Harper Plan

Madison, AL 35758

$624,900F

5 bd · 2.5 ba · 4,345 sqft · Built — · SingleFamily · Active · 72 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,870/mo
• Mortgage (P&I): −$4,213
• Tax + insurance: −$1,339
• HOA: −$0
• Vac / Maint / Mgmt: −$603
• Net cashflow: $-3,285/mo
• Annual: $-39,420/yr
• Cap rate: 1.39%
• Cash-on-cash: -17.52%
• DSCR: 0.22
• 1% rule: 0.36%
• Cash to close: $224,947

Investor read

• This is a 5-bed/2.5-bath single-family listed at $625k.
• At list price, monthly cash flow is $-3k ($-39k/yr) — negative.
• To cash-flow at today's rent, offer at most $328k (47.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $287k (54.1% below list).
• It's been on market 72 days — a 6% lower offer ($587k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $287k (54.1% below list) — sets the bar for 1% rule.
• In year one you build about $86k of equity ($6k loan paydown + $80k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#12 in AL, #3,280 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime B+; Watch: amenities F, commute F.
• Madison City (suburban): math 51% / reading 71% proficiency, ranked #4 of 129 in AL (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Zoned schools: Madison Elementary School (math 53% / reading 72%, grade B, #51 of 627 statewide, top 8%, 505 students, 27% FRL); Liberty Middle School (math 45% / reading 77%, grade B+, #9 of 257 statewide, top 3%, 1,493 students, 22% FRL); James Clemens High School (math 50% / reading 53%, grade D+, #14 of 305 statewide, top 4%, 2,149 students, 21% FRL).
• Market conditions: Rents rising (+1.6%/yr); 390 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$138k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 1.4% vs local median 2.6% in Madison — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 72 days. Have you received any prior offers? Is the seller open to a 54% 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.