The Chatham Plan

Newport, NC 28570

$388,100D+

3 bd · 2.0 ba · 2,054 sqft · Built — · SingleFamily · Active · 482 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $19,022/mo
• Mortgage (P&I): −$2,041
• Tax + insurance: −$649
• HOA: −$25
• Vac / Maint / Mgmt: −$3,995
• Net cashflow: $12,313/mo
• Annual: $147,754/yr
• Cap rate: 44.26%
• Cash-on-cash: 135.60%
• DSCR: 7.03
• 1% rule: 4.89%
• Cash to close: $108,967

Investor read

• This is a 3-bed/2.0-bath single-family listed at $388k. Condition is rated good.
• At list price, monthly cash flow is $12k ($148k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($19k rent vs $388k).
• It's been on market 482 days — a 12% lower offer ($342k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $342k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#385 in NC) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, amenities F, commute F.
• Carteret County Public Schools (rural): math 59% / reading 61% proficiency, ranked #31 of 178 in NC (top 17%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Newport Elementary (math 48% / reading 45%, grade D-, #542 of 1,410 statewide, top 39%, 645 students, 100% FRL); Newport Middle (math 39% / reading 56%, grade C-, #140 of 475 statewide, top 30%, 378 students, 98% FRL); West Carteret High (math 82% / reading 71%, grade A-, #89 of 535 statewide, top 16%, 1,146 students, 40% FRL) — zoned schools average 79% FRL vs 39% district-wide (40 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 358 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 935 units permitted in Carteret County in 2024 (360 in 5+ unit buildings).
• Carteret County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $109k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 44.3% vs local median 29.8% in Newport — 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 $19,022/mo this rent would consume 325% of the median local household income ($70k/yr) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 482 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.