609 Third St

Paintsville, KY 41240

$125,000C

2 bd · 1.0 ba · 1,414 sqft · Built 1940 · SingleFamily · Pending · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,042/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$73
• HOA: −$0
• Vac / Maint / Mgmt: −$219
• Net cashflow: $94/mo
• Annual: $1,131/yr
• Cap rate: 7.20%
• Cash-on-cash: 3.23%
• DSCR: 1.14
• 1% rule: 0.83%
• Cash to close: $35,000

Investor read

• This is a 2-bed/1.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $94 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $104k (16.7% below list).
• It's been on market 22 days — a 2% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $104k (16.7% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($864 loan paydown + $5k appreciation (4.1% local appreciation)).
• Location reads 73/100 on livability (#117 in KY) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Paintsville Independent (town): math 27% / reading 47% proficiency, ranked #57 of 165 in KY (top 34%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 39 active listings in the ZIP.
• Johnson County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 7y 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.
• Current owner paid $52k; list at $125k implies a 140% gain — meaningful room to come down on a strong offer.
• At projected returns (4.1% appreciation + 3.0% rent growth), your $35k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate flood risk; major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.2% vs local median 3.4% in Paintsville — 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 1940 — 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 B-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 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.