1621 Fagan St #109

Chattanooga, TN 37408

$279,000D+

1 bd · 1.5 ba · 1,173 sqft · Built 2021 · Townhouse · Active · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,628/mo
• Mortgage (P&I): −$1,463
• Tax + insurance: −$209
• HOA: −$60
• Vac / Maint / Mgmt: −$342
• Net cashflow: $-446/mo
• Annual: $-5,352/yr
• Cap rate: 4.37%
• Cash-on-cash: -6.85%
• DSCR: 0.70
• 1% rule: 0.58%
• Cash to close: $78,120

Investor read

• This is a 1-bed/1.5-bath townhouse listed at $279k.
• At list price, monthly cash flow is $-446 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $200k (28.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $163k (41.6% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $163k (41.6% below list) — sets the bar for 1% rule.
• In year one you build about $30k of equity ($2k loan paydown + $28k appreciation (10.0% local appreciation)).
• Location reads 78/100 on livability (#3 in TN, #2,582 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: employment D+, schools F, crime F.
• Hamilton County (urban): math 31% / reading 31% proficiency, ranked #42 of 139 in TN (top 30%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.8%/yr); 106 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 2,133 units permitted in Hamilton County in 2024 (405 in 5+ unit buildings).
• Hamilton County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 5y 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.
• By year 2, paydown + projected appreciation supports a ~$48k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 4.4% vs local median 3.4% in Chattanooga — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 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.