1206 Lake Ave

Pascagoula, MS 39567

$220,000D

3 bd · 2.0 ba · 1,891 sqft · Built 1920 · SingleFamily · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,016/mo
• Mortgage (P&I): −$1,154
• Tax + insurance: −$316
• HOA: −$0
• Vac / Maint / Mgmt: −$423
• Net cashflow: $123/mo
• Annual: $1,477/yr
• Cap rate: 6.96%
• Cash-on-cash: 2.40%
• DSCR: 1.11
• 1% rule: 0.92%
• Cash to close: $61,600

Investor read

• This is a 3-bed/2.0-bath single-family listed at $220k.
• At list price, monthly cash flow is $123 ($1k/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 $202k (8.4% below list).
• It's been on market 15 days — a 2% lower offer ($217k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $202k (8.4% 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 $7k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#41 in MS) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities D-, commute F.
• Pascagoula-Gautier School District (urban): math 40% / reading 38% proficiency, ranked #41 of 130 in MS (top 32%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 78% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Lake Elementary School (math 44% / reading 44%, grade F, #92 of 375 statewide, top 26%, 93 students, 100% FRL); William M Colmer Middle School (math 43% / reading 34%, grade F, #69 of 179 statewide, top 40%, 554 students, 100% FRL); Pascagoula High School (math 42% / reading 39%, grade F, #51 of 197 statewide, top 26%, 1,187 students, 100% FRL) — zoned schools average 100% FRL vs 78% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 86 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 516 units permitted in Jackson County in 2024 (6 in 5+ unit buildings).
• 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.
• Climate carrying-cost: moderate flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.0% vs local median 4.3% in Pascagoula — 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.
• This rent runs 39% of the median local income ($62k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1920 — 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.
• 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.
• 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.