The McGinnis Plan

Cleveland, TN 37323

$310,900D-

4 bd · 2.5 ba · 2,372 sqft · Built — · SingleFamily · Active · 77 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,583/mo
• Mortgage (P&I): −$1,734
• Tax + insurance: −$551
• HOA: −$0
• Vac / Maint / Mgmt: −$542
• Net cashflow: $-244/mo
• Annual: $-2,930/yr
• Cap rate: 5.41%
• Cash-on-cash: -3.17%
• DSCR: 0.86
• 1% rule: 0.78%
• Cash to close: $92,574

Investor read

• This is a 4-bed/2.5-bath single-family listed at $311k. Condition is rated excellent.
• At list price, monthly cash flow is $-244 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $295k (5.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $258k (16.9% below list).
• It's been on market 77 days — a 6% lower offer ($292k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $258k (16.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#55 in TN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: employment D, crime F, amenities F.
• Cleveland (urban): math 23% / reading 28% proficiency, ranked #85 of 139 in TN (top 61%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Park View Elementary School (math 42% / reading 37%, grade F, #231 of 952 statewide, top 26%, 463 students, 0% FRL); Ocoee Middle School (math 32% / reading 33%, grade F, #81 of 333 statewide, top 26%, 997 students, 0% FRL); Walker Valley High School (math 32% / reading 47%, grade F, #28 of 332 statewide, top 9%, 1,498 students, 0% FRL) — zoned schools average 0% FRL vs 53% district-wide (53 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: 476 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 768 units permitted in Bradley County in 2024 (0 in 5+ unit buildings).
• Bradley County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 3.6% in Cleveland — 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 $2,583/mo this rent would consume 45% of the median local household income ($69k/yr) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 77 days. Have you received any prior offers? Is the seller open to a 17% concession, seller financing, or rate buy-down credit?
• 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?
• 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.