408 Lynn Rd Apt B

Kingsport, TN 37617

$194,900F

2 bd · 3.0 ba · 1,144 sqft · Built 2000 · Townhouse · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,494/mo
• Mortgage (P&I): −$1,022
• Tax + insurance: −$133
• HOA: −$100
• Vac / Maint / Mgmt: −$314
• Net cashflow: $-75/mo
• Annual: $-896/yr
• Cap rate: 5.83%
• Cash-on-cash: -1.64%
• DSCR: 0.93
• 1% rule: 0.77%
• Cash to close: $54,572

Investor read

• This is a 2-bed/3.0-bath townhouse listed at $195k.
• At list price, monthly cash flow is $-75 ($-896/yr) — negative.
• To cash-flow at today's rent, offer at most $182k (6.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $149k (23.3% below list).
• It's been on market 27 days — a 2% lower offer ($192k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $149k (23.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#39 in TN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: amenities C-, crime F, commute F.
• Sullivan County (suburban): math 17% / reading 24% proficiency, ranked #109 of 139 in TN (top 78%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Indian Springs Elementary (math 22% / reading 32%, grade F, #496 of 952 statewide, top 55%, 377 students, 0% FRL) — zoned schools average 0% FRL vs 45% district-wide (45 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: 139 active listings in the ZIP; 453 units permitted in Sullivan County in 2024 (6 in 5+ unit buildings).
• Sullivan County population projected to shrink 5% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 6y 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 $86k; list at $195k implies a 125% gain — meaningful room to come down on a strong offer.
• Cap rate 5.8% vs local median 3.8% in Kingsport — 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

• 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.