12460 Nc Hwy 42 E

Kenly, NC 27542

$175,000B-

2 bd · 1.0 ba · 1,104 sqft · Built 1928 · SingleFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,738/mo
• Mortgage (P&I): −$918
• Tax + insurance: −$138
• HOA: −$0
• Vac / Maint / Mgmt: −$365
• Net cashflow: $317/mo
• Annual: $3,802/yr
• Cap rate: 8.47%
• Cash-on-cash: 7.76%
• DSCR: 1.35
• 1% rule: 0.99%
• Cash to close: $49,000

Investor read

• This is a 2-bed/1.0-bath single-family listed at $175k.
• At list price, monthly cash flow is $317 ($4k/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 $174k (0.7% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $174k (0.7% below list) — sets the bar for 1% rule.
• In year one you build about $19k of equity ($1k loan paydown + $18k appreciation (10.0% local appreciation)).
• Location reads 68/100 on livability (#183 in NC) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Johnston County Public Schools (rural): math 39% / reading 42% proficiency, ranked #105 of 178 in NC (top 59%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Glendale-Kenly Elementary (math 44% / reading 43%, grade F, #618 of 1,410 statewide, top 44%, 472 students, 68% FRL); North Johnston Middle (math 26% / reading 36%, grade F, #326 of 475 statewide, top 69%, 600 students, 72% FRL); North Johnston High (math 27% / reading 37%, grade F, #445 of 535 statewide, top 84%, 787 students, 62% FRL) — zoned schools average 67% FRL vs 41% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 89 active listings in the ZIP; 2,783 units permitted in Johnston County in 2024 (6 in 5+ unit buildings).
• Johnston County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 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 $40k; list at $175k implies a 338% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $49k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$30k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 80% 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.

Questions for listing agent

• Built in 1928 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.