40 Carolane Dr

Jackson, TN 38305

$409,500B-

8 bd · 11.0 ba · 4,960 sqft · Built 1975 · MultiFamily · Active · 42 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,648/mo
• Mortgage (P&I): −$2,147
• Tax + insurance: −$412
• HOA: −$0
• Vac / Maint / Mgmt: −$1,186
• Net cashflow: $1,902/mo
• Annual: $22,826/yr
• Cap rate: 11.87%
• Cash-on-cash: 19.91%
• DSCR: 1.89
• 1% rule: 1.38%
• Cash to close: $114,660

Investor read

• This is a 4 × 2.0-bed/1.5-bath units multifamily listed at $410k.
• At list price, monthly cash flow is $2k ($23k/yr) — positive. Per door: $476/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $410k).
• It's been on market 42 days — a 3% lower offer ($397k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $397k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#216 in TN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety C-, schools F, crime F.
• Madison County (urban): math 10% / reading 17% proficiency, ranked #131 of 139 in TN (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+1.6%/yr); 508 active listings in the ZIP; 247 units permitted in Madison County in 2024 (0 in 5+ unit buildings).
• Madison County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 6 sale attempts since 2y 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.
• At projected returns (-3.0% appreciation + 1.6% rent growth), your $115k cash investment doubles in ~7 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 11.9% vs local median 3.5% in Jackson — 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.
• At $5,648/mo this rent would consume 98% of the median local household income ($69k/yr) (locally 2228% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 42 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1975 — 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 F-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.