40 Folly Field Rd Unit B252

Hilton Head Island, SC 29928

$254,900D-

1 bd · 1.0 ba · 540 sqft · Built 1980 · Condo · Active · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,284/mo
• Mortgage (P&I): −$1,337
• Tax + insurance: −$425
• HOA: −$527
• Vac / Maint / Mgmt: −$480
• Net cashflow: $-484/mo
• Annual: $-5,812/yr
• Cap rate: 4.01%
• Cash-on-cash: -8.14%
• DSCR: 0.64
• 1% rule: 0.90%
• Cash to close: $71,372

Investor read

• This is a 1-bed/1.0-bath condo listed at $255k. Condition is rated good.
• At list price, monthly cash flow is $-484 ($-6k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $228k (10.4% below list).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $228k (10.4% below list) — sets the bar for 1% rule.
• In year one you build about $10k of equity ($2k loan paydown + $8k appreciation (3.2% local appreciation)).
• Location reads 64/100 on livability (#157 in SC) — a middle-class / working-renter tenant base. Strengths: employment A+, crime A-; Watch: amenities F, commute F, cost of living F.
• Beaufort 01 (town): math 42% / reading 51% proficiency, ranked #17 of 80 in SC (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: HOA is 23% of rent.
• Market conditions: Rents rising (+3.2%/yr); 845 active listings in the ZIP; solid renter incomes; 1,824 units permitted in Beaufort County in 2024 (618 in 5+ unit buildings).
• Beaufort County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 4, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 4.0% vs local median 2.9% in Hilton Head Island — 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?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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.