188 Waters Edge Ln

Madison, AL 35758

$140,000C

2 bd · 2.0 ba · 634 sqft · Built 1988 · Condo · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,226/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$108
• HOA: −$197
• Vac / Maint / Mgmt: −$257
• Net cashflow: $-71/mo
• Annual: $-847/yr
• Cap rate: 5.69%
• Cash-on-cash: -2.16%
• DSCR: 0.90
• 1% rule: 0.88%
• Cash to close: $39,200

Investor read

• This is a 2-bed/2.0-bath condo listed at $140k.
• At list price, monthly cash flow is $-71 ($-847/yr) — negative.
• To cash-flow at today's rent, offer at most $128k (8.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $123k (12.4% below list).
• It's been on market 16 days — a 2% lower offer ($138k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $123k (12.4% below list) — sets the bar for 1% rule.
• In year one you build about $15k of equity ($968 loan paydown + $14k 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: Midtown Elementary School (math 49% / reading 78%, grade B, #46 of 627 statewide, top 8%, 999 students, 26% 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; 2 comparable units currently listed for rent nearby; 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.
• At projected returns (10.0% appreciation + 1.6% rent growth), your $39k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% 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.
• This rent is only 13% of the median local income ($117k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.