235 Chad Ave

Lexington, AL 35648

$89,900B-

3 bd · 2.0 ba · 1,363 sqft · Built 1968 · SingleFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,087/mo
• Mortgage (P&I): −$471
• Tax + insurance: −$150
• HOA: −$0
• Vac / Maint / Mgmt: −$228
• Net cashflow: $237/mo
• Annual: $2,849/yr
• Cap rate: 9.46%
• Cash-on-cash: 11.32%
• DSCR: 1.50
• 1% rule: 1.21%
• Cash to close: $25,172

Investor read

• This is a 3-bed/2.0-bath single-family listed at $90k.
• At list price, monthly cash flow is $237 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $90k).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $622 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#34 in AL) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety D-.
• Lauderdale County (rural): math 19% / reading 46% proficiency, ranked #53 of 129 in AL (top 41%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Lexington Elementary School (435 students, 44% FRL); Lexington High School (math 35% / reading 56%, grade D-, #20 of 305 statewide, top 6%, 350 students, 47% FRL).
• Zoned-school proficiency averages 46% at this address vs 32% district-wide (+13 pts) — the actual schools serving this property are materially stronger than the Lauderdale County average implies; a family-tenant draw the district grade alone would hide.
• Market conditions: 32 active listings in the ZIP; 164 units permitted in Lauderdale County in 2024 (72 in 5+ unit buildings).
• 3 sale attempts since 3y 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; moderate wind risk, 23% chance of damaging wind over 30y; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.5% vs local median 3.2% in Lexington — 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 1968 — 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.
• 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.