8845 Downey St

Bayou La Batre, AL 36509

$39,999B

2 bd · 2.0 ba · 1,032 sqft · Built 1991 · SingleFamily · Active · 131 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $934/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$481
• HOA: −$0
• Vac / Maint / Mgmt: −$196
• Net cashflow: $47/mo
• Annual: $560/yr
• Cap rate: 20.49%
• Cash-on-cash: 50.70%
• DSCR: 3.26
• 1% rule: 2.34%
• Cash to close: $11,200

Investor read

• This is a 2-bed/2.0-bath single-family listed at $40k.
• At list price, monthly cash flow is $47 ($560/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($934 rent vs $40k).
• It's been on market 131 days — a 12% lower offer ($35k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $35k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $276 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 53/100 on livability (#493 in AL) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing B; Watch: health & safety D+, crime F, amenities F.
• Mobile County (urban): math 15% / reading 39% proficiency, ranked #81 of 129 in AL (top 63%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Anna F Booth Elementary School (math 32% / reading 57%, grade F, #171 of 627 statewide, top 31%, 409 students, 76% FRL); Peter F Alba Middle School (math 12% / reading 39%, grade F, #158 of 257 statewide, top 63%, 511 students, 75% FRL); Alma Bryant High School (math 16% / reading 21%, grade F, #184 of 305 statewide, top 61%, 1,617 students, 61% FRL) — zoned schools at 71% FRL track the district average.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 25 active listings in the ZIP; 1,678 units permitted in Mobile County in 2024 (264 in 5+ unit buildings).
• Mobile County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; severe wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 20.5% vs local median 4.5% in Bayou La Batre — 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 131 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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?
• 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.