1120 Douglas Ave

Martinsville, VA 24112

$26,000D

3 bd · 1.0 ba · 1,324 sqft · Built 1941 · Other · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,356/mo
• Mortgage (P&I): −$136
• Tax + insurance: −$27
• HOA: −$0
• Vac / Maint / Mgmt: −$285
• Net cashflow: $907/mo
• Annual: $10,888/yr
• Cap rate: 48.17%
• Cash-on-cash: 149.56%
• DSCR: 7.65
• 1% rule: 5.21%
• Cash to close: $7,280

Investor read

• This is a 3-bed/1.0-bath other listed at $26k.
• At list price, monthly cash flow is $907 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $26k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $180 of loan paydown is wiped out by about $780 of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#231 in VA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, schools B; Watch: amenities F, commute F, employment D-.
• Martinsville City Public School District (town): math 29% / reading 53% proficiency, ranked #122 of 131 in VA (top 93%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 74% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1941 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 256 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 75% of comp listings sitting > 30 days — soft ceiling on asking rent; 5 units permitted in Martinsville city in 2024 (5 in 5+ unit buildings).
• Martinsville County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $7k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: moderate flood risk; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 48.2% vs local median 5.9% in Martinsville — 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 33% of the median local income ($49k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1941 — 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.
• 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.
• 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.