111 Shadow Ter

Hot Springs, AR 71901

$55,000C-

4 bd · 2.0 ba · 2,032 sqft · Built 1938 · MultiFamily · Active · 128 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,322/mo
• Mortgage (P&I): −$288
• Tax + insurance: −$55
• HOA: −$0
• Vac / Maint / Mgmt: −$488
• Net cashflow: $1,491/mo
• Annual: $17,892/yr
• Cap rate: 38.82%
• Cash-on-cash: 116.18%
• DSCR: 6.17
• 1% rule: 4.22%
• Cash to close: $15,400

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $55k.
• At list price, monthly cash flow is $1k ($18k/yr) — positive. Per door: $745/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $55k).
• It's been on market 128 days — a 12% lower offer ($48k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $48k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $380 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#140 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A-; Watch: schools D, crime F, amenities F.
• Hot Springs School District (urban): math 24% / reading 25% proficiency, ranked #195 of 238 in AR (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1938 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 366 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 117 units permitted in Garland County in 2024 (24 in 5+ unit buildings).
• Garland County population projected at +7% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 2y 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 $35k; list at $55k implies a 57% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $15k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 38.8% vs local median 2.8% in Hot Springs — 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.
• At $2,322/mo this rent would consume 52% of the median local household income ($54k/yr) (locally 961% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 128 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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?
• Built in 1938 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 D-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?