906 Cannon Ave

Sweetwater, TN 37874

$131,000D

2 bd · 1.0 ba · 858 sqft · Built 1950 · SingleFamily · Active · 75 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,097/mo
• Mortgage (P&I): −$687
• Tax + insurance: −$102
• HOA: −$0
• Vac / Maint / Mgmt: −$230
• Net cashflow: $78/mo
• Annual: $941/yr
• Cap rate: 7.01%
• Cash-on-cash: 2.57%
• DSCR: 1.11
• 1% rule: 0.84%
• Cash to close: $36,680

Investor read

• This is a 2-bed/1.0-bath single-family listed at $131k.
• At list price, monthly cash flow is $78 ($941/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 $110k (16.2% below list).
• It's been on market 75 days — a 6% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (16.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $906 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#134 in TN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety C-, amenities F, commute F.
• Sweetwater (rural): math 25% / reading 24% proficiency, ranked #94 of 139 in TN (top 68%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Sweetwater Elementary (math 40% / reading 35%, grade F, #269 of 952 statewide, top 28%, 299 students, 0% FRL); Sweetwater Jr High School (math 11% / reading 18%, grade F, #231 of 333 statewide, top 70%, 322 students, 0% FRL) — zoned schools average 0% FRL vs 61% district-wide (61 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 142 active listings in the ZIP; 157 units permitted in Monroe County in 2024 (0 in 5+ unit buildings).
• 3 sale attempts since 16y ago; this cycle's ask has dropped $8k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $16k; list at $131k implies a 719% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.0% vs local median 4.1% in Sweetwater — 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 75 days. Have you received any prior offers? Is the seller open to a 16% concession, seller financing, or rate buy-down credit?
• Built in 1950 — 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.
• 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?
• 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?
• 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.