240 Plateau St

Hot Springs, AR 71901

$85,000B

2 bd · 1.0 ba · 996 sqft · Built 1935 · SingleFamily · Under Contract · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,149/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$53
• HOA: −$0
• Vac / Maint / Mgmt: −$241
• Net cashflow: $409/mo
• Annual: $4,903/yr
• Cap rate: 12.06%
• Cash-on-cash: 20.60%
• DSCR: 1.92
• 1% rule: 1.35%
• Cash to close: $23,800

Investor read

• This is a 2-bed/1.0-bath single-family listed at $85k.
• At list price, monthly cash flow is $409 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $85k).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $588 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#140 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A-; Watch: schools D, crime F, amenities F.
• Hot Springs School District (urban): math 24% / reading 25% proficiency, ranked #195 of 238 in AR (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 363 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 92% of comp listings sitting > 30 days — soft ceiling on asking rent; 117 units permitted in Garland County in 2024 (24 in 5+ unit buildings).
• Garland County population projected at +7% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $25k; list at $85k implies a 240% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $24k cash investment doubles in ~6 years — after that, you're playing with house money.
• 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 12.1% vs local median 2.8% in Hot Springs — 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 1935 — 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.