142 Patton St

Pea Ridge, AR 72751

$199,000B-

3 bd · 1.0 ba · 1,316 sqft · Built — · SingleFamily · Pending · 36 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,801/mo
• Mortgage (P&I): −$1,044
• Tax + insurance: −$141
• HOA: −$0
• Vac / Maint / Mgmt: −$378
• Net cashflow: $238/mo
• Annual: $2,858/yr
• Cap rate: 7.73%
• Cash-on-cash: 5.13%
• DSCR: 1.23
• 1% rule: 0.90%
• Cash to close: $55,720

Investor read

• This is a 3-bed/1.0-bath single-family listed at $199k.
• At list price, monthly cash flow is $238 ($3k/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 $180k (9.5% below list).
• It's been on market 36 days — a 3% lower offer ($193k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $180k (9.5% below list) — sets the bar for 1% rule.
• In year one you build about $16k of equity ($1k loan paydown + $15k appreciation (7.5% local appreciation)).
• Location reads 67/100 on livability (#98 in AR) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, cost of living A-; Watch: amenities F, commute F.
• Pea Ridge School District (suburban): math 43% / reading 42% proficiency, ranked #43 of 238 in AR (top 18%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 423 active listings in the ZIP; 32 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 44% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 4,359 units permitted in Benton County in 2024 (402 in 5+ unit buildings).
• Benton County population projected at +56% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $72k; list at $199k implies a 176% gain — meaningful room to come down on a strong offer.
• At projected returns (7.5% appreciation + 3.0% rent growth), your $56k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$40k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.7% vs local median 3.4% in Pea Ridge — 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 36 days. Have you received any prior offers? Is the seller open to a 10% concession, seller financing, or rate buy-down credit?
• 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.