3636 U.s. 62

Salem, AR 72576

$179,900D

5 bd · 1.0 ba · 1,856 sqft · Built 1975 · SingleFamily · Active · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,297/mo
• Mortgage (P&I): −$943
• Tax + insurance: −$160
• HOA: −$0
• Vac / Maint / Mgmt: −$272
• Net cashflow: $-79/mo
• Annual: $-943/yr
• Cap rate: 5.77%
• Cash-on-cash: -1.87%
• DSCR: 0.92
• 1% rule: 0.72%
• Cash to close: $50,372

Investor read

• This is a 5-bed/1.0-bath single-family listed at $180k.
• At list price, monthly cash flow is $-79 ($-943/yr) — negative.
• To cash-flow at today's rent, offer at most $166k (7.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $130k (27.9% below list).
• It's been on market 48 days — a 3% lower offer ($175k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $130k (27.9% below list) — sets the bar for 1% rule.
• In year one you build about $5k of equity ($1k loan paydown + $4k appreciation (2.4% local appreciation)).
• Location reads 65/100 on livability (#148 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+; Watch: amenities F, commute F, employment F.
• Salem School District (rural): math 53% / reading 55% proficiency, ranked #10 of 238 in AR (top 4%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Salem Elementary School (math 59% / reading 54%, grade C+, #57 of 454 statewide, top 13%, 451 students, 66% FRL); Salem High School (math 48% / reading 55%, grade D+, #13 of 292 statewide, top 4%, 425 students, 56% FRL).
• Market conditions: 39 active listings in the ZIP.
• Fulton County population projected at -17% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 13y 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 $125k; 44% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (2.4% appreciation + 3.0% rent growth), your $50k cash investment doubles in ~8 years — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.8% vs local median 3.2% in Salem — 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 48 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• Built in 1975 — 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?
• 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.