% below list).
• It's been on market 36 days — a 3% lower offer ($262k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $201k (25.6% below list) — sets the bar for 1% rule.
• In year one you build about $29k of equity ($2k loan paydown + $27k appreciation (10.0% local appreciation)).
• Location reads 82/100 on livability (#3 in AL, #1,082 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F.
• Huntsville City (urban): math 21% / reading 46% proficiency, ranked #48 of 129 in AL (top 37%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Ridgecrest Elementary School (math 8% / reading 35%, grade F, #450 of 627 statewide, top 72%, 511 students, 85% FRL); Columbia High School (math 12% / reading 17%, grade F, #220 of 305 statewide, top 77%, 954 students, 50% FRL) — zoned schools average 68% FRL vs 46% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 18% at this address vs 34% district-wide (-16 pts) — the specific schools serving this property underperform the Huntsville City average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1957 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.6%/yr); 216 active listings in the ZIP; solid renter incomes; 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.
• By year 2, paydown + projected appreciation supports a ~$46k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.1% vs local median 3.8% in Huntsville — 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 36 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• Built in 1957 — 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.
• 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.