3355 Lexington Rd

Montgomery, AL 36106

$249,900D-

4 bd · 1.0 ba · 2,397 sqft · Built 1935 · MultiFamily · Active · 178 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,179/mo
• Mortgage (P&I): −$1,311
• Tax + insurance: −$285
• HOA: −$0
• Vac / Maint / Mgmt: −$458
• Net cashflow: $126/mo
• Annual: $1,515/yr
• Cap rate: 6.90%
• Cash-on-cash: 2.17%
• DSCR: 1.10
• 1% rule: 0.87%
• Cash to close: $69,972

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $250k.
• At list price, monthly cash flow is $126 ($2k/yr) — positive. Per door: $63/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $218k (12.8% below list).
• It's been on market 178 days — a 12% lower offer ($220k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $218k (12.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#138 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: schools C-, employment D, crime F.
• Montgomery County (urban): math 9% / reading 31% proficiency, ranked #106 of 129 in AL (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.3%/yr); 137 active listings in the ZIP; 30 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 460 units permitted in Montgomery County in 2024 (37 in 5+ unit buildings).
• Montgomery County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 7 sale attempts since 20y ago; this cycle's ask is 19123% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $185k; 35% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 38% of the median local income ($69k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 178 days. Have you received any prior offers? Is the seller open to a 13% 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 1935 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?