520 N Magnolia Dr

Mount Sterling, KY 40353

$100,000B-

3 bd · 1.0 ba · 1,488 sqft · Built 1983 · MultiFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,888/mo
• Mortgage (P&I): −$524
• Tax + insurance: −$85
• HOA: −$0
• Vac / Maint / Mgmt: −$396
• Net cashflow: $882/mo
• Annual: $10,588/yr
• Cap rate: 16.88%
• Cash-on-cash: 37.81%
• DSCR: 2.68
• 1% rule: 1.89%
• Cash to close: $28,000

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $100k.
• At list price, monthly cash flow is $882 ($11k/yr) — positive. Per door: $441/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $100k).
• 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 $691 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#297 in KY) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B+; Watch: amenities F, commute F, employment F.
• Montgomery County (rural): math 24% / reading 44% proficiency, ranked #76 of 165 in KY (top 46%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Mount Sterling Elementary School (math 22% / reading 42%, grade F, #348 of 676 statewide, top 55%, 407 students, 62% FRL); Mcnabb Middle School (math 19% / reading 47%, grade F, #112 of 217 statewide, top 53%, 1,018 students, 55% FRL); Montgomery County High School (math 29% / reading 39%, grade F, #89 of 254 statewide, top 36%, 1,279 students, 47% FRL) — zoned schools at 55% FRL track the district average.
• Market conditions: 116 active listings in the ZIP; 56 units permitted in Montgomery County in 2024 (0 in 5+ unit buildings).
• Montgomery County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $28k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 16.9% vs local median 3.4% in Mount Sterling — 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.
• This rent runs 40% of the median local income ($57k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.