5854 E Main St

Bailey, NC 27807

$89,900C

2 bd · 1.0 ba · 864 sqft · Built 1953 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $880/mo
• Mortgage (P&I): −$471
• Tax + insurance: −$188
• HOA: −$0
• Vac / Maint / Mgmt: −$185
• Net cashflow: $36/mo
• Annual: $432/yr
• Cap rate: 7.66%
• Cash-on-cash: 4.88%
• DSCR: 1.22
• 1% rule: 0.98%
• Cash to close: $25,172

Investor read

• This is a 2-bed/1.0-bath single-family listed at $90k.
• At list price, monthly cash flow is $36 ($432/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 $88k (2.1% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $88k (2.1% below list) — sets the bar for 1% rule.
• 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 68/100 on livability (#171 in NC) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: crime D-, amenities F, commute F.
• Nash-Rocky Mount Schools (rural): math 20% / reading 32% proficiency, ranked #155 of 178 in NC (top 87%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Bailey Elementary (math 24% / reading 28%, grade F, #1,085 of 1,410 statewide, top 77%, 538 students, 75% FRL); Southern Nash Middle (math 20% / reading 35%, grade F, #368 of 475 statewide, top 78%, 798 students, 69% FRL); Southern Nash High (math 32% / reading 44%, grade F, #409 of 535 statewide, top 77%, 1,070 students, 56% FRL).
• Watch-outs: flood insurance adds $66/mo; built in 1953 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 136 active listings in the ZIP; 500 units permitted in Nash County in 2024 (0 in 5+ unit buildings).
• Nash County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts 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 $70k; 28% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe flood risk; major wind risk, 69% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.7% vs local median 2.2% in Bailey — 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 1953 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 D 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.
• 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.