1034 Bull Hill Rd

Fairgarden, TN 37876

$275,000D+

4 bd · 2.0 ba · 2,040 sqft · Built 2008 · Other · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,357/mo
• Mortgage (P&I): −$1,442
• Tax + insurance: −$458
• HOA: −$0
• Vac / Maint / Mgmt: −$495
• Net cashflow: $-39/mo
• Annual: $-463/yr
• Cap rate: 6.12%
• Cash-on-cash: -0.60%
• DSCR: 0.97
• 1% rule: 0.86%
• Cash to close: $77,000

Investor read

• This is a 4-bed/2.0-bath other listed at $275k.
• At list price, monthly cash flow is $-39 ($-463/yr) — negative.
• To cash-flow at today's rent, offer at most $269k (2.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $236k (14.3% below list).
• It's been on market 55 days — a 3% lower offer ($267k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $236k (14.3% below list) — sets the bar for 1% rule.
• In year one you build about $29k of equity ($2k loan paydown + $28k appreciation (10.0% local appreciation)).
• Location reads 54/100 on livability (#381 in TN) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A-; Watch: schools F, crime F, amenities F.
• Sevier County (rural): math 31% / reading 28% proficiency, ranked #62 of 139 in TN (top 45%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: Rents soft (-2.6%/yr); 1127 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,594 units permitted in Sevier County in 2024 (456 in 5+ unit buildings).
• Sevier County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 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 $150k; list at $275k implies a 83% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 0.0% rent growth), your $77k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$47k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 8→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 1.9% in Fairgarden — 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 $2,357/mo this rent would consume 49% of the median local household income ($58k/yr) (locally 611% of renters already pay >50% of income on rent) — 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 55 days. Have you received any prior offers? Is the seller open to a 14% concession, seller financing, or rate buy-down credit?
• 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?
• 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.