827 E Gulf Dr Unit K2

Sanibel, FL 33957

$447,007B-

2 bd · 2.0 ba · 967 sqft · Built 1974 · Condo · Pending · 211 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,500/mo
• Mortgage (P&I): −$2,344
• Tax + insurance: −$688
• HOA: −$1,903
• Vac / Maint / Mgmt: −$2,205
• Net cashflow: $3,359/mo
• Annual: $40,313/yr
• Cap rate: 16.46%
• Cash-on-cash: 36.30%
• DSCR: 2.62
• 1% rule: 2.35%
• Cash to close: $125,162

Investor read

• This is a 2-bed/2.0-bath condo listed at $447k.
• At list price, monthly cash flow is $3k ($40k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($10k rent vs $447k).
• It's been on market 211 days — a 12% lower offer ($393k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $393k (12.0% 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 $13k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#541 in FL) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, employment A+; Watch: housing D+, amenities F, commute F.
• Lee (suburban): math 47% / reading 50% proficiency, ranked #42 of 73 in FL (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 526 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 15,411 units permitted in Lee County in 2024 (4,686 in 5+ unit buildings).
• Lee County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts; this cycle's ask has dropped $47k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $125k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→28/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 16.5% vs local median 3.8% in Sanibel — 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 211 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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?